Langone v. Schad, Diamond and Shedden, P.C.

FIRST DIVISION
Opinion filed December 3, 2010
Modified upon denial of rehearing January 18, 2011
No. 1-09-2079
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
_________________________________________________________________
CHRISTOPHER V. LANGONE, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. )
) No. 08 L 12209
SCHAD, DIAMOND AND SHEDDEN, P.C.; )
ANTHONY J. MADONIA AND ASSOCIATES; )
and CHILDRESS, DUFFY AND GOLDBLATT, )
LTD., ) The Honorable
) Mary A. Mulhern,
Defendants-Appellees. ) Judge Presiding.
_________________________________________________________________
JUSTICE LAMPKIN delivered the judgment of the court, with
opinion.
Justices Hoffman and Rochford1 concurred in the judgment and
opinion.
OPINION
This case involves a dispute between law firms for the
attempted recovery of attorney fees awarded as part of a class
action settlement fund. Plaintiff, Christopher Langone, appeals
from the trial court’s order denying his motion pursuant to
section 2-1203 of the Code of Civil Procedure (Code) (735 ILCS
5/2-1203 (West 2008)), which sought the removal of “with
1
Justice Sebastian Thomas Patti originally sat on the panel
of this appeal and participated in its disposition. Justice
Patti is no longer with the appellate court. Therefore, Justice
Mary K. Rochford serves in his stead.
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prejudice” language from a prior order dismissing plaintiff’s
breach of contract action against defendants and co-class
counsel, Schad, Diamond & Shedden, P.C. (Schad), and Childress,
Duffy & Goldblatt, LTD. (Childress).
FACTS
In January 1999, plaintiff’s law firm, the Langone Law Firm,
and the law firms of Schad, Childress,2 and Anthony J. Madonia
and Associates3 (Madonia) entered into a contingent fee agreement
with class members in a putative class action against Royal
Macabees Life Insurance Company (Royal Macabees). Relevant to
this appeal, the terms of the agreement provided:
“4. *** If a court determines that CLIENT’S [class
representative James Miller] case should proceed as a
class action, then the LAW FIRMS’ [plaintiff’s firm,
Schad, Childress, and Madonia] fees will be set by the
court hearing the case.
***
6. If they decide it is appropriate, and the
client consents, the LAW FIRMS may, at their expense,
2
At the time of contracting, Schad was known as Beeler,
Schad & Diamond, P.C., and Childress was known as Childress &
Zdeb, Ltd.
3
Madonia was dismissed as a party to the instant appeal.
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associate with other attorneys in the prosecution of
CLIENT’S claim. CLIENT understands that as a result of
the services rendered by LAW FIRMS, LAW FIRMS will
share in the total fees paid on a pro rata basis
according to the amount of time each has expended or as
awarded by the Court hearing the case. The LAW FIRMS
assume equal legal responsibility for the performance
of legal services.” (Emphasis added.)
In October 2000, class certification was granted and
plaintiff’s firm, Schad, Childress, and Madonia were named as co-
class counsel. In August 2002, partial summary judgment was
granted to the class. By December 2004, the class secured breach
of contract liability against Royal Macabees and won summary
judgment on the majority of Royal Macabees’ affirmative defenses.
In 2005, a dispute arose in which there was a request for
the removal of plaintiff and Childress as class counsel and a
question as to which of the other firms should act as lead
counsel. Class counsel agreed to mediate the dispute. Following
mediation, an agreed order was entered in which Schad was
appointed lead counsel and Schad and Childress were appointed
trial counsel. No mention was made of plaintiff’s removal as
class counsel; however, the record contains an affidavit from
James Shedden of the Schad law firm stating that the mediator
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recommended plaintiff remain as cocounsel.
In January 2008, plaintiff filed a federal lawsuit alleging
breach of fiduciary duty against co-class counsel4 and seeking a
declaration of the parties’ respective rights and obligations
under the contingent fee agreement. Schad filed a motion to
dismiss, contending plaintiff’s claims were not ripe for
adjudication. The federal court dismissed plaintiff’s suit
without prejudice.
On January 11, 2008, the chancery court entered an order
providing preliminary approval of a class action settlement
agreement and providing the schedule for “Class Counsel’s
petition for attorneys’ fees and for reimbursement of expenses.”
The settlement agreement provided for a $93 million settlement
fund to satisfy the claims of the class members, as well as an
insurance rate rollback valued at approximately $34,600,000. In
the subsequent notice of class action settlement, the court
instructed class counsel to “petition the Court for an award of
attorneys’ fees, not to exceed one-third of the cash portion of
the Settlement, including accrued interest. Class Counsel will
also seek reimbursement of the expenses incurred by them in this
litigation. No attorney fees will be paid or any expenses
4
It is unclear from the record whether all three firms were
named as defendants.
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reimbursed except those approved by the Court.”
Thereafter, Schad, Childress, and Madonia filed a joint fee
petition seeking 33.3% of the settlement fund plus expenses.
Plaintiff did not join in the fee petition. The chancery court
requested detailed fee petitions from each law firm to ensure the
reasonableness of the fee award. Specifically, on February 19,
2008, an order was entered instructing plaintiff to file a fee
petition within 7 days and to exchange time records within 7
days. Schad, Childress, and Madonia complied with the request,
submitting voluminous time records totaling 41,381 hours of time
spent in connection with the litigation. Schad, Childress, and
Madonia claimed that a lodestar multiplier of 1.6 was a
reasonable fee.
Plaintiff filed an objection to the fee petition on behalf
of himself and one class member arguing that the fees and
expenses sought were excessive. Specifically, plaintiff argued
that the time records submitted in support of cocounsel’s fee
petition were inflated and the attorneys were entitled only to
10% of the settlement fund instead of 33.3% in light of the size
of the recovery in the case.
On April 4, 2008, the chancery court held a hearing for
final approval of the class action settlement and to determine
the issue of attorney fees. At the outset, plaintiff stated that
he did not object to the approval of the settlement. The final
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settlement was approved by the court. Plaintiff, however, argued
that he was not provided adequate notice with respect to the
notice of class action settlement, in that the notice was sent to
an old address. The court overruled plaintiff’s objection to
lack of adequate notice.
Turning its attention to the issue of attorney fees, the
court admonished plaintiff for failing to submit his time records
per the court’s request. The following relevant exchange between
the court and plaintiff ensued:
“MR. LANGONE: There has been a petition that has
been filed that seeks one-third of the fund as award to
Class counsel as a whole and there has been a petition
that has been filed that says that the Court should
award 10 percent of the fund to Class counsel as a
whole.
And this Court made it clear for the record when
the Court spoke on February 19th and said–-and I’m
quoting the Court-–and please make clear-–I will make
clear for the record there will be one award of
attorneys’ fees to Class counsel. And I think that the
Court’s intent in saying that was that the Court is not
going to get involved in this dispute that exists as to
how to divvy up the pie but just determine what size of
it is going to be. And if–-you know, if the Court
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wants to get into looking at all the lodestars of all
four law firms, obviously that’s --
THE COURT: I don’t have yours.
MR. LANGONE: -–within the Court’s discretion.
THE COURT: I don’t have yours. I don’t have
anything from you.
MR. LANGONE: Well, I submitted to them, and the
Court never indicated that it was going to be making
lodestar determinations.
THE COURT: Of course I did.
MR. LANGONE: The Court said we should exchange--
THE COURT: Of course I did. I said, and
specifically to your colleague who was here on that
day, that your own time should be filed if you were
seeking fees. I specifically said that. You haven’t
done it.
MR. LANGONE: Well, your Honor, your Honor said
that you were going to make one award of attorneys’
fees to Class counsel.
THE COURT: Mr. Langone, I’ve read the transcript.
I remember what I said.
MR. LANGONE: Well, I have it with me now.
THE COURT: I just read it.
MR. LANGONE: No, I have the time records with me.
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THE COURT: I don’t want them now.
MR. LANGONE: Okay. Well, I guess there’s several
issues with respect to the lodestar calculations,
right? One is that I don’t know what was submitted to
the Court. I didn’t know that the other lawyers’ time
had been submitted to the Court, and I did not–-I mean,
if they were–-for instance, I don’t know, did they
submit Mr. Madonia’s time records because I did not
receive any indication that they’ve done that or Mr.
Childress’ time records or my own time records, if
they’re submitting all of the time records to the Court
or are they just excluding mine, you know? It was not
clear--
THE COURT: Nobody submitted your time records, Mr.
Langone, and you know that. Don’t be silly. I
directed your colleague when you were here in February
that if you had a petition to submit, you should submit
it, and I gave you a date for that. You haven’t done
it.
MR. LANGONE: Okay. That was not clear to me.
THE COURT: I know you’re not relying on the Schad
firm to submit your fees. I know you aren’t.
MR. LANGONE: Well, that was not totally clear to
me. But, nonetheless, I was under the impression that
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the Court was indicating that it wanted us to exchange
time by a certain date, which we did, and we exchanged
the time records, and we gave them copies of our time
records. And then I was under the impression the
Court’s making a fund determination and not breaking
down the time records.
THE COURT: To the extent that you wanted your time
included in the lodestar, it had to be submitted. It’s
not included in the lodestar. I am going to make one
award of attorneys’ fees, but it won’t include any time
that you spent because it’s not included in the
lodestar.
MR. LANGONE: Okay. Well, your Honor, I mean, I
don’t want to talk about my time because I think this
is more about what the Class fee should be. I have–-
whatever your Honor awards, I have my rights under the
Lien Act and under my contract suits with them, and I
assume your Honor is not adjudicating any of my
separate rights and will make that clear because--
THE COURT: No
MR. LANGONE: No, you’re not?
THE COURT: No, I’m not.”
The court then provided plaintiff with an opportunity to
support his objection to the fee petition submitted by Schad,
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Childress, and Madonia. Defendants were provided an opportunity
to respond in support of their fee petition. The court took the
fee petition under advisement. Plaintiff informed the court that
he had filed an attorney’s lien in anticipation of the creation
of the settlement “fund.” Plaintiff also stated his intent to
file his time records with the clerk’s office.
On June 4, 2008, the chancery court issued a written order
ultimately concluding that $25 million was “a reasonable and
appropriate fee,” amounting to 26.9% of the common settlement
fund “with a risk multiplier on [an] adjusted lodestar multiplier
of 2.2.” The court denied the request for reimbursement of
expenses as there was no documentation to support the expenses.
In a footnote on the first page of the June 4, 2008, order, the
court said that the “opinion [named] the individual law firms
bringing the [fee] petition for clarification purposes”; however,
the court would only make a single award.
The court calculated the attorney fees using the “percentage
method” while cross-checking with the “lodestar method” to ensure
reasonableness. In so doing, the court determined that Schad,
Childress, and Madonia “significantly overstated” their lodestar
because the hours billed were inflated and the lodestar failed to
reflect a “reasonable time spent multiplied by a reasonable
hourly rate.” After thoroughly reviewing the time records, the
court found that Schad, in particular, logged significantly
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higher average billing hours while using multiple attorneys in
nonessential manners from 2005-08, after the class had already
secured breach of contract liability and had prevailed on summary
judgment, resolving the majority of Royal Macabees’ affirmative
defenses. Therefore, the “billable hours, attorney
representation, and strategy meetings increased in inverse
proportion to the reduced [litigation] risk.” Moreover, after
reviewing Schad’s time records, the court discovered that the
Schad attorneys with the highest billable rates performed the
vast majority of all of the work billed in connection with the
Royal Macabees case, “a result inconsistent with an attorney’s
obligation to use associates and paralegals.” The court noted
that, while it was awarding one sum to account for attorney fees,
“it [was] appropriate to analyze, for illustration purposes,
individual law firms’ billing submissions. In [that] respect,
the [Schad] time records [were] significant because they
[represented] roughly 75% of the total submitted hours.”
On July 15, 2008, a hearing was held on plaintiff’s petition
to adjudicate an attorney’s lien. The court concluded that
plaintiff could not recover under the Attorneys Lien Act (770
ILCS 5/0.01 et seq. (West 2008)). In so ruling, the court said:
“I just don’t see how it fits because the
prerequisites for asserting the lien are the existence
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of a client with a claim against somebody else who is
put on notice, and that’s not the factual situation
here. Your client doesn’t have a claim against your
co-counsel. Your firm does. You and your firm do, but
your client doesn’t.
* * *
On the petition to adjudicate attorney’s lien, the
Court invited the Langone firm to submit a petition for
fees along with the other fee petition submitted. This
the Langone firm declined to do. It instead
participated as an objector, arguing that the fund
should be limited to 10 percent, without any
significant analysis of the fees requested by Class
counsel.
Now the Langone firm is in on a petition to
adjudicate an attorney’s lien, not against the
settlement fund and not against Royal Macabees, but
against the attorney’s fees awarded by the Court from
the settlement fund. The Attorney’s Lien Act is a
statutory provision that must be strictly construed,
and as Mr. Langone has acknowledged, his client, [class
member], has no claim against co-Class counsel.
Rather, Mr. Langone is attempting to assert a claim
that he and his firm potentially have against co-Class
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counsel for fees.
This does not fall within the ambit of the
Attorney’s Lien Act. The only claim before the Court
is the one asserted under the [A]ct. There is nothing
before the Court under any other theory, nor would it
appear appropriate that it would be before the Court.
And so because the only claim asserted is under
the Attorney’s Lien Act and the Court has found that
under the circumstances the [A]ct does not apply, the
motion to adjudicate attorney’s lien is denied.
* * *
What I am going to add to this order is this is a
final and appealable order because the only thing
remaining apart from the jurisdiction I retained over
the administration of the settlement was this issue,
and I have resolved it.”
Plaintiff filed a notice of appeal on August 13, 2008,
citing the trial court’s July 15, 2008, final order and “all
prior orders, including the order dated June 4th, 2008," awarding
attorney fees and denying plaintiff’s claim for an attorney’s
lien. According to plaintiff, his appeal was dismissed for want
of prosecution. The dismissal order does not appear in the
record before us.
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On October 31, 2008, plaintiff filed a verified breach of
contract complaint against Schad, Childress, and Madonia for
failing to distribute plaintiff’s pro rata share of the attorney
fees awarded as a result of the class action settlement.5 On
January 6, 2009, Schad and Madonia filed a joint motion to
dismiss pursuant to section 2-619 of the Illinois Code of Civil
Procedure (Code) (735 ILCS 5/2-619 (West 2008)). Specifically,
Schad and Madonia argued that plaintiff’s complaint was barred by
a prior judgment, namely, the June 4, 2008, chancery court order,
and that the breach of contract claim was barred by an
affirmative matter avoiding the legal effect of or defeating that
claim, namely, the language of the parties’ contingency fee
agreement. See 735 ILCS 5/2-619(a)(4), (a)(9) (West 2008).
Childress joined in and adopted the section 2-619 motion filed by
Schad and Madonia. On February 13, 2009, plaintiff filed a
motion for summary judgment (735 ILCS 5/2-1005 (West 2008)),
contending that no genuine issue of material fact existed where
5
According to defendants, plaintiff simultaneously filed a
lawsuit to recover attorney fees against the Royal Macabees class
in federal court under the theory of quantum meruit. The class
moved for judgment on the pleadings, namely, the contingency fee
agreement. The motion was granted. See Langone v. Miller, 631
F. Supp. 2d 1067 (N.D. Ill. 2009).
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plaintiff’s complaint had not been controverted by an answer,
affidavit, or other pleading, and he was entitled to judgment as
a matter of law.
On April 20, 2009, the trial court dismissed plaintiff’s
breach of contract complaint with prejudice. In response, on May
15, 2009, plaintiff filed a combined motion pursuant to section
2-1203 of the Code (735 ILCS 5/2-1203 (West 2008)) to rehear,
modify, and/or vacate the trial court’s April 20, 2009, order, in
order to remove the “with prejudice” language, and pursuant to
section 2-616(a) of the Code (735 ILCS 5/2-616(a) (West 2008))
for leave to file an attached proposed amended complaint that
more specifically pled the breach of contract count with
additional facts, including a copy of plaintiff’s time records,
and added claims for breach of fiduciary duty and quantum meriut.
Schad and Madonia filed a response in opposition to plaintiff’s
motion. Childress joined in the opposition motion. In his reply
in support of his motion, plaintiff averred that the issue before
the trial court was restricted to the section 2-1203 portion of
the motion, i.e., whether the court would “reconsider”
withdrawing its dismissal of plaintiff’s complaint with prejudice
and instead dismiss the complaint without prejudice, so that his
section 2-616(a) motion to amend could be considered on its
merits.
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On July 10, 2009, following a hearing, the court denied
plaintiff’s section 2-1203 motion. Plaintiff appeals the court’s
July 10, 2009, order.
DECISION
Plaintiff has a very narrow contention on appeal. Plaintiff
contends the trial court erred in dismissing his first and only
complaint with prejudice and, pursuant to section 2-1203 of the
Code, the court should have modified its decision in order to
allow plaintiff the opportunity to seek leave to amend.
Plaintiff is clear that he does not challenge the dismissal of
the complaint itself, only the fact that the complaint was
dismissed with prejudice. At the July 10, 2009, hearing,
plaintiff’s counsel said:
“Judge, this is before the Court on the very
limited question of the 1203 motion to modify that
[April 20, 2009,] order to strike out the with
prejudice provisions and to make it without prejudice
and really nothing more. So that the interest of
justice can be served by then allowing the plaintiff to
present to Judge Ward the second half of the motion
which is for leave to amend the complaint by filing the
amended pleading that is attached to the motion.
* * *
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So the ends of justice will be served here by this
Court modifying its earlier order striking the with
prejudice language to make it without prejudice and
leave to Judge Ward to decide whether to allow the
filing of the first amended complaint and that--the
relief we ask for here today, the relief that Judge
Ward has said this Court may consider it is very
narrow, it’s just to modify that earlier order so that
the ends of justice can be considered at least by Judge
Ward in his deciding whether the plaintiff gets leave
to file his first, one and only amended pleading.”
Section 2-1203 of the Code provides:
“(a) In all cases tried without a jury, any party
may, within 30 days after the entry of the judgment or
within any further time the court may allow within the
30 days or any extensions thereof, file a motion for a
rehearing, or a retrial, or modification of the
judgment or to vacate the judgment or for other relief.
(b) A motion filed in apt time stays enforcement
of the judgment ***.” 735 ILCS 5/2-1203 (West 2008).
While addressing a section 2-1203 motion, this court has said:
“A motion to reconsider may be brought pursuant to
section 2-1203 or 2-1401 of the Code. [Citations.]
The purpose of a motion to vacate under section 2-1203
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is to alert the trial court to errors it has made and
to afford an opportunity for their correction.
[Citation.] Whether to grant or deny a motion to
reconsider is within the sound discretion of the trial
court. [Citation.] Whether a trial court has abused
its discretion turns on whether the court’s refusal to
vacate ‘ “violates the moving party’s right to
fundamental justice and manifests an improper
application of discretion.” ’ [Citation.] In re
Marriage of King, 336 Ill. App. 3d 83, 87, 783 N.E.2d
115 (2002).
We first note that plaintiff’s section 2-1203 motion did not
suffer the same defect as the motion in Shutkas Electric, Inc. v.
Ford Motor Co., 366 Ill. App. 3d 76, 81, 851 N.E.2d 66 (2006).
In Shutkas Electric, Inc., the plaintiff filed a motion entitled
“Motion to Modify Order Entered February 24, 2005 Pursuant to 735
ILCS 5/2-1203”; however, the body of the motion requested relief
in the form of adding a party plaintiff and leave to file a
second amended complaint. Shutkas Electric, Inc., 366 Ill. App.
3d at 81. A motion is defined by its substance rather than its
heading. Shutkas Electric, Inc., 366 Ill. App. 3d at 81. Here,
plaintiff’s motion sought at least one form of relief listed in
section 2-1203, namely, modification of the April 20, 2009,
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judgment, and provided that the grounds for requesting the
modification was for the consideration of a section 2-616(a)
motion for leave to amend. Plaintiff’s motion, therefore, was
unlike the motion in Shutkas Electric, Inc. even though it was a
precursor to the motion for leave to amend, in that it was a
motion directed against the April 20, 2009, judgment to the
extent that it challenged the “with prejudice” language. See
Shutkas Electric, Inc., 366 Ill. App. 3d at 81; compare
Vanderplow v. Krych, 332 Ill. App. 3d 51, 58-59, 773 N.E.2d 40(2002). Accordingly, plaintiff’s motion was a postjudgment
motion under section 2-1203.
“ ‘The intended purpose of a motion to reconsider is to
bring to the court’s attention newly discovered evidence, changes
in the law, or errors in the court’s previous application of
existing law.’ ” Cable America, Inc. v. Pace Electronics, Inc.,
396 Ill. App. 3d 15, 24, 919 N.E.2d 383 (2009), quoting General
Motors Acceptance Corp. v. Stoval, 374 Ill. App. 3d 1064, 1078,
872 N.E.2d 91 (2007). We review whether the court erred in
dismissing plaintiff’s complaint.
A section 2-619 motion to dismiss admits the legal
sufficiency of the pleading (Valdovinos v. Tomita, 394 Ill. App.
3d 4, 17, 914 N.E.2d 221 (2009)) and takes as true all well-pled
facts and reasonable inferences drawn therefrom (Purmal v. Robert
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N. Wadington & Associates, 354 Ill. App. 3d 715, 720, 820 N.E.2d
86 (2004)). We, therefore, must accept as true that plaintiff
contributed over 1,041 hours to the Royal Macabees class action
lawsuit; that class counsel entered a contract; that counsel for
the class was awarded $25 million; and that plaintiff’s pro rata
share of the fee award was 3.2%. We, however, need not accept as
true plaintiff’s assertion that defendants breached their duty to
compensate plaintiff for his pro rata share because that is a
conclusion of law. Purmal, 354 Ill. App. 3d at 720 (“conclusions
of law and conclusory factual allegations not supported by
allegations of specific facts are not deemed admitted”). In
addition, we need not accept as true those facts plaintiff
submits as support for his arguments that were included in his
proposed amended complaint. The proposed amended complaint was
not properly before the court when it denied plaintiff’s motion
to reconsider. As repeatedly advised by plaintiff, the proposed
amended complaint was attached to the section 2-1203 motion
merely for purposes of consideration with the section 2-616
motion.
I. Opportunity to Amend
Plaintiff contends the trial court abused its discretion in
denying his request to modify the April 20, 2009, judgment
deleting the with prejudice language, where public policy
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supports the liberal granting of amendments. This argument
combined with plaintiff’s repeated statements that the only issue
before the trial court and before us on appeal is whether the
“with prejudice” language should have been removed leads us to
conclude that plaintiff suggests his section 2-1203 motion should
have been granted outright. We disagree. The law is clear that
it is within the trial court’s discretion whether to grant or
deny a section 2-1203 motion. In re Marriage of King, 336 Ill.
App. 3d at 87.
Moreover, plaintiff’s complaint did not suffer from pleading
defects; rather, pursuant to section 2-619 of the Code,
plaintiff’s complaint was considered sufficient and was dismissed
because it was defeated by some other affirmative matter outside
of the complaint. See 735 ILCS 5/2-619(a)(9) (West 2008). As a
result, we find the cases that plaintiff primarily relies on to
support his argument that amendments should be granted liberally
are distinguishable.
In both Droen v. Wechsler, 271 Ill. App. 3d 332, 648 N.E.2d
981 (1995), and Cantrell v. Wendling, 249 Ill. App. 3d 1093, 620
N.E.2d 9 (1993), the appellate court found that the lower courts
abused their discretion in denying motions to amend the
underlying complaints in order to resolve pleading defects.
Droen, 271 Ill. App. 3d at 335-36; Cantrell, 249 Ill. App. 3d at
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1095-96. The Cantrell court concluded that the plaintiff had not
been given ample opportunity to state a cause of action where it
was not apparent that no amendment could cure defects in the
pleading. Cantrell, 249 Ill. App. 3d at 1095-96. While it is
true that the Droen court advised that the “circuit court should
exercise its discretion liberally in favor of allowing amendments
so that cases are decided on their merits and not on procedural
technicalities,” the “technicality” at issue there was whether
the plaintiff was properly barred from amending her complaint
when she did not attach a proposed amended complaint but included
the substance of the proposed amendment in her motion. Droen,
271 Ill. App. 3d at 335-36. After reading Droen and Cantrell, we
find them inapposite to the case before us where plaintiff’s
pleading was not dismissed because it failed to state a cause of
action.
II. Res Judicata
Despite plaintiff’s repeated assertions that the substance
of his complaint and the reasoning for the court’s dismissal of
the complaint are not at issue, plaintiff argues that his
complaint should not have been dismissed on the basis of res
judicata where defendants failed to, and cannot, establish the
elements of the doctrine. We, therefore, must determine whether
the trial court abused its discretion in dismissing plaintiff’s
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complaint with prejudice thereby denying plaintiff the
opportunity to amend his complaint. In order to do so, we must
consider whether plaintiff’s complaint is capable of successful
amendment. The court’s April 20, 2009, written order does not
provide the basis upon which the court dismissed plaintiff’s
complaint with prejudice; however, the transcript of the court’s
denial of the section 2-1203 motion does. In denying plaintiff’s
section 2-1203 motion, the trial court said:
“Well, the motion to reconsider today–-or the
motion for me to modify or vacate the judgment I
entered on April 20 is one that the plaintiff--that
issue was one that the plaintiff goes to some length in
his reply to point out that that’s all I have before me
is whether or not under 2[-]1203 I should modify this
judgment. And Judge Ward reserved to himself in the
June 2 order whether or not the plaintiff would be
given leave to amend if necessary, which obviously
contemplates that if I don’t grant the 1203 relief,
then there is no reason to go to 2[-]616.
***
I have to say that I find it rather misleading,
and I don’t know if I should say disingenuous that at
Page 2 of [plaintiff’s] reply it is argued, one, two,
three times that Langone was pro se in his proceedings.
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That kind of misrepresents his status as a litigant.
According to the entry in the Sullivan’s directory Mr.
Langone has been an attorney for over 18 years. So to
describe him as a pro se in what appears to be an
effort for some sympathy or latitude with regard to
pleading or conduct of this lawsuit is incorrect and
will be disregarded.
There’s nothing in the motion or the reply that
tells me that my decision that this action is barred on
the basis of res judicata is incorrect. There’s no
case law that says its incorrect. This all revolves
around whether or not Mr. Langone is going to get a
share of the fees in a class action suit that was
concluded a couple years ago. Mr. Langone has had
ample opportunity to pursue his claiming for payment,
and as a matter of fact, Judge Mason addressed that in
her comments which are not only in *** the 1203 motion
in response, but also in the motion made by the
defendants that was granted on April 20. And so I
don’t think there’s any reason for me to modify or
vacate this order. I don’t think the movant has made
an adequate record that would warrant that, and so I
think that’s the end of this before it goes to the
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Appellate Court.”
The trial court, therefore, dismissed plaintiff’s complaint on
the basis of res judicata, finding that the chancery court’s June
4, 2008, order awarding fees to class counsel and not plaintiff
barred plaintiff’s breach of contract claim.
Res judicata is an equitable principle intended to prevent
multiple lawsuits between the same parties involving the same
facts and issues. Green v. Northwest Community Hospital, 401
Ill. App. 3d 152, 154, 928 N.E.2d 550 (2010). Res judicata bars
any subsequent actions when a final judgment was reached on the
merits by a court of competent jurisdiction between their same
parties or privies on the same cause of action. Green, 401 Ill.
App. 3d at 154. “Res judicata is conclusive as to any matter
that was offered to sustain or defeat the claim or demand, as
well as any other matter that might have been offered for that
purpose.” Dalan/Jupiter, Inc. v. Draper & Kramer, Inc., 372 Ill.
App. 3d 362, 367, 865 N.E.2d 442 (2007). Therefore, the moving
party must demonstrate (1) an identity of the parties or their
privies in the two lawsuits; (2) an identity to the causes of
action; and (3) a final judgment on the merits of the first
lawsuit. Dalan/Jupiter, Inc., 372 Ill. App. 3d at 367.
Plaintiff contends that defendants have not established and
cannot establish the first requirement of the doctrine of res
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judicata, i.e., sameness of parties, because plaintiff was not a
party to the Royal Macabees class action. In his initial brief,
plaintiff, however, admits that “he was in privity with a party,
the class representative, as their agent in the lawsuit and
adverse to Royal Macabees.”
For purposes of res judicata, the parties need not be
identical to be considered the same. Kapoor v. Fujisawa
Pharmaceutical Co., 298 Ill. App. 3d 780, 786, 699 N.E.2d 1095(1998). Litigants are considered the same when their interests
are sufficiently similar, even if they differ in name or number.
Kapoor, 298 Ill. App. 3d at 786. Litigants are privies when “a
person is so identified in interest with another that he
represents the same legal right.” Jackson v. Callan Publishing,
Inc., 356 Ill. App. 3d 326, 340-41, 826 N.E.2d 413 (2005).
We find that plaintiff and defendants were in privity with
the Royal Macabees class action. Plaintiff and defendants
represented the class and their interests were aligned such that
all the attorneys sought a favorable outcome for their class
members. Moreover, plaintiff and defendants were parties in
interest in any action for attorney fees. See Cantwell v.
Reinhart, 244 Ill. App. 3d 199, 204-05, 614 N.E.2d 174 (1993)
(attorney in marriage dissolution proceedings was a party in
interest in the cause of action for recovery of attorney fees and
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dissolution order acted as bar for purposes of res judicata to
attorney’s subsequent action to recover attorney fees).
Plaintiff and defendants were, therefore, in privity for purposes
of res judicata.
Plaintiff contends that defendants have not demonstrated and
cannot demonstrate an identity of the causes of action because
plaintiff’s contractual rights are distinct from the Royal
Macabees class action.
To determine whether the causes of action are the same, we
apply the “transactional test.” Valdovinos, 394 Ill. App. 3d at
20. Under the “transactional test,” “separate claims will be
considered the same cause of action for purposes of res judicata
if they arise from a single group of operative facts, regardless
of whether they assert different theories of relief.” River
Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 311, 703
N.E.2d 883 (1998). Claims are “considered part of the same cause
of action even if there is not a substantial overlap of evidence,
so long as they arise from the same transaction.” River Park,
Inc., 184 Ill. 2d at 311. The focus of the inquiry, therefore,
is on whether the relief requested is based on substantially the
same facts. Jackson, 356 Ill. App. 3d at 337.
We conclude that there was an identity to the causes of
action between the July 15, 2008, order and plaintiff’s breach of
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contract complaint. In both instances, plaintiff relied on the
same contractual language, namely, pro rata share, to contend
that he was improperly frozen out of his share of the attorney
fee award. In both instances, plaintiff argued that he provided
a fee petition in the form of his objection to cocounsel’s fee
petition. Although the theories of relief differ, the operative
facts are the same. Plaintiff is attempting to relitigate his
right to a portion of the attorney fee award. This issue was
decided by the chancery court and is thus barred by the doctrine
of res judicata.
Plaintiff contends defendants have not demonstrated and
cannot demonstrate that there was a final judgment on the merits
in the prior proceeding because the chancery court’s June 4,
2008, memorandum and order was not a final and appealable order
where the court reserved jurisdiction to resolve additional
matters and provided a future status date.
We agree that the court’s June 4, 2008, memorandum and order
was not a final adjudication on the merits because the court
reserved jurisdiction to determine whether plaintiff’s cocounsel
were eligible for reimbursement of expenses. We, however, find
that, for purposes of res judicata, there was a final
adjudication on the merits of the attorney fee matter in the
court’s July 15, 2008, order. The chancery court dismissed
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plaintiff’s attorney lien claim and ordered the dispersal of the
awarded fees to Schad, Childress, and Madonia, expressly stating
that the order was final and appealable. The July 15, 2008,
order does not appear in the record before us; therefore, we base
our knowledge regarding that order on the transcript from that
date.
To the extent plaintiff argues that a final order was only
recently entered with the disbursement of the settlement fund,
nothing appears in the record to support that argument. As the
appellant, it was plaintiff’s duty to provide an accurate and
complete record. Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92, 459
N.E.2d 958 (1984). In the absence of a sufficient record, we
must resolve any doubts arising from the incompleteness of the
record against the appellant and presume the trial court’s order
was in conformance with the law and supported by the evidence, or
lack thereof. Foutch, 99 Ill. 2d at 392. We recognize that, in
order for there to be an appeal from a final judgment of one or
more but fewer than all parties, Supreme Court Rule 304(a)
requires an express written finding that “there is no just reason
for delaying enforcement or appeal.” 155 Ill. 2d. R. 304(a);
Kral v. Fredhill Press Co., 304 Ill. App. 3d 988, 992, 709 N.E.2d
1268 (1999). We infer, based on the transcript appearing in the
record in which the court provided that the order was final and
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appealable, that the requisite Rule 304(a) language found in the
transcript was also contained in the written order and res
judicata does apply to the order. Foutch, 99 Ill. 2d at 392.
Plaintiff appealed the chancery court’s July 15, 2008,
order; however, the appeal was dismissed for want of prosecution
on March 12, 2009. Plaintiff argues that the act of appealing
the July 15, 2008, order prevents its finality for purposes of
res judicata. Plaintiff is incorrect. “A final judgment can
serve as the basis to apply the doctrines of res judicata and
collateral estoppel even though the judgment is being appealed.”
Illinois Founders Insurance Co. v. Guidish, 248 Ill. App. 3d 116,
120, 618 N.E.2d 436 (1993); see Kensington’s Wine Auctioneers &
Brokers, Inc. v. John Hart Fine Wine, Ltd., 392 Ill. App. 3d 1(2009); In re Estate of Barth, 339 Ill. App. 3d 651 (2003).
We recognize there exists a split of authority on the
question of whether an order is final for purposes of res
judicata when an appeal is pending. Our supreme court continues
to cite Ballweg v. City of Springfield, 114 Ill. 2d 107 (1986),
for the proposition that “[f]or purposes of applying the doctrine
of collateral estoppel, finality requires that the potential for
appellate review must have been exhausted.” See In re A.W., 231
Ill. 2d 92 (2008) (collateral estoppel). It is important to note
that, in Rogers v. Desiderio, 58 F.3d 299 (7th Cir. 1995), the
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Seventh Circuit recognized the split in authority and noted that
Ballweg could be limited to issue preclusion (collateral
estoppel) and not claim preclusion (res judicata). In addition,
Ballweg relies on Relph v. Board of Education of DePue Unit
District No. 103, 84 Ill. 2d 436 (1981), to support the
proposition that an appeal bars the effects of res judicata;
however, in Relph, the “appeals” at issue were not final
judgments terminating litigation but, rather, were orders
remanding the cause to the trial court and thus only stood as the
law of the case at the time. Relph, 84 Ill. 2d at 442-43.
The split of authority is not relevant to our case because
Langone’s appeal was not pending when the breach of contract
claim was pending. Plaintiff appealed the chancery court’s July
15, 2008, order; however, the appeal was dismissed for want of
prosecution. We take judicial notice that plaintiff’s
consolidated appeal was dismissed on March 12, 2009. Plaintiff’s
appeal, therefore, was no longer pending when the trial court
dismissed plaintiff’s breach of contract claim on April 20, 2009.
Accordingly, plaintiff’s appeal did not disturb the finality of
the July 15, 2008, order.
In short, plaintiff has attempted several methods to recover
attorney fees, all of which would have been unnecessary had he
provided a detailed fee petition demonstrating his participation
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in the Royal Macabees case. The notice of class action
settlement advised plaintiff that he was required to file a fee
petition. The transcripts in the record reveal that plaintiff
failed to do so upon repeated request. The chancery court’s June
4, 2008, order expressly excluded plaintiff from the calculation
of attorney fees. While the chancery court did indicate that a
joint fee award was to issue, the judge made clear that the joint
award excluded plaintiff’s firm. In its concluding remarks, the
court advised plaintiff that “I made that award based on the
petition I received, which included [Schad], Childress Duffy, and
Madonia. It did not include yours, and I am not going to get
into this battle now. I am not going to.” Although a harsh
result, we conclude the trial court did not abuse its discretion
in denying plaintiff’s motion to reconsider the dismissal of his
breach of contract claim on the basis of res judicata.
III. Parties’ Contract
As we have stated, the trial court dismissed plaintiff’s
complaint on the basis of res judicata; however, defendants’
motion to dismiss also requested dismissal based on the parties’
contingency fee agreement. This court may affirm the trial
court’s judgment on any basis appearing in the record.
Dalan/Jupiter, Inc., 372 Ill. App. 3d at 366. In the contingency
fee agreement, the parties agreed that if a class action
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proceeded the attorney fees would be “set by the court hearing
the case.” The agreement went on to provide that the attorneys
would split any fee awarded pro rata “or as awarded by the Court
hearing the case.” Here, the court clearly decided that
plaintiff was not going to be awarded any portion of the fees
awarded because plaintiff failed to comply with the court’s
direct order to submit a detailed fee petition outlining the
hours plaintiff worked on the case on a timely basis.
Additionally, the court gave plaintiff an opportunity to support
his objection to his cocounsel’s joint fee petition; however, the
record demonstrates that plaintiff failed to provide support for
his claim that the attorneys, including himself, were entitled to
10% of the settlement fund.
Plaintiff cannot now request his pro rata share of a sum in
which his contribution was not accounted for. Our review of the
records at the time and shortly after plaintiff was ordered to
submit his time records demonstrates that plaintiff did not have
a record of his time in any cognizable format that could be
submitted and checked for accuracy and reasonableness.
Plaintiff’s repeated argument that his fee petition took the form
of his objection to cocounsel’s joint fee petition and
recommendation that the attorneys be awarded 10% of the
settlement fund had absolutely no support. The transcripts from
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the relevant time period demonstrate that plaintiff had no basis
for claiming the attorneys were entitled only to 10% of the fund.
Plaintiff agreed to let the court set the attorney fees. Had
plaintiff submitted the requisite fee petition, we agree that the
trial court left it up to the attorneys themselves to determine
the appropriate method for distributing the fees. In that case,
according to the contingency fee agreement, plaintiff would have
been entitled to his pro rata share. Plaintiff, however, cannot
now draw from a fee award in which he was not considered.
CONCLUSION
We conclude that the trial court did not abuse its
discretion in denying plaintiff’s section 2-1203 motion to
reconsider its dismissal of plaintiff’s breach of contract
complaint with prejudice. We, therefore, affirm the judgment of
the circuit court.
Affirmed.
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