The estate of a young woman killed in a car crash hired an attorney (Lawyer 1) to file a personal injury suit against the drivers involved in the crash. The estate representatives entered into a 1/3 contingent fee arrangement with the attorney who placed an attorney’s lien on any recovery by the estate.
About 2 years later, the estate fired Lawyer 1 and hired Lawyer 2. Lawyer 2 eventually facilitated a settlement for the estate in the amount of $75,000 and filed a motion to adjudicate the Lawyer 1’s attorney lien.
Lawyer 1 claimed he was entitled to $25,000 – 1/3 of the settlement amount. After considering his affidavit and time records, but without an evidentiary hearing, the trial court awarded Lawyer 1 a fraction (about $14K less) of what he sought on a quantum meruit basis (number of hours times hourly rate).
On appeal, Lawyer 1 argued the trial court denied him due process by not holding a formal hearing and erred by not awarding him more fees given the settlement’s proximity in time to his firing.
That’s the procedural backdrop to Dukovac v. Brieser Construction, 2015 IL App (3d) 14038-U, a recent unpublished Third District decision that addressed whether a fee petition requires an evidentiary hearing and the governing standards that guide a court’s analysis when assessing fees of discharged counsel.
The Third District upheld the trial court’s fee award and in doing so, relied on some well-settled fee award principles.
In Illinois, a client has the right to fire an attorney at any time. Once that happens, any contingency fee agreement signed by the client and attorney is no longer enforceable.
After he is discharged, an attorney’s recovery is limited to quantum meruit recovery for any services rendered before termination.
In situations where a case settles immediately after a lawyer is discharged, the lawyer can recover the full contract price.
In determining a reasonable fee under quantum meruit principles, the court considers several factors including (i) the time and labor required, (ii) the attorney’s skill and standing, (iii) the nature of the case, (iv) t he novelty and difficulty of the subject matter, (v) the attorney’s degree of responsibility in managing the case, (vi) the usual and customary charge for the type of work in the community where the lawyer practices, and (vii) the benefits flowing to the client.
A trial court adjudicating a lawyer’s lien can use its knowledge acquired in the discharge of its professional duties along with any evidence presented at the lien adjudication hearing.
Here, the appeals court that the trial court properly considered discharged Lawyer 1’s time records and affidavit in making its quantum meruit award. Even though there was no evidentiary hearing, the time sheets and affidavit gave the trial court enough to support its fee award.
Afterwords:
This case provides a good synopsis of the governing rules that apply where an attorney is discharged and the case soon after settles. A trial court has wide discretion in fashioning a fee award and doesn’t have to hold an evidentiary hearing with live witness testimony.
A clear case lesson is that a discharged petitioning attorney should be vigilant in submitting detailed time records so that the court has sufficient evidence to go on in making the fee award.