Appeal from the Circuit Court of Cook County. No. 98 M1 117557 Honorable Michael F. Sheehan, Jr., Judge Presiding
The opinion of the court was delivered by: Justice Cohen
Plaintiff Joseph Longo filed a breach of contract action against defendants Globe Auto Recycling, Inc. (Globe), and William Zuccaro (Zuccaro) seeking to recover attorney fees. Following a verdict in plaintiff's favor, collateral proceedings were held. On October 8, 1998, the trial court granted plaintiff's motion for contractual attorney fees and also entered a contempt judgment against defendants for failure to pay a pretrial sanction. On May 19, 1999, a different trial judge vacated both of the trial court's collateral orders, finding that they were void under principles of res judicata. The trial court also levied a $1,618 sanction against plaintiff on the ground that the October 8, 1998, orders were sought in bad faith. The issue in this appeal is whether the court erred in determining that the October 8, 1998, orders were void and further determining that plaintiff had acted in bad faith when seeking the attorney fees that were awarded. For the reasons set forth below, we reverse.
On March 31, 1998, plaintiff Joseph Longo filed a five-count complaint against defendants Globe and Zuccaro alleging breach of contract in count I, account stated in count II, quantum meruit in count III, unjust enrichment in count IV, and fraud in count V. Plaintiff had entered into a contract for legal representation with Globe in December 1997, through its agent William Zuccaro. Plaintiff alleged that defendants owed $9,041.25 in outstanding attorney fees and costs for plaintiff's representation of Globe in various legal matters between December 12, 1997, and February 16, 1998. In his prayer for relief, plaintiff also sought an award of all present and future attorney fees incurred in the prosecution of the breach of contract action.
On July 8, 1998, the trial court entered an order of default against defendant Globe for failure to answer or otherwise plead. Defendant Zuccaro was granted leave to file an answer. The court set the matter for September 2, 1998, for a damages hearing on plaintiff's claims against Globe and a bench trial on plaintiff's claims against defendant Zuccaro. On August 24, 1998, the trial court denied Globe's motion to vacate the order of default.
On September 1, 1998, the trial court granted Globe's motion to reconsider the denial of its motion to vacate the order of default. The court's September 1 order stated that its vacatur of the default order was conditioned upon Globe's payment of $1,550 in attorney fees to plaintiff by September 8, 1998. The order further specified that attorney fees granted therein served as a sanction and were "not to act as a substitute to Mr. Longo seeking further attorney fees for his time in this case."
On September 2, 1998, following a bench trial, Judge Gilbert J. Grossi entered a judgment against both defendants Globe and Zuccaro in the amount of $8,689. The trial court's order stated that its judgment included fees for attorney Longo's services through January 23, 1998. The trial court's September 2 order did not address plaintiff's claim for attorney fees incurred in prosecution of the present breach of contract action.
On September 24, 1998, plaintiff filed a "motion for contractual attorney fees, costs and interest." In this motion, plaintiff alleged that a fee-shifting clause in his attorney-client agreement required defendants to pay all costs associated with plaintiff's collection efforts and 1½% monthly interest until the all amounts owed by defendants are paid in full. In support of his motion, plaintiff attached the attorney-client agreement signed by Zuccaro, which states affirmatively,"I will pay Joseph A. Longo, if he represents himself, his regular hourly rate which currently is $155.00/hour for all time that he must expend before and after the lawsuit is filed."
Plaintiff also filed a motion for a rule to show cause why defendants should not be held in contempt. In this motion, plaintiff alleged that defendants had engaged in contemptuous conduct by willfully failing to comply with the trial court's September 1, 1998, sanction order which was entered by agreement of the parties and as a condition to vacating the order of default. On October 2, 1998, plaintiff served defendants with a notice of motion indicating that he would present his "motion for contractual attorney fees" and his rule to show cause on October 8, 1998. The record reflects that on October 7, 1998, defendants' attorney, Anthony Montemurro, followed up in a letter to plaintiff stating, "I do not intend to be in court on Thursday, October 8, 1998."
At the October 8, 1998, hearing, Judge Earl E. Strayhorn granted plaintiff's "motion for contractual attorney fees." The resulting judgment order awarded plaintiff $7,223 in attorney fees and $1,446 in costs for expenses incurred as a result of attorney Longo's self- representation in the underlying breach of contract action. At this hearing, Judge Strayhorn also found defendant Globe in contempt for failure to pay the $1,500 pretrial sanction entered on September 1, 1998. This contempt judgment levied an additional $1,000 sanction against defendant Globe for its willful, intentional and contumacious violation of the trial court's September 1, 1998, order. The contempt order further awarded attorney Longo $2,619.50 in fees associated with pursing the rule to show cause.
On November 4, 1998, the trial court denied defendants' motion to reconsider the September 2, 1998, judgment order. Defendants filed a notice of appeal on December 4, 1998, seeking review of both the trial court's "final judgment" order and its November 4, 1998, denial of defendants' motion to reconsider. Defendants did not specifically mention either of the October 8, 1998, orders in their notice of appeal. On March 24, 1999, defendants' appeal was dismissed. Longo v. Globe Auto Recycling, Inc., No. 1-99-0333 (March 24, 1999)(unpublished order of dismissal).
On May 13, 1999, plaintiff filed citations to discover assets against defendants to recover the monetary awards granted in the trial court's October 8, 1998, orders. On May 19, 1999, defendants presented an emergency motion to vacate citation notices and stay judgments. Defendants argued that the trial court's October 8, 1998, orders were void under principles of res judicata because the amounts awarded therein were the same amounts awarded in the trial court's September 2, 1998, judgment order. At the May 19 hearing, Judge Glenn Elliot entered an order which temporarily stayed the enforcement of all judgment orders. This order also continued defendants' emergency motion until May 21, 1999.
On May 21, 1999, Judge Michael F. Sheehan granted defendants' emergency motion to vacate citation notices and stay judgments. In the trial court's May 21 order, Judge Sheehan terminated the citations filed by plaintiff and ruled that both of the trial court's October 8, 1998, orders were "void as res judicata."
On August 18, 1999, Judge Sheehan denied plaintiff's motion to vacate or reconsider the court's May 21 order, plaintiff's motion to release $500 of the September 2, 1998, judgment which had previously been retained by the court and plaintiff's motion for postjudgment interest. Although the trial court's August 18 order does not set forth its reasoning, the court ordered plaintiff to pay defendants $1,618 in attorney fees. Ostensibly, the court granted defendants' motion for sanctions pursuant to Supreme Court Rule 137 (155 Ill. 2d R. 137). Defendants' motion alleged that ...