The opinion of the court was delivered by: Presiding Justice Garman
Intervenor-appellant Bettye D. Kelso, administrator of the estate of Thomas R. Kelso (Estate), appeals from a May 9, 1997, order of the circuit court of Champaign County. The trial court found that the Estate had neither a valid statutory attorney's lien (770 ILCS 5/1 (West 1996)) nor an equitable lien in the settlement proceeds in the matter of Lewsader v. Wal-Mart Stores, Inc., herein. The Estate has abandoned the argument that a valid statutory attorney's lien exists and now argues only that Kelso's agreement with the Lewsaders and his efforts on their behalf created an equitable lien on the settlement amount for which Wal- Mart Stores, Inc. (Wal-Mart), is liable. We reverse and remand to the trial court for further proceedings.
Plaintiff Ralph Lewsader was seriously injured on October 1, 1991, when he fell from a scaffold as he worked on the construction of Sam's Club Discount Store in Champaign, Illinois. On December 23, 1991, Lewsader and his wife, Victoria, retained attorney Thomas R. Kelso of the law firm of Beckett, Crewell, and Kelso to represent them in the personal injury matter. Under the terms of the attorney-client agreements signed by Kelso and the Lewsaders on December 23, 1991, the firm was to receive "33 1/3% of any amount recovered by settlement, with or without court proceedings, or by final judgment of any court." On September 20, 1993, Kelso filed a nine-count complaint on behalf of the Lewsaders in the circuit court of Champaign County naming the architect, general contractor, and Wal-Mart, the owner of the premises, as defendants. The contractor and Wal-Mart filed third-party complaints against Lewsader's employer for contribution.
During the pendency of this matter, the firm dissolved and Kelso formed a new firm, Kelso and Associates. A letter dated December 19, 1993, informed the trial court that Kelso and Associates then represented the Lewsaders. No new attorney-client agreement was executed. Kelso settled Ralph's workers' compensation claim against his employer, which was dismissed by stipulation of all parties on May 23, 1995, and received $20,000 in legal fees for his services. In February 1996, he settled the Lewsaders' claims with the general contractor for $300,000, for which his firm received $100,000 in fees. The trial court entered an order granting plaintiffs' petition for a good-faith finding, pursuant to the Illinois Joint Tortfeasor Contribution Act (740 ILCS 100/1 et seq. (West 1996)), over Wal-Mart's objections, on March 1, 1996. Kelso also conducted discovery and prepared the case for trial. The voluminous record discloses that Kelso prepared and filed many motions and supporting memoranda. He opposed the motion for summary judgment in favor of the architect that was granted on January 14, 1994. He filed multiple motions for partial summary judgment (August 11 and October 6, 1995, and September 4, 1996) on certain elements of the Structural Work Act (see Ill. Rev. Stat. 1991, ch. 48, par. 59.90 et seq. (740 ILCS 150/0.01 et seq. (West 1992))) claim. He engaged in extensive discovery, including taking depositions, and responded to defendants' discovery requests. In addition, on September 23, 1995, he filed a motion and memorandum seeking to bar Wal-Mart's expert witness for failure to comply with Supreme Court Rule 220 (134 Ill. 2d R. 220). He had repeated correspondence with opposing counsel regarding alleged discovery abuses and on September 11, 1995, filed a motion to compel and a motion for sanctions. He also filed multiple motions dealing with jury instructions, use of demonstrative exhibits, voluntary dismissal of certain counts, and other matters.
Due to the congested condition of the trial court calendar, the November 1995 trial date was postponed. As of March 1, 1996, Wal- Mart was the only remaining defendant. All work done by Kelso and his firm after that date related entirely to the pending litigation against Wal-Mart. After Wal-Mart became the sole remaining defendant, Kelso filed objections to the withdrawal of Wal-Mart's counsel and a third motion for sanctions on August 1, 1996; a motion for partial summary judgment on September 4, 1996; and successfully opposed Wal-Mart's September 11, 1996, motion to dismiss based upon the repeal of the Structural Work Act (740 ILCS 150.01 et seq. (West 1996)). However, the record is clear that much of the work done prior to that date related only to Wal-Mart. Kelso died on September 29, 1996. On October 8, 1996, the Lewsaders entered into another attorney-client agreement with the Kelso firm and, on October 9, 1996, a member of that firm responded to Wal-Mart's motion to continue the trial date from the November 1996 jury term to a later date. The Lewsaders then retained the law firm of Johnson, Frank, Frederick, and Walsh as counsel in this matter and, on October 10, 1996, Ralph informed the Kelso firm by letter that he was terminating their relationship with the firm. On October 22, 1996, the Kelso firm attempted to serve notice of an attorney's lien on Wal-Mart.
The trial was reset for May 1997, and a court-ordered settlement conference was held on April 23, 1997. A settlement was reached. Under the terms of the agreement, Liberty Mutual Insurance Company (Liberty Mutual), Wal-Mart's insurance carrier, was to pay the Lewsaders $300,000 in exchange for their complete release of all claims and dismissal of the action. On April 30, 1997, the Lewsaders filed a motion to bar the attorney's lien and, on May 8, 1997, the Estate filed a petition for leave to intervene and a petition to enforce the attorney's lien.
At the May 9, 1997, hearing, the Estate argued that Kelso was entitled to a portion of the proceeds of the settlement under two theories, a valid attorney's lien pursuant to statute (770 ILCS 5/1 (West 1996)) and an equitable lien. The trial court ruled against the Estate on both theories and ordered that Wal-Mart and Liberty Mutual "tender the settlement check in this case payable solely to Ralph Lewsader, Victoria Lewsader and the Law Offices of JOHNSON, FRANK, FREDERICK & WALSH." A settlement check in the amount of $300,000 was tendered by Liberty Mutual on May 15, 1997. MOTION TO DISMISS We first address the September 7, 1997, motion by Wal-Mart to dismiss it from these proceedings. Wal-Mart argues that it, through its insurance carrier, has fully complied with the valid trial court order of May 9, 1997, and that even if the Estate is successful in this appeal, Wal-Mart would not be liable for any amount awarded to the Estate. Wal-Mart also notes that the Estate did not seek a stay of the order pending this appeal.
In their brief, the Lewsaders offer support for this argument, stating that the entire matter is rendered moot by the disbursement of the settlement check. Citing the decision of our supreme court in In re Estate of Wellman, 174 Ill. 2d 335, 353, 673 N.E.2d 272, 280 (1996), they assert that, as a result of all settlement proceeds having been distributed, this court would be unable, in any event, to grant relief. Wellman, however, involved an adjudication of mental disability where the subject of the action died during the appeal. The issue became moot because the individual could not have been given any effective relief after his death. In this case, relief could be given, if it is found to be appropriate, by ordering payment by the proper party to the Estate.
In response to Wal-Mart's motion to dismiss, the Estate argues that Wal-Mart is a necessary party to this appeal because, if this court should reverse, Wal-Mart will be liable for the amount of the attorney's lien. Under this reasoning, Wal-Mart acted "at its own peril" when it disbursed the settlement funds while the order was still subject to appeal and, thus, continues to be liable if it acted in derogation of a valid attorney's lien. We note that Wal-Mart did not seek a stay of the order, nor did Wal-Mart pay the money to the court or post bond pending this appeal.
The Estate cites Process Color Plate Co. v. Chicago Urban Transportation District, 125 Ill. App. 3d 885, 890, 466 N.E.2d 1033, 1037 (1984), for the proposition that the lienee must "stand ready to pay the lawyer that portion of the proceeds which the client agreed to pay the lawyer." In that case, however, the petitioner attorney had properly served the defendant with notice of the lien as required by statute. So, too, in Bennett v. Chicago & Eastern Illinois R.R. Co., 327 Ill. App. 76, 63 N.E.2d 527 (1945), and Case v. Emerson-Brantingham Co., 269 Ill. 94, 109 N.E. 671 (1915), also cited by the Estate, the petitioner attorneys had served notice on the defendants under the terms of the attorney's lien law. The statutory lien argument failed at the trial court and is not made in this appeal.
The Estate also asserts that if this court finds an equitable lien exists, Wal-Mart, not the Lewsaders, will be liable for the amount of that lien. As noted above, however, all cases cited by the Estate involve statutory liens and, therefore, do not necessarily provide support for this proposition. On the other hand, Wal-Mart has cited no authority for its Conclusion that if this appeal is successful, Wal-Mart would not be required to pay any additional funds to satisfy the lien. Because Wal-Mart has not offered any support for concluding, at this stage, that it cannot be held liable as a matter of law, the motion to dismiss is denied.
We now turn to the issues of (1) whether, as a matter of law, the estate of a deceased attorney is precluded from asserting an equitable lien when the attorney died before settlement; (2) whether an equitable lien was created that entitles the Estate to a portion of a settlement reached after Kelso's death; and (3) if such a lien does exist, the amount to which the estate is entitled; and (4) whether a defendant that has already tendered the agreed settlement amount to the client is liable for payment.
I. AVAILABILITY OF EQUITABLE REMEDY
We note initially that a trial court has broad equitable power to grant relief when there is no adequate remedy at law. The exercise of these equitable powers "is a matter of sound judicial discretion controlled by established principles of equity and exercised upon a consideration of all the facts and circumstances of a particular case." Omni Partners v. Down, 246 Ill. App. 3d 57, 62, 614 N.E.2d 1342, 1346 (1993). Thus, the decision to grant or deny equitable relief is within the sound discretion of the trial court and will not be reversed by this court absent an abuse of that discretion. In this case, the Estate has no adequate remedy at law because Kelso did not comply with the terms of the statutory attorney's lien provision. 770 ILCS 5/1 (West 1996). There is no doubt that when the statutory remedy is unavailable, a trial court may use its equitable power to award fees to an attorney using equitable lien, quantum meruit, or other equitable device. The equitable lien has been employed in this manner both before (Cameron v. Boeger, 200 Ill. 84, 65 N.E. 690 (1902)) and after (Home Federal Savings & Loan Ass'n v. Cook, 170 Ill. App. 3d 720, 525 N.E.2d 151 (1988)) enactment of the attorney's lien law in 1909 (1909 Ill. Laws 97, §1).
The trial court, however, did not exercise its discretion to award or deny equitable relief to the Estate when the remedy at law, the statutory lien, was found not to be available. Rather, the trial court specifically found that any contract that existed between the Lewsaders and Kelso was terminated by Kelso's death and further found, as a matter of law, that an equitable lien could not exist unless it were based on a contract that was still in force at the time of the settlement. The trial court then stated, "Now you tell me where there is a case that allows me to give you a lien against the funds after the contract has terminated due to the death of the attorney claiming the lien and I will be glad to follow that case." It is this decision, and not an exercise of equitable powers, that we are asked to review. Because the trial court ruled on the law and not on the facts of ...