Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

AMERICAN NATION BANK AND TRUST CO. OF CHI. v. ALPS ELEC.

January 13, 2004.

AMERICAN NATION BANK AND TRUST COMPANY OF CHICAGO Plaintiff,
v.
ALPS ELECTRIC CO., LTD. NIT HOLDINGS LIMITED, MATHIAS BURLET, and DONALD WEST Defendants



The opinion of the court was delivered by: NAN NOLAN, Magistrate Judge

MEMORANDUM OPINION AND ORDER

This interpleader action has been referred to this Court for resolution of Morrison & Mix's Petition to Adjudicate Attorneys Lien [136-1] and Mathias Burlet's Motion to Invalidate Morrison & Mix's Notice of Attorneys' Lien [137-1]. For the reasons explained below, Morrison & Mix's Petition to Adjudicate Attorneys Lien is granted in part and denied in part, and Mathias Burlet's Motion to Invalidate Morrison & Mix's Notice of Attorneys' Lien is granted.

BACKGROUND*fn1

  American National Bank ("ANB") brought this interpleader action pursuant to 28 U.S.C. ยง 13 35 to determine the rights of several claimants to approximately $10.1 million it held in an account in the name of Donald West. After depositing the funds in an account maintained by the Clerk of the Court, ANB was dismissed from this action. Defendant NIT Holdings Limited ("NIT") filed an answer and an appearance but did not assert a claim to the funds at issue. A default judgment was Page 2 entered against NIT. Defendant Donald West did not assert any claim to the interplead funds, and in his deposition testified that the interplead funds belonged to Defendant Alps Electric Co., Ltd. ("Alps"). Seishin, Ltd. ("Seishin") was granted leave to intervene. The remaining parties, Defendant Mathias Burlet ("Burlet"), Alps, and Seishin reached a settlement dividing the interplead funds among them.

  Burlet and his former attorneys, the law firm of Morrison & Mix, now seek to determine who is entitled to approximately $175,000 from the settlement funds that Burlet received. Morrison & Mix claims that it has an attorney's lien over these funds. The district court ordered the law firm of Altheimer & Gray to retain $175,000 of the interplead funds in its client trust fund pending resolution of Morrison & Mix's purported attorney's lien.

  DISCUSSION

  Burlet raises three main arguments in support of his request that the Court invalidate the attorney's lien asserted by Morrison & Mix over the funds distributed in settlement of this action: 1) the November 15, 1999 Notice of Attorney's Lien (Lien Notice) failed to comply with the statutory requirements; 2) Morrison & Mix cannot assert an equitable lien; and 3) Morrison & Mix has already been paid reasonable compensation for its services. The Court addresses Burlet's arguments in turn.

 A. Statutory Lien

  The requirements for an effective statutory lien are set forth in the Illinois Attorney's Lien Act. The statute provides in pertinent part:

  Attorneys at law shall have a lien upon all claims, demands and causes of action, including all claims for unliquidated damages, which may be placed in their hands by their clients for suit or collection, or upon which suit or action has been instituted, Page 3 for the amount of any fee which may have been agreed upon by and between such attorneys and their clients, or, in the absence of such agreement, for a reasonable fee, for the services of such suits, claims, demands or causes of action, plus costs and expenses.

  * * *

 
To enforce such lien, such attorneys shall serve notice in writing, which service may be made by registered or certified mail, upon the party against whom their clients may have such suits, claims or causes of action, claiming such lien and stating therein the interest they have in such suits, claims, demands or causes of action.
Thus, the statute sets forth three requirements for an effective lien: 1) the attorney was hired by a client to assert a claim; 2) the attorney must perfect the lien by serving notice in writing; and 3) the notice must be served on the party against whom the client has the claim. Rhoades v. Norfolk & Western Railway Co., 399 N.E.2d 969, 973 (Ill. 1979). Morrison & Mix bears the burden of establishing valid service. Zazove v. Wilson, 80 N.E.2d 101, 103 (Ill.App. 1948).

  Burlet argues that the Lien Notice failed to comply with the second and third requirements of the statute. The Court agrees that notice was not served on Alps, a party against whom Burlet had a claim.*fn2 Burlet served the Lien Notice on certain parties' attorneys: John Heaphy, attorney for Alps; Daniel DuPre, in-house counsel for Bank One; Donald West, attorney and/or officer of NIT; and Howard Brinton, attorney for Donald West. Alps was only served through its counsel, John Heaphy. Service on a party's attorney is insufficient to perfect an attorney's lien. In re Del Grosso, 111 B.R. 178, 182 (Bankr. N.D. Ill. 1990); Cazalet et. al. v. Cazalet et. al., 54 N.E.2d 61, 63 (Ill.App. 1944).

  Morrison & Mix argue that ANB, the stakeholder, "was the only person against which Mr. Burlet asserted a claim" and thus, the only party requiring service of the Lien Notice to perfect the lien. Morrison & Mix's Petition, p. 11. The statute requires service "upon the party against whom Page 4 their clients may have such suits, claims or causes of action." Morrison & Mix's argument is inconsistent with the nature of the interpleader action. Interpleader has long existed for the purpose of enabling "a neutral stakeholder, usually an insurance company or a bank, to shield itself from liability for paying over the stake to the wrong party. This is done by forcing all the claimants to litigate their claims in a single action brought by the stakeholder." Indianapolis Colts y. Mayor and City Council of Baltimore, 733 F.2d 484, 486 (7th Cir. 1984). Parties in interpleader actions have claims against each other, not only the stake holder. "In fact, federal interpleader ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.