In re Marriage of Johnson

Case Date: 06/29/2004
Court: 1st District Appellate
Docket No: 1-03-2359 Rel

SECOND DIVISION
June 29, 2004



No. 1-03-2359

 

In Re: The Marriage of ) Appeal from the
  ) Circuit Court of
MARY BETH JOHNSON, ) Cook County.
  )  
                          Petitioner, )  
  )  
         v. )  
  )  
VERNON JOHNSON, )  
  )  
                         Respondent, )  
  )  

)  
LAW OFFICES OF JEFFERY M. LEVING, LTD., )  
  )  
                                Appellant, )  
  )  
             v. )  
  )  
MICHAEL A. WEIMAN and DAVID J. WESSEL, ) Honorable
  ) Daniel J. Sullivan,
                                Appellees.) ) Judge Presiding.

 

PRESIDING JUSTICE WOLFSON delivered the opinion of thecourt:

A law firm contends the statute that authorizes disgorgementof interim fees paid to it by its client in a marriagedissolution case is constitutionally defective. We conclude adecision on the issue will have to wait for another day. We lackjurisdiction to decide it.

The appellant, the Law Offices of Jeffrey M. Leving, Ltd.(Leving), appeals an interim order entered by the trial courtprior to the final divorce decree, ordering Leving to disgorgecertain attorney fees paid by its client Vernon Johnson (Vernon).

The issues raised by Leving on appeal are: (1) does thiscourt have jurisdiction to hear this matter, given that aninterim order is not a final order; (2) does section 501(c-1)(3)(750 ILCS 5/501(c-1)(3) (West 2002)) violate the separation ofpowers clause in the Illinois Constitution; (3) does sectionsection 501(c-1)(3) (750 ILCS 5/501(c-1)(3) (West 2002)) violatesubstantive or procedural due process, either on its face or asapplied to Leving; (4) is the trial court's order void becausethe court lacked statutory authority to order Leving to disgorge"earned" fees; and (5) is the trial court's order void because noproper pleading requesting disgorgement was filed at the time ofthe order?

The disgorgement order was entered pursuant to section501(c-1)(3) of the Illinois Marriage and Dissolution of MarriageAct (the Act), which states, in part:

"If the court finds that both parties lackfinancial ability or access to assets orincome for reasonable attorney's fees andcosts, the court (or hearing officer) shallenter an order that allocates available fundsfor each party's counsel, including retainersor interim payments, or both, previouslypaid, in a manner that achieves substantialparity between the parties." 750 ILCS5/501(c-1)(3) (West 2002).

Section 501(c-1)(3) of the Act was enacted as part of the"leveling of the playing field" amendments in 1997, changing thepetition methods and court procedures for interim fee awards indissolution of marriage actions. 750 ILCS 5/501 et seq. (West2002); In re Marriage of Tetzlaff, 304 Ill. App. 3d 1030, 1032,711 N.E.2d 346 (1999).

FACTS

On August 10, 2000, Mary Beth Johnson filed a petition fordissolution of marriage against Vernon Johnson. Linda Schneiderfiled an appearance as Vernon's attorney. Michael Weiman wasgranted leave to file his substitution as Mary Beth's attorney onDecember 5, 2000. The court appointed David Wessel as attorneyfor the minor children.

On January 15, 2002, Schneider withdrew, and Leving enteredan appearance as attorney for Vernon. Leving filed a motion towithdraw on April 9, 2002, contending Vernon failed to fulfill anagreement on expenses and fees. Leving later withdrew themotion. Leving filed a second motion to withdraw on July 12,2002, citing the same reasons. The court granted Leving leave towithdraw on July 17, 2002. On July 30, 2002, Leving filed apetition for attorney fees in the amount of $12,247.57, pursuantto section 508 of the Act. 750 ILCS 5/508 (West 2002). OnAugust 22, 2002, Michael Ochoa, an attorney with Leving, filed anadditional appearance as Vernon's attorney.

On August 23, 2002, the court entered an order setting ahearing date on Mary Beth's petition to modify visitation. Theorder also stated:

"The issue of the child's representative'sfees and a prospective leveling of theplaying field pursuant to 750 ILCS 5/501(c-1)shall be adjudicated at such time as well asthe setting of trial dates."

On August 27, 2002, Leving refiled its additional appearanceand filed a motion for leave to file appearance.

Mary Beth, through Weiman, presented to the court a petitionfor interim and prospective attorney fees and costs pursuant tosection 501(c-1) (750 ILCS 5/501(c-1) (West 2002)), allegingVernon was well able to pay Mary Beth's interim and prospectiveattorney fees. Wessel presented a petition for interim attorneyfees and prospective trial fees, pursuant to section 506 (750ILCS 5/506 (West 2002)). Neither petition was filed with theclerk of the court. Copies of the petitions had been sent toLeving. Wessel's petition asked the trial court to order fundsalready paid by the parties toward legal fees of their ownattorneys "to be disgorged by their attorneys and paid to DavidWessel ***." Weiman's petition said "there must be a leveling ofthe playing field between the parties" and it asked the trialcourt to decide the fees issue "on a non-evidentiary basispursuant to Section 501(c)(1)."

Vernon filed a motion to strike or dismiss the petition forinterim and prospective attorney fees and costs. In his motion,Vernon acknowledged having been served with the petition. On August 28, 2002, following a visitation hearing, thecourt heard arguments regarding the fee petitions. Ochoa toldthe court he had received $23,500 in fees since January 2002,which Vernon had borrowed from his parents. Weiman asked thecourt to disgorge fees paid to Ochoa, because Ochoa had received$11,000 as a retainer at the beginning of the case. Ochoaobjected that Weiman's petition did not ask for disgorgement andobjected to any hearing on the fee petition because he had justreceived it 90 minutes before. The court overruled the objectionbut did not order disgorgement. The court ordered Vernon to pay$15,000 in attorney fees to Weiman and $7,500 to Wessel within 30days and denied Vernon's motion to strike the fee petition. Theorder was entered on September 9, 2002.

On November 12, 2002, Mary Beth filed an emergency petitionfor rule to show cause why Vernon should not be held in contemptfor failure to pay the attorney fees under the court's September9, 2002, order and failure to pay child support. The courtissued a rule against Vernon pursuant to the petition. Vernonfiled a financial disclosure statement, indicating he owed Leving$16,113.91 in attorney fees, as of October 31, 2002.

On December 2, 2002, the court held Vernon in indirect civilcontempt of court following a hearing on the rule to show cause. The court remanded Vernon to the custody of the Sheriff of CookCounty with commitment stayed until December 4, 2002. The purgewas set for Vernon to pay $7,500 to Wessel, $7,300 to Weiman, and$2,200 to Mary Beth for child support.

On December 4, 2002, the cause came before the court forreturn of the body attachment issued against Vernon. With Vernonnot having met the ordered purge, the trial judge ordereddisgorgement of half the attorney fees paid to Leving, stating: "in light of the fact you [Vernon] paid$23,000 to your present attorney, under thestatute, the laws of the State of Illinois,I'm going to order that half of that bedisgorged and given in equal amounts to Mr.Weiman to cover his fees and Mr. Wessel tocover his fees. *** I want the record toreflect the reason the Court is taking thisaction is that it has been shown, through theevidence presented at the prove up, thatthere are no assets in this case whatsoeverto take attorney's fees from. None. Therefore, this is the only equitable wayunder the law to see that both sides and plusthe child's representative are paid theirattorney's fees."

The following exchange between Ochoa and the trial judgetook place:

"MR. OCHOA: Mr. Weiman is correct. Mr.Johnson has paid $23,500. With regard to theissue on Petition for Rule to Show Cause,this was brought about by two petitions forinterim fees and this Emergency Petition forRule to Show Cause, this being the secondpetition. Nowhere does anyone ask for apurge--sorry. Nowhere does anyone ask fordisclosure.(1)

THE COURT: In this petition they ask for anyand all other relief.

MR. OCHOA: Well, if that's going to be thecase in the pleading, then there's no pointin saying anything other than that. You canjust simply say relief allowed by thestatute.

THE COURT: Are you suggesting instead of theCourt making this order that your client goto jail?

MR. OCHOA: No. I'm suggesting the Court dosomething else. Make a payment history. Payment plan. Somehow enable him to pay oncehe becomes employed. ***

THE COURT: I think that will be an excellentidea. He will owe you more fees now that Iam disgorging you of half of the fees. Ithink it's an excellent idea for the Levingfirm to enter an agreement based on yourfuture employment to make payment to them."

The court ordered payment in 14 days. The court's order,entered December 5, 2002, stated, in part:

"1. Pursuant to 750 ILCS 5/501(c-1) and theagreement of the parties, the law firm ofJeffrey M. Leving, Ltd. is hereby disgorgedof one-half (1/2) of the fees paid byrespondent which total $11,750. Thisdisgorgement shall be made within 14 days viathe following payments to be made by JeffreyM. Leving, Ltd.:

A. $5,875.00 to David Wessel, Esq.

B. $5,875.00 to Michael Weiman, Esq.

***

3. In the event there is compliance withParagraph 1 of this order, the purge setforth in the 12/2/02 order relative to fees,as well as all claims for fees by petitionerand the children's representative against therespondent, shall be deemed satisfied infull." (Emphasis added.)

The court granted the parties 30 days to resolve any remainingissues related to division of personal property. The courtreserved jurisdiction to adjudicate those matters.

On December 6, 2002, Vernon filed an emergency motion tovacate the portion of the court's order indicating "agreement ofthe parties." The court entered an order striking the words "andthe agreement of the parties" from the December 5 order.

Leving filed an amended petition for attorney fees in theamount of $42,441.41 and a motion to withdraw on December 12,2002. Leving filed its second amended petition for attorney feesin the amount of $57,338.61 on December 23, 2002.

Vernon, through Leving, filed a motion to reconsider ordersfor disgorgement on December 23, 2002. The motion alleged nopetition for disgorgement was ever presented to the court orfiled with the clerk's office. Vernon contended he had noadequate opportunity to be heard and was denied a hearing uponproper notice with proper pleadings. He contended thedisgorgement orders were an unlawful taking of property inviolation of substantive and procedural due process.

Mary Beth filed a motion to strike the motion to reconsider,saying the motion failed to set forth any newly discoveredevidence, changes in the law, or errors by the trial court. MaryBeth conceded the court entered the disgorgement orders suasponte but contended the statute gave the court authority to doso. Vernon filed a response to the motion to strike. Levingfiled another motion to withdraw.

On December 27, 2002, the court entered an order vacatingthe remand of Vernon to the custody of the Sheriff, findingVernon had met the purge requirements. Leving had transferredthe required amounts of $5,875 each to Weiman and Wessel.

On April 18, 2003, the court heard arguments on the motionto reconsider and motion to strike. Ochoa argued the court madethree errors of law. First, the court found Vernon could notafford to pay fees, so there was no reason to find him incontempt. Second, neither Wessel nor Weiman requesteddisgorgement in their petitions, and the order violated dueprocess. Third, the funds for disgorgement were not availablebecause there was evidence Vernon still owed the firm $16,113.91. The court denied Vernon's motion to reconsider and Mary Beth'smotion to strike.

The judgment for dissolution of marriage was entered April18, 2003. The court retained subject matter jurisdiction forpurposes of enforcing the judgment. The court reserved forfurther hearing: (1) the division of personal property, subjectto each party's right to bring a motion within 30 days; (2) thedivision between the parties of certain funds held in escrow; and(3) all issues regarding attorney fees.

On July 1, 2003, the court entered an order awarding eachparty one-half of the escrowed funds, ordering other personalproperty to be distributed, and granting Leving leave towithdraw.

Leving filed its notice of appeal on July 30, 2003, followedby an amended notice of appeal on July 31, 2003, appealing theorders entered September 9, 2002, December 2, 2002, December 5,2002, December 6, 2002, and April 18, 2003.

On February 25, 2004, the trial court set a hearing date ofApril 27, 2004, on Leving's second amended petition for attorneyfees. On April 27, 2004, the hearing on fees was continued bymotion of Vernon and was pending before the trial court at thetime Leving filed its notice of appeal.

In addition, on February 25, 2004, the trial court allowed amotion by Wessel and Weiman to correct the record and file theirfee petitions nunc pro tunc to August 2002. The petitions wereformally filed on March 17, 2004. On March 18, 2004, Weiman andWessel filed in this court a joint motion for leave to filesupplemental record on appeal, requesting to add both feepetitions. Wessel and Weiman alleged the petitions were servedon Vernon in August 2002, but inadvertently not filed. Thiscourt entered an order that the joint motion would be taken withthe case. We now grant the joint motion.

DECISION

Before we can address Leving's contentions regarding thedisgorgement order's validity, we must consider whether thiscourt has jurisdiction to entertain this appeal.

This court has a duty to independently assess itsjurisdiction to hear an appeal. In re Marriage of Devick, 335Ill. App. 3d 734, 740, 781 N.E.2d 484 (2003). On this court'srequest, both parties submitted additional briefs addressing theissue of jurisdiction. Leving contends this court hasjurisdiction pursuant to Supreme Court Rule 301, which states,"[e]very final judgment of a circuit court in a civil case isappealable as of right" (155 Ill. 2d R. 301). Leving contendsthe disgorgement order, an otherwise interlocutory order, becamefinal and appealable on July 1, 2003. On July 1, 2003, the trialcourt entered a final order dividing the remaining personalproperty between Mary Beth and Vernon Johnson, but reservingattorney fees issues. In addition, Leving was given leave towithdraw as Vernon's attorney.

Weiman and Wessel contend the disgorgement order becamefinal when the order of dissolution of marriage was entered onApril 18, 2003; therefore, Leving's notice of appeal, filed July30, 2003, was untimely. Alternatively, Weiman and Wessel contendthe trial court has not yet entered a final order on attorneyfees, rendering this appeal premature and depriving this court ofjurisdiction.

To determine whether we have jurisdiction, we must firstdecide whether a disgorgement order is a final judgment. Westart by examining the relevant sections of the Act (750 ILCS5/101 et seq. (West 2002)). When construing a statute, our mainobjective is to ascertain and follow the legislature's intent,typically by applying the plain meaning of the statute'slanguage. In re Stella, 339 Ill. App. 3d 610, 614, 791 N.E.2d187 (2003).

Section 501(c-1)(3) provides for temporary relief in divorceproceedings, including interim awards of attorney fees:

"In any proceeding under this subsection(c-1), the court *** shall assess an interimaward against an opposing party in an amountnecessary to enable the petitioning party toparticipate adequately in the litigation ***. *** If the court finds that both parties lackfinancial ability or access to assets orincome for reasonable attorney's fees andcosts, the court *** shall enter an orderthat allocates available funds for eachparty's counsel, including retainers orinterim payments, or both, previously paid,in a manner that achieves substantial paritybetween the parties." (Emphasis added.) 750ILCS 5/501(c-1)(3) (West 2002).

This "allocation" of interim attorney fees, which iscommonly referred to as "disgorgement", was enacted to "level theplaying field by equalizing the parties' litigation resourceswhere it is shown that one party can pay and the other partycannot." In re Marriage of Beyer, 324 Ill. App. 3d 305, 315, 753N.E.2d 1032 (2001).

The Act also addressed the effect of any interim ordersgranting temporary relief. Section 501(c-1)(2) states in part:

"Any assessment of an interim award [ofattorney fees] *** shall be without prejudiceto any final allocation and without prejudiceas to any claim or right of either party orany counsel of record at the time of theaward. Any such claim or right may bepresented by the appropriate party or counselat a hearing on contribution under subsection(j) of Section 503 [750 ILCS 5/503] or ahearing on counsel's fees under subsection(c) of Section 508 [750 ILCS 5/508]." (Emphasis added.) 750 ILCS 5/501(c-1)(2)(West 2002).

Section 508(d) provides:

"A temporary order entered under thisSection:

(1) does not prejudice the rights of theparties or the child which are to beadjudicated at subsequent hearings in theproceeding;

(2) may be revoked or modified beforefinal judgment, on a showing by affidavit andupon hearing; and

(3) terminates when the final judgmentis entered or when the petition fordissolution of marriage or legal separationor declaration of invalidity of marriage isdismissed." (Emphasis added.) 750 ILCS5/508(d) (West 2002).

The statute's plain language indicates interim attorney feeawards provide temporary relief during divorce litigation. 750ILCS 5/501 et seq. (West 2002). These interim awards are treatedas interlocutory orders and are not subject to appeal. In reMarriage of Olesky, 337 Ill. App. 3d 946, 950, 787 N.E.2d 312(2003) (order awarding interim attorney fees was interlocutoryand portion of appeal relating to the order was dismissed forlack of jurisdiction); In re Marriage of Tetzlaff, 304 Ill. App.3d 1030, 711 N.E.2d 346 (1999).

In Tetzlaff, the attorneys in a divorce case filed aninterlocutory appeal challenging a disgorgement order. The trialcourt ordered the attorneys, upon their withdrawal from the case,to place $35,000 of previously awarded fees, which their clientalready paid, into an escrow account. Tetzlaff, 304 Ill. App. 3dat 1035. In that case, the attorneys did not wait for the courtto enter a final order of dissolution before filing their appeal. This court held it lacked jurisdiction on appeal, because thedisgorgement order was an interim order and the Act did notauthorize appeals of such orders. Tetzlaff, 304 Ill. App. 3d at1039, citing 750 ILCS 5/501(c-1) (West 2002). The court said thedisgorgement order was "merely a modification of the court'sprevious interim attorney fee award" and any dispute regarding aninterim order could be raised at the hearing for final attorneyfees. Tetzlaff, 304 Ill. App. 3d at 1038-39.

Here, the final order of dissolution was entered April 18,2003. In the dissolution order, the trial court specificallyreserved two issues for further consideration--the division ofsome personal property and attorney fees. The court ordered:

"All issues regarding attorneys feesbetween each of the parties and the attorneyfor the children, have been, and will bedetermine (sic) by separate orders of thisCourt. These issues are reserved for furtherhearing by the Court."

In the July 1, 2003, order, the court resolved the personalproperty issues but did not enter an order regarding attorneyfees. Leving contends the July 1, 2003, order made thedisgorgement order final, because it disposed of the remainingissues between Vernon and Mary Beth, the original parties to thedissolution. We believe neither the divorce decree on April 18,2003, nor the July 1, 2003, order finalized the disgorgementorder. See generally In re Marriage of King, 208 Ill. 2d 332,344, 802 N.E.2d 1216 (2003) ("the issue of fees owed by a clientto his or her attorney is not interrelated with other issues,such as child support, property division, and maintenance").

A final judgment is one that finally disposes of the entirecontroversy or a separate branch of it. In re Marriage of Berto,344 Ill. App. 3d 705, 716, 800 N.E.2d 550 (2003). For appellatereview purposes, an order is considered final even where thecourt reserved an issue for future determination, so long as thatissue was incidental to the rights adjudicated by the judgment. Berto, 344 Ill. App. 3d at 716.

Under the Act, an interim attorney fees award grantstemporary relief--disgorgement is simply a method the court usesto redistribute the necessary available funds when the obligatedparty cannot otherwise afford to pay the interim award. 750 ILCS5/501(c-1)(2) (West 2002). Neither the interim award nor thedisgorgement affects an attorney's claim for a final setting ofattorney fees. 750 ILCS 5/508 (West 2002). By definition, adisgorgement order is never a final adjudication of theattorney's right to fees--it merely controls the timing ofpayment, with no effect on whether, or how much, the attorney isentitled to collect at the conclusion of his services. See 750ILCS 5/501(c-1)(2) (West 2002); 750 ILCS 5/508 (West 2002); seegenerally In re Marriage of DeLarco, 313 Ill. App. 3d 107, 728N.E.2d 1278 (2000) (as a matter of discretion, a trial court willaward attorneys only fees it deems reasonable). The order"terminates" at final judgment. 750 ILCS 5/508(d)(3) (West2002); see also King, 208 Ill. 2d at 345.

The Act provides two procedures for presenting a claim forfees: (1) a party can pursue a contribution hearing to recoverattorney fees paid to the opposing side; or (2) an attorney canfile a section 508(c) petition to recover fees from a formerclient. 750 ILCS 5/501(c-1)(2) (West 2002). Both a contributionorder and a final setting of attorney fees are considered finaljudgments on fees for purposes of appeal. See In re Marriage ofSuriano & LaFeber, 324 Ill. App. 3d 839, 756 N.E.2d 382 (appealreviewed contribution award); Devick, 335 Ill. App. 3d at 742;see also King, 208 Ill. 2d at 344-45 (a section 508(c) ordersetting final attorney fees, which preceded dissolution order,became final and appealable on the day the final judgment ofdissolution was entered).

The reason orders awarding contribution or a final settingof fees are appealable, while interim orders are not, is clear: the trial court can effectively undo any interim attorney feeaward and related disgorgement by restoring fees to the attorneywho previously relinquished his fees to opposing counsel. However, in the case of a 508(c) petition, the former client, notthe other side, pays to replace the disgorged fees. 750 ILCS5/508(c) (West 2002). If the attorney is successful and recoversthe disgorged fees through a final setting of fees against hisformer client, the end result of disgorgement is merely a delayin payment. If an attorney wants to avoid that delay, theimmediate way he or she can contest on direct appeal the validityof a disgorgement order is to secure a contempt order by refusingto disgorge the fees. See Stella, 339 Ill. App. 3d at 617;Beyer, 324 Ill. App. 3d at 321 ("[i]n the absence of a contemptorder, the issue would not otherwise have been reviewable, asorders addressing interim attorney fee awards are not subject tointerlocutory appeal"). Or he or she might be able to persuade atrial judge to certify the question pursuant to Supreme CourtRule 308 (155 Ill. 2d R. 308).

In sum, the order disgorging attorney fees was not a finaladjudication of Leving's right to fees. Accordingly, theleveling of the playing field disgorgement order is notappealable, before or after final dissolution.

Leving paid the disgorged fees to opposing counsel asordered. Its client did not pursue contribution to recover theattorney fees from Mary Beth. Leving subsequently filed asection 508(c) petition to recover its fees from Vernon. Leving's petition was still pending in the trial court at thetime it filed this appeal. As of that time, the trial courtstill had to decide whether to order Vernon to pay Leving feesfor its representation, which may include the amount previouslydisgorged, in whole or in part.

Without a final disposition regarding Leving's right tofees--the disgorgement order being inherently temporary and thenterminated--we lack jurisdiction and must dismiss this appeal. Furthermore, Leving is trying to recover its fees from bothopposing counsel and its former client by simultaneouslylitigating this appeal and its 508(c) petition. To allow anappeal under these circumstances would create the possibility ofdouble recovery.

We dismiss for lack of jurisdiction.

Appeal dismissed.

BURKE, and GARCIA, JJ., concur.

1. On April 18, 2003, Ochoa requested the transcript bechanged to reflect that he said "disgorgement" and not"disclosure." The trial court denied the request. We assume hemeant to say "disgorgement."