Quick Takes on Illinois Supreme Court Opinions Issued Thursday, September 19, 2024
Leading appellate attorneys review the Illinois Supreme Court opinions handed down Thursday, September 19.
People v. Redmond, 2024 IL 129201
By Kerry J. Bryson, Office of the State Appellate Defender
At issue in this case was the important question of whether, following the legalization of recreational use of marijuana in Illinois, the odor of burnt cannabis emanating from a vehicle, alone, provides probable cause to search. Today, the Court held that it does not.
Probable cause to search exists where the evidence known to the investigating officer raises a “fair probability that contraband or evidence of a crime will be found in a particular place.” The officer is not required to eliminate any innocent explanations for suspicious facts in making a probable cause determination, but rather the analysis requires only that the facts available would warrant a reasonable man to believe there is a reasonable probability that a search will uncover contraband or evidence of criminal activity.
The Court first discussed the relatively recent evolution of cannabis law in Illinois. Prior to 2013, all cannabis was considered contraband; it could not be possessed legally for any purpose. During that time period, the Court decided People v. Stout, 105 Ill. 2d 77 (1985), the seminal case holding that the odor of cannabis emanating from a defendant’s vehicle, alone, was sufficient to establish probable cause to search that vehicle. In 2013, some cannabis possession became legal for medical purposes, and in 2016, possession of less than 10 grams of cannabis was decriminalized and made a civil law violation, punishable only by fine. At that time, possession of more than 10 grams remained a criminal offense. In People v. Hill, 2020 IL 124595, the court considered the propriety of a search conducted during that period. In Hill, the Court noted that the odor of cannabis in a vehicle remained a factor in a probable cause analysis, but declined to address the question of whether Stout remained good law in light of medical use and decriminalization because the record was clear that the officer in Hill relied on more than just the odor of cannabis.
Effective January 1, 2020, the legislature legalized cannabis possession, consumption, use, purchase, and transportation for personal use by persons at least 21 years of age. That statutory enactment provided that transportation in a vehicle must be “in a reasonably secured, sealed container and reasonably inaccessible while the vehicle is moving.” 410 ILCS 705/10-35(a)(2)(D) It also provided that individuals may not use cannabis in any motor vehicle or in any public place. 410 ILCS 705/10-35(a)(3)(D), (F). A corresponding provision in the Illinois Vehicle Code prohibits the use of cannabis in a vehicle upon a highway and provides that no driver may possess cannabis in a vehicle upon a highway “except in a sealed, odor-proof, child-resistant cannabis container.” 625 ILCS 5/11-502.15(a), (b).
In light of legalization, the smell of burnt cannabis, standing alone, is no longer sufficient to provide probable cause for a police officer to search a vehicle without a warrant. Stout is no longer good law with regard to searches occurring on or after January 1, 2020. Given the myriad of situations where cannabis can be used and possessed legally, the smell resulting from legal use and possession is not indicative of the commission of a criminal offense. More specifically, “given the fact that under Illinois law the use and possession of cannabis is legal in some situations and illegal in others, the odor of burnt cannabis in a motor vehicle, standing alone, is not a sufficiently inculpatory fact that reliably points to who used the cannabis, when the cannabis was used, or where the cannabis was used.”
Under legalization, cannabis is akin to alcohol, which also is legal to use and posses under some circumstances and illegal under others. For example, alcohol may not be transported in an open container in the passenger area of a vehicle, and a person may not drive a vehicle while the alcohol concentration in his blood, breath, or other bodily substance exceeds 0.08. The odor of alcohol, alone, is insufficient to establish probable cause to search a vehicle, and today’s decision puts cannabis on the same footing.
Applying the totality of the circumstances analysis to the facts here, the Court determined that the officer did not have probable cause to search Redmond’s vehicle. Redmond was stopped for driving 73 miles per hour in a 70-mile-per-hour zone and having an improperly secured license plate on I-80 in Henry County. He said he was traveling from Des Moines to Chicago, which the Court stated was not an inculpatory fact. While Redmond’s vehicle continued to smell of cannabis even after he exited it, that fact supported only the inference that he had smoked cannabis in the car at some point. But given that Redmond himself did not smell of cannabis and that he exhibited no signs of impairment, the odor was not indicative of recent use. Redmond’s failure to produce his driver’s license suggested a violation of the Vehicle Code provision requiring a driver to have his license in his immediate possession when operating a vehicle, that violation does not add to the probable cause analysis because it does not make it any more likely that evidence of cannabis use or possession would be found in the vehicle. During the stop, the officer confirmed that Redmond did in fact have a valid Illinois driver’s license. And, while the officer felt Redmond was not providing direct answers with regard to his living arrangements when Redmond stated that he lived in Chicago but was temporarily staying in Des Moines because of the pandemic, that fact did not make it any more likely that his car contained contraband or evidence of a crime. Additional relevant facts were that Redmond did not delay in pulling over, did not make any furtive movements, cooperated with the officer, did not exhibit any signs of impairment, and did not have visible cannabis or drug paraphernalia in the vehicle. Thus, the trial court properly granted Redmond’s motion to suppress.
Finally, the Court declined to address the State’s argument that the officer acted in good faith here. The State failed to raise the good-faith exception in the circuit court or appellate court, and thus it was twice-forfeited.
During briefing and argument in the Supreme Court, Redmond’s case was consolidated with People v. Molina, No. 129237, which presented the question of whether, following the legalization of recreational use of marijuana in Illinois, the odor of raw cannabis emanating from a vehicle, alone, provides probable cause to search. It appears Molina will be separately decided (see Redmond, footnote 5).
People v. Clark, 2024 IL 130364
By Kerry J. Bryson, Office of the State Appellate Defender
At issue in this appeal was the timing requirement for a petition for pretrial detention under 725 ILCS 5/110-6.1(c)(1). That section provides, “[a] petition may be filed without prior notice to the defendant at the first appearance before a judge.” The question before the court was the meaning of “the first appearance.”
Carlos Clark initially was charged by criminal complaint filed on August 23, 2023, at which time the State obtained an arrest warrant and the court set monetary bail at $100,000. Clark was taken into custody on September 16, 2023, and brought before a judge two days later, on September 18, 2023, the same date that the public act abolishing monetary bail went into effect (also known as the Pretrial Fairness Act, or PFA). The State filed its petition to detain at that hearing on September 18, and, following a hearing on the State’s petition, the court ordered Clark detained.
On appeal, Clark argued that the State’s petition was untimely because it was not filed at the first appearance before a judge. Clark asserted that the first appearance was the State’s August 23, 2023, ex parte appearance where it filed the complaint and obtained a warrant. The appellate court majority agreed, holding that “the first appearance” under 110-6.1(c)(1) includes an ex parte appearance by the State to begin the prosecution. The dissent concluded that “the first appearance” was meant to refer to the first appearance before a judge at which the defendant is present.
The Supreme Court agreed with the dissent. Under 725 ILCS 5/109-1, a person arrested for an offense subject to the denial of pretrial release must be taken before a judge without unnecessary delay. At that initial appearance, certain matters must be addressed, including either admitting defendant to pretrial release or setting a detention hearing. The Court reviewed the PFA’s provisions relating to pretrial detention hearings and noted an emphasis on two important elements – defendant’s presence and the court’s duty to make an informed decision regarding detention or release.
Ultimately, the Court determined that “first appearance” as used in 110-6.1(c)(1) was meant to refer to the defendant’s first appearance in court. To construe it any other way would allow for ex parte detention hearings where Section 110-6.1(c)(2) requires that a detention hearing be held “immediately” upon the filing of a petition under Section 110-6.1(c)(1). But the Code prohibits the court from holding detention hearings in defendant’s absence, and an ex parte hearing would deny defendant the benefit of counsel and the opportunity to mount a meaningful challenge to the State’s petition. This cannot be what the legislature intended. And while the statute allows the court to grant a continuance of the hearing, it does not require the State to request such a continuance, thus the continuance provision did not alter the Court’s conclusion.
The State’s detention petition was timely under Section 110-6.1(c)(1) where it was filed on the same day Clark made his first appearance before a judge, even though the State had appeared in court weeks earlier to obtain a warrant for Clark’s arrest. Accordingly, the appellate court’s decision was reversed, and the matter was remanded to the appellate court to consider Clark’s other challenges to the circuit court’s detention order.
People v. Turner, 2024 IL 129208
By Kerry J. Bryson, Office of the State Appellate Defender
Cortez Turner was charged with murder arising out of a shooting incident during which Turner was also shot. Prior to trial, he filed a motion to suppress evidence arguing that the warrantless seizure of his clothing while he was being treated in a trauma room in the hospital’s emergency department violated his fourth amendment rights and the search and seizure clause of the Illinois constitution. At issue in the Supreme Court was whether Turner had a reasonable expectation of privacy while he was a patient receiving treatment in the hospital emergency department’s enclosed trauma room.
In determining whether a person has a reasonable expectation of privacy in a particular place, courts typically consider six factors: (1) ownership of the property searched; (2) whether the person was legitimately present in the area searched; (3) whether the person has a possessory interest in the area or property searched; (4) prior use of the area searched or property seized; (5) the ability to control or exclude others from the use of the property; and (6) whether the person had a subjective expectation of privacy in the property.
Applying those factors to the hospital setting has led to mixed results in the appellate court. In People v. Hillsman, 362 Ill. App. 3d 623 (2005), and People v. Torres, 144 Ill. App. 3d 187 (1986), the courts determined there was no reasonable expectation of privacy in a hospital emergency room, though neither decision discussed the physical characteristics of the emergency room itself. In People v. Gill, 2018 IL App (3d) 150594, the court found that the defendant did have a reasonable expectation of privacy in a private hospital room on an upper floor of the building, distinguishing that space from an emergency room given that the emergency room is typically meant for a temporary stay where a patient is unable to restrict the access of others. And, in People v. Pearson, 2021 IL App (2d) 190833, the court found a reasonable expectation of privacy in an emergency department trauma room where the door to the room was closed when the police entered and where there was limited access to the emergency department because it was separated from the waiting room by locked doors.
Looking at the six factors noted, the Supreme Court found that Turner had no reasonable expectation of privacy in the trauma room here. He had no ownership or possessory interest in the room, so the first and third factors weighed against him. But the second factor weighed in his favor because he was legitimately present in the trauma room, receiving treatment for an injury. The Court found the fourth factor – prior use – irrelevant to determining whether an individual has a reasonable expectation of privacy in an emergency department trauma room. An individual’s expectation of privacy would not change regardless of whether it was his first time in the room or whether he had been treated there previously. With regard to Turner’s ability to control or exclude others from the room, the only evidence was his mother’s testimony that she was not allowed to go into the room for at least an hour after she arrived. While this established that the hospital had the ability to exclude others from Turner’s room, it was not evidence that Turner had any similar ability. And, the Court rejected Turner’s argument that his position as a patient in a trauma room should give him similar rights of exclusion as a hotel guest, noting among other things that the hospital was required by law to notify the police that a gunshot victim was being treated there. Turner’s situation simply was not comparable to that of an overnight hotel guest. Finally, the Court found that Turner failed to introduce any evidence that he had even a subjective interest of privacy in the trauma room. Instead, the evidence was that he willingly spoke to the police when they entered the room through its open door, that he did not ask for the door to be closed or for the detectives to leave, and that he was generally cooperative.
Accordingly, the Court found that under the totality of the circumstances here, Turner failed to establish a reasonable expectation of privacy. The Court cautioned that each case must be decided on its individual facts, suggesting that such an expectation of privacy might be found in an emergency department trauma room in some other case under some other circumstances, but Turner did not meet his burden here.
Zurich American Insurance Co. v. Infrastructure Engineering, 2024 IL 130242
By Michael T. Reagan, Law Offices of Michael T. Reagan
This well-ordered opinion by Justice Overstreet for a unanimous court, in the course of affirming the First District’s reversal of a summary judgment for the plaintiff insurer, provides a strong overview of the purpose of builder’s risk insurance policies and the elements of both contractual and equitable subrogation.
The City Colleges of Chicago contracted with CMO as general contractor to build a building for Malcolm X College. City Colleges also contracted with Moody Nolan, Inc. for architectural and engineering services. Moody Nolan in turn contracted with Infrastructure Engineering, Inc. (IEI) as subcontractor for the civil engineering work on the project, incorporating the City Colleges’ agreement with Moody Nolan as the “prime agreement.”
The contract between CMO and City Colleges required CMO to purchase a builder’s risk property insurance policy, which is defined as first-party property insurance that provides coverage for a building under construction before it becomes insurable as a completed structure. CMO was the named insured and City Colleges, as owner, was an additional named insured under that policy, purchased from Zurich. The policy also defined additional named insureds to include all contractors and subcontractors of every tier. The policy deemed CMO to be the sole agent for all other entities insured under the policy. The policy provided that payment for a loss would be payable to CMO, or pursuant to its order.
The policy provided that in the event of a payment of a claim by Zurich that Zurich would be subrogated to all of the Insured’s rights of recovery from other persons. It was further provided that Zurich would not have rights of subrogation against persons against whom the Insured had waived rights of subrogation before the loss, and that Zurich would have no rights of subrogation against any entity which is a named insured or additional named insured. “Even so,” in the wording of the opinion, the policy also provided that Zurich would be subrogated to all unwaived rights of recovery against any third-party architect or engineer, whether named as an insured or not.
An alleged defect in the storm water handling system designed by IEI allegedly did not perform properly, a rainstorm flooded the basement of the building, and the building itself and electrical and mechanical equipment were damaged. CMO submitted a claim to Zurich for that damage. Zurich paid CMO, and CMO repaired the damage.
Zurich, as subrogee of City Colleges, filed this case against IEI to recover its payments. Zurich alleged that IEI breached its subcontract with Moody Nolan of which City Colleges was a third-party beneficiary, pursuant to express terms of that contract, which also provided that the Colleges were to be third-party beneficiaries of any subcontracts which Moody Nolan entered into. Zurich alleged that the City Colleges sustained damage as a result of IEI’s performance of its design duties, and that Zurich was damaged in that it paid the damages sustained by City Colleges. Zurich alleged that it was entitled to stand in the shoes of City Colleges as a result of those payments. IEI moved for summary judgment, arguing in part that City Colleges sustained no loss and received no loss payments from Zurich pursuant to the policy. IEI argued that Zurich could not establish “the third element of a subrogation claim,” namely that it had paid the insured under the policy. Zurich’s response contended that IEI was paying insufficient attention to the wording of the subrogation provisions in the policy. Zurich contended that it was subrogated to the Colleges’ rights of recovery because the Colleges were an insured under the policy. Zurich asserted that a distinction existed between contractual subrogation and equitable subrogation, and that it was not required to establish the requirements for equitable subrogation because the contract controlled. The circuit court granted IEI’s motion for summary judgment, finding that City Colleges sustained no loss.
The appellate court reversed. While first noting the conventional three requirements that IEI argued must be shown to exist for subrogation, the appellate court held that those requirements did not control when a party meets all the contractual requirements for subrogation under a contract at issue. The court stated that City Colleges had in fact sustained a loss because of the damage and that Zurich had a right to be subrogated to City Colleges.
The supreme court established that the purpose of a builder’s risk policy was to shift the risk of loss to the insurer “to facilitate timely completion of the project and avoid the prospect of time-consuming and expensive litigation.” A further purpose was that the owner and contractor seek to insulate themselves from a loss they might suffer because of damage in the process of construction. The court’s analysis began with the historical note that the right of subrogation “originated in equity,” when the courts sought to achieve substantial justice by placing responsibility for a loss upon the one against whom in good conscience it ought to fall. The court was quick to follow that with the statement that subrogation rights may also arise from contract.
The court disagreed with IEI’s fundamental premise that the City Colleges did not sustain a loss that was indemnified by Zurich. That insured, as owner, maintained an insurable interest in repairing any part of the building that sustained physical damage. City Colleges had protected that insurable interest with the builder’s risk policy and CMO, deemed as the Colleges’ agent, had received policy proceeds to make the repairs, which were performed by CMO. IEI argued that CMO was not acting as agent when it submitted the claim and received payment. Leaving no doubt as to what was coming, the opinion states that “IEI argues, then, that the contractual language in the policy does not mean what it says.” The court “decline[d] to so hold.”
IEI persisted in its argument that subrogation was not permitted because the City Colleges was not compensated for the loss. Zurich countered by saying that that element of subrogation was limited to equitable subrogation, not contractual, and was therefore inapplicable. The court stated that even though this case dealt with contractual subrogation, that circumstance does not alter the basic requirements of subrogation, including that an insurer must pay its insured before it maintains suit, in its insured’s shoes. However, even so the necessary elements of subrogation were met here, pointing to the fact that City Colleges, an insured, was the owner of a damaged building in need of repairs.
The supreme court devoted significant thought to distinguishing a New York case which IEI cited in support of its current contention that “there is no right of subrogation in favor of the insurer against its own insured or a party named as an additional insured.” While the court distinguished that authority, the court further stated that IEI had not argued in its motion for summary judgment or on appeal “that Zurich’s subrogation claim against it is barred by anti-subrogation principles on the basis that IEI is an additional insured under the ‘subcontractor of every tier’ language.” The court usefully cited a number of cases from around the country on that topic generally, including the extent to which co-insured status insulates a negligent contractor or subcontractor from liability. The supreme court declined to employ that reasoning to “affirm on any basis in the record.”
The court affirmed the appellate court’s judgment that the circuit court erred in entering summary judgment in favor of IEI and remanded for further proceedings.
The court allowed the filing of an amicus brief by the National Association of Subrogation Professionals in support of Zurich’s arguments.
Passafiume v. Jurak, 2024 IL 129761
By Karen Kies DeGrand, Donohue Brown Mathewson & Smyth LLC
In Passafiume v. Jurak, the Illinois Supreme Court addressed the impact of remarriage on one aspect of damages recoverable under the Wrongful Death Act by the spouse of the decedent. The court concluded that a jury may take into account a claim for “loss of material services,” also described in the case law as “household or personal services,” sustained after the date of remarriage.
The issue arose in the trial of a medical negligence case, where the parties agreed that damages for loss of consortium--when defined as loss of the decedent’s society, companionship, and sexual relations--terminate upon the plaintiff’s remarriage. But the defendants, a physician and his medical group, argued in pretrial motions that loss of material services are part of a loss of consortium claim and end when the surviving spouse remarries. Based on that reasoning, the defendants sought to limit the opinions and calculations of plaintiff’s economist, Stan Smith. Plaintiff responded that material services fall within the category of financial support rather than loss of consortium and, consequently, that plaintiff’s remarriage did not establish the end date for Smith’s calculation of marital services.
The trial court agreed with plaintiff, and the jury heard evidence of plaintiff’s claims for loss of material services past the date of plaintiff’s 2015 remarriage. Smith’s calculation of plaintiff’s loss of material services following the death of his wife in 2014 at age 34 (according to the appellate court’s opinion) totaled about $998,000. Smith relied on information from plaintiff that the decedent spent two to three hours daily on chores including cooking, cleaning, laundry, and other tasks, and used age 78, the decedent’s life expectancy, as the end date. Smith also testified to roughly $913,000 as the value of plaintiff’s loss of the decedent’s financial support, based on her lost wages and lost employment benefits less her personal consumption. The jury returned a verdict for the plaintiff of over $2 million. The defendant challenged the award for material services on appeal, along with other issues not addressed by the supreme court. Agreeing with the trial court, the appellate court affirmed the trial court’s reasoning on the material services issue and affirmed the judgment.
Characterizing the issue as presenting a question of law, the supreme court reviewed the trial court’s ruling on defendant’s motion in limine under the de novostandard of review. The court traced the history of pecuniary damages recoverable under the Wrongful Death Act, 740 ILCS 180/2 (West 2014), and the opinion contains a detailed summary of the case law back to 1903, when the supreme court noted that a plaintiff’s remarriage cannot be considered in mitigation of loss of services in a wrongful death case, a principle the court reaffirmed in Watson v. Fischbach, 54 Ill. 2d 498 (1972). The court also explored the case law, including conflicting appellate decisions, addressing various elements of loss of consortium and pecuniary injuries compensable under the Act. In particular, the court explained that its decision in Elliott v. Willis, 92 Ill. 2d 530 (1982), which did not address remarriage, had been misconstrued; the court there had intended to broaden, not limit, loss of consortium claims allowable as pecuniary injuries under the Wrongful Death Act.
Ultimately, the supreme court concluded that its long-standing precedent permitted recovery under the Wrongful Death Act for material services without limitation by remarriage and affirmed the lower courts’ judgments. And noting that amicus “takes the case as it finds it,” the court rejected the request of Amicus, the Illinois Trial Lawyers Association, to reach an issue not raised by the parties: the effect of remarriage on other loss of consortium claims.
Justice O’Brien took no part in the otherwise unanimous decision authored by Justice Rochford.
Davis v. Yenchko, 2024 IL 129751
By Amelia Buragas, Illinois State University
In Davis v. Yenchko, a unanimous opinion written by Justice O’Brien, the Illinois Supreme Court considered a direct appeal from a circuit court order declaring that section 8(n) of the Firearm Owners Identification Card Act was unconstitutional. The supreme court, however, did not reach the merits of plaintiff’s constitutional arguments, instead resolving the case on the threshold issue of standing. In doing so, the court clarified the statutory requirements for preserving an affirmative defense and explained a key legal distinction between the doctrines of standing and mootness.
The plaintiffs in this case, Aaron and Charles Davis, were charged in 2016 with felony reckless discharge of a firearm. In response to the felony charges, the Illinois State Police revoked their FOID cards under section 8(n) of the FOID Card Act, which authorizes the revocation of any individual who is “prohibited from acquiring or possessing firearms or firearm ammunition by any Illinois statute or by federal law.” The plaintiffs ultimately pleaded guilty to misdemeanor reckless conduct and sought the return of their FOID cards on the basis that they were no longer subject to felony charges. The FOID cards were reissued in 2017. Plaintiffs then filed a lawsuit against the chief of the Firearms Services Bureau of the Illinois State Police, alleging that they were deprived of their constitutionally protected right to keep and bear arms in the home for the purpose of self-defense. Plaintiffs sought a declaration that section 8(n) of the FOID Card Act was unconstitutional as applied to persons who are charged, but not convicted of a felony and an injunction preventing the suspension of FOID cards based solely on a person being charged with a felony.
In response to the complaint, the defendant filed a motion to dismiss arguing that the plaintiffs lacked standing and that their claims were moot. The circuit court denied the motion to dismiss, finding that the public interest exception applied. After further proceedings, the circuit court granted plaintiffs’ motion for summary judgment, declaring section 8(n) unconstitutional as applied to all persons charged with, but not convicted of a felony. The court also entered a permanent injunction enjoining defendant from suspending FOID cards of individuals charged with felonies.
Defendant appealed directly to the Illinois Supreme Court pursuant to Rule 302(a) and the supreme court stayed the trial court judgment pending the appeal. On appeal, defendant again argued that the plaintiffs lacked standing. Plaintiffs countered that the issue of standing was waived because defendant did not include it as an affirmative defense in its answer to the complaint after its motion to dismiss for lack of standing was denied. The Illinois Supreme Court noted that under section 2-619(a) of the Code of Civil Procedure, standing is an “affirmative matter,” and may be properly challenged through a motion to dismiss. The court further explained that while section 2-619(a) does not preclude a defendant from both challenging standing in a motion to dismiss and in a subsequent answer, the statute “does not contain language requiring defendant to do both.” As a result, defendant was not required to raise standing in its answer to preserve the issue for later review because it had raised the issue in a section 2-619 motion to dismiss.
The supreme court then moved on to the issue of standing and found this issue to be conclusive by rejecting plaintiffs’ arguments that they had standing to bring the lawsuit. The court explained that while plaintiffs had a legally recognizable interest during the period when their FOID cards were revoked, the lawsuit was filed after the cards were reissued and at that time, “plaintiffs were no longer deprived of their constitutional right to bear arms and no longer had a legally recognizable interest sufficient to achieve standing.” Key to the court’s analysis was the relief sought by the plaintiffs. The supreme court noted that to have standing, the plaintiff must have an injury that is not only “distinct and palpable,” but also “substantially likely to be prevented or redressed by the grant of the relief requested.” Plaintiffs, however, did not seek redress through monetary damages for the time that they were without their FOID cards. Instead, they only sought prospective relief in the form of a declaratory judgment and injunctive relief. The court explained this meant that the plaintiffs no longer had a personal claim, status, or right that would be affected by the relief requested because a declaration that the statute was unconstitutional and the entry of an injunction “will have no impact on plaintiffs.” The court further explained that this posture distinguished the case from past cases where plaintiffs sought redress for past injuries or where plaintiffs suffered an injury that could be redressed through prospective relief. The court also found plaintiffs’ argument that prospective relief was appropriate because they could be charged with a felony at some point in the future was “purely speculative,” and that this tenuous risk of future harm was not sufficient to confer standing to the plaintiffs.
Finally, the supreme court also clarified the legal distinction between the related, but discrete concepts of standing and mootness and explained that the circuit court incorrectly relied on the public interest exception to mootness to find that the plaintiffs had standing. The court noted that while standing and mootness are both issues of justiciability, “this court has never authorized the application of the public interest exception to standing.” Thus, since the court found that the plaintiffs lacked standing, the public interest exception was inapplicable. The supreme court then vacated the circuit court order and remanded with instructions that the circuit court dismiss the plaintiffs’ complaint.
Andrew W. Levenfeld & Associates, Ltd. v. O'Brien, 2024 IL 129599
By Amanda J. Hamilton, Konicek & Dillon, P.C.
In Andrew W. Levenfeld and Associates, Ltd. v. O’Brien, the Illinois Supreme Court addressed the impact of a failure to comply with Rule 1.5 of the Illinois Rules of Professional Conduct in obtaining a recovery of fees under quantum meruit. Specifically, the Court addressed whether a failure to strictly comply with Rule 1.5 would render a fee agreement void ab initio, such that it could not be considered in calculating a quantum meruit award.
The defendants in this case had retained Andrew W. Levenfeld and Stephen J. Schlegel, and their respective firms, to pursue claims to assets held by the Estates of Daniel P. O’Brien Sr. and Mary D. O’Brien. The attorney-client agreement provided that “the total fees to be charged shall either be 15% of the first $10,000,000 and 10% of any additional values of the assets recovered for the clients, or the amount of charges made for time expended, whichever is greater.” The attorneys represented the clients for 1 year and 7 months, spending in excess of 3100 hours of time, litigating matters in Cook County, the Fourth District Appellate Court, federal court, and Michigan circuit courts on behalf of the clients. The clients terminated the attorneys on May 25, 2017 and later reached a settlement agreement with the O’Brien Estates through their new attorneys. The discharged attorneys sought to recover their fees in quantum meruit and argued that the contingency structure set forth in the agreement would constitute a reasonable fee. The defendant clients argued, as an affirmative defense, that the agreement failed to comply with Rule 1.5 because it did not state how the fees would be split between the attorneys and their firms and therefore the attorneys should be barred from any recovery whatsoever.
The trial court held a bench trial and heard evidence, including expert testimony, regarding the value of the services provided. The trial court held that a technical violation of an Illinois Rule of Professional Conduct did not bar recovery as a matter of law, but rather that the circuit court could consider the egregiousness of the violation and any resulting prejudice to the clients or to the administration of justice as part of the quantum meruit analysis in determining what award would be appropriate. Further, the circuit court noted that although the fee agreement did not comply with Rule 1.5, it could still serve as a basis for calculating the amount of the award. After considering all of the evidence, the trial court used the contingency fee framework in the attorney fee agreement to the settlement reached and awarded the attorneys those fees.
On appeal, the First District reversed the circuit court’s decision in part, finding instead that the attorney-client agreement was void as against public policy due to the Rule 1.5 violation and that the circuit court should not have based its calculation of a reasonable fee upon it.
The Illinois Supreme Court affirmed the circuit and appellate court’s findings that the attorneys had proved the requisite elements for quantum meruit recovery. As to the issue of the attorney-client agreement, the Illinois Supreme Court noted the difference between an attorney-client agreement that is unenforceable because it contains an illegal term or fails to include a legally required term and those that are void against public policy because the subject of the agreement is prohibited by law.
The Illinois Supreme Court discussed Rule 1.5 at length and held that the attorney-client agreement in this case was valid. Specifically, the Court noted that the clients admitted that they knew the attorneys would jointly represent them and would both be fully responsible for their case. The Court also stated: “Importantly, while the existence of a fee-splitting agreement, including how the fees were to be divided, is required to be disclosed to and assented by the client in writing, nothing in Rule 1.5(e) requires that these provisions be included in the attorney-client agreement itself. In addition, while Rule 1.5(e) indicates that failure to abide by these requirements renders a fee splitting agreement unenforceable, it does not indicate that any related attorney client agreement is likewise unenforceable.” The Court concluded that a failure to comply with Rule 1.5(e) does not render an attorney-client agreement void ab initio but rather renders it unenforceable and therefore left to the circuit court’s discretion.
The Illinois Supreme Court then affirmed the circuit court’s judgment, finding that the circuit court’s consideration and use of the contingency fee provision in the attorney-fee agreement was proper in determining a reasonable fee in quantum meruit.