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Kehoe v. Saltarelli

March 07, 2003

ROBERT E. KEHOE, JR., PLAINTIFF-APPELLANT,
v.
GERALD G. SALTARELLI AND BUTLER, RUBIN, SALTARELLI AND BOYD, DEFENDANTS-APPELLEES.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE MICHAEL J. HOGAN, JUDGE PRESIDING.

The opinion of the court was delivered by: Presiding Justice Campbell

Released for publication April 7, 2003.

ROBERT E. KEHOE, JR., PLAINTIFF-APPELLANT,
v.
GERALD G. SALTARELLI AND BUTLER, RUBIN, SALTARELLI AND BOYD, DEFENDANTS-APPELLEES.

APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE MICHAEL J. HOGAN, JUDGE PRESIDING.

The opinion of the court was delivered by: Presiding Justice Campbell

Publish

This appeal arises out of an attorney malpractice action filed by plaintiff, Robert Kehoe, Jr., against defendants, attorney Gerald Saltarelli and the law firm Butler, Rubin, Saltarelli and Boyd (collectively, defendants or Saltarelli or Butler), based on defendants' decision to decline to represent plaintiff in a legal malpractice claim filed against plaintiff and his former law firm, Wildman, Harrold, Allen & Dixon (Wildman or the Wildman firm ). Plaintiff appeals from an order of the circuit court of Cook County dismissing his second amended complaint (revised), which contained four counts against defendants, including: (1) breach of fiduciary duties (count I); (2) tortious interference with contract (count II); (3) participation in Wildman's breach of fiduciary duties (count III); and (4) a common law claim for attorney fees as a result of breach of contract (count IV). We affirm.

BACKGROUND

Plaintiff, Robert Kehoe, Jr., was a partner in the Wildman firm from 1979 through 1996. In 1997, plaintiff filed suit against Wildman for refusal to distribute his full financial interest in the partnership (Wildman litigation). The Wildman litigation remains pending and plaintiff and Wildman have characterized each other as "adversaries." On March 5, 1998, two former clients of Wildman, Matthew Songer and Robert Songer, sued plaintiff and the Wildman firm in connection with legal services performed by plaintiff and Wildman between 1992 and 1996 (Songer v. Kehoe, No. 98 CH 2895). Wildman initially retained defendants, Saltarelli and the Butler firm, to provide its legal defense of the Songer lawsuit. After retaining defendants, Wildman instructed Saltarelli to contact plaintiff to discuss the prospect of joint representation of both Wildman and plaintiff individually.

Plaintiff initially withheld his consent to joint representation. Subsequently, plaintiff agreed to defendants' representation subject to its recognition of certain conflicts of interest. Defendants did not agree to plaintiff's request and declined to represent plaintiff, informing him that he should seek other counsel. Ultimately, defendant represented himself pro se and obtained a dismissal of all of the claims against him. The Songer lawsuit was dismissed on June 15, 2001.

Plaintiff filed a one-count complaint against defendants for attorney malpractice which was dismissed on September 21, 2000. Plaintiff filed his second amended complaint (revised) (hereafter complaint) on July 17, 2001, alleging four counts as follows: legal malpractice/breach of fiduciary duty; tortious interference; participation in Wildman's breach of fiduciary duty; and attorney fees for breach of contract.

In his complaint, plaintiff alleged that in defending the Songer lawsuit, Wildman had the responsibility to procure conventional liability insurance. However, by agreement of the partners, Wildman adopted a plan of self-insurance as follows: In the event of a claim arising out of the firm's activities, Wildman would arrange for defense counsel and pay the expense of the defense using accumulated assets that had not been distributed to the partners. Plaintiff alleged that this defense plan was in place prior to the Songer lawsuit and was routinely applied over the years as a matter of custom and practice.

Plaintiff alleged that at the time Wildman retained defendants for the Songer lawsuit Wildman "intended to exploit the defense of the Songer lawsuit to offset the plaintiff's pending partnership claims against the Wildman firm." Plaintiff described Wildman's "strategy" as follows:

"(A) Insisting that one attorney represent both the plaintiff and the Wildman firm so that the defense counsel representing the plaintiff would be subject to direction and control by the Wildman firm as a direct client.

(B) Managing the defense so as to give priority to defeating the firm's direct exposure for its own acts of independent culpability, relative to its exposure for its own acts of independent culpability, relative to its exposure for vicarious liability that could be attributed to the plaintiff.

(C) Eventually asserting a claim for reimbursement from the plaintiff, the amount of which would be maximized by depicting whatever might be paid in settlement as being attributable entirely to claims for which the Wildman firm was only vicariously liable."

In count I, plaintiff alleged that between May 1, 1998, and May 27, 1998, defendants were his attorneys and in that capacity owed plaintiff fiduciary duties, including the duty to investigate and disclose conflicts of interests that arose from simultaneously representing the Wildman firm. Plaintiff alleged that on May 1, 1998, defendants agreed to represent both him and Wildman in the Songer litigation. During the week of May 4, 1998, plaintiff met with defendants as attorney/client to discuss confidential matters relating to his defense. Plaintiff directed defendants' attention to whether conflicts of interest prevented one attorney from representing both parties. Saltarelli denied the existence of any such conflict. In a letter of Monday, May 11, 1998, plaintiff proposed that the parties meet promptly to resolve the issue of representation. In a letter dated May 15, 1998, Wildman insisted that plaintiff be represented by defendants, stating that "[i]f you choose to be separately represented under these circumstances, the firm will not be obligated to pay for your defense or indemnify you against any adverse settlement or verdict."

In a letter dated Monday, May 18, 1998, plaintiff expressly consented to defendants serving as his legal counsel. In response, Saltarelli left a voicemail message for plaintiff stating he would call plaintiff back to discuss his letter and also stating that he would be getting an extension on the filing of an answer. Plaintiff alleges that by virtue of ...


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