Court of Appeals of Illinois, First District, Second Division
MERITURN PARTNERS, LLC, MERITURN FUND MANAGEMENT, LLC, MERITURN FUND, LP, SSI INVESTORS, LLC, and SSI HOLDCO, INC., Plaintiffs-Appellees and Cross-Appellants,
BANNER AND WITCOFF, LTD. and JOSEPH BERGHAMMER, Defendants-Appellants and Cross-Appellees
[Copyrighted Material Omitted]
Appeal from the Circuit Court of Cook County. No. 10 L 3985. Honorable William J. Haddad, Judge Presiding.
For Defendants-Appellants/Cross-Appellees: Karen Kies DeGrand, Matthew J. Hammer, Donohue Brown Mathewson & Smyth LLC, Chicago, IL.
For Plaintiffs-Appellees/Defendants-Appellants: Michael C. Bruck, Megan A. Rees, Alyssa M. Reiter, Williams Montgomery & John Ltd., Chicago, IL.
PRESIDING JUSTICE SIMON delivered the judgment of the court, with opinion. Justices Neville and Liu concur in the judgment and opinion.
[¶1] This is a legal malpractice case in which a jury found that the plaintiffs were entitled to a judgment of $6 million. Defendants appeal arguing that they should be made to pay less; plaintiffs cross-appeal arguing that they are entitled to more. We affirm the judgment entered by the trial court.
[¶3] Plaintiff Meriturn Partners, LLC is a private equity company. Meriturn, together with other individuals and companies, invests in troubled businesses, attempting to turn them around for a profit. Defendant Joseph Berghammer is an attorney who specializes in the area of intellectual property and is employed by defendant Banner & Witcoff, Ltd., a law firm.
[¶4] In 2005, Meriturn began to explore an investment in a company called Sustainable Solutions, Inc. Sustainable Solutions was in the business of repurposing industrial waste into usable products. Lee Hansen, one of the founders of Meriturn, took the most active role on the Meriturn side of the undertaking. After conducting a preliminary investigation into the sensibility of the investment, Meriturn and Sustainable Solutions agreed on a " term sheet" that outlined the general terms of the proposed transaction. However, a final decision on whether to invest was reserved until more thorough due diligence could be conducted. Meriturn retained Jeffrey Hechtman, an attorney, to structure and oversee the transaction. Because Sustainable Solutions' business relied on a number of proprietary processes that were the subject of patents, Hechtman recommended that Meriturn retain counsel that regularly worked on intellectual property matters. Hechtman recommended Berghammer of Banner & Witcoff to Lee Hansen and introduced them to each other.
[¶5] After an initial consultation, Berghammer agreed to perform due diligence on certain intellectual property issues involved in the proposed transaction. In a letter to Hansen, Berghammer memorialized the initiation of the representation and set forth the basic terms of the parties' relationship. The letter refers only to the representation of Meriturn Partners, LLC. However, Meriturn's typical investment strategy was to arrange and manage a transaction in which some of the money from its fund would be invested along with some of its individual clients' money. For this particular ...