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Levin v. Seigel and Capitel, Ltd., No. 3-99-0697

3rd District, 7 July 2000

JUSTICE HOMER delivered the opinion of the court:

The sole issue on appeal is whether the trial court erred in dismissing an associate attorney's complaint against his law firm, seeking contribution and/or indemnification for any sanctions that may be imposed against him, pursuant to Supreme Court Rule 137 (155 Ill. 2d R. 137) in a pending action. After our careful review, we affirm the trial court's dismissal of the attorney's complaint.

FACTS

The law firm of Seigel & Capitel, Ltd. (law firm) represented Bill Spivey and his company, Spivey Marine and Harbor Service (Spivey), in the prosecution of a lender's liability action against First Midwest Bank (Bank). Samuel Levin, an associate attorney with the law firm, was the attorney of record in the case and signed all substantive pleadings.

After the underlying action was terminated by summary judgment, the Bank filed a motion for Supreme Court Rule 137 sanctions against Spivey, Levin, and the law firm. The Bank asserted that allegations in pleadings and other documents filed in the underlying case were unfounded and not made in good faith.

In response, Levin filed a complaint for contribution and/or indemnification against the law firm. Levin alleged that he was supervised by partners at the law firm during his handling of Spivey's lawsuit and that he was acting within the scope of his duties as an associate attorney at the time. He contends, therefore, that under principles of agency the law firm should be held jointly and severally liable for any sanctions imposed upon him.

The law firm moved to dismiss Levin's complaint pursuant to section 2--615 of the Code of Civil Procedure (Code) (735 ILCS 5/2--615 (West 1998)). In granting the law firm's motion, the court held that Levin's complaint did not fall within the purview of section 2--1117 of the Code (735 ILCS 5/2--1117 (West 1998)) or any contractual relationship between the parties. The trial court made Supreme Court Rule 304(a) findings (155 Ill. 2d R. 304(a)), and this appeal by Levin followed.

ANALYSIS

A motion to dismiss under section 2--615 of the Code challenges the legal sufficiency of a complaint. 735 ILCS 5/2--615 (West 1998). On appeal, this court must conduct de novo review to determine whether sufficient facts are contained in the pleadings which, if proved, would entitle the plaintiff to relief. Roehrborn v. Lambert, 277 Ill. App. 3d 181, 183, 660 N.E.2d 180, 181-82 (1995). In doing so, we must accept as true all well-pleaded facts, and all reasonable inferences from those facts must be drawn in favor of the nonmoving party. McCormick v. Kruk, 220 Ill. App. 3d 449, 451, 581 N.E.2d 73, 75 (1991).

Levin contends that the allegations in his complaint establish a cause of action for indemnification and/or contribution against his law firm. Citing Brubakken v. Morrison, 240 Ill. App. 3d 680, 608 N.E.2d 471 (1992), Levin argues that when an associate attorney engages in sanctionable conduct while acting within the scope of his authority and in the exercise of his duties, his law firm is jointly and severally liable for any sanctions imposed against him.

In response, the law firm argues that Levin's association with the law firm is insufficient to subject it to any liability for such sanctions. Citing Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120, 107 L. Ed. 2d 438, 110 S. Ct. 456 (1989), the law firm contends that Levin, as the individual who signed the offending documents as Spivey's attorney, is solely responsible for his sanctionable conduct.

The right of indemnification and the right of contribution are separate and distinct concepts. Contribution is a statutory remedy which involves the sharing of liability for damages among joint tortfeasors according to each tortfeasor's relative percentage of fault. 740 ILCS 100/2 (West 1998); Cosey v. Metro-East Sanitary District, 221 Ill. App. 3d 205, 209, 581 N.E.2d 914, 917 (1991). In contrast, indemnification is a common law principle which allows one tortfeasor to shift the entire loss to another tortfeasor. Dixon v. Chicago & North Western Transportation Co., 151 Ill. 2d 108, 118, 601 N.E.2d 704, 708-09 (1992). In general terms, indemnity transfers liability from one who has been compelled to pay damages to another who should bear the entire loss. 41 Am. Jur. 2d Indemnity