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08/27/97 WILLIAM T. DAVIES v. PAUL W. GRAUER

August 27, 1997

WILLIAM T. DAVIES, PLAINTIFF-APPELLANT,
v.
PAUL W. GRAUER, D/B/A PAUL W. GRAUER AND ASSOCIATES, ATTORNEYS AT LAW, DEFENDANT-APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. No. 95 L 11403. THE HONORABLE DAVID LICHTENSTEIN, JUDGE PRESIDING.

Released for Publication October 9, 1997.

Presiding Justice Cousins delivered the opinion of the court. Leavitt and Cahill, JJ., concur.

The opinion of the court was delivered by: Cousins

PRESIDING JUSTICE COUSINS delivered the opinion of the court:

Plaintiff, attorney William T. Davies (Davies), filed suit against defendant, attorney Paul W. Grauer (Grauer), seeking one-half of the attorney fees Grauer received in connection with two oral joint venture agreements between Davies and Grauer. Grauer moved for summary judgment pursuant to section 2-1005 of the Code of Civil Procedure (735 ILCS 5/2-1005 (West 1992)), on the ground that the oral joint venture agreements were unenforceable. Grauer argued that the two oral joint venture agreements violated Rule 2-107 of the Illinois Code of Professional Responsibility, entitled Division of Fees Among Lawyers." *fn1 The trial court granted Grauer's motion for summary judgment, from which Davies appeals.

We reverse and remand.

BACKGROUND

Davies is an attorney licensed to practice in the State of Illinois. As a sole practitioner, Davies' general practice includes divorce, real estate and criminal cases, with 20% of his practice devoted to personal injury matters. In 1985, Davies and Grauer entered into two oral joint venture agreements to represent Norman Rosser and John Metz in their respective personal injury suits.

The Rosser Case

In August of 1984, Norman Rosser (Rosser), a client of Davies for many years, contacted Davies regarding the death of Rosser's wife. On July 31, 1984, Evelyn Rosser was killed when she was struck by her own automobile. Davies consulted with Rosser about the possibility of a product liability suit. Davies informed Rosser that, if there was a case, Davies would represent him for a one-third contingent fee. Davies also informed Rosser that he would bring in another attorney with an engineering background to work on the case and that Davies and the other attorney would split the attorney fees from the one-third contingent fee. Prior to Grauer's involvement, Davies expended approximately 100 hours on the case and hired an engineer to investigate the cause of the accident.

On or about August 1, 1985, Davies spoke with Grauer about the case. Prior to that date, Davies had never referred a case to Grauer, nor had the two worked together as associates or partners in the same law firm. In his amended complaint, Davies alleged that he and Grauer entered into an oral joint venture agreement, subject to the client's approval. Davies and Grauer were to split the attorney fees equally, with Davies' contribution being the exploratory work he completed prior to Grauer's involvement in the case and the referral of the case and Grauer's contribution being the filing of the case and either settling or taking the matter to trial. In his deposition, Davies also alleged that he and Grauer agreed that Davies' name would appear on all documentation in the case. However, none of the pleadings filed included Davies as counsel of record. In his answer to Davies' amended complaint, Grauer denied the specifics of the agreement alleged by Davies. However, in his motion for summary judgment, Grauer admitted that, on or about August 1, 1985, Davies and Grauer entered into an oral joint venture agreement whereby Davies referred the Rosser case to Grauer to be handled on a contingent fee basis with the fee to be divided equally between Davies and Grauer. Grauer also admitted in his motion for summary judgment that he was to draft the written fee agreement to be signed by Rosser consenting to the referral and the division of fees. Rosser confirmed Grauer's admission by stating in his affidavit that "Davies told me that Grauer would make out the fee arrangement."

On August 27, 1985, Rosser and Grauer signed a contingent fee agreement whereby Rosser retained Grauer to represent him regarding the accident. The contingent fee agreement made no reference to Davies nor did it contain any reference to a division of fees between Davies and Grauer. On September 20, 1985, Davies sent Grauer a letter requesting acknowledgment of their joint venture agreement. Grauer never returned an acknowledgment of the agreement. In his deposition, when asked why he never asked Grauer about acknowledgement of the agreement Davies said, "It just never entered my mind that he would not honor the agreement."

Over the next eight years, Davies was kept informed of case developments. Davies also met with Rosser periodically to discuss the case. Davies called Rosser on or about June 1, 1993, to discuss the status of the case. During this conversation, Rosser informed Davies that the case had been settled "some time ago' for $953,000. Grauer received attorney fees in the amount of $317,666.68. On July 22, 1993, Rosser signed a letter drafted by Grauer and addressed to Davies. The letter included the statement, "I understand that you will pay attorney Bill Davies for any services that he has performed out of your attorney fees." On July 24, 1993, Grauer sent Davies a check for attorney fees in the amount of $27,600. Davies never negotiated the check. On March 23, 1995, Davies filed a first amended complaint against Grauer ...


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