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09/26/88 In Re Marriage of Donald W. Kosterka

September 26, 1988

IN RE MARRIAGE OF DONALD W. KOSTERKA, PETITIONER, AND EDITH


APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

H. KOSTERKA, Respondent-Appellant (Robert A. Chapski,

Ltd., Petitioner-Appellee; David I. Grund,

Respondent-Appellant)

529 N.E.2d 12, 174 Ill. App. 3d 954, 124 Ill. Dec. 295 1988.IL.1447

Appeal from the Circuit Court of Kane County; the Hon. Michael F. O'Brien, Judge, presiding.

APPELLATE Judges:

JUSTICE WOODWARD delivered the opinion of the court. LINDBERG, P.J., concurs. JUSTICE UNVERZAGT, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WOODWARD

On June 22, 1982, Donald Kosterka (Donald), filed his petition for dissolution of marriage in the circuit court for the Sixteenth Judicial Circuit, Kane County, Illinois. On August 25, 1982, Edith Kosterka (Edith), represented by Schiller, DuCanto, and Fleck, Limited (Schiller), filed her petition for legal separation in the circuit court of Cook County, Illinois. The cases were subsequently consolidated in Kane County, Illinois.

On or about June 25, 1982, Edith retained Schiller to represent her in her marital proceedings against her husband. In or about June 1982, Edith gave Schiller the name of Robert Chapski (Chapski) as a lawyer who handled matrimonial matters in Geneva, Illinois. Edith did not know Chapski personally but had gotten his name from a friend of hers. Schiller retained Chapski as local (Kane County) counsel and forwarded to him a retainer fee in the amount of $500.

No written agreement was entered into by Chapski and Schiller, nor was any letter sent by Chapski to Schiller outlining the terms of Chapski's engagement or his hourly rate. No written agreement was entered into between Chapski and Edith, nor was any letter sent by Chapski to Edith outlining the terms of Chapski's engagement or his hourly rate. No billing was ever sent by Chapski to either Edith or Schiller during the course of these proceedings.

On September 26, 1984, David I. Grund (Grund) entered his appearance for Edith, and Schiller withdrew its appearance on behalf of Edith. On that same day, grounds for dissolution of marriage were proved up by Donald. On October 16, 1984, Schiller filed its petition for attorney fees under section 508 of the Illinois Marriage and Dissolution of Marriage Act (Act) (Ill. Rev. Stat. 1985, ch. 40, par. 508). This petition contained no fees for Chapski. Schiller subsequently received approximately $17,000 in fees. None of this amount was sent to Chapski in payment for services he had rendered up to that point in the litigation. On December 4, 1984, the parties executed a written settlement agreement, settling the questions of property division, maintenance, and other issues existing between them. On December 20, 1984, a judgment of dissolution of marriage, incorporating the written settlement agreement, was entered by the court. Included in the settlement agreement was the provision that Donald would pay to Grund, as attorney for Edith, $47,000 in attorney fees. In this agreement, no mention was made of Chapski or of fees payable to him.

On July 24, 1985, Chapski filed a three-count lawsuit against Grund for attorney fees allegedly owed to Chapski by Grund as a result of the Kosterka divorce. The complaint was based on theories of oral contract, conversion, and a third-party beneficiary theory. On February 11, 1986, Chapski filed his petition in the divorce proceedings for attorney fees setting forth his hours and his services allegedly rendered. The petition listed 153 total hours of work performed in Edith's behalf. He requested $20,289.95 in fees and costs. On September 5, 1986, Chapski's section 508 petition for attorney fees against Edith and Donald was consolidated with Chapski's lawsuit against Grund. Grund filed his motion to dismiss Chapski's petition arguing, among other things, that Chapski was employed by Grund as successor to the law firm of Schiller and, therefore, had no claim against Edith and Donald for attorney fees under section 508 of the Act. The court denied Grund's motion to dismiss Chapski's petition for attorney fees.

On September 11 and 14, 1987, a hearing was held on Chapski's consolidated section 508 petition and his complaint at law. At the end of Chapski's case in chief, the court granted Grund's motion for a directed finding against Chapski on Chapski's complaint at law against Grund.

Also, the court found that some of Chapski's time was unnecessary, duplicative, or uncorroborated. As a result, the court reduced his fees from $20,289.95 to $14,929.95. Also at this time, Grund stated to the court that he would indemnify Edith for Chapski's fees and costs. As her indemnitor, Grund appealed the trial court's decision. Therefore, Grund is the actual party at interest in this matter, not Edith.

On appeal Grund raises the following issues: (1) petitioner Chapski had no standing to recover attorney fees against Edith or Donald; (2) the trial court's allowance for $14,929.95 was against the manifest weight of the evidence and an abuse of discretion; and (3) the trial court erred in not disclosing the basis for its order.

Initially Grund argues that Chapski is without standing to pursue this action. Grund asserts that the evidence clearly shows that no independent attorney-client relationship existed between Chapski and Edith. In support of his argument, Grund cites the following evidence. Chapski never sent Edith a letter or an agreement outlining a fee arrangement with her. He never sent her a bill during his 2 1/2-year involvement in the case. Chapski admitted that he never had an agreement with Edith concerning his hourly fees. He also acknowledged that he never discussed with Edith who would pay his fees, i.e., Edith or Schiller.

Further, Grund points to Edith's testimony as proving no independent client-attorney relationship existed. Edith testified that she never received a bill from Chapski, that she never agreed to pay Chapski any money, and that she understood that Schiller would pay Chapski for his services.

Grund argues that the instant case is analogous to Bounougias v. Peters (1964), 49 Ill. App. 2d 138. In Bounougias, plaintiff retained defendant Peters, an attorney, to represent him in actions arising out of plaintiff's work-related injuries. Plaintiff and Peters executed two written contingency fee agreements. Peters then hired Phillips, another attorney, as cocounsel. After winning the injury cases, plaintiff sued both attorneys for wrongfully withholding excessive attorney fees.

The appellate court found that Phillips, as an attorney whose services were obtained by the attorney retained by the client, could not become a party to the contractual relationship between the client and his retained attorney as a matter of law. Thus, plaintiff could not sue Phillips for the return of excessive fees. Based upon Bounougias, Grund argues that Chapski's only cause of action is against attorney Schiller, who retained him, not against Edith.

Initially, Chapski argues that Grund failed to raise the issue of his standing in the trial court and, therefore, waived the issue on appeal. (Gentile v. Gentile (1980), 87 Ill. App. 3d 311.) We disagree. The issue of Chapski's standing was specifically raised both in Grund's motion to dismiss the disputed fee petition and at the hearing. Therefore, this issue has not been waived.

Chapski next argues that he was hired by Schiller, who was Edith's agent and that, by her subsequent conduct spanning over 2 1/2 years, she ratified the attorney-client relationship between them. Chapski asserted at trial that Edith called him constantly, and they often met to discuss the case. Chapski also ...


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