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09/30/94 F.H. PRINCE & CO. v. TOWERS FINANCIAL

APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION


September 30, 1994

F.H. PRINCE & CO., INC., A CORPORATION, PLAINTIFF-APPELLEE,
v.
TOWERS FINANCIAL CORPORATION, A CORPORATION, DEFENDANT-APPELLANT.

APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE IRVING R. NORMAN, JUDGE PRESIDING.

Gordon, Murray, McNULTY

The opinion of the court was delivered by: Gordon

JUSTICE GORDON delivered the opinion of the court:

F. H. Prince and Co., Inc. (hereinafter referred to as Prince) filed a complaint against Towers Financial Corporation (hereinafter referred to as Towers) alleging breach of contract. The contractual terms were contained in a settlement agreement, promissory note and guaranty. The trial court struck Towers first affirmative defense and counterclaim and dismissed with prejudice Towers' second affirmative defense. Towers filed an amended verified answer and counterclaim, and Prince moved to dismiss that pleading. At the hearing, Towers sought leave to file a second amended answer and counterclaim. The trial court proceeded to hear argument on the motion to dismiss the first amended answer and counterclaim and granted the motion to dismiss. The court also denied Towers' motion for leave to file its second amended verified affirmative defense and counterclaim. Towers filed a motion to reconsider which was denied, and the case proceeded to jury trial.

At trial, the court directed a verdict on the amount of principal due Prince under the promissory note and guaranty and denied Towers' request to have the jury determine the issue of attorneys' fees and costs. The jury returned a verdict on Prince's claim for interest on the principal; and judgment was entered on February 6, 1991 for Prince in the amount of $767,986.86 representing the principal and interest. On February 25, 1991, Prince filed a petition for attorneys' fees and costs for the period through February 13, 1991, the last day of trial, and amended the petition to include additional fees and costs through April 4, 1991. A second judgment was entered for Prince on April 4, 1991 in the amount of $60,967.39 for attorneys' fees and costs. Also on that date, Towers filed a post-trial motion which was heard and denied on May 8, 1991.

On May 9, 1991 Prince filed a second petition for fees for the period through May 8, 1991. Hearing on this matter was set for May 13, 1991; but on that date, Towers filed a notice of appeal from various orders and judgments entered through May 8, 1991. On May 31, 1991, after submission of briefs and argument, the trial court held that it had jurisdiction to hear Prince's May 9, 1991 petition for fees and costs and, on June 28, 1991, entered judgment in the additional amount of $18,519.56. Towers filed a second notice of appeal from the court's May 31, 1991 order and the June 28, 1991 judgment. By order of this court, the appeals were consolidated.

On appeal, Towers argues that the trial court erred in dismissing its amended affirmative defense and counterclaim and in refusing to permit the jury to determine attorneys' fees and expenses. Towers also argues that the trial court lost jurisdiction to rule on Prince's supplemental petition for fees filed on May 9, 1991 because that petition was not timely filed and because Towers had filed its notice of appeal on the day that petition was scheduled to be heard.

Prince has filed a motion in this court to dismiss Towers' first notice of appeal filed on May 13, 1991. We have taken this motion with the case and must address that issue first. In order to do so, some background is necessary on the basis for the complaint filed by Prince against Towers.

In 1988, Prince settled a lawsuit and bankruptcy claim against United Fire Insurance Company (hereinafter referred to as United Fire), a Towers' subsidiary, for $1.2 million to be paid in installments plus interest. Towers guarantied all payments owed by United Fire to Prince in accordance with the terms of the settlement agreement, promissory note and guaranty. The settlement agreement required the payment of six installments totalling $600,000; and the promissory note required additional quarterly payments totalling $600,000 plus interest. Thereafter, United Fire paid Prince the first three installments totalling $350,000; and Towers paid the remaining $250,000 under the settlement agreement. No payments were made in accordance with the terms of the promissory note, and Prince instituted the instant action.

Paragraph 5 of the settlement agreement provided in relevant part:

"If at any time or times hereafter Prince proceeds with a lawsuit or takes any other action to enforce this Settlement Agreement, then UFIC [United Fire] and Towers agree to pay on demand all reasonable costs, fees and expenses incurred by Prince in any manner or way with respect to the foregoing. Such costs, fees and expenses include but are not limited to: (i) attorneys' fees, costs and expenses; * * * (iii) court costs and expenses; (iv) court reporter fees, costs and expenses; (v) long distance telephone charges; (vi) telegram or telecopy charges; (vii) expenses for travel * * *." (Emphasis added.)

Paragraph 7 of the guaranty provided in relevant part:

"If at any time or times hereafter Prince: (a) employs counsel for advice or other representation, (i) to represent Prince in any litigation * * * relating to this Guaranty * * * and/or (ii) to enforce any rights of Prince against Guarantor * * * and/or (b) attempts to or enforces any of Prince's rights or remedies against Guarantor or UFIC, the reasonable costs, fees and expenses incurred by Prince in any manner or way with respect to the foregoing shall be part of the Guarantor's Liabilities, payable by Guarantor to Prince, on demand. Without limiting the generality of the foregoing, such costs, fees and expenses include: (i) attorneys' fees, costs and expenses; * * * (iii) court costs and expenses; (iv) court reporter fees, costs and expenses; (v) long distance telephone charges; (vi) telegram or telecopy charges; * * *." (Emphasis added.)

The promissory note, executed simultaneously with the settlement agreement and guaranty, incorporated by reference all the terms of the agreement and guaranty and repeated the language quoted above relating to Prince's rights and remedies against Towers and United Fire.

Prince's complaint alleged that Towers had breached the terms of the settlement agreement, promissory note and guaranty and sought the entry of judgment against Towers in the amount of $600,000 plus interest, at the rate defined in the promissory note, attorneys' fees and costs. As stated above, Prince prevailed on the merits of its complaint and obtained judgments for the principal and interest and for certain attorneys' fees and costs.

The dates that are relevant to the issue of jurisdiction are as follows:

2/6/91 - Judgment entered for Prince in the amount of $767,986.86 (principal and interest)

2/25/91 - Prince files petition for fees and costs (initially fees and costs incurred through trial; amended to include period of 2/14/91 to 3/21/91)

4/4/91 - Judgment entered for Prince for $60,967.39 for attorneys' fees and costs

4/4/91 - Towers files post-trial motion

5/8/91 - Order denying Towers' post-trial motion

5/9/91 - Prince files second petition for fees and costs (incurred through 5/8/91) (Hearing set for 5/13/91)

5/13/91 - Towers files first notice of appeal pursuant to Supreme Court Rule 303

5/13/91 - Hearing on Prince's second petition for fees and costs (jurisdictional argument raised)

5/31/91 - Trial court finds jurisdiction and orders briefs on reasonableness of fees and costs

6/28/91 - Judgment entered for Prince for fees and costs in the amount of $18,519.56

7/1/91 - Towers files second notice of appeal pursuant to Supreme Court Rule 303

Every final judgment in a civil case is appealable pursuant to Supreme Court Rule 301 (134 Ill. 2d R. 301); *fn1 and jurisdiction is vested in the appellate court to hear the appeal of that final judgment upon the filing of a notice of appeal. (E.g., Application of County Treasurer (1990), 208 Ill. App. 3d 561, 567 N.E.2d 486, 153 Ill. Dec. 528; Danaher v. Knightsbridge Co. (1978), 56 Ill. App. 3d 977, 372 N.E.2d 862, 14 Ill. Dec. 583.) "A final judgment is one which fixes absolutely and finally the rights of the parties in the lawsuit; it is final if it determines the litigation on the merits so that, if affirmed, the only thing remaining is to proceed with the execution of the judgment." Nelson v. United Airlines, Inc. (1993), 243 Ill. App. 3d 795, 799, 612 N.E.2d 980, 983, 184 Ill. Dec. 104.

The time for filing the notice of appeal is specified in Supreme Court Rule 303(a)(1) (134 Ill. 2d R. 303(a)(1)). That rule provides in relevant part:

"Except as provided * * * below, the notice of appeal must be filed with the clerk of the circuit court within 30 days after the entry of the final judgment appealed from, or, if a timely post-trial motion directed against the judgment is filed, whether in a jury or a nonjury case, within 30 days after the entry of the order disposing of the last pending post-trial motion."

For purposes of Supreme Court Rule 303, an order or judgment is final if it terminates the litigation between the parties on the merits of the cause or disposes of the rights of the parties either upon the entire controversy or upon some definite part thereof. E.g., Mars v. Priester (1990), 205 Ill. App. 3d 1060; 563 N.E.2d 977, 150 Ill. Dec. 850; Hernandez v. Fahner (1985), 135 Ill. App. 3d 372; 481 N.E.2d 1004, 90 Ill. Dec. 204.

When a final judgment or order does not dispose of all matters presented to the court, Supreme Court Rule 304(a) governs. That rule states:

"If multiple parties or multiple claims for relief are involved in an action, an appeal may be taken from a final judgment as to one or more but fewer than all of the parties or claims only if the trial court has made an express written finding that there is no just reason for delaying enforcement or appeal. * * * In the absence of such a finding, any judgment that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not enforceable or appealable and is subject to revision at any time before the entry of a judgment adjudicating all the claims, rights, and liabilities of all the parties." (134 Ill. 2d R. 304(a).) *fn2

A "claim" under the terms of Supreme Court Rule 304 has been defined as "any right, liability or matter raised in an action." ( Marsh v. Evangelical Covenant Church (1990), 138 Ill. 2d 458, 465, 563 N.E.2d 459, 463, 150 Ill. Dec. 572.) Marsh further held that "if an order does not resolve every right, liability or matter raised, it must contain an express finding that there is no just reason for delaying an appeal. Otherwise, the order is not appealable." 138 Ill. 2d at 465, 563 N.E.2d at 463.

A request for attorneys' fees is a claim within the meaning of Supreme Court Rule 304(a). This is so whether the fees are sought pursuant to statute, such as the entry of sanctions for false pleadings (Marsh v. Evangelical Covenant Church (Ill. Rev. Stat. 1987, ch. 110A, par. 2-611 now embodied in Supreme Court Rule 137)) or pursuant to a contract provision ( Mars v. Priester (1990), 205 Ill. App. 3d 1060, 563 N.E.2d 977, 150 Ill. Dec. 850). ( Northern Trust Co. v. Upjohn Co. (1991), 213 Ill. App. 3d 390, 572 N.E.2d 1030, 157 Ill. Dec. 566.) Although it may be filed after entry of judgment, a claim for attorneys' fees is not a post-trial motion within sections 2-1202 and 2-1203 of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, pars. 2-1202, 2-1203 now codified at 735 ILCS 5/2-1202, 5/2-1203 (West 1992)) nor, even if viewed as a motion to modify the judgment, is it a post-trial motion "directed against the judgment" within the meaning of Supreme Court Rule 303(a). Marsh v. Evangelical Covenant Church; Servio v. Paul Roberts Auto Sales, Inc. (1991), 211 Ill. App. 3d 751, 570 N.E.2d 662. *fn3, 156 Ill. Dec. 186

Consequently, if a trial court has jurisdiction to hear a claim for fees, any other judgment entered in the case before the claim for fees is ruled upon is or becomes nonfinal and nonappealable when the claim for fees is made, unless the prior judgment contains the language set forth in Supreme Court Rule 304(a), that there is no just reason to delay enforcement or appeal. (Northern Trust Co. v. Upjohn Co.) Thus, any notice of appeal filed before or after the filing of a timely claim for fees is premature under Supreme Court Rule 301 while the claim for fees remains pending; and the appeal must be dismissed unless the otherwise final order being appealed from satisfies the requirements of Supreme Court Rule 304(a). See, e.g., Marsh v. Evangelical Covenant Church (notice of appeal filed after claim for statutory fees); Pines v. Pines (1994), Ill. App. 3d , 635 N.E.2d 986 (notice of appeal filed before claim for statutory fees); Rago Machine Products, Inc. v. Shields Technologies, Inc.(1992), 233 Ill. App. 3d 140, 598 N.E.2d 332, 174 Ill. Dec. 135 (notice of appeal filed on same day as claim for statutory interest); Gaynor v. Walsh (1991), 219 Ill. App. 3d 996, 579 N.E.2d 1223, 162 Ill. Dec. 409 (notice of appeal filed before claim for statutory fees); American National Bank & Trust Co. (1991), 212 Ill. App. 3d 133, 569 N.E.2d 1377, 155 Ill. Dec. 766 (notice of appeal filed after claim for statutory fees); Servio v. Paul Roberts Auto Sales, Inc. (1991), 211 Ill. App. 3d 751, 570 N.E.2d 662, 156 Ill. Dec. 186 (notice of appeal filed before claim for statutory fees); SJS Investments, Ltd. v. LaSalle National Bank (1991), 210 Ill. App. 3d 228, 569 N.E.2d 49, 155 Ill. Dec. 49 (notice of appeal filed after claim for statutory fees); Cashmore v. Builders Square, Inc. (1990), 207 Ill. App. 3d 267, 565 N.E.2d 703, 152 Ill. Dec. 170 (notice of appeal filed after claim for statutory fees).

Applying the case law discussed above to the facts in the instant case, it is clear that Prince's request for attorneys' fees and costs was a "claim" within the meaning of Supreme Court Rule 304(a). Towers agrees that Prince's right to recover attorneys' fees and costs is a "claim." It also agrees that, because this claim was pending, the court's first judgment on February 6, 1991 awarding Prince principal and interest, was not a final judgment. Tower argues, however, that the claim for attorneys fees and costs was ruled upon with finality on April 4, 1991 when the trial court granted Prince fees and costs through March 21, 1991. Towers further argues that Prince was barred from bringing its supplemental petition for fees on May 9, 1991 because the court did not have jurisdiction to hear that petition since it was filed more than 30 days after the court's ruling on the last pending post-trial motion, which was May 8, 1991, and because the court was divested of jurisdiction over the case when Towers filed its notice of appeal on May 13, 1991.

It is our opinion that the April 4, 1991 judgment, which granted attorneys' fees and costs through March 21, 1991, was not a final judgment and that a final judgment for purposes of Supreme Court Rule 301 could not have been entered until Prince's claim for all attorneys' fees and costs incurred to enforce the settlement agreement, promissory note and guaranty had been adjudicated. This Conclusion is based on the fact that the primary cause of action in the instant case is a breach of contract action. The terms of the contract, which were derived from a settlement agreement, promissory note and guaranty quoted earlier in this opinion, provided that if a breach occurred by Towers, Prince would be entitled to "all reasonable costs, fees and expenses incurred" to enforce the agreement.

In Home State Bank/National Association v. Potokar (1993), 249 Ill. App. 3d 127, 617 N.E.2d 1302, 187 Ill. Dec. 581, the court stated that a request for attorney fees pursuant to a contract constitutes a claim within the meaning of Supreme Court Rule 304(a). Quoting from Mars v. Priester (1990), 205 Ill. App. 3d 1060, 1064, 563 N.E.2d 977, 150 Ill. Dec. 850, which in turn cited to Hernandez v. Fahner (1985), 135 Ill. App. 3d 372, 481 N.E.2d 1004, 90 Ill. Dec. 204, the court stated:

"'The attorney fees claim meets all of the criteria set out in Rule 304(a). It is a matter involved in the action; it is a possible right of the plaintiff and a possible liability for defendant. [Citations.] Because the request for attorney fees and costs is a "claim" under Rule 304(a), it is not an issue incidental to the merits of the case.'" 249 Ill. App. 3d at 137, 617 N.E.2d at 1309.

In Home State Bank/National Association, the plaintiff filed its complaint seeking recovery of amounts due under a promissory note executed by the defendant. The promissory note expressly provided that the defendant would pay reasonable attorneys' fees, costs and expenses incurred by the bank in the collection and enforcement of the note. The plaintiff bank requested an award of attorneys' fees and costs of suit in its complaint. The trial court entered judgment against the defendant on April 15, 1991 in the amount of $29,170.72 plus interest, costs and attorney fees. The April 15th order did not specify the amount of attorney fees and costs nor did it expressly reserve jurisdiction over the matter of fees and costs or schedule further proceedings relative to fees and costs. (Cf. Mars v. Priester (order set hearing date on issue of fees and costs) and Northern Trust Co. v. Upjohn Co. (1991), 213 Ill. App. 3d 390, 572 N.E.2d 1030, 157 Ill. Dec. 566 (order expressly retained jurisdiction to hear claim for fees).) On May 26, 1992, more than one year later, the plaintiff bank filed a petition seeking a determination of the allowable amount of interest, attorney fees and costs awarded by the court in its order of April 15, 1991. *fn4 The defendant moved to strike the petition arguing that the trial court lacked jurisdiction to consider the request for attorney fees since more than 30 days had passed since the entry of the judgment. The trial court struck the bank's request for attorney fees, and the defendant cross-appealed from this order.

On appeal, the appellate court reversed the trial court and held that the trial court did have jurisdiction to determine the amount of attorneys' fees to which the bank was entitled. Since the trial court had ruled previously that the plaintiff was entitled to attorneys' fees, and although it did not set forth the amount or expressly reserve jurisdiction to determine the amount, the order finding liability was given the effect of reserving jurisdiction to determine the amount of that liability. The court in Home State Bank stated:

"Indeed we believe that because the trial court awarded attorney fees and costs in its order of April 15, 1991, but failed to specify their amount, the order did not constitute a final judgment as to all claims in the case and was thus subject to modification prior to the entry of a final judgment. Citations.

Where a judgment disposes of fewer than all claims and lacks a finding of no just reason to delay enforcement or appeal pursuant to Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)), it is subject to revision before the entry of a judgment that does in fact adjudicate all claims and liabilities of the parties." 249 Ill. App. 3d at 136-37, 617 N.E.2d at 587.

While the facts in the instant case are not wholly identical to the facts in Home State Bank/National Association, we believe they warrant similar treatment. As in Home State Bank, the plaintiff in the case at bar filed a complaint seeking recovery of amounts due under a promissory note. The promissory note in both cases specifically provided that the defendant would pay reasonable attorneys' fees, costs and expenses incurred by the plaintiff in the collection and enforcement of the note. The complaints in both cases requested attorneys' fees and costs pursuant to the specified contractual provisions. The requests for fees and costs constituted claims within the meaning of Supreme Court Rule 304(a).

Moreover, as in Home State Bank/National Association, the trial court in the instant case held that Towers was liable under the contract for attorneys' fees and costs. In its judgment dated April 4, 1991, the trial court in the case at bar, quoted provisions in the settlement agreement and guaranty which stated that Towers agreed to pay "all reasonable costs, fees and expenses incurred by Prince" to enforce the settlement and guaranty. Unlike the order in Home State Bank, however, this order finding liability also included a partial judgment for fees and costs incurred by Prince up to March 21, 1991. *fn5 It cannot be said, however, that this judgment for fees and costs up to March 21, 1991 was a judgment for all fees and costs incurred by Prince to enforce the settlement agreement, promissory note and guaranty. Thus, as in Home State Bank, the judgment of April 4, 1991 was interlocutory and nonfinal. As a result, Towers could not file a notice of appeal pursuant to Supreme Court Rule 301; and the trial court retained jurisdiction to hear subsequent petitions filed by Prince seeking fees and costs that accrued after March 21, 1991 and, in fact, could hear subsequent petitions seeking modification of any prior judgment, absent a Rule 304(a) finding in the prior judgments.

What distinguishes the instant case and Home State Bank/National Association from many of the cases cited by Towers is a clear distinction that exists between a petition for fees as a sanction pursuant to Supreme Court Rule 137 and the former section 2-611 of the Code of Civil Procedure and a petition for fees pursuant to a breach of contract action wherein the contract entitles a party to all fees and costs when enforcement of the contract is pursued. While both claims are considered to be part of the underlying cause of action and must be brought as part of that action (e.g., Marsh v. Evangelical Covenant Church), the former claim is a separate and distinct substantive theory for recovery in the underlying action whereas the latter is a claim recoverable under the substantive theory presented in the underlying action. This distinction effects the trial court's jurisdiction to hear each type of claim. With respect to a claim for fees as a sanction, the claim does not exist until the petition for fees is filed. The petition must be filed while the court has jurisdiction over the underlying action; and that period lapses upon the later of: the date final judgment on the underlying action is entered; 30 days after entry of that final judgment (e.g., Marsh; American National Bank & Trust Co. v. Bus (1991), 212 Ill. App. 3d 133, 569 N.E.2d 1377, 155 Ill. Dec. 766; SJS Investments, Ltd. v. LaSalle National Bank (1991), 210 Ill. App. 3d 228, 569 N.E.2d 49, 155 Ill. Dec. 49; Cashmore v. Builders Square, Inc. (1990), 207 Ill. App. 3d 267, 565 N.E.2d 703, 152 Ill. Dec. 170;); or 30 days after ruling on the last pending post-trial motion ( Gaynor v. Walsh (1991), 219 Ill. App. 3d 996, 579 N.E.2d 1223, 162 Ill. Dec. 409). (Supreme Court Rule 137 (157 Ill. 2d R. 137).) *fn6 Until the petition for fees is filed, the trial court has no jurisdiction to hear the matter; and if final judgment is entered in the underlying action and the above-mentioned time periods have expired, the trial court will have lost jurisdiction forever over the claim for fees.

Unlike a claim for fees as a sanction, however, the filing of a petition for attorneys fees and costs pursuant to a breach of contract does not create the claim nor does it vest jurisdiction with the trial court to hear that claim. The claim is created when the complaint for breach of contract, seeking fees and costs as an element of damages, is filed. Once the complaint is filed, the trial court has jurisdiction over that claim; and once the court finds a breach and entitlement to attorneys's fees and costs as a result of that breach, the court retains jurisdiction to determine all amounts owed. Home State Bank/National Association v. Potokar.

Towers argues that such a broad interpretation of a claim would never bring finality to this case so that an appeal could be taken. While it is true that Towers would be precluded from bringing an appeal pursuant to Supreme Court Rule 301, based on the existence of a final judgment, Towers would not be without recourse in terms of seeking review of the other claims that have been brought to finality. Towers could seek to modify the language of the prior orders to include a Rule 304(a) certification on the claims that have been finally adjudicated. (See Pines v. Pines (1994), Ill. App. 3d , 635 N.E.2d 986 (a final judgment that becomes nonfinal upon the filing of a motion for sanctions must be "subsequently reactivated" with a Rule 304(a) finding after the motion for sanctions is filed; otherwise prior appeal is premature despite the existence of Rule 304(a) language which was contained erroneously in the order which was final when entered); cf. American National Bank and Trust Co. (1991), 212 Ill. App. 3d 133, 569 N.E.2d 1377, 155 Ill. Dec. 766 (if final order erroneously contained a Rule 304(a) finding but subsequently became nonfinal upon the filing of a motion for sanctions, notice of appeal filed before motion for sanctions was not premature since the order appealed from contained the required Rule 304(a) certification).) Such an appeal would vest jurisdiction in the appellate court, while the trial court would retain jurisdiction over matters not involved in that appeal. The filing of a Rule 304(a) appeal serves only to deprive the circuit court of jurisdiction to modify the judgment appealed from or rule on matters of substance which are the subject of the appeal. See American National Bank & Trust Co.

In addition to the foregoing Conclusion that Prince's claim for attorneys' fees and costs had not been brought to finality because that claim was an integral part of Prince's general claim under the settlement contracts, and our reliance on Home State Bank/National Association in support thereof, the jurisdiction of the trial court to hear petitions for fees and costs after April 4, 1991 can be supported by virtue of the trial court's affirmative retention of jurisdiction for that purpose. On May 8, after the court denied Towers' post-trial motion, Discussion was had as to the amount of bond to set. Prince asked that the bond be set at an amount to include additional attorneys' fees and costs that had accumulated from March 22, 1991 and which would continue to accumulate through the appellate process. Prince's attorney also asked that the order of May 8, 1991 denying Towers' post-trial motion include a statement that the issue of fees remained before the trial court. The Judge did not specifically rule on the request to include this language in its order of May 8, 1991 but, instead, told the attorney to bring another petition; and the attorney responded that he would.

Although the court's written order of May 8, 1991 did not include an express reservation of jurisdiction to rule on attorneys' fees and costs (see Northern Trust Co. v. Upjohn Co. (1991), 213 Ill. App. 3d 390, 397, 572 N.E.2d 1030, 1034, 157 Ill. Dec. 566 ("trial court's retention of jurisdiction [in the order] to hear such a claim makes any other judgment in the case nonfinal and nonappealable unless the language set forth in Rule 304(a) * * * has been inserted")), such a reservation is implied from the court's oral pronouncements. *fn7 Further support for the court's retention of jurisdiction over future claims for fees was the trial court's written order of May 31, 1991 which stated:

"While the April 4, 1991 Memorandum Opinion does not expressly state that the trial court retained jurisdiction to hear and rule upon subsequent attorneys' fees and expenses [sic] petitions, this Court did address this issue in its Memorandum Opinion and finds that plaintiff is entitled to recover all reasonable attorneys' fees and expenses including the pursuit of fees and expenses in the future. It was always the understanding of this Court that it retained jurisdiction to hear and rule upon future petitions for attorneys' fees and expenses and this Court so finds."

Finally, even assuming, as Towers contends, that Prince's claim for fees became final on April 4, 1991 and that the trial court could not retain jurisdiction over future claims for fees, and further assuming that the court's attempt to retain jurisdiction was insufficient absent an express reservation in the written order, the case of Gaynor v. Walsh (1991), 219 Ill. App. 3d 996, 579 N.E.2d 1223, 162 Ill. Dec. 409, is directly on point to extend the trial court's jurisdiction to hear the petition for fees filed on May 9, 1991 and to dismiss appeal no. 91-1562 as premature. In Gaynor, the plaintiff filed a complaint against the defendant alleging wrongful transfer of partnership assets. On September 12, 1990, the trial court granted defendant's motion for summary judgment. On September 20th, the plaintiff filed a post-trial motion to reconsider which was denied on November 15, 1990. None of the orders contained language pursuant to Supreme Court Rule 304(a). Plaintiff filed a notice of appeal on December 5, 1990. On December 10, 1990, within 30 days of the ruling on plaintiff's post-trial motion, the defendant filed a motion for attorneys' fees and costs pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137). A hearing was held on December 31, 1990; and the trial court granted defendant's motion and awarded attorneys' fees and costs on January 8, 1991.

The court in Gaynor held that the defendant's motion for Rule 137 sanctions filed on December 10 made plaintiff's December 5 notice of appeal premature since the November 15 order, from which the plaintiff was appealing, did not contain a Rule 304(a) finding. The court further held:

"We also disagree with plaintiff's contention that under the Marsh decision defendant had to file his motion for sanctions within 30 days of the issuance of the summary judgment order or alternatively before the trial court ruled on plaintiff's motion to reconsider. While section 2-611 at one time specified that motions had to be made within 30 days of judgment or dismissal (Ill. Rev. Stat. 1985, ch. 110, par. 2-611, repealed by Pub. Act. 86-1156, eff. August 10, 1990), Supreme Court Rule 137 (134 Ill. 2d R. 137) does not specify a time period for filing motions that request sanctions. And the court in Marsh specifically held that a Rule 137 motion is not a post-trial motion and is therefore not governed by Section 2-1203 of the Civil Practice Law (Ill. Rev. Stat. 1989, ch. 110, par. 2-1203 [now codified at 735 ILCS 5/2-1203 (West 1992)] (allowing a 30-day filing period after judgment for post-trial motions)).

We hold that a Rule 137 motion may be filed at any time during which the trial court has jurisdiction, which extends 30 days past the date the last order or judgment was issued in the case. Ill. Rev. Stat. 1989, ch. 110, par. 2-1301(e) [now codified at 735 ILCS 5/2-1301 (e) (West 1992)] (trial court retains jurisdiction to set aside any final order or judgment for 30 days after entry thereof." 219 Ill. App. 3d at 1002, 579 N.E.2d at 1226.] *fn8

In accordance with Gaynor v. Walsh, Prince's supplemental petition for fees would still have been a timely filed claim. The petition was filed on May 9, 1991, one day after the trial court's denial of Towers' post-trial motion, well within the 30-day period following that denial, and while the court retained jurisdiction to set aside any final judgment or order under section 2-1301(e) of the Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2-1301(e) now codified at 735 ILCS 5/2-1301 (e) (West 1992)). Furthermore, since the May 9, 1991 claim for attorneys' fees and costs was timely filed, there was no final judgment from which a Rule 301 appeal could have been taken.

For all of the reasons stated above, we find that the notice of appeal filed by Towers on May 13, 1991 was premature and did not vest jurisdiction in this court pursuant to Supreme Court Rule 301. A final judgment had not been rendered when that notice was filed because a claim for attorneys' fees and costs was pending before the trial court which that court had jurisdiction to hear. Also, a Rule 304(a) appeal could not have been taken since the orders and judgments Towers appealed from did not contain the Rule 304(a) certification. Accordingly, case no. 91-1562 must be dismissed, and we are barred from reviewing its merits.

We also must dismiss, sua sponte, case no. 91-2231 for many of the reasons discussed above. Although at the time the notice of appeal in that case was filed, which was July 1, 1991, the trial court had entered two additional orders, neither of these orders brought finality to Prince's breach of contract action. The judgment entered on June 28, 1991 gave Prince additional fees and costs that accrued from March 22, 1991 through May 8, 1991. However, Towers' liability to Prince for all reasonable attorneys' fees and costs continues to accrue, and in accordance with Home State Bank/National Association v. Potokar (1993), 249 Ill. App. 3d 127, 617 N.E.2d 1302, 187 Ill. Dec. 581, the trial court retains jurisdiction to hear that claim. See Dayan v. McDonald's Corp. (1984), 126 Ill. App. 3d 11, 466 N.E.2d 945, 81 Ill. Dec. 143 (trial court properly retained jurisdiction to award appellate fees and expenses based on section 2-611 award).

We realize that our holdings requiring dismissals of both appeals is rather harsh. The fact remains, however, that we are without jurisdiction to reach the merits of this case. To do otherwise would negate the importance of Supreme Court Rules 301, 303 and 304(a). We further wish to note, however, that if jurisdiction is subsequently perfected in this case by obtaining the trial court's belated certification pursuant to Supreme Court Rule 304(a), we would agree to take any subsequent appeal, timely filed, without additional briefs and argument with respect to the merits already presented to this court.

For the foregoing reasons, case nos. 91-1562 and 91-2231 are dismissed.

MURRAY, P. J. and McNULTY, J., concur.


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