Ferris, Thompson, and Zweig, Ltd. v. Esposito

2016 IL App (2d) 151148No. 2-15-1148
Opinion filed August 10, 2016
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
FERRIS, THOMPSON, AND ZWEIG, LTD., ) Appeal from the Circuit Court
) of Lake County.
Plaintiff-Appellant, )
)
v. ) No. 13-L-483
)
ANTHONY ESPOSITO, ) Honorable
) Thomas M. Schippers,
Defendant-Appellee. ) Judge, Presiding.
______________________________________________________________________________
JUSTICE BIRKETT delivered the judgment of the court, with opinion.
Justices McLaren and Hudson concurred in the judgment and opinion.
OPINION
¶1 Plaintiff, Ferris, Thompson, & Zweig, Ltd., and defendant, Anthony Esposito, had a
longstanding work relationship. During that relationship, plaintiff referred a number of workers’
compensation clients to defendant in return for a portion of the attorney fees defendant received.
Each such referral was evidenced by a written agreement that each of the parties and the clients
signed. When defendant refused most recently to pay plaintiff pursuant to some of these
agreements, plaintiff sued defendant. Defendant moved to dismiss, claiming that the agreements
did not comply with Rule 1.5(e)(1) of the Illinois Rules of Professional Conduct of 2010 (eff.
Jan. 1, 2010) in that they did not expressly state that the parties assumed “joint financial
2016 IL App (2d) 151148responsibility” in representing the clients. The trial court granted the motion to dismiss. We
reverse and remand.
¶2 The relationship between the parties began sometime around 2007. In 2012, before this
appeal arose, defendant refused to pay plaintiff pursuant to two referral agreements, and plaintiff
sued defendant in circuit court for breach of contract. Defendant moved to dismiss, arguing that
the Worker’s Compensation Commission, not the circuit court, had jurisdiction over the case.
The trial court denied the motion, defendant appealed, and the trial court’s decision was affirmed
by this court (see Ferris, Thompson, & Zweig, Ltd. v. Esposito, 2014 IL App (2d) 130129) and
our supreme court (Ferris, Thompson, & Zweig Ltd. v. Esposito, 2015 IL 117443) (Ferris I).
¶3 While Ferris I was pending in this court, defendant refused to pay plaintiff pursuant to 10
other referral agreements. As a result, plaintiff filed a 10-count complaint against defendant.
Attached to the complaint were the referral agreements executed in each case. These
agreements, which were executed between 2007 and 2010, provided, like the agreements in
Ferris I, that the clients had retained plaintiff and that plaintiff had contracted with defendant for
defendant to pursue the clients’ workers’ compensation cases on their behalf. The agreements
also outlined which services each attorney would provide, and each agreement was signed by
plaintiff, defendant, and the client. Nowhere did the agreements state that the attorneys assumed
“joint financial responsibility” for representing the clients. Ill. R. Prof’l Conduct (2010) R.
1.5(e)(1) (eff. Jan. 1, 2010).
¶4 Defendant moved to dismiss pursuant to section 2-615 of the Code of Civil Procedure
(735 ILCS 5/2-615 (West 2014)), arguing, among other things, that the agreements were
unenforceable. Specifically, defendant claimed that the agreements did not comply with Rule
1.5(e)(1) in that the agreements did not state that plaintiff and defendant agreed to assume “joint
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2016 IL App (2d) 151148financial responsibility.” Ill. R. Prof’l Conduct (2010) R. 1.5(e)(1) (eff. Jan. 1, 2010). Plaintiff
responded, claiming, among other things, that Rule 1.5(e), which governs referral agreements,
does not mandate that a written referral agreement contain such an express statement. Ill. R.
Prof’l Conduct (2010) R. 1.5(e) (eff. Jan. 1, 2010).
¶5 The trial court granted defendant’s motion. Plaintiff moved the court to reconsider, the
court denied the motion, and this timely appeal followed.
¶6 At issue in this appeal is whether plaintiff’s complaint should have been dismissed. A
section 2-615 motion to dismiss attacks the legal sufficiency of a pleading. Vernon v. Schuster,
179 Ill. 2d 338, 344 (1997). We review de novo an order granting a motion to dismiss under
section 2-615. Marshall v. Burger King Corp., 222 Ill. 2d 422, 429 (2006).
¶7 Resolving whether defendant’s motion to dismiss should have been granted is
problematic, because, unfortunately, defendant has not filed a brief on appeal. While we may
not reverse summarily on that basis alone, we need not serve as defendant’s advocate or search
the record for a basis upon which to affirm. First Capitol Mortgage Corp. v. Talandis
Construction Corp., 63 Ill. 2d 128, 133 (1976); Orava v. Plunkett Furniture Co., 297 Ill. App. 3d
635, 636 (1998). As relevant here, unless the record is simple and the issues can be easily
decided without the aid of an appellee’s brief, we may reverse “if the appellant’s brief
demonstrates prima facie reversible error and the contentions of the brief find support in the
record.” Talandis, 63 Ill. 2d at 133; see Orava, 297 Ill. App. 3d at 636. “ ‘Prima facie means,
“at first sight, on the first appearance, on the face of it, so far as can be judged from the first
disclosure; presumably; a fact presumed to be true unless disproved by some evidence to the
contrary.” [Citation.]’ ” Talandis, 63 Ill. 2d at 132 (quoting Harrington v. Hartman, 233 N.E.2d
189, 191 (Ind. App. 1968)).
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2016 IL App (2d) 151148¶8 We do not believe that the issue raised in this case can be easily decided. Therefore, we
consider whether plaintiff’s brief establishes prima facie reversible error. We hold that it does.
¶9 In so holding, we must examine Rule 1.5(e). In interpreting Rule 1.5(e), we apply the
same principles that we employ in construing a statute. In re Marriage of Nettleton, 348 Ill.
App. 3d 961, 967 (2004). Our primary goal in construing a rule is to ascertain and give effect to
the drafters’ intent. Id. The surest and most reliable indicator of the drafters’ intent is the
language used in the rule. Macknin v. Macknin, 404 Ill. App. 3d 520, 530 (2010). Accordingly,
when the language in the rule is clear and unambiguous, we must apply it as written, giving the
rule’s language its plain and ordinary meaning. Id. However, if the rule is ambiguous, we may
look beyond the rule’s language to discern the drafters’ intent, and we may consider the purpose
of the rule and the evils that the rule was designed to remedy. People v. King, 349 Ill. App. 3d
877, 879 (2004). Moreover, when a rule is ambiguous, courts may look to the rule’s committee
comments to ascertain the drafters’ intent. In re Estate of Burd, 354 Ill. App. 3d 434, 437
(2004). Regardless, whenever possible, we will avoid a construction that leads to absurd or
unjust results, and we will presume that the drafters intended a sensible result rather than an
absurd one. In re Marriage of Nettleton, 348 Ill. App. 3d at 967. Like a ruling on a motion to
dismiss, we review de novo the construction of a rule. See In re Marriage of Webb, 333 Ill. App.
3d 1104, 1108 (2002).
¶ 10 Rule 1.5(e) provides:
“A division of a fee between lawyers who are not in the same firm may be made only if:
(1) the division is in proportion to the services performed by each lawyer,
or if the primary service performed by one lawyer is the referral of the client to
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2016 IL App (2d) 151148another lawyer and each lawyer assumes joint financial responsibility for the
representation;
(2) the client agrees to the arrangement, including the share each lawyer
will receive, and the agreement is confirmed in writing; and
(3) the total fee is reasonable.” (Emphases added.) Ill. R. Prof’l Conduct
(2010) R. 1.5(e) (eff. Jan. 1, 2010).
¶ 11 In ascertaining the meaning of Rule 1.5(e), we note that, in order for any fee-sharing
agreement to be enforceable, the attorneys involved in the agreement must strictly comply with
Rule 1.5(e). See Donald W. Fohram & Associates, Ltd. v. Mark D. Alberts, P.C., 2014 IL App
(1st) 123351, ¶ 41. For the purposes of this appeal, the question is whether strict compliance
with Rule 1.5(e) occurs when a written referral agreement does not expressly state that the
attorneys assume “joint financial responsibility” for representing the client. Ill. R. Prof’l
Conduct (2010) R. 1.5(e)(1) (eff. Jan. 1, 2010).
¶ 12 At first sight, as plaintiff argues, the unambiguous language of Rule 1.5(e) does not
provide that a written referral agreement must contain an express statement that the lawyers
assume “joint financial responsibility” for representing the client. Id. Rather, Rule 1.5(e)(2),
which mentions a writing, states that the writing must include only the client’s agreement to the
“arrangement, including the share each lawyer will receive.” Ill. R. Prof’l Conduct (2010) R.
1.5(e)(2) (eff. Jan. 1, 2010). “[T]he share each lawyer will receive” (id.) seems to require the
writing to show that “the division [of fees] is in proportion to the services performed by each
lawyer,” which is mentioned in Rule 1.5(e)(1) (Ill. R. Prof’l Conduct (2010) R. 1.5(e)(1) (eff.
Jan. 1, 2010)). If the drafters had wanted the writing to expressly provide also that the attorneys
assume “joint financial responsibility,” as is provided also in Rule 1.5(e)(1) (id.), they could have
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2016 IL App (2d) 151148so stated in Rule 1.5(e)(2). Reading into Rule 1.5(e)(2) a requirement that the writing must
expressly provide that the lawyers assume “joint financial responsibility” would violate a
cardinal rule of construction. See State Farm Mutual Automobile Insurance Co. v. Hayek, 349
Ill. App. 3d 890, 892 (2004) (in construing a court rule, “courts may not alter the rule or read into
it exceptions or limitations, no matter how beneficial or desirable the result”).
¶ 13 Moreover, even if the language of Rule 1.5(e) is seen as ambiguous, we believe that the
last-antecedent rule, which should be employed only when the language is ambiguous, helps to
illustrate what is arguably the proper construction of Rule 1.5(e). Pursuant to the last-antecedent
rule, “ ‘relative or qualifying words, phrases, or clauses are applied to the words or phrases or
clauses immediately preceding them and are not construed as extending to or including other
words, phrases, or clauses more remote,’ ” unless the language requires such an extension.
Department of Transportation v. Singh, 393 Ill. App. 3d 458, 465 (2009) (quoting In re E.B., 231
Ill. 2d 459, 467 (2008)). Applying that rule here shows that the only thing that the written
referral agreement must contain is an express statement that the client agrees to the referral and
the proportion of attorney fees that each attorney involved in the referral agreement will receive.
¶ 14 The committee comments to the rule seem to support this conclusion. The comments
provide that “[j]oint financial responsibility for the representation entails financial responsibility
for the representation as if the lawyers were associated in a general partnership.” Ill. R. Prof’l
Conduct (2010) Rule 1.5(e) cmt. 7 (eff. Jan. 1, 2010). That is, like lawyers in a general
partnership, the attorneys involved in a referral agreement agree that, if one of them is sued by
the client for legal malpractice, the other attorney is also liable. See In re Storment, 203 Ill. 2d
378, 392 (2002) (concluding that the term “[same] legal responsibility” (internal quotation marks
omitted) in a prior version of Rule 1.5(e) “indicates that the rule is concerned with the financial
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2016 IL App (2d) 151148responsibility of the referring lawyer for potential malpractice actions against the receiving
lawyer”); see also 805 ILCS 206/305(a) (West 2014) (“A partnership is liable for loss or injury
caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other
actionable conduct, of a partner acting in the ordinary course of business of the partnership or
with authority of the partnership.”). This “joint financial responsibility” does not concern the
client and would apply regardless of whether it was provided for in the written referral
agreement. Accordingly, it makes sense that the term “joint financial responsibility” would not
need to be expressly included for in the written referral agreement the attorneys have with the
client.
¶ 15 Finally, a review of the history of Rule 1.5(e) suggests that the written referral agreement
need not contain an express statement that the attorneys agree to assume “joint financial
responsibility” in representing the client. Rule 1.5(e) arose from section 2-107(a) of the Illinois
Code of Professional Responsibility (Ill. S. Ct. Code of Prof’l Res., canon 2, R. 2-107 (eff. July
1, 1980)). That section provided in part:
“(a) A lawyer shall not divide a fee for legal services with another lawyer who is
not a partner in or associate of his law firm, unless
(1) the client consents in a writing signed by him to employment of the
other lawyer, which writing shall fully disclose (a) that a division of fees will be
made, (b) the basis upon which the division will be made, including the economic
benefit to be received by the other lawyer as a result of the division, and (c) the
responsibility to be assumed by the other lawyer for performance of the legal
services in question;
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2016 IL App (2d) 151148(2) the division is made in proportion to the services performed and
responsibility assumed by each, except where the primary service performed by
one lawyer is the referral of the client to another lawyer and (a) the receiving
lawyer fully discloses that the referring lawyer has received or will receive
economic benefit from the referral and the extent and basis of such economic
benefit and (b) the referring lawyer agrees to assume the same legal
responsibility for the performance of the services in question as if he were a
partner of the receiving lawyer; and
(3) the total fee of the lawyers does not exceed reasonable compensation
for all legal services they rendered to the client.” (Emphases added.) Id.¶ 16 Thereafter, in August 1990, the law was modified. The modification provided:
“(f) Except as provided in Rule 1.5(j), a lawyer shall not divide a fee for legal
services with another lawyer who is not in the same firm, unless the client consents to
employment of the other lawyer by signing a writing which discloses:
(1) that a division of fees will be made;
(2) the basis upon which the division will be made, including the
economic benefit to be received by the other lawyer as a result of the division;
and
(3) the responsibility to be assumed by the other lawyer for performance
of the legal services in question.
(g) A division of fees shall be made in proportion to the services performed and
responsibility assumed by each lawyer, except where the primary service performed is
the referral of the client to another lawyer and
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2016 IL App (2d) 151148(1) the receiving lawyer discloses that the referring lawyer has received or
will receive economic benefit from the referral and the extent and basis of such
economic benefit, and
(2) the referring lawyer agrees to assume the same legal responsibility for
the performance of the services in question as would a partner of the receiving
lawyer.
(h) The total fee of the lawyers shall be reasonable.” (Emphases added.) Ill. R.
Prof’l Conduct (1990) R. 1.5(f)-(h) (eff. Aug. 1, 1990).
¶ 17 An examination of the history of Rule 1.5(e) reveals that, from the beginning, referral
agreements had to be in writing. However, nothing in any of the prior versions of Rule 1.5(e)
indicated that the attorneys involved in the referral agreement must expressly state that they will
assume “joint financial responsibility” for representing the client. Given that the last-antecedent
rule mandates that the term “writing” modify the clause immediately preceding it, and as the
term “joint financial responsibility” does not immediately precede the term “writing” in any of
the variations of Rule 1.5(e), it is arguable that the written referral agreement need not contain an
express statement that the attorneys involved in the referral agreement assume “joint financial
responsibility” for representing the client. See Department of Transportation, 393 Ill. App. 3d at
465.
¶ 18 The history of Rule 1.5(e) is also relevant for another reason. In contrast to what plaintiff
suggests, a prior version of the rule might apply here. Given that the referral agreements were
executed between 2007 and 2010, it might well be that the August 1990 version applies to all the
agreements except the ones executed in 2010. Compare Paul B. Episcope, Ltd. v. Law Offices of
Campbell & Di Vincenzo, 373 Ill. App. 3d 384, 394 (2007) (a “supreme court rule is applied
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2016 IL App (2d) 151148retroactively, even though it was different from its predecessor rule”), with Naughton v. Pfaff,
2016 IL App (2d) 150360, ¶¶ 58-59 (discussing when supreme court rules apply retroactively).
However, that said, we observe that, regardless of which version of Rule 1.5(e) applies, it
appears that a written referral agreement might not need to contain an express statement that the
attorneys involved assume “joint financial responsibility” for representing the client.
¶ 19 In reaching our conclusion, we recognize that one court, in addressing a different issue
under Rule 1.5(e), determined that a written referral agreement must contain an express
statement that the attorneys will assume “joint financial responsibility.” See Fohram, 2014 IL
App (1st) 123351, ¶ 55 (“[W]e would not find there was substantial compliance with Rule 1.5(e)
in this case where the attorney-client agreements did not inform the clients of the fee-sharing
arrangement based on referrals, the exact split in fees, and that [the attorneys] had assumed equal
financial responsibility.”). The trial court here relied on Fohram in finding that the written
referral agreements executed in this case were unenforceable.
¶ 20 Given Fohram, we see how an argument could be made that the term “joint financial
responsibility” must be contained in a written referral agreement. However, as outlined above,
we believe that plaintiff has presented a prima facie case of error. Because plaintiff has
presented a prima facie error on this point, we will not address the other issues it raises on appeal
in support of its claim that the trial court should have denied defendant’s motion to dismiss.
¶ 21 Because we find that plaintiff’s brief on appeal demonstrates prima facie error, we
reverse the judgment of the circuit court of Lake County and remand the case.
¶ 22 Reversed and remanded.
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