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07/28/88 Robert L. Andreasen Et Al. v. Suburban Bank of Bartlett

July 28, 1988

ROBERT L. ANDREASEN ET AL., PLAINTIFFS AND COUNTERDEFENDANTS-APPELLEES

v.

SUBURBAN BANK OF BARTLETT, F/K/A SB BANK, DEFENDANT AND COUNTERPLAINTIFF-APPELLEE (LAW OFFICES OF FREDERIC F.



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

Brace, Jr., Respondent-Appellant; Gromer,

Wittenstrom & Meyer, Respondent-Appellee)

527 N.E.2d 595, 173 Ill. App. 3d 333, 123 Ill. Dec. 132 1988.IL.1160

Appeal from the Circuit Court of Cook County; the Hon. Robert L. Sklodowski, Judge, presiding.

APPELLATE Judges:

JUSTICE LINN delivered the opinion of the court. JOHNSON and McMORROW, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINN

In 1986, plaintiffs-counterdefendants, minority shareholders of Suburban Bank of Bartlett, filed a stock appraisal action against the bank. They were represented by two law firms, Law Offices of Frederic F. Brace, Jr. (Brace), and Gromer, Wittenstrom & Meyer . Brace was to try the case and GW&M was to act as liaison, channelling information between the minority shareholders and Brace.

The bank filed a counterclaim against six of the shareholders who were also former officers or directors of the bank. Neither law firm representing the shareholders filed an answer to the counterclaim and a default judgment was entered against the counterdefendant shareholders. Upon application of the shareholders (through new counsel), the trial court vacated the default on the counterclaim, providing, however, that they and/or their attorneys pay attorney fees to the bank in the amount of $16,571.50 in addition to $1,202.86 in costs.

In a later order the court allocated the total fee award between Brace and GW&M. GW&M filed a special and limited appearance. Brace, however, participated in the trial court proceedings. He now appeals, contending that the court lacked jurisdiction to assess fees against him because Brace was not a party to the action and had withdrawn as counsel at the time the fees were allocated. In addition, Brace claims that since the counterdefendants' designated agent was GW&M, which was the firm responsible for filing the answer to the counterclaim, the counterdefendants should be bound by the acts of that firm. Hence, Brace should not be held liable for the inaction of GW&M. *fn1

We affirm in part, vacate in part, and remand.

Background

In January of 1986 Brace agreed to represent the minority shareholders of the Suburban Bank of Bartlett, some of whom were former bank directors, in an action for the appraisal of their shares. He would handle the trial and GW&M would communicate with the clients, acting as liaison. The three name partners of GW&M, Earl Gromer, Clarence Wittenstrom, and Greg Meyer, all were shareholders of the bank. Gromer was also a former director of the bank.

On August 30, 1986, the bank filed a counterclaim against the six plaintiff shareholders who were former officers of the bank: Robert L. Andreasen, A.B. Bussmann, Earl Gromer, Andrew Ratkins, Andrew Gorski, and James Herbison. These individuals contacted Meyer about the litigation because they considered him to be the liaison between them and Brace.

When the counterclaim was filed, both Brace and GW&M received notice. Neither firm, however, answered the counterclaim even though they continued to represent the shareholders in the appraisal suit. According to an associate of Brace, he called Meyer about the matter and Meyer said that "separate counsel was necessary and that it would be Mark Hellner." Meyer also told Brace that he would contact the counterdefendants and Hellner about the counterclaim.

The counterdefendants denied ever receiving notice of the counterclaim, although GW&M claimed to have notified Earl Gromer.

On December 5, 1986, at a status hearing on the bank's motion to dismiss count I of the appraisal suit, counsel for the parties agreed to extend counterdefendants' time to answer the counterclaim. Brace's associate wrote to Meyer notifying him of the new date.

In early March 1987, Brace and GW&M received notice that the bank was moving for a default judgment on the counterclaim because no answer had been filed. Neither firm filed a response to the motion or requested leave to file an answer. According to Brace, he contacted Meyer, who told him that Mark Hellner would be representing the counterdefendants. Another associate of Brace reaffirmed with ...


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