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Morris B. Chapman & Associates, Ltd. v. Kitzman

August 27, 1999

MORRIS B. CHAPMAN & ASSOCIATES, LTD.,
PLAINTIFF-APPELLANT AND CROSS-APPELLEE,
V.
JOHN KITZMAN AND EDNA KITZMAN,
DEFENDANTS-APPELLEES AND CROSS-APPELLANTS.



Appeal from the Circuit Court of Madison County. No. 93-MR-375 Honorable Ann Callis, Judge, presiding.

The opinion of the court was delivered by: Justice Kuehn.

IN THE COURT OF APPEALS OF THE STATE OF ILLINOIS

REPLACES WITHDRAWN ORIGINAL OPINION (2 FEBRUARY 1999)

John W. Kitzman III died in an industrial accident. His wife, Karen, hired Morris B. Chapman & Associates, Ltd. (Chapman), to pursue a wrongful death action. Karen agreed to pay Chapman one-third of any recovery. Chapman recovered $800,000 but was only paid $227,040. This action ensued.

The lawsuit filed on behalf of Karen in Missouri named Karen and decedent's parents, John and Edna Kitzman, as his heirs. Chapman obtained an $800,000 settlement for the benefit of those heirs, prepared a petition for settlement approval, and noticed a hearing.

A few days prior to the Missouri trial court's hearing on the petition, John and Edna retained separate counsel, attorney John A. Kilo. They agreed to pay Kilo one-third of their recovery in excess of $100,000. John and Edna intervened and participated in the settlement approval and apportionment hearing.

After the apportionment hearing, the Missouri trial court entered an order distributing 86% of the settlement ($688,000) to Karen and 7% ($56,000) each to John and Edna. It further ordered that Chapman's fee would consist of one-third of Karen's share ($227,040) only, while Kilo would receive one-third of John's and Edna's share over $100,000 ($4,000). The Missouri trial court based its fee apportionment on section 537.095(4)(2) of the Missouri Revised Statutes, which requires a trial court to order the claimant:

"To deduct and pay the expenses of recovery and collection of the judgment and the attorneys' fees as contracted, or if there is no contract, or if the party sharing in the proceeds has no attorney representing him before the rendition of any judgment or settlement, then the court may award the attorney who represents the original plaintiff such fee for his services, from such persons sharing in the proceeds, as the court deems fair and equitable under the circumstances." Mo. Rev. Stat. §537.095.4(2) (1986).

The Missouri trial court stated that this provision required it to apportion attorney fees according to the existing contingency contracts for the following reason: "Once separate counsel appear for competing claimants, the statutory language directing payment of attorney's fees 'as contracted' must be given full effect."

Chapman filed the instant action in Madison County Circuit Court, seeking additional attorney fees from defendants, John and Edna Kitzman. Chapman's complaint originally consisted of a single quantum meruit count but was later amended to include a second count based upon the common-fund doctrine. The circuit court disposed of the action in an order that:

•granted Chapman's oral motion to dismiss count I.

•granted defendants' motion to dismiss count II grounded on the common-fund doctrine's inapplicability to this case.

•denied defendants' motion to dismiss both counts based upon the full faith and credit clause of the United States Constitution (U.S. Const., art. IV, §1).

•denied defendants' motion for sanctions seeking attorney fees pursuant to Supreme Court Rule 137 (155 Ill. 2d R. 137).

•denied Chapman's summary judgment motion, including Chapman's argument that a Judge, rather than a jury, must decide a common-fund-doctrine case.

On appeal, Chapman attacks the circuit court's dismissal of count II and its decision that a common-fund-doctrine action may be tried to a jury. Defendants cross-appeal the circuit court's denial of their dismissal motion under the full faith and credit clause and the denial of their motion for sanctions.

We first address defendants' argument that the circuit court erred in denying their motion to dismiss both counts. Specifically, defendants contend that the full faith and credit clause of the United States Constitution bars this action because the Missouri trial court's fee-apportionment order is res judicata as to Chapman's claim. This contention presents a disputed question of law that we review de novo. See Statler v. Catalano, 293 Ill. App. 3d 483, 485-86, 691 N.E.2d 384, 386 (1997).

"The full faith and credit clause of the United States Constitution [citation] generally requires every State to give a foreign judgment at least the res judicata effect which the judgment would be accorded in the State which rendered it." Pfaff v. Chrysler Corp., 208 Ill. App. 3d 910, 922, 567 N.E.2d 52, 60 (1991), aff'd, 155 Ill. 2d 35, 610 N.E.2d 51 (1992). Thus, we must apply Missouri law in determining whether the Missouri trial court's order is res judicata as to the claim before us.

In Missouri, the res judicata doctrine bars a claim only if the following elements are satisfied: (1) the identity of the thing sued for, (2) the identity of the cause of action, (3) the identity of the parties to the action, and (4) the identity of the quality of the person for or against whom the claim is made. See State of Missouri ex rel. Sanders v. Martin, 945 S.W.2d 641, 642 (Mo. Ct. App. 1997). Our res judicata analysis turns on the third element. Facing an attorney-fees dispute arising from a wrongful death action, the Missouri appellate court explained that attorneys seeking fees are not parties to a suit:

"The problem with the trial court's ruling is that the attorneys were not parties to the underlying litigation. Res judicata bars only claims by parties and privies. Attorneys claiming a portion of a party's fee have not previously been held to be in privity with their clients. The concept of privity for purposes of res judicata connotes interests so closely related that the party sought to be barred may be said to have had a day in court. The interest of an attorney with regard to a fee claim is not of this character." Floyd v. Shaw, 830 S.W.2d 564, 565 (Mo. Ct. App. 1992).

Consequently, the case before us lacks an identity of parties with the underlying Missouri wrongful death action.

Defendants nevertheless claim that, though technically not a party to the underlying litigation, Chapman was an "actual interested party" with respect to the attorney-fees issue. Chapman was the petitioner for fees and had an opportunity to be heard. Thus, defendants argue, Chapman could have assailed the fee apportionment in the Missouri appellate ...


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