Appeal from the Circuit Court of Cook County. HONORABLE Sophia Hall, Judge Presiding.
As Corrected January 17, 1996.
The Honorable Justice Cerda delivered the opinion of the court:* O'brien, J., Concurs. Zwick, J. Dissents.
The opinion of the court was delivered by: Cerda
The Honorable Justice CERDA delivered the opinion of the court:
This is a cross-appeal from a circuit court judgment awarding attorney fees to attorneys Leonard Handmacher and Seymour Schriar in a class action. The history of the underlying case is documented in Shortino v. Illinois Bell Telephone Co. (1990), 207 Ill. App. 3d 52, 565 N.E.2d 170, 151 Ill. Dec. 899.
Intervening plaintiffs, Business and Professional People For the Public Interest, the Midland Hotel Corporation, Eugene Pekow, Kathryn Tholin, and Ron Stevens, objected to the attorney fees as excessive and based on an erroneous legal standard. The only attorney fees at issue in this cross-appeal are those of attorneys Handmacher and Schriar. The objectors assert that (1) the trial court violated the legal standards established in Fiorito v. Jones (1978), 72 Ill. 2d 73, 377 N.E.2d 1019, 18 Ill. Dec. 383, by failing to determine the reasonableness of the hours claimed and the hourly rate requested by attorneys Handmacher and Schriar; (2) the trial court violated the legal standards established in Fiorito and Waters v. City of Chicago (1981), 95 Ill. App. 3d 919, 420 N.E.2d 599, 51 Ill. Dec. 185, by placing the burden of proof on the objectors; and (3) the trial court's fee award was not supported by the record. For the following reasons, we affirm the number of hours expended, but reverse the $350 hourly rate and remand this case for the trial court to conduct a hearing to determine a reasonable lower hourly rate.
Class counsel, including Handmacher and Schriar, filed a fee petition and legal memorandum requesting $7.5 million in attorney fees based on 25% of the common fund. Following several objections by intervening plaintiffs and other plaintiff class members, the trial court ordered class counsel to submit detailed documentation of tasks performed and hours expended. Ultimately, class counsel submitted an "Amended Statement of Tasks," which describes general tasks with each attorney's hours for that task. In addition, Handmacher and Schriar submitted affidavits stating the number of hours they expended.
Relying on Fiorito, 72 Ill. 2d 73, 377 N.E.2d 1019, 18 Ill. Dec. 383, the trial court rejected the percentage-based attorney fees award sought by class counsel and analyzed the fee request on a lodestar basis. The trial court awarded $1.5 million in fees to Handmacher and Schriar, which was based on a $350 hourly rate for all hours claimed with a multiplier of two.
The objectors' first issue on appeal was waived. The manner of Handmacher and Schriar's time records is not at issue because the objectors were given the opportunity to inspect the time records on which the summary was based, but declined to do so. They made no objection relating to the manner of the claimed hours. ( Burke v 12 Rothschild's Liquor Mart (1992), 148 Ill. 2d 429, 437, 593 N.E.2d 522, 170 Ill. Dec. 633; People v. Enoch (1988), 122 Ill. 2d 176, 188, 522 N.E.2d 1124, 119 Ill. Dec. 265; Tokar v. Crestwood Imports, Inc. (1988), 177 Ill. App. 3d 422, 434, 532 N.E.2d 382, 126 Ill. Dec. 697; Waters, 95 Ill. App. 3d at 925, 420 N.E.2d 599.
At the June 28, 1992, fee hearing, the objectors did not question the veracity of Handmacher and Schriar's time entries or affidavits. They merely challenged whether the hours claimed were duplicative of attorney Karasik's hours. The objectors declined to sample Handmacher and Schriar's entries even though they were allowed and encouraged to do so.
The objectors next argue that the number of hours claimed by Handmacher and Schriar for specific tasks are excessive and the trial court improperly placed the burden of proving reasonableness on the objectors rather than on those requesting the fees. That issue is also waived.
Finally, the objectors argue that the trial court awarded the $350 per hour fees based on the lack of evidence from the objectors rather than on a finding that the fee was reasonable. The objectors contend that they objected to the $350 per hour across-the-board fee as being unreasonable because it violates Fiorito's requirement that the hourly rate must reflect the nature of the tasks performed. The objectors indicate that Handmacher and Schriar presented no evidence of the reasonableness of the $350 per hour fee nor did they show that attorneys of similar experience, skill, and qualification customarily charge $350 per hour for such services, which included Shephardizing citations, doing basic factual and legal research, filing and serving notices of depositions, and conducting basic discovery. The objectors argue that the typical class action case involves a litigation team of lawyers with different levels of experience, who are compensated at different hourly rates that are consistent with their experience and regular rates. As a result, the objectors conclude that different hourly rates should have been assigned to different tasks or a lower blended across-the-board rate should have been awarded to reflect the variety of tasks performed. We agree.
As to the reasonableness of the $350 hourly fee, the trial court cited the affidavits filed by Handmacher and Schriar testifying that they regularly charge $350 an hour. The court concluded as follows:
"Considering the experience of counsel as presented in the affidavits, the Court has no evidentiary basis upon which to reduce the requested hourly rate for ...