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04/18/94 DEBBIE KANNEWURF AND MICHAEL KANNEWURF v.

April 18, 1994

DEBBIE KANNEWURF AND MICHAEL KANNEWURF, PLAINTIFFS-APPELLANTS,
v.
JAY D. JOHNS, DEFENDANT (LAW OFFICES OF NELSON, BEMENT, STUBBLEFIELD & RICH, INTERVENOR-APPELLEE).



Appeal from the Circuit Court of St. Clair County. No. 89-L-559. Honorable Patrick J. Fleming, Judge Presiding.

Lewis, Welch, Maag

The opinion of the court was delivered by: Lewis

PRESIDING JUSTICE LEWIS delivered the opinion of the court:

Plaintiffs, Debbie Kannewurf and Michael Kannewurf, appeal the trial court's award of attorney fees to the intervenor, the law firm of Nelson, Bement, Stubblefield & Rich, for its representation of plaintiffs in their personal injury action. Attorney Thomas C. Rich was the attorney handling plaintiffs' claim, and therefore, we will refer to Rich as the intervenor herein, rather than referring to the law firm. Although the parties present several subissues for review, the main issue of this appeal is whether an attorney representing a client under a contingent fee contract is entitled to a reasonable amount of compensation for his services before withdrawing, when the sole reason for the withdrawal is because of the client's refusal to allow the attorney to attempt to negotiate a settlement. For reasons we will more fully explain, we affirm the trial court's award of attorney fees.

The facts of this case are as follows: On June 29, 1989, Rich filed a complaint in negligence on behalf of plaintiff, Debbie Kannewurf, alleging that defendant, Jay D. Johns, had negligently driven into the rear of the Kannewurf vehicle, causing personal injury and property damage. On February 27, 1990, Rich filed a first amended complaint, adding a second count alleging loss of consortium by Michael Kannewurf, Debbie's husband. On October 22, 1991, Rich filed a motion to withdraw as plaintiffs' attorney, alleging that it had become "professionally impossible" to continue to represent plaintiffs and requesting that discovery be stayed for 60 days so that plaintiffs could find another attorney. On the same date, the trial court granted the motion to withdraw and stayed all discovery for 60 days.

On February 26, 1992, the plaintiffs and defendant Johns jointly filed a motion to adjudicate attorney's lien, alleging that the parties had settled the case for $120,000, with each party to bear its own costs and plaintiffs to satisfy all outstanding medical and legal liens. The motion also alleged that "on October 7, 1991, attorney[ ]Thomas C. Rich * * * filed their [sic ] Attorney's Lien, claiming a lien for one-third of $50,000 and costs of $2,356.23." The motion attached an October 7, 1991, letter from Rich to defense counsel as evidence of the attorney's lien.

On March 10, 1992, Rich filed a motion to award attorney fees, alleging that the parties had recently settled the case for $120,000 and that Rich was entitled to one-third of the $120,000 settlement. Attached to the motion was an affidavit signed by Rich, stating that he had personally worked between 250 and 300 hours on plaintiffs' case and further stating as follows:

"6. That in this case the plaintiffs were offered $50,000 to settle the case and in a lengthy and protracted meeting (2 1/2 hours) which took place between both plaintiffs and * * * Rich * * *, Attorney Rich advised plaintiffs that he believed that he could settle the case for $75,000 to $100,000 by further immediate negotiations with the defendant's attorney, and that if the plaintiffs were interested in accepting said amount plaintiff's attorney could get the case settled immediately but if they weren't interested in accepting that amount and wanted the entire policy of $300,000 then plaintiff's attorney would withdraw, assert his lien, and they could find new attorneys.

7. That plaintiffs asked for their file and indicated they did not want to accept $100,000, and began negotiating with the defense attorneys on their own and just after said meeting the defendant's attorney offered plaintiffs' [sic ] $100,000 to settle the case."

On April 21, 1992, the trial court conducted the first of our hearings on the question of what, if any, fees were due attorneys out of the settlement of the underlying personal injury case. On July 2, 1992, eight days before the second hearing, plaintiffs filed a motion for summary judgment, claiming:

"6. That it is uncontested that Movants withdrew from their representation of Plaintiffs because Plaintiffs refused to settle their claims upon the terms Movants recommended.

7. That under Illinois law, the aforesaid reason for Movants' withdrawal does not constitute justifiable cause for withdrawal by an attorney."

Basically, plaintiffs argued through their motion for summary judgment that Rich gave plaintiffs an ultimatum of settling the case or he would withdraw. Rich argued that he never gave plaintiffs an ultimatum but only asked for authority to make a settlement demand of less than $300,000. The trial court found that the questions of whether the contingent fee contract was terminated and, if so, by whom and for what reasons, were questions of fact, and accordingly, the court denied plaintiffs' motion for summary judgment.

In summary, the testimony and other evidence adduced at all four of the hearings demonstrates that the parties had different views of how Rich came to withdraw from the case. Throughout the hearings, Rich maintained that he never issued plaintiffs an ultimatum to settle the case for a particular dollar amount. He insisted that plaintiffs had initially made a settlement demand of $300,000, which was defendant's insurance policy limit, and that they had never allowed him to negotiate for a settlement of less than $300,000, even though defense counsel had raised its offer of settlement from $25,000 initially to $50,000, the parties had tried to mediate a settlement, and Rich had advised plaintiffs by a letter dated October 7, 1991, that, in his opinion, the case was worth between $75,000 and $100,000. Rich claimed that he told plaintiffs that there was a strong possibility that they would obtain a verdict of zero damages if they took the case to trial, because Mrs. Kannewurf did not seek treatment for her injuries until several months after the ...


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