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Friedman v. Malevitis

March 26, 1999

ALBERT BROOKS FRIEDMAN, LTD., PLAINTIFF-APPELLANT,
v.
JOHN MALEVITIS AND JAMES STAMOS, FORMERLY D/B/A STAMOS AND MALEVITIS, LTD., DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. No. 96-L-02654. Honorable Lee Preston, Judge Presiding.

The opinion of the court was delivered by: Justice Theis

JUSTICE THEIS delivered the opinion of the court:

The issue presented in this appeal is whether a discharged attorney may enforce a contract to split a contingency fee with a newly retained attorney. The circuit court dismissed a breach of contract suit filed on behalf of Albert Brooks Friedman, Ltd., a professional corporation, against attorneys John L. Malevitis and James Stamos, formerly doing business as Stamos and Malevitis, Ltd. Friedman's complaint arose after Friedman's client, Sally Ruecking, discharged Friedman and hired Stamos and Malevitis, Ltd., to represent her in the same matter while her personal injury lawsuit was pending. After receiving an award of $10,000 as quantum meruit, Friedman sought to recover additional attorney fees in the amount of $45,450 under an alleged fee-division agreement negotiated with Stamos on behalf of Stamos and Malevitis individually and as the agents of Ruecking. We affirm.

We turn first to the factual allegations contained in Friedman's complaint. On or about November 27, 1990, Ruecking entered into a contingent fee contract with Albert Brooks Friedman, Ltd., which provided that Friedman would prosecute Ruecking's personal injury matter in exchange for one-third of the amount recovered. Friedman filed a lawsuit and did investigative, research, and discovery work on Ruecking's behalf. In addition, Albert Brooks Friedman, Ltd., possessed a common law retaining lien and a statutory attorney's lien on Ruecking's personal injury matter.

Friedman attached to his complaint a copy of a letter he received, dated November 18, 1991, and signed by Ruecking, in which Ruecking requested that Friedman "transfer" her personal injury case to Malevitis of Stamos and Malevitis. The letter further stated, "Mr. Malevitis will be sending someone over immediately to obtain my file, and to discuss your interest in the case."

Friedman's complaint alleged that Ruecking's letter evidenced Ruecking's designation of Stamos and Malevitis as her agents and authorized them to negotiate on her behalf a division of fees with Friedman. Friedman further alleged that, at the time he received Ruecking's letter of discharge, he possessed the legal right to ask for quantum meruit and to collect attorney fees from Ruecking.

Friedman complained that he relied upon the purported agency of Stamos and Malevitis, as expressed in Ruecking's letter of November 18, 1991, to negotiate a fee-division arrangement with them for work he already had performed on Ruecking's behalf. Friedman memorialized this purported fee-division arrangement in a letter dated January 15, 1992, which he alleged constituted an agreement with Friedman on behalf of Stamos and Malevitis individually and acting as agents of Ruecking. Friedman attached a copy of this unsigned letter, dated January 15, 1992, to the complaint. That unsigned letter, bearing an Albert Brooks Friedman, Ltd., letterhead and directed to James Stamos of Stamos and Malevitis, referenced the Ruecking matter. The letter reads as follows:

"Gentlemen:

"This will confirm my conversation with Jim Stamos on January 15, 1992. Fees in reference to the above are to be divided as follows: 30% to Albert Brooks Friedman, Ltd. based upon work already completed. 70% to Stamos and Malevitis based upon work to be completed. If I could be of any assistance, please do not hesitate to contact me."

Allegedly acting in reliance upon the purported agreement expressed in the January 15, 1992, letter, Friedman waived his common law retaining lien and surrendered Ruecking's file to Malevitis.

Malevitis ultimately settled Ruecking's personal injury suit in the amount of $550,000 and, in keeping with his existing contingency fee agreement with Ruecking, received attorney fees in the amount of $183,315. After learning of the settlement, Friedman filed an emergency petition to enforce attorney's lien on February 22, 1995, based upon the same allegations as those contained in his later filed complaint at law, which is the subject of this appeal. On July 25, 1995, the circuit court entered an order stating that it lacked jurisdiction over any claims for attorney fees arising out of the alleged contractual agreement between Albert Brooks Friedman, Ltd., and Stamos and Malevitis. By that same order, the court found that the fair and reasonable quantum meruit fee for the legal services of Albert Brooks Friedman, Ltd., was the amount of $10,000. Consequently, Friedman received $10,000.

Friedman's complaint alleged $45,450 remained due him under the terms of his purported fee arrangement with Stamos and Malevitis. Malevitis moved to dismiss Friedman's complaint on grounds that the purported fee-division arrangement was void and unenforceable in that it violated public policy and Rule 1.5(f) of the Rules of Professional Conduct. 134 Ill. 2d R. 1.5(f). Specifically, Malevitis maintained that Friedman's complaint failed to allege the existence of any written consent by Ruecking to the purported fee arrangement.

In support of the motion, Malevitis attached his own affidavit and the affidavit of Ruecking. By her affidavit, Ruecking stated that she discharged Friedman as her attorney in her personal injury lawsuit by letter dated November 18, 1991. Ruecking explained that, after discharging Friedman, she retained Malevitis as her attorney in her personal injury suit. Ruecking averred that she "never agreed, verbally, in writing or otherwise, or consented to and/or approved of any division of fees or fee arrangement between attorney John L. Malevitis and Albert Brooks Friedman." In his affidavit, Malevitis stated he never agreed to a fee-sharing agreement with Friedman.

In reply Friedman attached the evidence deposition of James Stamos. Stamos stated that Malevitis agreed to resolve the issue of Friedman's interest in the Ruecking case rather than to adjudicate any lien immediately or upon resolution of Ruecking's suit. Stamos averred that, as a result of his conversations with Friedman, he and Friedman agreed to the terms of the January 5, 1992, letter. According to Stamos, Malevitis claimed he had advised Ruecking of the ...


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