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Staes and Scallan, P.C v. P. Daniel Orlich

November 6, 2012


Appeal from the Circuit Court of Cook County, County Department, Law Division No. 09 L 6030 The Honorable Daniel J. Pierce, Judge Presiding.

The opinion of the court was delivered by: Justice Harris

PRESIDING JUSTICE HARRIS delivered the judgment of the court, with opinion. Justices Quinn and Connors concurred in the judgment and opinion.


¶ 1 Staes & Scallan, P.C., a law firm (plaintiff), filed a verified complaint for breach of contract against defendants, and former clients, P. Daniel Orlich and Jeffrey Gidney. Defendants each owned a baseball team in the independent Northern League, a professional baseball league (League). Plaintiff sought payment of approximately $56,000 in fees and costs associated with its defense of defendants in a lawsuit brought by the League. Prior to trial, and after having a default judgment and subsequent judgment order entered against him, Gidney settled with plaintiff for $28,000. This amount represented approximately half of the amount plaintiff claimed it was owed from defendants. Following the bench trial against Orlich, the circuit court found in plaintiff's favor on the issue of liability only, taking the issue of damages under advisement. After allowing Orlich and plaintiff to file written submissions outlining their respective positions to charges contained in plaintiff's outstanding invoices, the circuit court entered judgment against Orlich in the amount of $23,397.35, plus prejudgment interest. At issue here is whether the circuit court's judgment order in the amount of $23,392.35, plus prejudgment interest, is against the manifest weight of the evidence. We hold that the circuit court's judgment order is not against the manifest weight of the evidence.


¶ 3 On July 27, 2011, the circuit court entered judgment against Orlich. On September 12, 2011, the circuit court denied Orlich's motion for reconsideration and to reduce the judgment amount. On October 11, 2011, Orlich timely filed his notice of appeal. Accordingly, this court has jurisdiction pursuant to Illinois Supreme Court Rules 301 and 303 governing appeals from final judgments entered below. Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R. 303 (eff. May 30, 2008).


¶ 5 Plaintiff filed a verified complaint for breach of contract against defendants seeking the payment of fees and costs associated with its defense of defendants in the underlying lawsuit. In the underlying lawsuit, the League sought damages of $2 million from each defendant per a contractual liquidated damages clause. The League sought an additional $50,000 from Orlich for contractually agreed expenses. According to the complaint, defendants hired plaintiff to represent them in the lawsuit in November of 2007. Orlich signed a retainer agreement, while Gidney "verbally and continuously authorized" plaintiff to represent him. Plaintiff represented both defendants from November of 2008 "through early 2009." Plaintiff, at Orlich's request, had the lawsuit removed to the United States District Court for the Northern District of Illinois.*fn1 Plaintiff alleged that because of the services it provided defendants, the League agreed to "give up" its $4 million plus in monetary claims and provide Orlich with "franchise protection."

¶ 6 Plaintiff further alleged that it was paid an initial retainer of $10,000, but that defendants had refused to pay any additional billed legal fees and expenses totaling $51,124.40. This was despite "their repeated acknowledgment to [plaintiff] that the monies were owed." Plaintiff agreed with defendants to a $5,000 reduction in fees "to resolve all billing disputes." Defendants never paid the adjusted amount and, therefore, "they breached the agreement that would have allowed for the reduction." Plaintiff requested that defendants be jointly and severally liable for $51,124.40, plus interest and costs.

¶ 7 Orlich answered the complaint and denied liability. Gidney, however, did not appear or respond to the complaint. On June 24, 2010, the circuit court entered default judgment against Gidney in the amount of $56,397.09.

¶ 8 On September 8, 2010, plaintiff, as a judgment creditor, filed a release of judgment against Gidney. The release stated that full satisfaction was received "by way of [a] $28,000 settlement."

¶ 9 Trial was held October 6-7, 2010. Stephen Scallan, a partner in the firm, testified on plaintiff's behalf. Scallan testified that plaintiff was retained to represent defendants in October of 2007. The agreement was memorialized in a December 4, 2007, retainer agreement and signed by Orlich. The billing rates, as provided for in the retention agreement, listed the partners' rate as $400 an hour, while associates billed $275 per hour, and the firm's paralegals billed $60 per hour. Scallan described the factual allegations being made by the League against defendants. He testified that the League alleged defendants had voluntarily left the League and that it was owed $2 million from both defendants in liquidated damages. The League additionally sought the return of the trade logos used by the teams. An additional $50,000 in damages from travel expenses was sought from Orlich, while $25,000 was sought from Gidney. Orlich had agreed to a $50,000-a-year travel subsidy because his team was located farther away from the other members of the League. Orlich raised no legal or factual defenses to paying the $50,000- a-year travel subsidy.

¶ 10 Scallan also described the services plaintiff performed on defendants' behalf. This included calling several people who had practiced before the assigned circuit judge. Plaintiff researched the best forum to litigate the matter, eventually deciding Illinois was preferable to Florida and South Dakota. Research was also performed to determine jurisdiction in the possible forums.

¶ 11 The case was then removed to federal district court, which Scallan testified was a decision made by Orlich. The district court sua sponte issued an order remanding the matter to the circuit court of Cook County because the initial removal papers were defective in alleging residency, not citizenship, as required. When asked whether Orlich was billed for the mistake made by plaintiff, Scallan responded "[t]here was no billing whatsoever in connection with the docketing statement, the notice of appeal, the brief in the Seventh Circuit. There was also briefing on the jurisdictional issue in the Seventh Circuit, and he was charged for none of that."

¶ 12 After a motion to reconsider was denied, plaintiff appealed, which automatically triggered a settlement conference with a Seventh Circuit mediator. A mediation was scheduled, and Orlich and Gidney attended the conference. Prior to the mediation conference, plaintiff had an extensive meeting at its office to prepare. Scallan, his partner Andrew Staes, Orlich, and Gidney were all in attendance. Neither Orlich nor Gidney objected at the morning meeting to having both Staes and Scallan attend the mediation conference. At the mediation conference, Scallan testified he attended along with Orlich, Gidney, Staes, and an unidentified woman. Three lawyers appeared on behalf of the League; Pat Salvi, Jr., who owned a team in the League; his son; and Mr. Goldberg. No other owners from the League appeared, which caused Orlich to become very angry. Despite the absence of the other owners, the mediation conference lasted for three hours. A resolution was not reached that day. Plaintiff prepared a motion for sanctions based on the failure of the other owners of the League to appear at the mediation. The motion was eventually denied.

ΒΆ 13 Following the denial of the motion for sanctions, "extensive settlement discussions" occurred with the mediator and the League. Eventually, the case was resolved. Scallan described the settlement, stating that Orlich and Gidney did not have to pay any money to the League. Orlich and Gidney were able to keep their baseball teams, insignia, rosters, and "all the other ...

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