Holwell v. Zenith Electronics Corp.

Case Date: 11/06/2002
Court: 1st District Appellate
Docket No: 1-01-3834 Rel

THIRD DIVISION

FILED:11/06/02




No. 1-01-3834

 

JOSEPH HOLWELL, a Minor, By and  ) Appeal from the
Through His Mother and Next Friend, ) Circuit Court of
DIANE HOLWELL, ) Cook County
)
                  Plaintiff, )
)
                        v. )
)
ZENITH ELECTRONICS CORPORATION, )
)
                  Defendant )
)
(Estate of Joseph Holwell, a Minor, )
Appellee; John Petrulis, Petitioner;  ) Honorable
and Susan E. Loggans & Associates, P.C., ) Paddy H. McNamara,
Respondent-Appellant). ) Judge Presiding.

 

JUSTICE HOFFMAN delivered the opinion of the court:

Upon the settlement of this case, the circuit court of CookCounty entered an order which provided, in part, that attorney feesin the sum of $500,000 were to be paid to the law firm of Susan E.Loggans & Associates, P.C. (hereinafter referred to as the LoggansFirm). In a subsequent order, the circuit court directed that one-third of the fees previously awarded to the Loggans Firm be paid tothe Estate of Joseph Holwell, a minor. After its motion toreconsider was denied, the Loggans Firm instituted the instantappeal.

The facts giving rise to this appeal are not in dispute. OnDecember 28, 1988, a fire broke out in the home of Diane Holwellwhich seriously injured her minor son, Joseph Holwell. On January22, 1989, Diane Holwell executed a retainer agreement, engagingJohn B. Petrulis, who at that time was licensed to practice law inIllinois, to represent her and her minor son in the prosecution ofany claims they might have against Zenith Electronics Corporation(Zenith) and others for damages resulting from the fire. Pursuantto the terms of the retainer agreement, Holwell agreed to pay acontingency fee equal to one-third of any sums recovered. Theretainer agreement also provided that the Loggans Firm wouldparticipate in representing Holwell and her son without additionalfee and that Petrulis and the Loggans Firm would divide any feeearned. In a letter dated February 23, 1989, the Loggans Firmacknowledged that Petrulis would receive "one-third of the grossfee to be realized in this matter".

On February 17, 1989, the Loggans Firm filed an action in thecircuit court of Cook County against Zenith on behalf of Holwell inher capacity as mother and next friend of Joseph Holwell, a minor(hereinafter referred to as the plaintiff). This action wasdocketed in the circuit court as case number 89 L 2143. TheLoggans Firm represented the plaintiff for the next six and one-half years. During the course of a pretrial conference in June1995, Zenith offered to settle the action for $1.5 million. Although the Loggans Firm recommended to the plaintiff that sheaccept Zenith's settlement offer, the plaintiff rejected the offeron the advice of Petrulis. Shortly thereafter, she discharged theLoggans Firm.

After the plaintiff discharged the Loggans Firm, Petrulisreferred her to the law firm of Hofeld and Schaffner (hereinafterreferred to as the Hofeld Firm). The referral agreement betweenPetrulis and the Hofeld Firm provided that Petrulis would receiveone-third of the fee earned. On August 10, 1995, the trial courtgranted the Hofeld Firm leave to file its appearance on behalf ofthe plaintiff.

On January 7, 1997, the trial court granted the plaintiff'smotion pursuant to section 2-1009 of the Code of Civil Procedure(735 ILCS 5/2-1009 (West 1996)), thereby allowing her tovoluntarily dismiss the case docketed as number 89 L 2143. Subsequently, on January 5, 1998, the plaintiff, represented by theHofeld Firm, filed the instant action against Zenith, which wasdocketed as case number 98 L 79 in the circuit court of CookCounty.

On June 30, 2000, the Illinois Supreme Court suspendedPetrulis from the practice of law for a period of three years.

In early December 2000, the plaintiff agreed to settle herson's claim against Zenith for $5 million, consisting of a cashpayment of $3,326,188 and a guaranteed annuity with a cash value of$1,673,812. In a December 5, 2000, letter to the Hofeld Firm, theLoggans Firm claimed entitlement to "a fee in the amount of$500,000, one third of the original settlement offer of$1,500,000." On December 6, 2000, the plaintiff filed a petitionseeking an order approving the settlement of her son's claimagainst Zenith. In that petition, the plaintiff asserted that theonly distributions to be made for attorney's fees from thesettlement proceeds were a $1,166,666.66 distribution to the HofeldFirm and a $500,000 distribution to the Loggans Firm.

On December 14, 2000, the circuit court of Cook County enteredan order approving the settlement reached by the plaintiff andZenith and authorizing the plaintiff to execute releases toeffectuate that settlement. In that same order, the circuit courtfound that legal fees in the amount of $1,666,666.66 were "fair andreasonable" and approved the distribution of those legal fees as follows: $1,166,666.66 to the Hofeld Firm and $500,000 to theLoggans Firm. Although the December 14, 2000, order stated thatthe action was dismissed "with prejudice," the order also providedthat it would be "effective only after the entry in the probatedivision or circuit court of an order approving the bond or othersecurity required to administer the settlement and distribution".

Following the entry of the December 14, 2000, order in theinstant case, Diane Holwell filed a petition in the circuit courtof Will County, the county in which Joseph Holwell was a resident,seeking the appointment of a guardian for the minor. In herpetition, Holwell also sought the entry of an order authorizing thesettlement of her son's action against Zenith and the distributionof the settlement proceeds. On February 9, 2001, the circuit courtof Will County entered an order appointing Diane Holwell and theHarris Trust and Savings Bank as co-guardians of the Estate ofJoseph Holwell (hereinafter referred to as the Estate) and waivingany requirement for a bond. That same day, the circuit court ofWill County also entered an order approving the settlement ofJoseph Holwell's claim against Zenith on the terms set forth in thecircuit court of Cook County's December 14, 2000, order. The WillCounty order also directed certain distributions from thesettlement proceeds, including the payment of $500,000 to theLoggans Firm for legal fees and the payment of $1,334,079.83 to theHofeld Firm for legal fees and costs. The circuit court of WillCounty was not asked to and did not approve the payment of anyattorney's fees to Petrulis on that date.

On February 23, 2001, the Hofeld Firm forwarded to the LoggansFirm a $500,000 check issued by Zenith and made payable to theLoggans Firm and Petrulis. The letter accompanying the checkstates that, pursuant to its referral agreement with Petrulis, theHofeld Firm paid him one-third of the fee awarded to it. Subsequently, the Loggans Firm unsuccessfully attempted to causethe issuance of a $500,000 check payable solely to itself. Zenithdid, however, issue a check in the sum of $333,333.33, payablesolely to the Loggans Firm, and place the remaining $166,666.67 inan account with Virginia Surety Company.

On April 25, 2001, the Loggans Firm filed a motion in thecircuit court of Cook County, asserting that it had not been paidthe entire amount of fees which had been awarded to it andrequesting an order directing Zenith to pay it the remaining$166,666.67. On May 14, 2001, Petrulis filed a petition in thecircuit court of Cook County requesting that he be awarded the sumof $166,666.67 from the $500,000 fee awarded to the Loggans Firmfor legal services he rendered to the plaintiff prior to hissuspension. Petrulis amended his petition for fees twice before itcame on for hearing on August 9, 2001.

Petrulis and Diane Holwell were the only witnesses at theevidentiary hearing on Petrulis' second amended petition for fees. Petrulis testified as to the time that he allegedly spentrepresenting the plaintiff in her original and refiled actions. Heacknowledged that he had filed a petition in the circuit court ofWill County seeking a portion of the fees which had been awarded tothe Hofeld Firm and that the circuit court of Will County grantedthat petition on July 11, 2001, awarding him $388,088.88 in fees.(1) Petrulis further acknowledged that, although he was requesting feeson the basis of quantum meruit, the fees that he sought in thecircuit court of Will County and those he was seeking in thecircuit court of Cook County equaled one-third of the fees awardedto the Hofeld Firm and the Loggans Firm, respectively. For herpart, Holwell testified in general terms to Petrulis' involvementin the litigation and stated that she had no objection to him beingawarded the fees he was seeking.

In a written order entered on September 14, 2001, the circuitcourt of Cook County denied Petrulis' petition for fees, findingthat Petrulis had been "vastly overcompensated" for his work on theinstant case as a result of the fees that the circuit court of WillCounty had awarded to him. The trial court also found that thepetitions Petrulis filed in the circuit court of Cook County were"unquestionably over-inflated" and inconsistent and that acomparison of those petitions with the petition Petrulis filed inthe circuit court of Will County revealed that he "padded his timein the Will County petition." Although the trial court found thatPetrulis was not entitled to any additional fees, it went on tohold that there was "no reason to provide Susan E. Loggans &Associates with the remaining $166,666.67 given that these feeswere never part of the contract that Loggans had with *** DianeHolwell." The court ordered that the funds in the custody ofVirginia Surety Company be paid to the Estate.

On September 20, 2001, the Loggans Firm filed a motion,requesting that the trial court reconsider that portion of itsSeptember 14, 2001, order which directed that $166,666.67 of thefees that had previously been awarded to it be paid to the Estate. The trial court denied the motion on October 4, 2001.

On October 12, 2001, Petrulis filed a notice of appeal fromthe trial court's September 14, 2001, order. That appeal wasdocketed in this court as number 1-01-3694. However, Petrulis'appeal was dismissed for want of prosecution on May 25, 2002, andwas never reinstated.

On October 17, 2001, the Loggans Firm filed the instant appealfrom the trial court's September 14, 2001, order directing that thefunds in the custody of the Virginia Surety Company be paid to theEstate, and October 4, 2001, order denying its motion toreconsider.

In their original briefs before this court, the Loggans Firmand the Estate focused their arguments on the question of whetherthe trial court abused its discretion in ordering that one-third ofthe attorney's fee previously awarded to the Loggans Firm be paidto the Estate. We ordered the parties to prepare supplementalbriefs addressing the issue of whether the circuit court of CookCounty had jurisdiction to entertain either the Loggans Firm'smotion for an order directing Zenith to pay it the remaining$166,666.67 in fees or Petrulis' petition for fees,

We turn first to the question of whether the circuit court ofCook County possessed the necessary jurisdiction to entertainPetrulis' petition for fees. In its supplemental brief, theLoggans Firm argues that no such jurisdiction existed as Petrulis'petition was filed more than 30 days after the entry of a finaljudgment terminating this action. The Estate seems to arguegenerally that the circuit court is vested with jurisdiction toresolve issues relating to the fees to which a suspended attorneyis entitled (see Delbecarro v. Cirignani, 261 Ill. App. 3d 644,633 N.E. 2d 981 (1994)). It fails, however, to address thequestion of whether, on the date Petrulis filed his petition forfees, the trial court had already been divested of jurisdiction toenter any further orders in the instant case by virtue of the factthat more than 30 days had passed since the December 14, 2000,order disposing of the case became final.

In the absence of a timely filed post-judgment motion, a trialcourt loses jurisdiction over a case pending before it 30 daysafter the entry of a final judgment terminating the litigation. Brigando v. Republic Steel Corp., 180 Ill. App. 3d 1016, 1020, 536N.E. 2d 778 (1989). After the expiration of that 30-day period,the trial court lacks the necessary jurisdiction to amend, modify,or vacate its judgment. Beck v. Stepp, 144 Ill. 2d 232, 238, 579N.E.2d 824 (1991). These general propositions of law are notwithout exception, though. A court may at any time modify itsjudgment to correct a clerical error or a matter of form so thatthe record conforms to the judgment actually rendered. This powermay not, however, be employed to correct judicial errors or supplyomitted judicial action. Beck, 144 Ill. 2d at 238. Additionally,courts retain jurisdiction to enforce the terms of a judgment. Comet Casualty Co. v. Schneider, 98 Ill. App. 3d 786, 791, 424N.E.2d 911 (1981).

The circuit court of Cook County's December 14, 2000, orderapproved the settlement entered into between the plaintiff andZenith, provided for the payment of attorney's fees to the HofeldFirm and the Loggans Firm, and dismissed this action "withprejudice." As noted earlier, however, that order provided that itwould be effective only after the entry of an appropriate orderapproving the bond or other surety required to administer thesettlement between the plaintiff and Zenith. On February 9, 2001,the circuit court of Will County entered such an order, appointingDiane Holwell and the Harris Trust and Savings Bank as co-guardiansof the Estate, waiving any requirement for a bond, and approvingthe settlement entered into between the plaintiff and Zenith on theterms set forth in the Cook County court's December 14, 2000,order. As a consequence, the December 14, 2000, order of thecircuit court of Cook County became final, at the latest, onFebruary 9, 2001. The record reveals that no motions or petitionsof any kind were filed in this case within 30 days after February9, 2001.

At the time that Petrulis filed his petition for fees in thiscase on May 14, 2001, the circuit court of Cook County had alreadylost jurisdiction to grant any additional relief or to vacate,amend, or modify its December 14, 2000, order. The court'sadjudication of Petrulis' petition for fees can not, under anyinterpretation of the September 14, 2001, order or the proceedingsleading up to the entry of that order, be deemed the correction ofa clerical error or the enforcement of the court's December 14,2000, order.

The Estate contends that, even if the trial court had lostjurisdiction over the instant case by May 14, 2001, the datePetrulis filed his original fee petition, the court was revestedwith jurisdiction by virtue of the Loggans Firm's conduct. It istrue that, after the trial court loses jurisdiction over an actiondue to the passage of time, the parties to that action may revestthe court with jurisdiction by appearing before it and activelyparticipating in proceedings which are inconsistent with the meritsof the prior judgment. People v. Kaeding, 98 Ill. 2d 237, 240, 456N.E.2d 11 (1983). Conduct is deemed to be inconsistent with themerits of a prior judgment if it can reasonably be construed as anindication that the parties do not view the prior order as finaland binding. Kandalepas v. Economou, 269 Ill. App. 3d 245, 251,645 N.E.2d 543 (1994). The Estate notes that the Loggans Firmactively participated in proceedings on Petrulis' fee petition,responding to its merits rather than contesting the court'sjurisdiction to hear it. Thus, the Estate argues, the circuitcourt was revested with jurisdiction over the case. We disagree.

First, we question whether the Loggans Firm's conduct could beconstrued as an indication that it did not consider the circuitcourt's December 14, 2000, order awarding it fees to be final andbinding. Although the Loggans Firm responded to Petrulis' feepetition on the merits, at the time it did so it had pending itsown motion to enforce the December 14, 2000, fee award. Further,the Estate appears to overlook the fact that the Loggans Firm,although awarded attorney fees as part of the December 14, 2000,order, was not a party to the litigation. Additionally, theapproval of the distribution of attorney's fees was only one partof the December 14, 2000, order. The order also approved thesettlement agreement reached between the plaintiff and Zenith anddismissed the case with prejudice. The Estate does not assert thateither the plaintiff or Zenith engaged in any conduct which couldbe construed as an indication that they did not consider theapproval of the settlement offer or the dismissal of the case withprejudice as final and binding. The Estate asks us to find thatthe conduct of a non-party to the litigation, the Loggans Firm, inresponse to the motion of another non-party, Petrulis, revested thecircuit court with jurisdiction over only the award of attorney'sfees, a matter which was purely collateral to the approval of thesettlement agreement, without disturbing the finality of theremainder of the December 14, 2000, order. We find no authority todo so.

For these reasons, we find that the circuit court of CookCounty lacked the requisite jurisdiction to hear and resolve thepetition for fees that Petrulis filed in this case. To avoid anymisunderstanding or misapplication of our conclusion in thisregard, we do not mean to be understood as holding that the circuitcourt of Cook County is not the appropriate forum in which toresolve the question of whether Petrulis is entitled to an award offees on a quantum meruit basis for legal services rendered to theplaintiff prior to the date of his suspension from the practice oflaw. We have not so held. See Delbecarro, 261 Ill. App. 3d 644. We hold only that it had no jurisdiction to address the question inresponse to a petition filed in this case more than 30 days afterthe cause was dismissed.

We have determined that the circuit court of Cook Countylacked jurisdiction to hear and resolve Petrulis' fee petition, butour jurisdictional analysis must continue. Although the circuitcourt's September 14, 2001, order states that it was entered uponPetrulis' second amended petition for fees, the order implicitlydenied the Loggans Firm's April 25, 2001, motion and also modifiedthe December 14, 2000, order by directing that one-third of thefees awarded to the Loggans Firm be paid to the Estate.

Both the Loggans Firm and the Estate assert, and we agree,that, on September 14, 2001, the trial court had jurisdiction toentertain the Loggans Firm's April 25, 2001, motion seekingenforcement of the December 14, 2000, order. Comet Casualty Co.,98 Ill. App. 3d at 791. The Loggans Firm contends, however, thatthe portion of the court's September 14, 2001, order directing thatone-third of the fees previously awarded to it be paid to theEstate constitutes an impermissible modification of the December14, 2000, order more than 30 days after that order became final.

In support of its assertion that the trial court did, indeed,have jurisdiction to modify the fee award to the Loggans Firm, theEstate points to Rule 6.4(a) of the Rules of the Circuit Court ofCook County, which provides that the determination as to the amountof fees to which any attorney is entitled for representation of aminor in litigation must be made by the same judge who approved thesettlement agreement arising out of the litigation. Cook Co. Cir.Ct. R. 6.4(a) (eff. April 27, 1984). The reason for its relianceon Rule 6.4(a) is unclear. The trial judge that entered theDecember 14, 2000, order approving the settlement agreement in theinstant case also determined, in that same order, the amount ofattorney's fees to be awarded to the Loggans Firm. Clearly, Rule6.4(a) was complied with in this regard, and the Estate does notassert otherwise. After asserting compliance with Rule 6.4(a), theEstate simply goes on to argue the merits of the trial court'sorder reducing the fees to which the Loggans Firm is entitled. Wehave no quarrel with the Estate's assertion that, since theplaintiff discharged the Loggans Firm prior to the entry of a finaljudgment, any fees awarded to it should have been based on aquantum meruit theory for the reasonable value of services renderedprior to termination (Rhoades v. Norfolk & Western Ry. Co., 78 Ill.2d 217, 229-30, 399 N.E.2d 969 (1979)), and not computed based upona percentage of a rejected settlement offer (In re Estate ofMurphy, 56 Ill. App. 3d 1037, 1039-40, 372 N.E.2d 878 (1978)). Thepertinent question, however, is not whether the trial court appliedan incorrect standard when it awarded the Loggans Firm $500,000 infees on December 14, 2000, but whether, on September 14, 2001, thetrial court had jurisdiction to modify the terms of its earlierorder. The Estate offers no authority to support a finding thatthe trial court had such jurisdiction. We conclude that it didnot.

In its order of December 14, 2000, the circuit court awardedthe Loggans Firm $500,000 in legal fees. Neither a motion tovacate that award, nor any other type of post-judgment motion, wasfiled within 30 days of the order terminating this case havingbecome final, or at any time for that matter. Further, no petitionpursuant to section 2-1401 of the Code of Civil Procedure (735 ILCS5/2-1401 (West 2000)) for relief from the December 14, 2000,judgment was ever filed in this case. Consequently, on September14, 2001, although the trial court had jurisdiction to enforce itsDecember 14, 2000, order (Comet Casualty Co,, 98 Ill. App. 3d at791), it lacked jurisdiction to modify that order by directing thatone-third of the fees previously awarded to the Loggans Firm bepaid to the Estate.

Based upon the foregoing analysis, we find that the orderentered in this cause by the circuit court of Cook County onSeptember 14, 2001, is void for want of jurisdiction. We,therefore, vacate the circuit court's September 14, 2001, order,and remand this cause to the circuit court of Cook County forfurther proceedings not inconsistent with this opinion.

Order vacated; cause remanded.

SOUTH, P.J., and WOLFSON, J., concur.

1. On June 28, 2002, the circuit court of Will Countyentered an order vacating its July 11, 2001, order awardingPetrulis $388,088.88 in fees and transferring Petrulis' feepetition to the circuit court of Cook County.