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04/11/94 STEFANICH v. ANDREA HOEFLICH

April 11, 1994

STEFANICH, MCGARRY, WOLS & OKREI, LTD., PLAINTIFF-APPELLANT,
v.
ANDREA HOEFLICH, DEFENDANT-APPELLEE. STEFANICH, MCGARRY, WOLS & OKREI, LTD., PLAINTIFF-APPELLEE, V. ANDREA HOEFLICH, DEFENDANT-APPELLANT.



Appeal from the Circuit Court of the 12th Judicial Circuit, Will County, Illinois. No. 92 LM 12420. Honorable Edwin Grabiec, Judge Presiding

Released for Publication May 19, 1994.

Present - Honorable Peg Breslin, Justice, Honorable Tobias Barry, Justice, Honorable Michael P. Mccuskey, Justice

The opinion of the court was delivered by: Mccuskey

JUSTICE McCUSKEY delivered the opinion of the court:

The plaintiff, Stefanich, McGarry, Wols & Okrei, Ltd. (the law firm) filed a complaint against the defendant, Andrea Hoeflich (Hoeflich), its former employee. The law firm was seeking an equitable portion of the attorney fees Hoeflich received after settling a lawsuit involving Rebecca Quasny, a former client of the law firm. The law firm appeals from the trial court's orders which granted summary judgment in favor of Hoeflich and denied the law firm's motion for leave to file a second amended complaint. Hoeflich has appealed from the trial court's order which denied her motion for sanctions against the law firm.

The law firm raises two issues on appeal: (1) whether the trial court erred when it granted Hoeflich's motion for summary judgment on the basis that Hoeflich was not the proper party-defendant in the law firm's action; and (2) whether, after summary judgment was granted in Hoeflich's favor, the law firm should have been allowed to file a second amended complaint.

The sole issue raised in Hoeflich's appeal is whether the trial court erred in denying her motion for sanctions pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137). She claims that sanctions are necessary because there was no legal basis for the law firm's action against her.

Following our careful review of the record, we affirm in part and reverse in part. We find the trial court properly granted summary judgment in Hoeflich's favor. However, we also find the law firm's proposed second amended complaint states a cause of action against Hoeflich for breach of an implied contract. As a result, we conclude the trial court should have allowed the law firm to file its second amended complaint. Accordingly, we reverse the trial court's order and remand the cause for further proceedings on the second amended complaint. Now we turn to Hoeflich's appeal. We disagree with her argument that the law firm had no legal basis for a cause of action against her. Thus, we affirm the trial court's order denying Hoeflich's motion for sanctions.

In June 1990, the law firm began representing Quasny on her personal injury claim against Edward Gorman. Hoeflich started working for the law firm as an associate on August 16, 1990. Hoeflichwas assigned the Quasny file and was supervised by one of the partners in the law firm. In December 1991, Gorman's insurance company offered to settle the claim for $24,000. Quasny rejected the insurance company's offer.

On January 1, 1992, Hoeflich left her position as an associate with the law firm and began her own law practice. At approximately the same time, Quasny notified the law firm that she was discharging them from further representation on her claim. Quasny later hired Hoeflich to handle the claim against Gorman. Quasny's case was subsequently settled with Gorman's insurance carrier, and a check for $30,000 was received by Hoeflich in April 1992. Hoeflich did not notify the law firm of the settlement and retained $10,000 as attorney fees.

When a partner in the law firm learned of the settlement, he contacted both Hoeflich and Quasny concerning the issue of attorney fees. On July 7, 1992, a partner of the law firm met with Quasny. She paid $299.48 for the costs the law firm incurred representing her. No agreement was reached concerning the attorney fees. At the meeting, the partner informed Quasny that the law firm would not sue her.

Thereafter, Hoeflich refused to pay the law firm any portion of the $10,000 in attorney fees. On October 1, 1992, the law firm filed a lawsuit against Hoeflich. The trial court later granted the law firm leave to file a first amended complaint. In this complaint, the law firm alleged that Hoeflich had actual knowledge of the law firm's claim for reasonable attorney fees. The law firm further alleged that Hoeflich's "retention of the full fee of $10,000 violates the fundamental principles of Justice, equity and good conscience." The law firm sought an award of reasonable attorney fees in the amount of $8,000. This sum represented one-third of the $24,000 settlement offer that Gorman's insurance carrier made while the law firm represented Quasny.

In response, Hoeflich filed a motion for summary judgment. She argued that the law firm had not perfected a statutory lien for attorney fees (see Ill. Rev. Stat. 1991, ch. 13, par. 14) and, therefore, its only remedy was an action for quantum meruit against Quasny. The law firm admitted it did not have a statutory lien for attorney fees. However, the law firm argued it had a cause of action against Hoeflich based upon unjust enrichment. The trial court disagreed with the law firm's arguments and granted Hoeflich's motion for summary judgment.

The law firm then filed a motion for leave to file a second amended complaint. The gist of this complaint was that Hoeflich acknowledged the law firm "was entitled to fees in the event arecovery was obtained by Quasny on the Gorman claim." In support of this allegation, the law firm attached a copy of a letter Hoeflich had written to one of ...


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