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06/26/96 PATRICIA T. KRANTZ v. KENNETH C. CHESSICK

June 26, 1996

PATRICIA T. KRANTZ, EXECUTOR OF THE WILL OF QUENTIN R. KRANTZ, AND JAY S. BLEECKER, PETITIONERS-APPELLEES AND CROSS-APPELLANTS,
v.
KENNETH C. CHESSICK, RESPONDENT-APPELLANT AND CROSS-APPELLEE.



Appeal from the Circuit Court of Cook County. 91 P 11481. Honorable Henry A. Budzinski, Judge Presiding.

As Corrected July 9, 1996. Released for Publication August 13, 1996.

The Honorable Justice Cerda delivered the opinion of the court: Tully, P.j., and Greiman, J., concur.

The opinion of the court was delivered by: Cerda

JUSTICE CERDA delivered the opinion of the court:

Respondent, Kenneth C. Chessick, appeals from a judgment order of the circuit court of Cook County finding in favor of petitioners, Patricia T. Krantz, executor of the will of Quentin R. Krantz, and Jay S. Bleecker, in a dispute over the amount of attorney fees owed to respondent. Petitioners cross-appeal. We affirm.

I. Facts

Quentin R. Krantz ("Krantz") and Bleecker hired respondent, an attorney, to prosecute their claims, and each executed a retainer contract, which stated in part:

"I agree to pay KENNETH C. CHESSICK for services to be rendered pursuant to this retainer and employment, a sum equal to thirty-three and one-third percent (33-1/3%) of any sum which may be received on my said claim and cause of action on trial in Court, or which I receive in settlement thereof *** together with all reasonable and necessary advances, costs and expenses, if any, paid or incurred by the law office."

Respondent represented Krantz and Bleecker, who were plaintiffs in a lawsuit in federal court. A jury awarded Krantz $160,000 ($60,000 were punitive damages) and awarded Bleecker $20,000 ($10,000 were punitive damages), but no judgment was entered. Respondent filed a motion seeking an award of costs and attorney fees for Bleecker pursuant to the federal civil rights law (42 U.S.C.A. ยง 1988 (West 1994)("section 1988")). The motion was never ruled upon.

The federal case was settled for $195,000. There was one settlement check for the entire amount, and the release form did not allocate the funds between Krantz and Bleecker. Krantz and Bleecker signed over the settlement check to respondent, who tendered a $71,532.50 check to Krantz ($73,668 minus $2,135.50 in unpaid costs) and a $19,531.50 check to Bleecker ($21,667 minus $2,135.50 in unpaid costs). Based on their belief that they were entitled to more settlement money, Krantz and Bleecker refused the checks, one of which was marked "Final Settlement Krantz" and the other "Final Settlement Bleecker." Respondent placed the funds in a trust account with interest paid to the Lawyers Trust Fund of Illinois, apparently pursuant to Rule of Professional Conduct 1.15(d) (134 Ill. 2d R. 1.15(d)).

Krantz died and his widow initiated proceedings in the probate court to recover his settlement proceeds from respondent. Bleecker intervened in the case to pursue his claim against respondent. The trial court made an interim order for respondent to pay to Krantz's estate and to Bleecker the amounts of the checks previously tendered by respondent.

Petitioners moved for summary judgment. Respondent swore to the following in an affidavit in opposition: In a settlement conference in the federal case, the judge indicated that he would reduce Krantz's punitive damages award to $40,000 and Bleecker's punitive damages award to $5,000, he would recommend a total $205,000 settlement in which Krantz would receive $120,000 (subject to the contingency agreement), Bleecker would receive $20,000 (not subject to the contingency agreement), and respondent would receive $65,000 in section 1988 attorney fees. Respondent discussed the judge's recommendation with Krantz and Bleecker, who agreed to the judge's recommended $205,000 settlement and allocation of the settlement, but the federal defendants would settle only for $195,000.

Respondent prepared a file memorandum that stated that Bleecker and Krantz agreed to settle for $195,000, with Bleecker, Krantz, and respondent each reducing their recovery by $3333.33 (one-third of the $10,000 difference between the $205,000 and the $195,000), and with the expenses to be divided equally by Bleecker and Krantz. According to respondent's calculations, ...


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