APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION
529 N.E.2d 632, 174 Ill. App. 3d 1074, 124 Ill. Dec. 651 1988.IL.1334
Appeal from the Circuit Court of Cook County; the Hon. David J. Shields, Judge, presiding.
PRESIDING JUSTICE JIGANTI delivered the opinion of the court. JOHNSON and McMORROW, JJ., concur.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JIGANTI
The plaintiff, George D. Karcazes, appeals from an order of the trial court denying his petition for attorney fees as a sanction against the defendants, Dina Antoniou, Dimitrios Antoniou, Constantine Antoniou and other members of their family, pursuant to former section 2-611 of the Illinois Code of Civil Procedure *fn1 (Ill. Rev. Stat. 1985, ch. 110, par. 2-611). The petition was based upon allegedly untrue allegations and denials made by the defendants in their answer to a declaratory judgment action filed by Karcazes. The parties eventually submitted the subject matter of the declaratory judgment action to arbitration upon a stipulation of the issues. Following the arbitrators' award to Karcazes, Karcazes filed a section 2-611 petition seeking to recover the costs and attorney fees which he allegedly incurred during the arbitration proceedings in disproving the defendants' untrue pleadings. The trial court denied the petition, finding that Karcazes failed to show that the defendants' allegations and denials were made without reasonable cause and further finding that the parties had agreed to have the entire matter fully resolved through the arbitration process.
Karcazes has appealed, contending that the issue of untrue pleadings was not one of the specific issues submitted to arbitration and that the trial court's determination that the pleadings were made with reasonable cause was against the manifest weight of the evidence.
This litigation arose in November of 1979 when Karcazes, an attorney, filed a declaratory judgment action against the defendants seeking to recover fees in connection with his representation of the defendants in a will contest against the estate of Demos Tingos, the brother of defendant Dina Antoniou. In his complaint, Karcazes alleged, in part, that the defendants signed a retainer agreement on May 9, 1973, providing for a one-third contingency fee; that Karcazes filed a lawsuit to contest the will, a claim against the estate for $85,000 and conducted numerous citations to discover assets; that a settlement agreement was entered into on May 5, 1975, between all of the parties in interest; and that pursuant to the settlement Karcazes received certain specified stock certificates from the executor of the estate for the benefit of the defendants.
The defendants filed an answer containing general denials of the allegations stated above. The answer also raised certain affirmative defenses and stated a counterclaim against Karcazes. In the first affirmative defense, the defendants stated that because they spoke Greek and the retainer agreement was in English, they did not understand the document and Karcazes failed to explain it to them. The defendants' second affirmative defense was that Karcazes misrepresented the nature of the retainer agreement to them. A third affirmative defense stated that Karcazes was engaged in a conflict of interest in representing both Dina and Dimitrios Antoniou and their minor son Constantine Antoniou and that Karcazes failed to disclose the existence of this conflict of interest. Finally, the answer contained a counterclaim alleging that Karcazes had mishandled funds of the estate by failing to deposit them in an interest-bearing account.
Sometime after the date of the settlement agreement, certain stocks held by the estate of Demos Tingos appreciated significantly in value. This caused a dispute between Karcazes and the defendants as to what date should be used for computing the value of estate assets in determining any contingency fee owed to Karcazes.
The parties agreed in October of 1981 to submit the matter of Karcazes' fee to arbitration based upon the following stipulation of issues:
"(i) Whether the purported retainer agreement drafted by plaintiff, George D. Karcazes, and signed by the defendants, Dina and Dimitrios Antoniou, and Peter Tingos, individually and on behalf of others, is valid in light of the legal and factual circumstances surrounding its execution and in light of the legal and factual circumstances subsequent to its execution.
(ii) If the purported retainer agreement is invalid, whether Plaintiff, George D. Karcazes, is entitled to any fees and, if so, on what basis and in what amount.
(iii) If the purported retainer agreement is found to be valid, whether Plaintiff, George D. Karcazes, is entitled to recover a 'sum of money equal to one-third of any amount realized from said claims' or one-third of all assets ...