In re Marriage of Newton , 2011 IL App (1st) 90683 ( 2011 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
In re Marriage of Newton, 2011 IL App (1st) 090683Appellate Court In re THE MARRIAGE OF DAVID NEWTON, Petitioner-Appellee, and
Caption HADLEY NEWTON, Respondent (David J. Grund, Marvin J. Leavitt,
and Grund & Leavitt, P.C., Contemnors-Appellants).
District & No. First District, Fourth Division
Docket Nos. 1-09-0683, 1-09-0684, 1-09-0685 cons.
Filed June 30, 2011
Held In a marriage dissolution action where contemnor attorneys were
(Note: This syllabus disqualified from representing respondent pursuant to Rule 1.9 of the
constitutes no part of Illinois Rules of Professional Conduct based on their prior representation
the opinion of the court of petitioner and their retainer agreement was unenforceable under
but has been prepared section 508(c)(3) of the Illinois Marriage and Dissolution of Marriage
by the Reporter of Act, the trial court did not err in denying the attorneys any attorney fees
Decisions for the and the finding of contempt was upheld on the ground that they had no
convenience of the good-faith basis to test the trial court's order.
reader.)
Decision Under Appeal from the Circuit Court of Cook County, No. 06-D-5136; the Hon.
Review Edward R. Jordan, Judge, presiding.
Judgment Affirmed.
Counsel on Marvin J. Leavitt and David C. Adams, both of Grund & Leavitt, P.C., of
Appeal Chicago, for appellants.
Michael J. Berger, Leon I. Finkel, and Rebecca S. Berlin, all of Berger
Schatz, of Chicago, for appellee.
Panel JUSTICE PUCINSKI delivered the judgment of the court, with opinion.
Justices Salone and Sterba concurred in the judgment and opinion.
OPINION
¶1 Contemnors-appellants, David Grund, Marvin Leavitt, and Grund & Leavitt, P.C.
(collectively Grund and Leavitt), appeal the court’s entry of a contempt order against them
based on their refusal to comply with the court’s order to step aside following an earlier court
order that disqualified Grund and Leavitt due to a conflict of interest and denied their petition
for attorney fees seeking $250,000 in interim and prospective fees in the divorce of David
Newton (David) and Hadley Newton (Hadley).
¶2 After a full hearing on David’s motion to disqualify, the circuit court determined that
there was a conflict of interest in violation of Rule 1.9 of the Illinois Rules of Professional
Conduct (Ill. Rs. of Prof’l Conduct, R. 1.9 (eff. Aug. 1, 1990)), and that Grund and the firm
of Grund & Leavitt were disqualified from representing Hadley. At a hearing on the petition
for fees, the court determined Grund and Leavitt were not entitled to any fees based on their
disqualification due to the conflict of interest. Grund and Leavitt refused to comply with the
court’s order denying them fees and ordering them to step away from the bench, and the
court found them in contempt and ordered Grund to pay $100 to purge the contempt. Grund
and Leavitt appeal only the contempt order.
¶3 The issue before us is discrete and limited: did the court err in entering the contempt
order? We clarify from the outset that Grund and Leavitt appeal only the contempt order and
seek corollary review of the underlying denial of their fee petition because of the
disqualification order, not their disqualification. A contempt order is final and appealable and
generally also brings the propriety of the underlying disqualification order and subsequent
denial of attorney fees before us. See SK Handtool Corp. v. Dresser Industries, Inc., 246 Ill.
App. 3d 979, 986 (1993).
¶4 We find that the circuit court did not err in finding Grund and Leavitt in contempt based
on their unwillingness to step aside, thus continuing their unwillingness to comply with
Grund’s disqualification due to a conflict of interest and the resulting denial of attorney fees.
Grund and Leavitt violated Rule 1.9, and under section 508(c)(3) of the Illinois Marriage and
Dissolution of Marriage Act (the Act), the retainer agreement with Hadley was not
enforceable because it was in violation of a court rule. 750 ILCS 5/508(c)(3) (West 2008).
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Further, as the court correctly noted, even without section 508, ordinary contract law requires
fees only for valid contracts and here the contract with Hadley was void ab initio because
Grund was not allowed by Rule 1.9 to enter into it.
¶5 JURISDICTION
¶6 At the time of the instant appeal, March 18, 2009, the underlying divorce proceedings
were still pending and judgment was not entered until nearly a year later, on March 8, 2010.
Disqualification orders are not immediately appealable (In re Estate of French, 166 Ill. 2d
95, 100 (1995)), but Grund and Leavitt here are not appealing the disqualification order.
Following the disqualification order the court denied attorney fees going back in time to the
first meeting with Hadley. Grund and Leavitt are not directly appealing the denial of attorney
fees. Grund and Leavitt argue that they are entitled to fees up to the time of their
disqualification. The court disagreed and denied all fees. Grund and Leavitt are appealing the
contempt order and fine of $100 imposed by the court for not stepping aside, thereby
disregarding the disqualification order and challenging the court’s denial of all fees from
either David or Hadley.
¶7 Contempt judgments that impose a penalty are final, appealable orders. In re Marriage
of Gutman, 232 Ill. 2d 145, 153 (2008). See also Ill. S. Ct. R. 304(b)(5) (eff. Jan. 1, 2006).
¶8 “ ‘ “Where an unappealable interlocutory order results in a judgment of contempt
including a fine or imprisonment, such a judgment is a final and appealable judgment and
presents to the court for review the propriety of the order of the court claimed to have been
violated.” ’ ” Index Futures Group, Inc. v. Street, 163 Ill. App. 3d 654, 657 (1987) (quoting
People v. Verdone, 107 Ill. 2d 25, 30 (1985), quoting People ex rel. Scott v. Silverstein, 87
Ill. 2d 167, 174 (1981)). Here, the court imposed a fine of $100, and therefore the contempt
was a final judgment which was immediately appealable.
¶9 STANDARD OF REVIEW
¶ 10 The parties dispute the standard of review. Grund and Leavitt assert the issue must be
reviewed de novo, as it presents a question of law, while David maintains that the proper
standard of review is abuse of discretion. When the facts of a contempt finding are not in
dispute, their legal effect may be a question of law, which we review de novo. Busey Bank
v. Salyards, 304 Ill. App. 3d 214, 217 (1999). See also Skokie Gold Standard Liquors, Inc.
v. Joseph E. Seagram & Sons, Inc., 116 Ill. App. 3d 1043, 1054 (1983) (this court conducts
an independent review of questions of law presented by the disqualification order). “As a
general rule, a trial court’s decision to award fees is a matter of discretion and will not be
disturbed on appeal absent an abuse of discretion.” In re Marriage of Nesbitt, 377 Ill. App.
3d 649, 656 (2007) (citing In re Marriage of Schneider, 214 Ill. 2d 152, 174 (2005)). Here,
however, the circuit court indicated its belief that it could not award attorney fees once Grund
and Leavitt were disqualified. Meanwhile, Grund and Leavitt argue that, although they were
disqualified, they are still entitled to their fees accrued for work performed for Hadley under
section 508 of the Act before the disqualification and assert that nothing in the ethical rules
explicitly states that no fees are allowed if an attorney is disqualified. The legal question is
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thus whether the circuit court properly denied attorney fees from the beginning of Grund’s
representation of Hadley. Whether a court or administrative agency has the authority to
award attorney fees is a question of law that we review de novo. Grate v. Grzetich, 373 Ill.
App. 3d 228, 231 (2007) (citing Alvarado v. Industrial Comm’n, 216 Ill. 2d 547 (2005)).
“Furthermore, whether a party may recover attorney fees and costs pursuant to any specific
act is a question of law.” Grate, 373 Ill. App. 3d at 231 (citing Johnson v. Thomas, 342 Ill.
App. 3d 382 (2003)). Thus, since the facts of the contempt are not in dispute and since Grund
and Leavitt are not appealing the disqualification, we are presented with a question of law
and we review this issue de novo.
¶ 11 BACKGROUND
¶ 12 Petitioner, David Newton, and respondent, Hadley Newton, were divorced pursuant to
a judgment for dissolution of marriage entered on March 8, 2010. In the underlying divorce
proceedings, David filed an emergency motion to disqualify Hadley’s attorney, Grund, and
the law firm of Grund & Leavitt, pursuant to Rule 1.9 (Ill. S. Ct. Rs. of Prof. Conduct, R. 1.9
(eff. Aug. 1, 1990)), due to Grund’s former representation of David in the same proceeding.
On August 9, 2007, the circuit court entered a preliminary injunction order prohibiting Grund
and Leavitt from representing Hadley while the motion to disqualify was pending. Hadley
filed her response to the motion to disqualify on July 27, 2007. A hearing was held on
September 4, 2007. The court heard testimony by David, Grund, and Hadley. However, upon
questioning of Grund regarding his conversation with David, David’s counsel objected based
on attorney-client privilege. Although there was an offer of proof, the circuit court barred
Grund’s testimony on the basis of the attorney-client privilege. David testified that he met
alone with Grund in Grund’s office for between 1 1/2 and 2 hours. They discussed
information and issues related to his marriage and impending divorce from Hadley, including
issues regarding the children and his financial situation, and Grund took notes.
¶ 13 Hadley testified, upon questioning by Grund, that she learned that there was a conflict
with Grund representing her because Grund himself told her there was a conflict when she
came in to see him. However, he entered into a retainer agreement with her and represented
her. The court found that Grund and Leavitt were disqualified from representing Hadley.
¶ 14 On September 18, 2007, Hadley sought interlocutory review of the court’s order and filed
a petition for leave to appeal (first appeal) under Supreme Court Rule 306 (Ill. S. Ct. R. 306
(eff. Sept. 1, 2006)). On October 17, 2007, we granted leave to appeal, thus staying
proceedings below. On June 13, 2008, we rendered our decision pursuant to Illinois Supreme
Court Rule 23 (Ill. S. Ct. R. 23 (eff. May 30, 2008)), in which we held that the circuit court
erred in barring Grund’s testimony at the hearing on the motion to disqualify. In re Marriage
of Newton, No. 1-07-2590 (2008) (unpublished order under Supreme Court Rule 23). We
reversed and remanded for a full and fair hearing including Grund’s testimony to resolve the
question of whether there was an attorney-client relationship between David and Grund. In
re Marriage of Newton, No. 1-07-2590 (2008) (unpublished order under Supreme Court Rule
23).
¶ 15 David filed a petition for rehearing. On July 15, 2008, we entered an order denying the
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petition for rehearing and further ordered that Arthur Berman, who had joined Grund &
Leavitt, was allowed to represent Hadley while the disqualification motion was pending. On
November 26, 2008, the Illinois Supreme Court denied David’s petition for leave to appeal,
and on January 8, 2009, we returned the mandate to the circuit court. David also filed a
motion seeking review of a certified question (second appeal) on July 16, 2008, pursuant to
Illinois Supreme Court Rule 308 (Ill. S. Ct. R. 308 (eff. Feb. 1, 1994)). However, we
dismissed that appeal.
¶ 16 On January 22, 2009, Grund and Leavitt filed a petition for attorney fees on behalf of
Hadley pursuant to sections 501 and 508 of the Act (750 ILCS 5/501, 508 (West 2008)),
seeking prospective and interim fees and costs from David in the amount of $250,000,
including amounts incurred during both appeals. The court conducted a hearing as directed
on February 25, 2009, and Grund testified that he told David that representation would not
begin until David actually signed a contract, that no attorney-client privilege would attach
during their meeting, and that David should not disclose anything to Grund that could not
appear in answers to interrogatories or in the public record. Grund testified that David
“volunteered some information,” but Grund did not recall anything specifically. Grund
denied taking any notes. Grund believed David never intended to actually hire him. Grund
also denied giving David a business card with his private cellular telephone number, but was
impeached by the production by David of Grund’s business card with his cellular telephone
number written on the back of the card. In rebuttal, David testified that Grund assured him
everything they discussed was confidential.
¶ 17 On March 3, 2009, the circuit court entered its memorandum opinion and order finding
that there was an attorney-client relationship between David and Grund and disqualifying
Grund and Leavitt from representing Hadley. The court specifically found that, “[c]learly,
from Mr. Grund’s own interrogation of Hadley it is obvious that he believed there to be a
conflict and that he so informed Hadley, yet he knowingly entered into a retainer agreement
with her.”
¶ 18 The court also specifically found that “Mr. Grund’s credibility *** was diminished by
his impeachment and general demeanor. His attitude on the stand was sarcastic, evasive,
cavalier and argumentative ***.”
¶ 19 On March 10, 2009, the matter was before the court on Grund and Leavitt’s fee petition.
Since Grund and Leavitt were disqualified, the parties and the court discussed whether the
petition should be treated as a section 501, 508 or 503(j) petition, but ultimately the court
concluded that it could not award attorney fees in any event because of counsel’s
disqualification. Grund and Leavitt argued strenuously for fees under section 508, and the
court offered to find them in contempt so that they could immediately appeal. The court
asked counsel to step away from the bench, but counsel did not do so, and the court found
them in contempt. In its order, the court stated:
“The court informed Grund and Leavitt that it would not and could not hold a hearing
with regard to the fees they incurred by virtue of their representation of Hadley
Newton and would deny their fee petition. The court also ordered Grund and Leavitt
to step away from the bench. They refused to do so and therefore it is ordered as
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follows:
1. The Grund & Leavitt fee petition is denied.
2. Mr. Grund and Mr. Leavitt are found to be in direct contempt of this court for
their failure to obey the court’s disqualification order.
3. Grund & Leavitt shall pay a fine of $100 to purge said contempt.”
¶ 20 Thereafter, Grund and Leavitt appealed both the disqualification order and the contempt
order. On June 2, 2009, we entered an order granting David’s motion to dismiss the appeal
of the disqualification order, but denied his motion to dismiss the appeal of the contempt
order.
¶ 21 ANALYSIS
¶ 22 David asserts that the appeal is moot since the judgment for dissolution of marriage has
been entered. However, there is no authority for David’s proposition that pending attorney
fee petitions are rendered moot by the entry of judgment of dissolution. Rather, as section
508(c)(2) provides, awarding fees under a petition is a distinct cause of action from a
proceeding for dissolution of marriage. We therefore proceed to address the issues presented
in the instant appeal.
¶ 23 We now address David’s argument that Grund and Leavitt’s appeal should be dismissed
because they lack standing. According to David, once Grund and Leavitt were disqualified,
they had no standing to seek attorney fees incurred on behalf of Hadley because their petition
was brought under section 501 of the Act, and section 501 makes provision only for the
petitioning party’s current counsel, and not former counsel (750 ILCS 5/501(c-1) (West
2008)).
¶ 24 However, Hadley’s petition for an award of attorney fees from David was brought
pursuant to both section 501 and section 508 of the Act, and not only section 501. At the
hearing on the petition counsel and the court discussed whether section 501 or section 508
of the Act applied. The court did not feel it would be “appropriate” to treat the fee petition
as brought under section 508, and it wanted instead to treat the petition as brought under
section 503(j) at the end of the dissolution proceeding. The court found that Grund and
Leavitt were not entitled to any fees in any event because of their disqualification and denied
the fee petition. Grund and Leavitt argued before the court, and argue now on appeal before
us, that they are entitled to fees under section 508.
¶ 25 We clarify that although the parties, including Grund and Leavitt, assert that Hadley’s
petition filed January 22, 2009, sought fees from David only pursuant to section 501, the
record shows the petition sought fees pursuant to section 508 as well. Section 508(a) of the
Act provides the following as to counsel’s right to collect fees under the Act:
“The court from time to time, after due notice and hearing, and after considering the
financial resources of the parties, may order any party to pay a reasonable amount for
his own or the other party’s costs and attorney’s fees. Interim attorney’s fees and
costs may be awarded from the opposing party, in a pre-judgment dissolution
proceeding in accordance with subsection (c-1) of Section 501 [750 ILCS 5/501] and
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in any other proceeding under this subsection.” 750 ILCS 5/508(a) (West 2010).
¶ 26 Here, the petition for attorney fees was filed on January 22, 2009, during the pendency
of the dissolution proceedings, and was still pending at the time the judgment for dissolution
was entered. Thus, Grund and Leavitt have standing to seek fees under section 508.
¶ 27 Grund and Leavitt also have standing because they are appealing the contempt order. A
contempt order is final and appealable and generally also brings the propriety of the
underlying disqualification order and denial of attorney fees before us. Directly on point is
SK Handtool Corp. v. Dresser Industries, Inc., 246 Ill. App. 3d 979 (1993), where the
defendant and contemnor appealed a finding of civil contempt, including a $100 fine,
imposed for contemnor’s failure to obey the trial court’s disqualification order. SK Handtool
Corp., 246 Ill. App. 3d at 985. Counsel for both sides of the litigation in SK Handtool
indicated that, after this court denied leave to appeal and a petition for leave to appeal to the
supreme court was denied, the only avenue to seek review of the disqualification order was
to find counsel for Dresser in contempt of that order, and so the court found counsel in direct
contempt for failing to comply with the order. SK Handtool Corp., 246 Ill. App. 3d at 985.
We held that we had jurisdiction of the contempt finding, which brought the underlying
disqualification order before the court. SK Handtool Corp., 246 Ill. App. 3d at 986 (citing
Index Futures Group, Inc. v. Street, 163 Ill. App. 3d 654, 657 (1987)). Here, similarly, a
contempt order was entered against Grund and Leavitt, finding them in contempt for failing
to step away from the bench after they refused to comply with the disqualification order and
denial of fees, and thus they have standing to appeal and we have jurisdiction. Grund and
Leavitt’s disqualification did not strip them of standing or divest this court of jurisdiction to
review the contempt order and underlying disqualification and resulting denial.
¶ 28 Although Grund does not appeal the disqualification order, it is necessary to review it to
determine if the denial of fees was proper, which led to the finding of contempt.
¶ 29 DISQUALIFICATION
¶ 30 The trial court’s denial of Grund and Leavitt’s fees was founded on the trial court’s
determination that they were disqualified due to a conflict of interest with Grund’s prior
representation of David. Rule 1.9(a) of the Illinois Rules of Professional Conduct (Ill. Rs. of
Prof’l Conduct, R. 1.9(a) (eff. Aug. 1, 1990)) provides:
“Rule 1.9. Conflict of Interest: Former Client
(a) A lawyer who has formerly represented a client in a matter shall not
thereafter:
(1) represent another person in the same or a substantially related matter in
which that person’s interests are materially adverse to the interests of the former
client, unless the former client consents after disclosure; or
(2) use information relating to the representation to the disadvantage of the
former client, unless:
(A) such use is permitted by Rule 1.6; or
(B) the information has become generally known.” Ill. Rs. of Prof’l
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Conduct, R. 1.9 (eff. Aug. 1, 1990).
¶ 31 We find the circuit court’s determination correct. Grund and Leavitt’s representation of
Hadley violated Rule of Professional Conduct 1.9. The testimony at the hearing below
established that David sought legal advice from Grund and that Grund discussed David’s
marriage and divorce with him during his consultation. “An attorney/client relationship can
be created at the initial interview between the prospective client and the attorney, and it is
possible that confidential information passed during the interview sufficient to disqualify the
attorney from representing the opposing party in related litigation.” Nuccio v. Chicago
Commodities, Inc., 257 Ill. App. 3d 437, 440 (1993) (citing Herbes v. Graham, 180 Ill. App.
3d 692 (1989)). “[T]he relationship can come into being during the initial contact between
the layperson and the professional and appears to hinge on ‘ “the client’s belief that he is
consulting a lawyer in that capacity and his manifested intention to seek professional legal
advice.” ’ ” Herbes, 180 Ill. App. 3d at 699 (quoting Westinghouse Electric Corp. v. Kerr-
McGee Corp., 580 F.2d 1311, 1319 (7th Cir. 1978), quoting Edward W. Cleary, McCormick
on Evidence § 88, at 179 (2d ed. 1972)). The testimony at the hearing below established that
David consulted with Grund and sought legal advice regarding his divorce. We agree with
the circuit court’s determination that David’s consultation with Grund gave rise to an
attorney-client relationship.
¶ 32 Furthermore, since David and Hadley were parties in the identical case, there was clearly
a substantial relationship between Grund’s representation of David and Grund’s
representation of Hadley regarding their divorce. “ ‘Once a substantial relationship is found
between the prior and present representations, it is irrebuttably presumed that confidential
information was disclosed in the earlier representation.’ ” Franzoni v. Hart Schaffner &
Marx, 312 Ill. App. 3d 394, 403-04 (2000) (quoting Herbes, 180 Ill. App. 3d at 700). See
also SK Handtool Corp., 246 Ill. App. 3d at 990 (“If such a relationship exists, it is presumed
that the client disclosed confidential information to the attorney during the prior
representation.” (citing Skokie Gold Standard Liquors, Inc., 116 Ill. App. 3d at 1055, and
Novo Therapeutisk Laboratorium v. Baxter Travenol Laboratories, Inc., 607 F.2d 186, 196
(7th Cir. 1979) (en banc))). Thus, there is an irrebuttable presumption that confidential
information was disclosed during Grund’s consultation with David. Thereafter, Grund was
prohibited by Rule 1.9 from representing Hadley. The circuit court did not err in (1) finding
that Grund had not rebutted the presumption; (2) in finding that Grund and Leavitt were
disqualified; and (3) in entering the disqualification order.
¶ 33 DENIAL OF FEES
¶ 34 A. Under Section 508 of the Act
¶ 35 We next determine whether the court below was correct in its determination that Grund
and Leavitt’s disqualification barred them from recovering attorney fees. Section 508(a) of
the Act provides:
“The court *** may order any party to pay a reasonable amount for his own or the
other party’s costs and attorney’s fees. Interim attorney’s fees and costs may be
awarded from the opposing party, in a pre-judgment dissolution proceeding in
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accordance with subsection (c-1) of Section 501 [750 ILCS 5/501] and in any other
proceeding under this subsection.” 750 ILCS 5/508(a) (West 2010).
¶ 36 Section 508(a) further provides, in relevant part:
“Awards may be made in connection with the following:
(1) The maintenance or defense of any proceeding under this Act.
(2) The enforcement or modification of any order or judgment under this Act.
(3) The defense of an appeal of any order or judgment under this Act,
including the defense of appeals of post-judgment orders.
(3.1) The prosecution of any claim on appeal (if the prosecuting party has
substantially prevailed).
(4) The maintenance or defense of a petition brought under Section 2-1401
of the Code of Civil Procedure [735 ILCS 5/2-1401] seeking relief from a final
order or judgment under this Act.
(5) The costs and legal services of an attorney rendered in preparation of the
commencement of the proceeding brought under this Act.” 750 ILCS 5/508(a)
(West 2008).
In their petition on behalf of Hadley, Grund and Leavitt sought fees from David under
section 508 largely for their work performed on their prosecution of Hadley’s appeal and
defense of David’s appeal under subsections (a)(3) and (a)(3.1). See 750 ILCS 5/508(a)(3),
(a)(3.1) (West 2008). Grund and Leavitt argue there is no limitation to their right to seek fees
under section 508. However, although Grund and Leavitt perceive no limitation to an award
of attorney fees under section 508 which could be based on their disqualification due to a
conflict of interest, section 508(c)(3) applies to Grund and Leavitt’s petition for fees, as it
seeks fees for services under sections 508(a)(1) through (a)(5).1 The conditions stated in
section 508(c)(3) apply to both petitions for final hearings for attorney fees and costs against
an attorney’s own client under section 508(c)(3), as well as to an independent proceeding for
services within the scope of subdivisions (1) through (5) of section 508(a). 750 ILCS
5/508(c)(3) (West 2008). Section 508(c)(3) specifically conditions the enforceability of a fee
agreement on meeting applicable court rules:
“(3) The determination of reasonable attorney’s fees and costs either under this
subsection (c), whether initiated by a counsel or a client, or in an independent
proceeding for services within the scope of subdivisions (1) through (5) of subsection
(a), is within the sound discretion of the trial court. The court shall first consider the
written engagement agreement and, if the court finds that the former client and the
filing counsel, pursuant to their written engagement agreement, entered into a
contract which meets applicable requirements of court rules and addresses all
material terms, then the contract shall be enforceable in accordance with its terms,
subject to the further requirements of this subdivision (c)(3).” (Emphasis added.) 750
1
Grund and Leavitt’s claim for prospective fees was initially part of their petition, but is
irrelevant now on appeal due to their disqualification.
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ILCS 5/508(c)(3) (West 2008).
Here, Grund and Leavitt’s contract with Hadley did not meet the applicable requirements of
our court rules, as it violated Rule 1.9, and therefore the contract was unenforceable under
section 508 of the Act.
¶ 37 B. Grund and Leavitt’s Contract With Hadley Was Void Ab Initio
¶ 38 A second, broader, basis supporting the circuit court’s denial of attorney fees is the fact
that Grund and Leavitt’s fee agreement with Hadley is void for violation of Rule of
Professional Conduct 1.9. While the ethical rules do not explicitly provide for an ipso facto
rejection of attorney fees when an attorney is disqualified due to a conflict of interest,
supreme court rules have the force of law and represent the public policy of this state.
¶ 39 While Illinois courts strongly favor the freedom of contract, a court will declare a
contract void if it contravenes the public policy of the state. Fosler v. Midwest Care Center
II, Inc., 398 Ill. App. 3d 563 (2009). A court will not declare a contract illegal unless it
expressly contravenes the law or a known public policy of this State. Holstein v. Grossman,
246 Ill. App. 3d 719, 726 (1993) (citing Schniederjon v. Krupa, 130 Ill. App. 3d 656, 659,
474 N.E.2d 805, 808 (1985)). If the subject matter of a contract is illegal, that contract is void
ab initio. Illinois State Bar Ass’n Mutual Insurance Co. v. Coregis Insurance Co., 355 Ill.
App. 3d 156, 164 (2004). “[A] contract that is void ab initio is treated as though it never
existed; neither party can choose to ratify the contract by simply waiving its right to assert
the defect.” Coregis Insurance Co., 355 Ill. App. 3d at 164. Courts will not enforce contract
terms that violate public policy. Dowd & Dowd, Ltd. v. Gleason, 181 Ill. 2d 460, 482 (1998)
(citing American Federation of State, County & Municipal Employees v. Department of
Central Management Services, 173 Ill. 2d 299, 317-18 (1996); Beneficial Development Corp.
v. City of Highland Park, 161 Ill. 2d 321, 330-31 (1994)). “The question of whether a
contract is enforceable under considerations of public policy is a conclusion of law.”
Holstein, 246 Ill. App. 3d at 726 (citing Zeigler v. Illinois Trust & Savings Bank, 245 Ill. 180(1910)).
¶ 40 Precedent establishes that our Code of Professional Conduct, part of our Supreme Court
Rules, have the force of law and embody the public policy of our state. “The Illinois Code
of Professional Responsibility is a Supreme Court Rule.” Marvin N. Benn & Associates, Ltd.
v. Nelsen Steel & Wire, Inc., 107 Ill. App. 3d 442, 447 (1982). “Supreme court rules have the
force of law and are indicative of public policy in the area of attorney conduct.” Albert
Brooks Friedman, Ltd. v. Malevitis, 304 Ill. App. 3d 979, 984 (1999), appeal denied, 185 Ill.
2d 617 (1999) (citing Marvin N. Benn & Associates, 107 Ill. App. 3d at 447). “Supreme
Court Rules have the function of law [citation] and thus are another strong indicator of public
policy in the area of attorney conduct.” Marvin N. Benn & Associates, 107 Ill. App. 3d at
447. Where attorney conduct is at issue, we look to the Supreme Court Rules for expressions
of public policy. Richards v. SSM Health Care, Inc., 311 Ill. App. 3d 560, 564 (2000) (citing
Marvin N. Benn & Associates, 107 Ill. App. 3d at 447). The Illinois Supreme Court Rules
should be followed; they are not suggestions, nor are they aspirational. In re Haley D., 403
Ill. App. 3d 370, 375 (2010); Applebaum v. Rush University Medical Center, 231 Ill. 2d 429,
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447 (2008); People v. Young, 387 Ill. App. 3d 1126, 1127 (2009). Here, Rule 1.9 is a clear
prohibition on representing a party with a conflicting interest. Thus, the contract was void
ab initio.2
¶ 41 Furthermore, while the supreme court rules do not explicitly state that attorney fees are
barred, the judicial decisions of our state are clear and long standing that attorney fees will
not be allowed if counsel is disqualified due to a conflict of interest. “The public policy of
this State is reflected in its constitution, its statutes and its judicial decisions.” Holstein, 246
Ill. App. 3d at 726 (citing O’Hara v. Ahlgren, Blumenfeld & Kempster, 127 Ill. 2d 333, 341
(1989)). Precedent holds that, “[g]enerally, an attorney may not receive fees after
representing adverse, conflicting, and antagonistic interests in the same litigation.” In re
Estate of Vail, 309 Ill. App. 3d 435, 441 (1999). See also In re Estate of Kirk, 292 Ill. App.
3d 914, 923 (1997) (“It has been stated as a general principle that attorneys may not recover
fees after representing adverse, conflicting, and antagonistic interests in the litigation.”
(citing In re Estate of Halas, 159 Ill. App. 3d 818, 831 (1987))); King v. King, 52 Ill. App.
3d 749, 753 (1977) (“An attorney cannot recover from the party that he has wronged for legal
services where he has represented adverse, conflicting, and antagonistic interests in the same
litigation.”).
¶ 42 King, relied upon by David, involved a divorce case where an attorney represented one
spouse after he initially consulted with the other spouse, just as in this case, and is precisely
on point. In King, the husband visited the law office of the attorney to discuss his marital
problems and the possibility of divorce. King, 52 Ill. App. 3d at 751. He consulted with the
attorney for less than one-half hour and did not retain him. Id. The wife filed a complaint for
separate maintenance and retained the attorney who previously consulted with her husband.
Id. The husband filed a motion to exclude the attorney, but the trial court denied it. Id. The
court entered a decree of separate maintenance and ordered the husband to pay the wife’s
attorney fees in the amount of $6,000, and the husband appealed. Id. at 752. The appellate
court found that an attorney-client relationship existed between the attorney and the husband
and that it was improper for the attorney to then undertake the representation of the wife. Id.
at 753. The court reversed the award of attorney fees. Id. The court held that “[t]he rule
[against representing conflicting interests] applies even though the attorney acquired no
knowledge which could operate to the client’s disadvantage,” and “[i]t makes no difference
that the client offered no compensation and the attorney neither made nor expected to make
any charge for his services.” King, 52 Ill. App. 3d at 753. Further, the motives or intentions
of the attorney are irrelevant. King, 52 Ill. App. 3d at 753.
¶ 43 Grund and Leavitt argue that King is inapplicable because it was decided prior to the
enactment of the Act. However, the strict bar against representing parties with conflicting
interests was established as part of the public policy of our state long before the enactment
of the Illinois Code of Professional Responsibility (ISBA 1970). See People v. Gerold, 265
Ill. 448, 477 (1914) (“The rule has long been firmly established that an attorney cannot
2
We note that although the court mentioned quantum meruit during a hearing, Grund and
Leavitt have not raised this issue on appeal and it is not properly before us.
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represent conflicting interests or undertake to discharge inconsistent duties.”); Strong v.
International Building Loan & Invest. Union, 183 Ill. 97, 102 (1899) (per curiam) (“ ‘[a]
lawyer can, under no conceivable circumstances, recover for services rendered in the same
suit to parties having opposing interests.’ ” (quoting MacDonald v. Wagner, 5 Mo. App. 56,
58 (1878))). The same result as in King obtains here even after the enactment of the Act.
¶ 44 Grund and Leavitt further argue that subsequent decisions have either criticized the
holding of King or found it inapplicable, citing the Illinois decisions of Nuccio, and Page v.
Hibbard, 142 Ill. App. 3d 788 (1986), rev’d in part on other grounds, 119 Ill. 2d 41 (1987).
However, Grund and Leavitt’s attempt to avoid the application of the holding in King is not
well-founded. In Nuccio, we found King distinguishable only because the controversy existed
for more than six years prior to the filing of a motion to disqualify, and therefore we found
that the plaintiff forfeited any issue with regard to any conflict of interest. See Nuccio, 257
Ill. App. 3d at 442. We did not criticize the holding of King, nor did we find it inapplicable.
The facts in Page presented no conflict of interest whatsoever. Rather, the award of attorney
fees out of funds received by employers to lawyers who represent employees in suits against
third parties was specifically provided for by the Workers’ Compensation Act. Page, 142 Ill.
App. 3d at 797 (citing Ill. Rev. Stat. 1983, ch. 48, ¶ 138.5(b)).
¶ 45 Grund and Leavitt nevertheless also maintain that they are entitled to their fees because
the Act permits fees for good-faith, unsuccessful petitions, citing In re Marriage of Pylawka,
277 Ill. App. 3d 728 (1996), and In re Marriage of McCaskey, 167 Ill. App. 3d 860 (1988).
Grund and Leavitt claim that if fees are allowed for unsuccessful good-faith petitions, they
should be entitled to fees here because they “won” the two prior appeals on behalf of Hadley.
We note that on Hadley’s previous appeal, we reversed the court’s order of disqualification
and remanded for the purpose of conducting a full hearing and did not make the ultimate
determination whether Grund and Leavitt were disqualified. Further, it is arguable to what
extent Grund and Leavitt’s defense of the prior appeals regarding their disqualification was
on behalf of Hadley, as opposed to being in their own interest to stay in the case and collect
their fees.
¶ 46 Also, Grund and Leavitt’s citations are wholly inapposite to the facts in the case at bar.
In Pylawka the cause was remanded and the court was ordered to reconsider the denial of
attorney fees where the appellant spouse unsuccessfully, but in good faith, argued that the
amount of a tax refund constituted a substantial change in circumstances and necessitated an
adjustment of the other spouse’s net income. In re Marriage of Pylawka, 277 Ill. App. 3d at
735. In McCaskey, the spouse sought fees after she had proceeded in good faith in an action
to set the dissolution judgment aside on a jurisdictional question. In re Marriage of
McCaskey, 167 Ill. App. 3d at 866. Neither case involved the disqualification of the
attorney–only that they did not win on the merits.
¶ 47 Here, in contrast, Grund and Leavitt represented Hadley despite a clear, known conflict
of interest. Where the ethical rules have been violated and counsel has represented a party
with conflicting, adverse interests, counsel’s purported good faith is irrelevant. “An attorney
may not undertake employment that constitutes a conflict of interest, no matter how honest
his motives or intentions might be.” In re Estate of Kirk, 292 Ill. App. 3d at 922 (citing In
re LaPinska, 72 Ill. 2d 461, 469 (1978)). Grund and Leavitt cite no authority for the
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proposition that attorneys representing parties with conflicting interests should be awarded
attorney fees if they are successful.
¶ 48 Finally, Grund and Leavitt argue strenuously that the purpose of section 508 of the Act
and, in particular, its provision allowing an award of attorney fees directly to the attorneys,
was to “level the playing field” for economically disadvantaged spouses to obtain counsel
of their choosing despite intimidation tactics of wealthier spouses. However, counsel cannot
simply flout the ethical rules. Rule 1.9 provides that representation of a client with
conflicting interests adverse to a former client is permitted if counsel first obtains the consent
of the former client. Ill. S. Ct. Rs. of Prof. Conduct, R. 1.9(a)(1) (eff. Aug. 1, 1990).
However, Grund and Leavitt did not obtain David’s consent. They cannot “level the playing
field” by rolling over the rights of their former client, David.
¶ 49 We note that the amended Supreme Court Rules of Professional Conduct, though not in
effect at the time of Grund’s attorney-client relationship with David, now help resolve the
problem suggested by Grund and Leavitt. Rule 1.18 provides guidance for attorneys who
have an initial consultation with a prospective client, but then later desire to represent
another party with conflicting, adverse interests. Under Rule 1.18, a lawyer who has had
discussions with a prospective client shall not represent a client with interests materially
adverse to those of a prospective client in the same or a substantially related matter if the
lawyer received information from the prospective client that could be significantly harmful
to that person in the matter (Ill. Rs. of Prof’l Conduct, R. 1.18(c) (eff. Jan. 1, 2010)), except
if:
“(1) both the affected client and the prospective client have given informed
consent, or
(2) the lawyer who received the information took reasonable measures to avoid
exposure to more disqualifying information than was reasonably necessary to
determine whether to represent the prospective client; and that lawyer is timely
screened from any participation in the matter and is apportioned no part of the fee
therefrom.” Ill. Rs. of Prof’l Conduct, Rs. 1.18(d)(1), (d)(2) (eff. Jan. 1, 2010).
¶ 50 Committee comment 5 to Rule 1.18 provides how this result can be achieved:
“(5) A lawyer may condition conversations with a prospective client on the
person’s informed consent that no information disclosed during the consultation will
prohibit the lawyer from representing a different client in the matter.” Ill. Rs. of
Prof’l Conduct, R. 1.18, Committee Comment (eff. Jan. 1, 2010).
¶ 51 This blueprint for representing a spouse after having an initial consultation with the other
spouse should discourage the tactical “conflicting out” of divorce attorneys by wealthier
spouses that Grund and Leavitt suggest is a pervasive practice in the area of divorce law.
¶ 52 We emphasize that the Rules of Professional Conduct recognize that the practice of law
is a public trust and lawyers are the trustees of the judicial system. Horwitz v. Holabird &
Root, 212 Ill. 2d 1, 16-17 (2004). “A single focus animates our rules of professional conduct
and the common law of this state: the client’s best interest.” Albert Brooks Friedman, Ltd.
v. Malevitis, 304 Ill. App. 3d 979, 985-86 (1999). “[A]nything which might tend to debase
the learned professions is at war with the public interest and is therefore contrary to public
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policy.” Marvin N. Benn & Associates, 107 Ill. App. 3d at 440 (citing In re Miller, 7 Ill. 2d
443 (1955)).
¶ 53 Here, Grund and Leavitt violated Rule of Professional Conduct 1.9, a supreme court rule
having the force of law and a clear expression of the public policy against attorneys
representing clients with conflicting interests. Thus, we have no difficulty in concluding, as
the court did, that their contract with Hadley was void ab initio. Therefore, there is no
contract basis upon which to award them fees.
¶ 54 Although Grund and Leavitt argue that they should be entitled to fees incurred before
they were disqualified by the court’s order, Grund violated Rule 1.9 at the moment he agreed
to meet with Hadley knowing he had a conflict. Grund knew from the initial consultation
with Hadley that there was a conflict of interest. The testimony by Hadley at trial was that
Grund told her of the conflict. Notably, this testimony was unrebutted by Grund and Leavitt.
As the court clearly stated, it is inexplicable that Hadley made it past screening and that
Grund agreed to represent her. Grund was clearly prohibited by Rule 1.9 from entering into
a retainer agreement with Hadley. As noted earlier in our analysis, “[a]n attorney/client
relationship can be created at the initial interview between the prospective client and the
attorney.” Nuccio v. Chicago Commodities, Inc., 257 Ill. App. 3d 437, 440 (1993) (citing
Herbes v. Graham, 180 Ill. App. 3d 692 (1989)). Therefore, Grund is barred from any earlier
fees based on either ground we have discussed: (1) the retainer agreement was unenforceable
under section 508(c)(3) of the Act; or (2) the retainer agreement was void ab initio as against
public policy.
¶ 55 Next we consider the time between the signed retainer and the disqualification.
¶ 56 Section 508(c)(3) provides, “[t]he court shall first consider the written engagement
agreement” to find whether “the former client and the filing counsel *** entered into a
contract which meets applicable requirements of court rules.” (Emphasis added.) 750 ILCS
5/508(c)(3) (West 2008). The relationship of attorney and client is a contractual one and is
created by a retainer or an offer to retain or fee paid. Holstein v. Grossman, 246 Ill. App. 3d
719, 743 (1993). “A client must manifest his authorization for an attorney to act on his behalf
and the attorney must indicate his acceptance of the authorization to represent the client’s
interests.” Kehoe v. Saltarelli, 337 Ill. App. 3d 669, 676 (2003) (citing Torres v. Divis, 144
Ill. App. 3d 958, 963 (1986)).
¶ 57 Grund and Leavitt are not entitled to any attorney fees before the court entered the
disqualification order because the retainer agreement itself was void ab initio as against
public policy due to the clear violation of Rule 1.9. At the hearing on March 10, 2009, the
court cogently explained to Grund: “You don’t get any [fees] because your disqualification
relates to the date of the contract and in effect voids your contract to represent.” In the court’s
memorandum opinion and order, it found that, “[c]learly, from Mr. Grund’s own
interrogation of Hadley it is obvious that he believed there to be a conflict and that he so
informed Hadley, yet he knowingly entered into a retainer agreement with her.”
¶ 58 We agree with the court’s insightful and well-reasoned opinion and order, as it is in
accord with both section 508(c)(3) of the Act and Rule 1.9. The conflict of interest was
present at the time Grund entered into the contract with Hadley. Therefore, Grund’s contract
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with Hadley is unenforceable under the plain language of section 508(c)(3) (750 ILCS
5/508(c)(3) (West 2008)), as well as void ab initio as against public policy due to the
violation of Rule 1.9 of the Supreme Court Rules of Professional Conduct.
¶ 59 CONTEMPT ORDER
¶ 60 Grund and Leavitt argue the circuit court erred in entering the contempt order because
the underlying order denying them attorney fees was in error. In its order, the court stated:
“The court informed Grund and Leavitt that it would not and could not hold a
hearing with regard to the fees they incurred by virtue of their representation of
Hadley Newton and would deny their fee petition. The court also ordered Grund and
Leavitt to step away from the bench. They refused to do so and therefore it is ordered
as follows:
1. The Grund & Leavitt fee petition is denied.
2. Mr. Grund and Mr. Leavitt are found to be in direct contempt of this court for
their failure to obey the court’s disqualification order.
3. Grund & Leavitt shall pay a fine of $100 to purge said contempt.”
¶ 61 We find that the circuit court did not err in finding Grund and Leavitt in contempt based
on their unwillingness to step aside, thus continuing their unwillingness to comply with the
disqualification and resulting denial of attorney fees.
¶ 62 Contempt of court can result from a party’s failure to comply with the terms of a court
order. People v. Coupland, 387 Ill. App. 3d 774, 777 (2008). Persons subject to the order of
a court having jurisdiction must obey the order until it is reversed by a reviewing court or set
aside or modified. Busey Bank v. Salyards, 304 Ill. App. 3d 214, 217 (1999) (citing People
v. Graves, 74 Ill. 2d 279, 284-85 (1979), quoting Faris v. Faris, 35 Ill. 2d 305, 309 (1966)).
“[E]xposing oneself ‘to a finding of contempt is an appropriate method of testing the validity
of a court order.’ ” In re Marriage of Rosenbaum-Golden, 381 Ill. App. 3d 65, 82 (2008)
(quoting In re Marriage of Beyer, 324 Ill. App. 3d 305, 321 (2001)). “ ‘[W]hether a party is
guilty of contempt is a question of fact for the trial court, and *** a reviewing court will not
disturb the finding unless it is against the manifest weight of the evidence or the record
reflects an abuse of discretion.’ ” Killion v. City of Centralia, 381 Ill. App. 3d 711, 715
(2008) (quoting In re Marriage of Logston, 103 Ill. 2d 266, 286-87 (1984)).
¶ 63 We note the well-established rule that where a “ ‘refusal to comply with a trial court’s
order constitutes a good-faith effort to secure an interpretation of [an issue without direct
precedent], it is appropriate to vacate a contempt citation on appeal.’ ” Mueller Industries,
Inc. v. Berkman, 399 Ill. App. 3d 456, 482 (2010) (quoting Cangelosi v. Capasso, 366 Ill.
App. 3d 225, 230 (2006)). However, under the facts of this case, we find that Grund and
Leavitt’s refusal to comply with the circuit court’s order denying them fees did not constitute
a good-faith effort to secure an interpretation without direct precedent. Rule 1.9 of the Rules
of Professional Conduct is clear that representing clients with conflicts of interest is
prohibited. Precedent is clear that fees for such prohibited representation are barred. It is
unrebutted that Grund knew of the conflict before he agreed to represent Hadley and yet
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undertook to represent her anyway, thus paving his own road to the denial of fees. Therefore,
the court’s adjudication of civil contempt was well founded and not against the manifest
weight of the evidence or an abuse of discretion.
¶ 64 Further, we note that in this very case Grund had previously been found in direct civil
contempt in an order dated June 30, 2008, in which the court found: “Grund’s verbal
outbursts obstructed and embarrassed the court and constituted a direct defiance of a court
order before a judge in open court and Grund is found to be in direct contempt of court. It
is ordered that contemnor David Grund will pay to the Clerk of the Circuit Court a fine of
$500.00 forthwith. Grund is remanded to the custody of the Cook County Sheriff and
released upon payment of the fine. Mittimus stayed 48 hours–10:40 am 7/2/08” s/Judge
Jordan.”
¶ 65 The fact that the order states that Grund and Leavitt were found in direct contempt “for
their failure to obey the court’s disqualification order” indicates that the court was attempting
to coerce compliance with its order denying Grund and Leavitt’s fees. The order stated that
paying the fine would purge the contempt.
¶ 66 We note that our distinguished colleagues in the Fourth District take a different approach.
In re Marriage of Samuel, 394 Ill. App. 3d 398 (2009), is instructive. In In re Marriage of
Samuel the circuit court entered a civil contempt order imposing a fine and ordering an
apology. The appellate court found that the trial court’s imposition of a fine was a
punishment for improper behavior. In re Marriage of Samuel, 394 Ill. App. 3d at 402.
However, the apology “ implie[d] an admission of past conduct” and was “easily construed
as a promise not to engage in similar behavior in the future,” and to that extent, it was
coercive and permissible as a sanction for civil contempt. In re Marriage of Samuel, 394 Ill.
App. 3d at 402.
¶ 67 We find that the purging provision which would allow Grund and Leavitt an opportunity
to purge the contempt by paying the $100 fine was well within the court’s discretion in the
selection of a purging provision and was remarkably restrained, given the entire record of this
case.
¶ 68 CONCLUSION
¶ 69 For all the reasons stated above, we hold that the trial court did not err in denying Grund
and Leavitt attorney fees from the first moment they undertook representation of Hadley
based on a disqualification due to a conflict of interest. Grund and Leavitt’s representation
of Hadley was a known conflict of interest, in violation of Rule 1.9, and under section
508(c)(3) of the Act the retainer agreement was not enforceable. 750 ILCS 5/508(c)(3) (West
2008). Further, we affirm the court’s finding of contempt and hold Grund and Leavitt had
no good-faith basis to draw a contempt judgment to test the validity of the court’s order
denying their attorney fees due to the established conflict of interest.
¶ 70 Affirmed.
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