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Alice E. Dolan and Joel F. Handler v. Joseph Michael O'callaghan

September 28, 2012

ALICE E. DOLAN AND JOEL F. HANDLER,
PLAINTIFFS-APPELLEES,
v.
JOSEPH MICHAEL O'CALLAGHAN, DEFENDANT-APPELLANT ALICE E. DOLAN,
PLAINTIFF, JOSEPH MICHAEL O'CALLAGHAN, P.C., N/K/A WEST MONROE LAW
OFFICE, P.C., DEFENDANT).



Appeal from the Circuit Court of Cook County No. 07 L 749 Honorables Allen S. Goldberg and John C. Griffin, Judges Presiding.

The opinion of the court was delivered by: Justice Palmer

JUSTICE PALMER delivered the judgment of the court, with opinion. Justices Garcia and Gordon concurred in the judgment and opinion.

OPINION

¶ 1 Appellant, Joseph Michael O'Callaghan, appeals from three orders entered by the circuit court of Cook County. The first order, entered on February 11, 2010, granted plaintiff Alice Dolan sanctions against O'Callaghan pursuant to Illinois Supreme Court Rule 219 (eff. July 1, 2002) for refusing to answer certain questions at his deposition and specifically required O'Callaghan to pay the attorney fees Dolan's counsel incurred in connection with preparing the motion for sanctions. The second order, dated July 6, 2010, entered a specific amount of attorney fees on the court's February 11, 2010, order and required O'Callaghan to pay attorney fees in the amount of $4,781.25. The third order, entered on May 2, 2011, entered additional sanctions against O'Callaghan pursuant to Supreme Court Rule 219 for refusing to answer certain questions at his deposition and specifically required O'Callaghan to pay additional attorney fees in the amount of $4,165.

¶ 2 On appeal, O'Callaghan challenges the propriety of all three orders. In addition, O'Callaghan and Dolan have each filed a motion which was taken with the case. O'Callaghan filed a "dispositive motion pursuant to Rule 361(2)(H)" requesting an order vacating the circuit court's orders as void for lack of personal jurisdiction without the necessity of briefing all of the issues involved in this case. Dolan filed a motion to dismiss the appeal for lack of jurisdiction.

¶ 3 For the reasons that follow, we deny Dolan's motion to dismiss and O'Callaghan's motion to vacate and we affirm the judgment of the circuit court of Cook County.

¶ 4 BACKGROUND

¶ 5 The circuit court's orders imposing sanctions against O'Callaghan arise from an underlying lawsuit between Dolan and defendant, Joseph Michael O'Callaghan, P.C., now known as West Monroe Law Office, P.C. (hereinafter, defendant). Dolan's original and amended complaint asserted a claim for breach of contract against defendant and Joseph Michael O'Callaghan individually. Those complaints alleged that Dolan, an attorney, worked as an associate for defendant from 1981 to 1984. In 1982, Dolan and O'Callaghan memorialized an agreement in an office memorandum in which Dolan agreed to accept a percentage of all fees of defendant in lieu of a salary. The complaint alleged that O'Callaghan ultimately breached that agreement. Dolan's amended complaint was dismissed by the circuit court of Cook County pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1992)). However, this court reversed that judgment. See Dolan v. O'Callaghan, No. 1-95-0438 (1996) (unpublished order pursuant to Supreme Court Rule 23). As part of discovery in that case, O'Callaghan was deposed in October of 1997 and February of 1999.

¶ 6 In 2000, the circuit court entered summary judgment in O'Callaghan's favor and dismissed him individually from the lawsuit. Dolan voluntarily dismissed the lawsuit on a later date and subsequently filed a second amended complaint against defendant, asserting claims for breach of contract and fiduciary duty. This complaint did not name O'Callaghan as an individual defendant.

¶ 7 The record indicates that O'Callaghan was deposed as a witness on October 9, 2006.*fn1 On August 20, 2007, the circuit court entered an order requiring O'Callaghan to again appear for his deposition by September 28, 2007, and ordering him to "produce the requested documents."

¶ 8 On January 9, 2008, Dolan filed a motion "to compel production of documents and to resume deposition of Joseph Michael O'Callaghan." That motion stated that despite the court's order that O'Callaghan appear for his deposition by September 28, 2007, the deposition did not resume until October 26, 2007. During the resumed deposition, O'Callaghan did not produce all of the requested documents and also refused to answer certain questions regarding O'Callaghan's new law firm, O'Callaghan & Colleagues, P.C. (Colleagues, P.C.). The motion alleged that during the deposition, O'Callaghan took an "exorbitant amount of time" answering certain questions and that his attorney would not let counsel for Dolan complete the deposition. Dolan requested that O'Callaghan's deposition be resumed because information was needed on Colleagues, P.C., which Dolan believed was related to the firm Joseph Michael O'Callaghan, P.C., now known as West Monroe Law Office, P.C., and into which Dolan believed that O'Callaghan had transferred whatever assets existed in West Monroe Law Office, P.C. The motion alleged that Dolan's attorney had contacted O'Callaghan's attorney to request that O'Callaghan's deposition be reopened and that O'Callaghan's attorney indicated that O'Callaghan would not voluntarily appear to resume his deposition. The motion requested that defendant produce specific financial records of Colleagues, P.C., and documents concerning O'Callaghan's dealings with Dolan. The motion claimed that O'Callaghan had given inconsistent responses in his depositions on October 9, 2006, and on October 26, 2007, as to whether defendant maintained a personnel file on Dolan. The motion also claimed that whether O'Callaghan was a party to the case was irrelevant because he was defendant's president and majority shareholder and maintained all of the documents being sought by Dolan. The motion further claimed that O'Callaghan's deposition had to be reopened due to statements made during the deposition of "Edward Fitzsimons," who owned one share of Joseph Michael O'Callaghan, P.C. Fitzsimons allegedly produced relevant documents at his deposition and testified that he sent those documents to O'Callaghan prior to his deposition. Attached to the motion were excerpts from O'Callaghan's October 26, 2007, deposition in which he refused to answer questions regarding Colleagues, P.C., on the basis of relevancy and because he was not an individual party to the lawsuit. Also attached were records from the Illinois Secretary of State indicating that defendant and Colleagues, P.C., occupied the same location and had the same president and agent, Joseph Michael O'Callaghan.

¶ 9 Defendant responded to the motion to compel and to resume O'Callaghan's deposition by asserting that the circuit court previously allowed Dolan to depose O'Callaghan and that the deposition commenced on October 9, 2006, for approximately one hour. The deposition was continued but Dolan's counsel failed to attend that session. The deposition was then continued on October 26, 2007, and proceeded for approximately two hours. Defendant claimed that Dolan had twice the amount of time allotted by the supreme court rules to depose O'Callaghan and that Dolan should not be allowed additional time to continue to depose O'Callaghan, who was only a witness and not a party to the lawsuit.

¶ 10 On May 5, 2008, the circuit court set a hearing date on Dolan's motion to compel. However, there is no transcript of that hearing contained in the record on appeal. Nevertheless, on July 3, 2008, the court entered an order granting the motion to compel. The court ordered defendant to tender the requested documents to O'Callaghan's attorney for purposes of removing privileged documents and to thereafter allow Dolan's counsel to inspect the documents. The court further order O'Callaghan to appear to resume and complete his deposition so that he could be questioned on the following subjects: (1) the documents produced pursuant to the court's order; (2) documents concerning defendant's clients at the time Dolan was employed by it; (3) documents produced at the deposition of Edward Fitzsimons; (4) information concerning Colleagues, P.C.; and (5) defendant's income tax records for specified years. The order finally provided that O'Callaghan's deposition would proceed for two hours.

¶ 11 On March 30, 2009, Dolan filed a motion to compel and for sanctions against defendant based upon defendant's failure to produce, among other things, documents relating to Colleagues, P.C. Dolan claimed that pursuant to the court's July 3, 2008, order, she needed these documents in order to question O'Callaghan about them at his resumed deposition. On July 20, 2009, the circuit court entered an order requiring defendant to produce certain documents requested by Dolan. On August 6, 2009, O'Callaghan submitted an affidavit attesting that he was defendant's president, that he had searched defendant's records and that defendant had either previously produced the requested documents or was unable to locate certain documents.

¶ 12 On August 12, 2009, the court ordered defendant to submit another affidavit indicating that O'Callaghan & Colleagues never received money from persons or entities who were defendant's clients during the fiscal years of 1982 and 1983 and to identify all bank accounts into which defendant deposited money from cases in 1982 and 1983. The court also ordered O'Callaghan to appear by October 8, 2009, to resume his deposition. In response to the court's order, O'Callaghan submitted an affidavit attesting that O'Callaghan & Colleagues did not exist in 1982 and 1983 and therefore did not receive money from clients of the corporation formerly known as Joseph Michael O'Callaghan, P.C. He also stated that there were no records that identified the bank accounts into which funds from clients of defendant were deposited during 1982 and 1983.

¶ 13 On November 4, 2009, Dolan filed a motion for sanctions against O'Callaghan pursuant to Illinois Supreme Court Rules 201 and 219 (eff. July 1, 2002) for his "deliberate and willful violation" of the court's July 3, 2008, order by refusing to answer questions concerning Colleagues, P.C. The motion alleged that after numerous continuances by defendant, O'Callaghan's deposition had resumed on October 9, 2009. During that deposition, Dolan's counsel inquired about Colleagues, P.C., but, despite the court's order, O'Callaghan refused to answer those questions. The questions included whether O'Callaghan operated under the name of Colleagues, P.C., since November 1997 and who were the shareholders and employees of Colleagues, P.C. The motion asked the court to sanction O'Callaghan by barring him from testifying at trial and requiring him to pay Dolan's attorney fees incurred in connection with the motion for sanctions. The proof of service attached to the motion states that the motion was served on "Robert Grossman," counsel for defendant.

¶ 14 Attached to the motion were excerpts from O'Callaghan's October 9, 2009, deposition. Those excerpts reveal that O'Callaghan refused to answer questions regarding Colleagues, P.C., on the ground that he was appearing at the deposition only as defendant's corporate representative. For example, Dolan's counsel asked O'Callaghan if he had ever personally furnished any financial documents to Dolan, and O'Callaghan replied that he "was not a defendant in the lawsuit" and was only at the deposition "as the representative of the corporation." Counsel asked O'Callaghan if he had operated under the corporate name of Colleagues, P.C., since November 1997, to which O'Callaghan replied that he was "not here to answer that question." When asked to identify the employees or shareholders of Colleagues, P.C., he replied that "as the representative of Joseph Michael O'Callaghan, P.C., and *** Colleagues, P.C., and West Monroe Law Office, I'm not in a position to know that information." Reminded by Dolan's counsel that he had been ordered by the court to answer that question and others relating to Colleagues, P.C., O'Callaghan replied "in my capacity as the witness here, I can't answer that question" and stated that he refused to answer the question regarding the employees of Colleagues, P.C. O'Callaghan invoked his alleged corporate status in response to numerous other questions regarding Colleagues, P.C., and stated that he was refusing to answer those questions "in compliance with Judge Goldberg's order."

¶ 15 Defendant filed a response to the motion, arguing that there was no relevant basis to pursue discovery regarding Colleagues, P.C., and that there was no basis to sanction O'Callaghan under Supreme Court Rule 219. Defendant pointed out that at a conference, the court indicated that whether defendant had transferred assets to Colleagues, P.C., might be a legitimate area of inquiry, and it argued that during his deposition and in his affidavits, O'Callaghan had made it clear that there was no relationship between the two firms and that no money had been transferred from the corporation Joseph Michael O'Callaghan, P.C., now known as West Monroe Law Offices, P.C., to Colleagues, P.C. Defendant also argued that the court's order compelling O'Callaghan to answer certain questions was impermissibly vague, that Dolan was improperly seeking sanctions to punish O'Callaghan and that attorney-client privilege prohibited O'Callaghan from answering questions regarding Colleagues, P.C.

¶ 16 On February 11, 2010, the court entered an order granting Dolan's motion for sanctions.*fn2

The court ordered O'Callaghan to appear to resume his deposition by March 4, 2010, at which Dolan was allowed to inquire "as to the questions that Mr. O'Callaghan refused [and] did not answer plus any follow-up questions." The order further provided that "assuming Mr. O'Callaghan refuses to answer the questions at the resumption of his deposition, the sanctions entered by this court will escalate and Mr. O'Callaghan will be barred from further testifying in this case." Finally, the order stated that "pursuant to Supreme Court Rule 219(c)," O'Callaghan was ordered to pay the attorney fees of Dolan's counsel that were incurred in preparing all documents related to the motion for sanctions. Dolan thereafter filed a petition for attorney fees in which she set forth a specific amount of attorney fees she incurred in connection with the motion for sanctions. Attached to the petition was an affidavit from Dolan's counsel, Joel Handler, in which he itemized the time he spent on the motion and the amount he billed Dolan for that time.

¶ 17 On March 15, 2010, O'Callaghan filed a motion for leave to file a special and limited appearance and a pro se motion to quash the court's February 11, 2010, order imposing sanctions against him. In his pro se motion to quash, O'Callaghan argued that he was not a party to the action, that he had not been subpoenaed as a witness but instead appeared for his deposition only in the capacity of a corporate representative of defendant and that he was not served with notice of the motion for sanctions. Accordingly, he argued, Dolan never took the necessary steps to obtain the court's jurisdiction over him. In a supporting memorandum, O'Callaghan argued that the purpose of Supreme Court Rule 219 was to compel compliance with discovery and that he had fully complied with the court's discovery orders.

¶ 18 On March 16, 2010, defendant filed a motion to vacate the court's February 11, 2010, order imposing sanctions "in favor of Joel Handler." The motion stated that after the court set a briefing schedule on the amount of attorney fees to be awarded, defendant submitted a discovery request seeking information regarding his attorney fees in order to respond to the fee petition and that Handler had refused to provide this information. Defendant claimed that it could not respond to the fee petition without this information and requested that the court vacate its prior order insofar as it related to an award of sanctions to Handler.

¶ 19 On July 6, 2010, the court set the case for trial, closed discovery and allowed Dolan to file an amended petition for attorney fees. Also on that date, the court entered a memorandum opinion and order in which it found that O'Callaghan's motion to quash was improper because it did not attack the reasonableness of the petition for attorney fees but instead "simply restat[ed] the arguments previously brought by defendants which led to sanctions, and even attempt[ed] to assert new [arguments] as [a] basis to reverse" the court's order for sanctions. The court noted that "it would have been proper to raise these arguments in a motion to reconsider." Accordingly, the court found that O'Callaghan had not demonstrated a sufficient basis for a motion to quash and denied the motion. With regard to defendant's motion to vacate and to deny sanctions, the court found that the motion did not address the petition for attorney fees and that defendant's request for production to Handler was overbroad and did not demonstrate why Handler's billing rate in other cases was relevant to the case at bar. The court also found that the rate Handler charged was reasonable and awarded Dolan attorney fees in the amount of $4,781.25.

¶ 20 On July 9, 2010, Dolan filed a petition for additional attorney fees in the amount of $4,165. The motion alleged that those additional fees had been incurred in connection with the motion for sanctions and included an affidavit from Handler itemizing the additional fees.

¶ 21 On August 4, 2010, O'Callaghan filed a pro se "motion for rehearing, to vacate and response to petitions for attorney fees." The motion was made pursuant to sections 2-301, 2-1401 and 2-1203 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-301, 2-1401, 2-1203 (West 2010)) and asked the circuit court to vacate its July 6, 2010, order denying O'Callaghan's motion to quash the court's order entered on February 11, 2010. O'Callaghan argued that the order of February 11, 2010, was void for lack of personal jurisdiction. O'Callaghan also responded to Dolan's petitions for attorney fees.

ΒΆ 22 On May 3, 2011, the circuit court entered an order granting Dolan's petition for additional attorney fees and imposing additional sanctions against O'Callaghan in the amount of $4,165. The court also denied O'Callaghan's motions for a rehearing and to vacate the court's July 6, 2010, order imposing sanctions against him. The court further denied ...


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