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Sharp  Thinking

No. 191  Perspectives on Developments in the Law from Sharp-Hundley, P.C.  December 2020

Crack Develops In Rule Against Divorce Contingent Fees

The rule against contingency fees in marriage dissolution matters may be crumbling.

That’s the implication from a recent decision from the Appellate Court in Chicago.  Grund & Leavitt, P.C. v. Stephenson, 2020 IL App (1st) 191074.

In Grund, the law firm entered into an “advance payment retainer agreement” which (a) called for a $100,000 payment “which assures the availability of the services of [the firm] to represent you”; (b) provided that the firm would bill against that deposit monthly “at the hourly rates” designated on an attachment thereto, and if the retainer deposit was insufficient, the client would replenish same; and (c) said the firm would render “a final bill to you, such final bill taking into account various factors, in addition to the hourly rates, as delineated in the Illinois Rules of Professional Conduct”.

The firm billed the client over $3.7 million on a monthly basis, with hourly rates averaging $437.  It then issued its final bill for $9.775 million, comprised of an additional $25,000 in hourly fees and $9.75 million for the “final bill” amount.  The client objected, noting that the final bill amounted to a multiplier of 2.61.

The trial court invalidated the agreement as a contingency agreement in a domestic relations matter.  See Illinois Rule (“Rule”) of Professional Conduct 1.5(d)(1).  The firm appealed, claiming its agreement was permissible under Rule 1.5(a)(4), which permits consideration of “the results obtained” in determining whether a fee is “reasonable”.

The appellate panel said that to the extent the trial court ruled based on its belief that the results obtained could not be considered in setting a fee in a domestic relations matter, it erred.  Citing Rule 1.5(a), it said “consideration of the result achieved in a particular case is not only permissible but required” under that rule and In re Marriage of Malec, 205 Ill. App. 3d 273 (1990).  It said the trial court “should have given consideration to the parties’ agreement expressed in a written contract for a final bill, giving ‘proper consideration to the relevant factors, including the results achieved’ to determine whether [the firm] ‘is entitled to any additional fees’ beyond the hourly fees” (court’s emphasis; quoting Malec).

“New” Jurisdiction Analysis Continues In Probate Cases

Some 21 months ago, we noted that the “new” jurisdictional theory – with its roots in the constitutional changes of 1964 and its judicial recognition marked by Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325 (2002) – had reached the probate courts.  Sharp Thinking No. 166 (March 2019).  But we noted that “old ways of thinking sometimes die hard” and the trial courts were slow to embrace the “seismic change” which Belleville Toyota had decreed to be the law of Illinois.

In re Estate of Hughes, 2020 IL App (5th) 190390, decided recently by the Appellate Court, demonstrates both of those observations in a difficult context.

Ryan Hughes suffered traumatic brain injury in a slip-and-fall incident, causing him to need guardianship.  His mother was appointed.  His son initially opposed her in that regard because she had signed a do-not-resuscitate order while Ryan was in a coma.  Eventually mom and the son reached agreements where that order was rescinded and an agreed order was entered that mother would not “authorize to forego [sic] ‘life-sustaining treatment’ as defined in the Illinois Health Care Surrogate Act [755 ILCS 40] without petitioning this court for approval and without prior notice to” the son.

Some six months later, Ryan suffered cardiac arrest.  Efforts to resuscitate him began at 3:40 a.m.  At 5:17 a.m., mother permitted the doctors to withdraw resuscitative efforts and to extubate Ryan.  He died one minute later.  The son brought proceedings to have the mother held in indirect criminal contempt.

Relying on In re Estate of Gebis, 186 Ill. 2d 188 (1999), and its pre-Belleville Toyota analysis, the guardianship court denied the contempt petition on the theory it lost subject matter jurisdiction when Ryan died.  The son appealed.

The Appellate Court reversed.  Under Belleville Toyota, it said, “the only consideration is whether the alleged claim falls within the general class of cases that the court has the inherent power to hear and determine.  If it does, then subject matter jurisdiction is present” (court’s emphasis).

“The circuit court unquestionably has subject matter jurisdiction over [the son’s] petition,” the panel continued.  “That the circuit court is the appropriate tribunal to adjudicate findings of contempt for a violation of its own orders is beyond dispute.”

Supreme Court Grants PLA On Process Server Appointment

In July we noted that the Appellate Court’s Third District’s decision in Municipal Trust & Savings Bank v. Moriarity, 2020 IL App (3d) 190016, put that district in open disagreement with the Appellate Court’s Second District on whether the place where process is served or the place where the process is issued controls in determining whether the special appointment provisions of 735 ILCS 5/2-202(a) must be met.  See Sharp Thinking No. 185 (July 2020).

Now that dispute appears headed for resolution.  The Supreme Court has granted leave to appeal in Moriarity.  No. 126290.