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Morad Elusta v. City of Chicago

September 4, 2012

MORAD ELUSTA, PLAINTIFF-APPELLANT,
v.
CITY OF CHICAGO, ET AL., DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 06 C 4264--Amy J. St. Eve, Judge.

The opinion of the court was delivered by: Wood, Circuit Judge.

ARGUED APRIL 11, 2012

Before WOOD, WILLIAMS, and TINDER, Circuit Judges.

This is a case about attorney's fees. But it is not the typical attorney's fees case in which*fn1 an attorney seeks review of a court's award, perhaps arguing about an improperly calculated lodestar. In- stead here, a client--Morad Elusta--seeks to compel two of his former attorneys, Zane Smith and Shelia Genson, to turn over some of the fee award to him. Smith and Genson represented Elusta in a civil rights suit against the City of Chicago, in which he won a $40,000 judg- ment. Pursuant to 42 U.S.C. § 1988, the court then awarded Elusta $82,696.50 for his attorney's fees, which the City has since paid to Smith and Genson.

In addition, the court entertained fee claims from two more of Elusta's former attorneys, David Cerda and John De Leon, who represented Elusta in the same matter before Smith and Genson took over. The dis- trict court determined that although Cerda and De Leon could not assert an attorney's lien on Elusta's judg- ment, Elusta should still pay them $15,000 in quantum meruit for their services. Elusta now insists that the City of Chicago, not he, should pay the quantum meruit award, and on top of that, he is entitled to retain 60% of the amount awarded for the attorneys. Like the district court, we find these arguments to be entirely without merit. We thus affirm.

I

In the underlying case, Elusta sued the City of Chicago and several of its police officers for excessive force, false arrest, and intentional infliction of emotional dis- tress that he suffered in conjunction with their search of his home and his subsequent arrest. He first retained Cerda and De Leon to bring these claims. Cerda and De Leon conducted discovery and obtained a settle- ment offer of $100,000 from the City of Chicago. But Elusta rejected this offer, apparently because he was upset that his retainer agreement with Cerda and De Leon contained a 40% contingent fee provision. Although the parties attempted mediation to resolve the dispute over the fee arrangement, the district court eventually permitted Cerda and De Leon to withdraw from the case.

Elusta had difficulty finding new attorneys to repre- sent him, but he ultimately retained Smith and Genson. They took the case to trial before a jury, which found in Elusta's favor on two of the counts (excessive force and intentional infliction of emotional distress) and awarded him a total of $40,000. Smith and Genson then petitioned the court for attorney's fees on behalf of Elusta pursuant to 42 U.S.C. § 1988. Before the court could rule on the petition, Elusta retained a third set of attorneys--Donald Johnson and Joseph Gentleman--to litigate the fee issue. Johnson and Gentleman filed a motion seeking to direct payment of some of the fees to Elusta, rather than to Smith and Genson. The court dis- missed that motion as premature, as it had not yet ruled on the fee petition.

Smith and Genson's petition languished for nearly 16 months without a ruling. At that point, Cerda and De Leon filed their own motion for fees, asserting an attorney's lien on the judgment or in the alternative, a right to recover the value of their work under quantum meruit.

On December 13, 2010, the district court resolved the various fee motions. It granted Smith and Genson's request that it award $82,696.50 in fees pursuant to § 1988. Cerda and De Leon, it concluded, had not complied with Illinois state law requirements to perfect an attor- neys' lien, but the court decided that they could re- cover $15,000 in quantum meruit. Elusta then refiled his motion seeking to have 60% of both amounts paid to him directly by the City of Chicago, with the remainder going to the attorneys. The district court denied Elusta's motion, thereby concluding its work on the fee issues, and Elusta now appeals.

II

We begin with Elusta's assertion that he has a right to a portion of the fees awarded to Smith and Genson. It is well established that statutory attorney's fees are awarded to a prevailing party, but that the party is free to waive or negotiate her right to the fees in her contract with counsel. Venegas v. Mitchell, 495 U.S. 82, 87-90 (1990). We thus must look to Elusta's retainer agree- ment with Smith and Genson to see if that agreement supports Elusta. Interpretation of this contract raises questions of law that we review de novo. Thomas v. General Motors Acceptance Corp., 288 F.3d 305, 307 (7th Cir. 2002).

The pertinent language in the agreement is the fol- lowing:

[T]he Client(s) acknowledges his/her understanding of and consent to the fact that [Genson and Smith] will divide the attorney's fees ...


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