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03/29/89 Maria P. O'hara, v. Ahlgren

March 29, 1989

MARIA P. O'HARA, APPELLANT

v.

AHLGREN, BLUMENFELD AND KEMPSTER ET AL., APPELLEES



SUPREME COURT OF ILLINOIS

537 N.E.2d 730, 127 Ill. 2d 333, 130 Ill. Dec. 401 1989.IL.432

Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Albert S. Porter, Judge, presiding.

APPELLATE Judges:

JUSTICE MILLER delivered the opinion of the court. WARD and CALVO, JJ., took no part in the consideration or decision of this case.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE MILLER

Maria P. O'Hara, surviving spouse and sole beneficiary of the estate of deceased attorney Barratt O'Hara II, filed a breach of contract action in the chancery division of the circuit court of Cook County against the law firm of Ahlgren, Blumenfeld and Kempster and against two of its partners, Robert D. Ahlgren and Barry E. Blumenfeld. The complaint alleged that, pursuant to a contract between Mrs. O'Hara and the defendants, Mrs. O'Hara had transferred the goodwill associated with the name of her deceased husband's law practice to the defendants, and that the defendants had failed to compensate her for it according to the terms of their agreement. Mrs. O'Hara sought an accounting, damages, costs and attorney fees, injunctive relief, and termination of the contract. Following cross-motions for summary judgment, the trial court denied Mrs. O'Hara's motion and granted summary judgment for the defendants. Mrs. O'Hara appealed that part of the order that granted summary judgment for the defendants. The appellate court, with one Justice Dissenting, reversed the trial court, concluding that the contract at issue violated public policy and that neither party was entitled to relief. The appellate court then remanded the case to the trial court with directions to dismiss the complaint. (158 Ill. App. 3d 562.) We allowed Mrs. O'Hara's petition for leave to appeal from the appellate court's judgment (107 Ill. 2d R. 315).

Barratt O'Hara II (O'Hara) was a licensed attorney who practiced law in Chicago, primarily in the immigration and naturalization field, until his death on December 28, 1978. During his last illness, his wife contacted an unnamed attorney and asked him to assist her husband with certain active cases. The attorney agreed and proceeded to work on various active files up to and following O'Hara's death.

In March 1979, Mrs. O'Hara contacted defendant Ahlgren and asked him to take over the work then being performed by the other attorney. The defendant agreed, and, following his conversation with Mrs. O'Hara, drafted an agreement which he then mailed to her.

The agreement called for the merger of Mrs. O'Hara's deceased husband's law practice with the defendants' law firm. Under the terms of the contract, the defendants were given the right to purchase the furniture and furnishings of the O'Hara office (provided the parties could agree on a price) and the right to all current and former files and records of the practice. The defendants also received the exclusive right to use a specified telephone number and to use the name Barratt O'Hara on their stationery and office door.

In exchange, the contract provided that the defendants were to compensate Mrs. O'Hara by paying her one-third of the net income derived from the O'Hara practice prior to the physical merger of the two offices. Following the merger, Mrs. O'Hara was to receive 25% of the gross receipts attributable to the O'Hara practice for the first year, with her percentage of the receipts decreasing at the rate of 5% per year and then terminating at the end of the fifth year. Income derived from the O'Hara practice was defined as those fees received from cases involving Barratt O'Hara's past or current immigration clients and from cases involving future clients developed from past or current clients. Mrs. O'Hara was also to receive, at her request, an accounting of the sums due her for five years after the merger and, in any event, at least once a year. The final paragraph of the agreement stated, "It is expressly understood that Maria P. O'Hara is being compensated as aforementioned for the good will attributed to the law firm of Barratt O'Hara II." On March 19, 1979, the parties signed the agreement. It is uncontested that Mrs. O'Hara entered the contract without the advice of counsel and that the defendants were aware of that fact.

Sometime after entering into the agreement, Mrs. O'Hara signed a letter which was sent to former and current clients of her husband. The letter notified the clients of Barratt O'Hara's death and advised them that all files opened by O'Hara in the past 30 years had been referred to the defendants. The letter also informed the clients that the defendants were competent attorneys who were well known in the field of immigration law and assured the clients that pending matters would be handled promptly and carefully.

According to the defendants' accounting records, between March 1979 and January 1983, they collected fees totaling approximately $120,000 which were subject to the terms of the agreement. Of that amount, $11,500 was remitted to Mrs. O'Hara.

On September 15, 1982, Mrs. O'Hara filed a complaint in the circuit court of Cook County alleging in each of three counts that she had contracted to transfer the goodwill associated with her late husband's law practice to the defendants and that she had performed her part of the bargain. Mrs. O'Hara further alleged that the defendants had received substantial sums of money subject to the terms of the agreement but that, despite repeated requests to do so, the defendants had failed to account for the receipts or to pay her the sums due her. Mrs. O'Hara sought an accounting, actual and punitive damages, interest, costs and attorney fees, injunctive relief and termination of the contract.

The defendants answered by denying the allegations contained in the complaint and by raising an affirmative defense in which they claimed that Mrs. O'Hara lacked the capacity to transfer any goodwill associated with her husband's law practice and that the alleged contract was not supported by legal consideration. Mrs. O'Hara responded to the affirmative defense by asserting that the defendants should be ...


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