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09/07/89 In Re Estate of Phillip Edward Callahan

September 7, 1989



(Deborah Oughton, Guardian, Plaintiff-Appellant, v.

John C. Parkhurst, Claimant-Appellee)

544 N.E.2d 112, 188 Ill. App. 3d 323, 135 Ill. Dec. 755 1989.IL.1392

Appeal from the Circuit Court of Peoria County; the Hon. William J. Voelker, Judge, presiding.


JUSTICE SCOTT delivered the opinion of the court. HEIPLE and STOUDER, JJ., concur.


The matter at issue in this appeal involves the measure of damages for a discharged attorney, and when a cause of action for those damages accrues to the attorney so discharged. We believe it is a matter of first impression for Illinois courts, and to fully understand the issue, a brief recitation of the factual background in which it arises is helpful.

On May 27, 1985, Phillip Callahan was injured in a highway accident and left totally disabled. Deborah Oughton, Phillip's wife, was appointed guardian on behalf of Phillip, a disabled adult.

On May 29, 1985, Mrs. Oughton entered into a contingent fee contract with the law firm of Bartley, Parkhurst, Hession and Schroeder, to represent her in all matters arising from her husband's accident. Pursuant to the contract, the attorney fees to be paid were to be 25% of any amount recovered for the ward by way of suit, settlement or in any other manner. The claimant in the instant action, John C. Parkhurst, was the attorney principally responsible for the representation.

On August 11, 1986, Mr. Parkhurst and his firm were discharged, by letter, as attorneys for the guardian and her ward. In August of that same year, the law firm of Corboy and Demetrio, P.C., formally replaced the Parkhurst law firm, and later that same month, the Parkhurst law firm filed this action as a claim for attorney fees. Subsequently, the Parkhurst law firm's cause of action was assigned to John C. Parkhurst, individually.

This action for legal fees proceeded to trial before the underlying action arising from the automobile accident was adjudicated or settled. In the trial, the circuit court of Peoria County heard evidence that the claimant law firm rendered legal services to the guardian and her ward for more than a year. The Peoria County court determined that based upon the testimony, the claimant was entitled to $36,000 for legal services rendered, which was held to be presently due from the assets of the guardianship estate. The court further retained jurisdiction of the claimant's action to determine any further fee due from any future recovery by the employer of Phillip Callahan through its workers' compensation insurance carrier.

The guardian and her ward appealed the circuit court decision seeking a reversal and an accompanying direction to delay further action on the issue of attorney fees until the occurrence of the contingency in the original fee contract. In the alternative, the guardian and her ward assert that the fees established by the circuit court were not supported by the evidence. Finally, the appellants urge that it was error to reserve jurisdiction over the attorney fees owing the claimant as a result of the workers' compensation matter.

The briefs of both parties and our own review of the case law establish Rhoades v. Norfolk & Western Ry. Co. (1979), 78 Ill. 2d 217, 399 N.E.2d 969, as the leading case in Illinois governing the issue of fees for discharged attorneys. In that case, William D. Rhoades sustained an injury, while in the employ of the Norfolk and Western Railway Company. He considered filing suit against the railroad, and to that end he telephoned the law firm of Chapman and Chapman. An investigator associated with the law firm visited Mr. Rhoades at his home and, after some Discussion, a retainer contract was signed authorizing the Chapman law firm to represent Rhoades for a 25% contingent fee. The next day, after a change of mind, Mr. Rhoades again telephoned the Chapman firm with instructions to not proceed with a lawsuit. Despite the client's instructions, suit was filed along with a declaration of lien for attorney fees. When no explanation of this unauthorized lawsuit was forthcoming, Mr. Rhoades dismissed the Chapman firm as his attorney. Subsequently, the lawsuit, but not the lien claim, was dismissed, and Rhoades settled his claim against the railroad for $15,000. The adjudication of the lien ...

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