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FIRST DIVISION
December 22, 2003

No. 1-02-1516

JUSTICE McNULTY delivered the opinion of the court:

After her husband died in a train accident, Mary Corcoranreceived a settlement offer from the railroads involved in theaccident. She talked to Joseph Dowd, a lawyer, who referred herto Corboy & Demetrio (C&D). She signed a contingent fee contractwith C&D. The contract included a referral fee for Dowd. C&Deventually advised Mary to accept the offer she received from therailroads. When Mary settled C&D waived its fee, but Dowddemanded his referral fee. The trial court awarded Dowd the fee. Mary now appeals. Because we find no abuse of discretion, weaffirm.

On October 11, 1998, a Metra train struck and killed MichaelCorcoran while he was working for Union Pacific Railroad ontracks in Chicago. Metra and Union Pacific offered Michael'swidow, Mary, some money not to sue, and she negotiated with therailroads on her own. Mary eventually elicited an offer of$1,400,000 to settle the case.

In May 1999 a friend introduced Mary to Dowd. The friendhad already told Dowd about the accident and Mary's negotiations. Dowd told Mary she needed a lawyer. She said she wanted to hireC&D because her father knew Corboy from high school. Dowdoffered to take Mary to C&D's office. At the office, on May 19,1999, Mary signed a contract for C&D to handle the case. Thecontract provides:

"I agree to pay CORBOY & DEMETRIO as compensation forits services and assign to it twenty-five percent ofany sum recovered from settlement or judgment.

***

I fully understand, agree and consent to the factthat Joseph P. Dowd, the referring lawyer, will receive40% of the attorneys' fees and that Joseph P. Dowd hasagreed to assume the same legal responsibility for theperformance of the legal services as CORBOY & DEMETRIOassumes on my behalf."

David Wise of C&D filed a wrongful death lawsuit against therailroads in August 1999. Wise moved for appointment of Mary asspecial administrator of Michael's estate, after obtainingconsents from both of Michael and Mary's children. Attorneysfrom C&D sent notices to the railroads for depositions of severalwitnesses. Wise filed an answer to the railroads' affirmativedefenses and a response to the railroads' interrogatories andrequests for production. Attorneys from C&D met with Mary onseveral occasions to discuss the status of the case.

No depositions ever took place. In April 2001 Wiserecommended settling the case for the $1,400,000 offer. Maryaccepted the advice. The court approved the settlement inDecember 2001. Because C&D did not improve on the settlementoffer Mary obtained without its help, C&D waived its fee.

Dowd petitioned for an award of 40% of C&D's contractual feeof 25% of the settlement. Mary answered that the fee wasunreasonable because Dowd had no contract with Mary and did nowork on the case.

The trial court found that Dowd met the requirements of theRules of Professional Conduct for charging a referral fee. Inthe written order the court added:

"When the case settled, Plaintiff became obligated topay 25% of the settlement in fees with 40% of that 25%going to Dowd. The fact that Corboy & Demetriodeclined to collect the owed fee does not lead to theconclusion that Dowd may not collect a fee.

The only basis for denying the $140,000 fee toDowd would be if Corboy & Demetrio's 25% contingencyfee [were] unreasonable. ***

While Corboy & Demetrio chose to waive its feebecause it was not able to obtain a higher settlementfor Plaintiff th[a]n what was originally offered, the25% contingency fee was not unreasonable. The courtcomputer record attached to the Petition shows thatCorboy & Demetrio did a significant amount of work inthis case in the two years it was pending. The firmwas simply unable to achieve a higher settlement.Plaintiff retained Corboy & Demetrio and agreed to paya contingency fee on any settlement or judgment knowingthat she already had a significant offer forsettlement. It was Plaintiff's decision to file alawsuit instead."

We will not reverse an award of attorney fees unless thetrial court abused its discretion. Tobias v. King, 84 Ill. App.3d 998, 1002 (1980). As with any appeal, if the case presents apure issue of law, we determine the issue without deference tothe trial court's judgment. In re Lawrence M., 172 Ill. 2d 523,526 (1996).

Mary argues on appeal primarily that Dowd did not performsufficient legal work to warrant an award of $140,000 in fees. When lawyers working on a case split a fee, the division usuallyshould be proportionate to the services each attorney performedand responsibilities each attorney assumed. 134 Ill. 2d R.1.5(g). But the rules make an explicit exception for referralfees. 134 Ill. 2d R. 1.5(g). Because Dowd sought a referral feehe did not need to prove that his legal work merited the fee. See Baer v. First Options of Chicago, Inc., 72 F.3d 1294, 1302-04(7th Cir. 1995).

According to Rule 1.5 of the Rules of Professional Conduct:

"(g) A division of fees shall be made inproportion to the services performed and responsibilityassumed by each lawyer, except where the primaryservice performed by one lawyer is the referral of theclient to another lawyer and

(1) the receiving lawyer discloses thatthe referring lawyer has received or willreceive economic benefit from the referraland the extent and basis of such economicbenefit, and

(2) the referring lawyer agrees toassume the same legal responsibility for theperformance of the services in question aswould a partner of the receiving lawyer.

(h) The total fee of the lawyers shall bereasonable." 134 Ill. 2d Rs. 1.5(g), (h).

C&D disclosed in writing the fee apportioned to Dowd for thereferral. The contract asserted that Dowd agreed to assume thesame responsibility for the case as a partner in C&D wouldassume. The writing met the requirement of Rule 1.5(g) fordisclosure of the referral fee. See Elane v. St. BernardHospital, 284 Ill. App. 3d 865, 873 (1996).

Courts have a duty to guard against the collection ofexcessive fees in all cases, including those involving referralfees. XL Disposal Corp. v. John Sexton Contractors Co., 168 Ill.2d 355, 360 (1995). Here a contract sets forth the totalcompensation for attorneys and the portion of the totaldesignated as the referral fee. Usually a contract between anattorney and his client will control compensation for theattorney. Hapaniewski v. Rustin, 179 Ill. App. 3d 951, 954(1989). Courts will enforce contingent fee contracts unless theyare unreasonable. In re Estate of Sass, 246 Ill. App. 3d 610,614 (1993).

Mary cites In re Teichner, 104 Ill. 2d 150 (1984), and In reGerard, 132 Ill. 2d 507 (1989), to support her argument that thecontingent fee contract here is unreasonable. In Gerard theclient misplaced certificates of deposit. The attorney merelyreregistered the certificates with the banks that held theaccounts. Because no one disputed the client's right to thefunds, the work concluded with neither a judgment nor asettlement. In Teichner, the client received insurance proceedsfrom routine payment, where the insurer never questioned theclient's right to payment. Our supreme court held that thepredecessor of Rule 1.5(c) of the Rules of Professional Conductprecluded contingent fees in those cases because therepresentation concluded with neither a judgment nor asettlement. 134 Ill. 2d R. 1.5(c); Gerard, 132 Ill. 2d at 522;Teichner, 104 Ill. 2d at 160.

Here the railroads denied liability in their response to thecomplaint, claiming that Michael's negligence caused hisinjuries. The parties resolved the complaint through asettlement. In this case, unlike Teichner and Gerard, the rulespermit C&D to charge a reasonable contingent fee.

Mary contends that we should find all contingent feecontracts unreasonable unless the attorney obtains someimprovement over any settlement offered without the attorney'sintervention. Of course the attorney and the client have theright to enter into a contingent fee contract with such aprovision. See Mohr v. Dix Mutual County Fire Insurance Co., 143Ill. App. 3d 989, 1000 (1986). But nothing in the rules compelssuch contracts or forbids contracts like the one Mary signed, inwhich she agreed to pay her attorneys 25% of the total recoveredfrom the railroads, with no mention of the amounts the railroadshad already offered her.

Mary also argues that the attorneys' work does not merit thefee. The record gives scant indication of the work C&Dperformed, as Mary's evidence and argument focused on Dowd'sfailure to perform substantial work. The judge who presided overthe case and observed the work of the attorneys found thecontingent fee contract not unreasonable, and thereforeenforceable. The trial court correctly focused on C&D's work,and noted that C&D had filed papers needed to protect Mary'sright to litigate her claim. We cannot say the trial courtabused its discretion by finding the work sufficient to make thecontingent fee contract enforceable.

Finally, Mary seeks rescission of the contingent feecontract, claiming that it rested on a mutual mistake regardingmaterial facts. Both Mary and her attorneys believed at the timeof contracting that Mary would win more than $1,400,000 if shelitigated the case. Attorneys at C&D later realized Mary faced asubstantial risk of recovering at trial far less than thesettlement offer.

To invalidate an agreement, a mistake must relate to a pastor present fact material to the contract. Cameron v. Bogusz, 305Ill. App. 3d 267, 272 (1999). Predictions usually do not qualifyas such present facts (see Lidecker v. Kendall College, 194 Ill.App. 3d 309, 314-16 (1990)), and mistaken predictions will notinvalidate a contract. Since parties generally enter intocontracts expecting to benefit, the rule Mary espouses wouldinvalidate many contracts in which either party fails to reap theexpected benefits. Allowance of rescission here, as in Cameron,would leave parties to most contracts uncertain as to whetherthey have a valid contract throughout the period of performance,as subsequent events might make the contract disadvantageous forone party who expected a benefit. Public policy demands greatercertainty concerning contracts. Cameron, 305 Ill. App. 3d at274. The mistaken prediction here provides no grounds forinvalidating the contingent fee contract.

C&D had a valid contingent fee contract with Mary for one-fourth of any settlement reached with the railroads in thiswrongful death case. The contract included a provision for Dowdto take 40% of C&D's fee. When Mary settled her case for$1,400,000, the amount the railroads offered without anyattorney's intervention, Dowd had a contractual right to paymentof 40% of C&D's 25% fee, for a referral fee of $140,000. Thetrial court did not abuse its discretion when it awarded Dowdthat fee. The judgment of the trial court is affirmed.

Affirmed.

O'MALLEY, P.J., and McBRIDE, J., concur.