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Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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In the 

United States Court of Appeals 

For the Seventh Circuit ____________________ 

No. 19-2241 

MERLE L. ROYCE, 

Plaintiff, 

v.

MICHAEL R. NEEDLE P.C., 

Defendant-Appellant, 

v.

COZEN O’CONNOR, 

Appellee. 

____________________ 

Appeal from the United States District Court for the 

Northern District of Illinois, Eastern Division. 

No. 15-cv-00259 — Rebecca R. Pallmeyer, Chief Judge. 

____________________ 

ARGUED JANUARY 14, 2020 — DECIDED FEBRUARY 20, 2020 

____________________ 

Before WOOD, Chief Judge, and ROVNER and ST. EVE, Circuit 

Judges. 

ST. EVE, Circuit Judge. After Michael R. Needle P.C. (“Needle P.C.”) went months without counsel in a fee dispute 

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action and was on the verge of a default judgment, three partners from the law firm Cozen O’Connor stepped in to represent Needle P.C. Their representation successfully staved off

the pending default motion but was otherwise short-lived. 

Less than three months after appearing as counsel, Cozen 

O’Connor understandably withdrew due to irreconcilable 

differences and a total breakdown of the attorney–client relationship. Cozen O’Connor sought to be compensated for its 

work, though, under a quantum meruit theory and perfected 

an attorney’s lien. The district court then granted Cozen 

O’Connor’s petition to adjudicate and enforce the lien. Because Cozen O’Connor is entitled to recover in quantum meruit

and the district court properly concluded that the petitioned 

fees were reasonable, we affirm. 

I. Background 

This appeal represents just a small, discrete slice of the underlying litigation—the activities at issue here span only three 

months out of a three-and-a-half-year row.1 That action is a 

dispute over attorney’s fees between an attorney, Michael R. 

Needle of Needle P.C., on the one side, and his former cocounsel, Merle L. Royce, and their former clients on the other. 

In short, after Needle and Royce settled a lawsuit on behalf 

of their clients for $4.2 million, Needle argued the attorneys 

(i.e., he and Royce) were entitled to $2.5 million—or about 

sixty percent—of the settlement as attorney’s fees. But the parties’ contingent fee agreement plainly provided, and the district court held, that the attorneys were entitled only to onethird of the settlement as their fee. Needle and Royce also 

1 This is one of two appeals that we decided today regarding Needle’s 

efforts to obtain a larger portion of the settlement. 

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disagreed over the appropriate split of the aggregate attorney’s fee pursuant to a co-counsel agreement, which the district court also determined. We affirmed both of those decisions in a separate appeal. 

During the course of the fee dispute, however, Needle P.C. 

went long stretches of time without an attorney of record. The 

court intermittently permitted Needle to appear pro hac vice 

and represent Needle P.C., but Needle invariably failed to adhere to deadlines, disobeyed court orders, and generally engaged in “obstructionist” and vexatious tactics that delayed 

the case. So Needle’s admission pro hac vice was revoked, on 

more than one occasion, and the district court numerous 

times ordered Needle to retain independent counsel to represent Needle P.C. 

Finally, with no clear end in sight and Needle’s refusal to 

obtain counsel for Needle P.C. bringing the case to a standstill, Royce filed a motion for default on account of Needle 

P.C.’s failure to defend. Needle was again ordered to find an 

attorney for Needle P.C. and was given thirty days to do so. 

On the last day of the deadline, three partners from Cozen 

O’Connor filed appearances for Needle P.C. 

When Cozen O’Connor first entered the case, it had been 

going on for more than two-and-a-half years and had over 

seven hundred docket entries. Cozen O’Connor, predictably, 

spent a great deal of time familiarizing itself with the massive 

record to even take on the representation. The attorneys also 

engaged Royce in settlement discussions, which included participating in settlement conferences. Cozen O’Connor then 

sought and was granted leave to file a sur-reply in opposition 

to the motion for default. As a result of Cozen O’Connor 

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appearing and filing the sur-reply, Needle P.C. avoided default judgment. 

But less than three months after first appearing, Cozen 

O’Connor moved to withdraw as counsel for Needle P.C., citing irreconcilable differences. No small part of those differences was the fact that Needle had given another law firm, 

Mayer Brown—who represented one of the former clients—a 

lien on any Needle P.C. recovery from the underlying lawsuit 

so that Mayer Brown would continue to represent that client. 

It is not clear why Needle did this, and the district court too 

was “puzzled” by it, but the reason makes no difference here. 

The bottom line is that Mayer Brown asserted a priority interest in the same source of funds that Cozen O’Connor sought 

to be paid out of under a contingent fee arrangement. Therefore, before Cozen O’Connor withdrew from the case, it 

served a Notice of Attorneys’ Lien pursuant to the Illinois Attorneys Lien Act via certified mail. See 770 ILCS 5/1. 

After it withdrew, Cozen O’Connor filed a petition to adjudicate and enforce its attorney’s lien and for an award of its 

fees and costs. The petition sought attorney’s fees in the 

amount of $124,458.00, which was broken down by hours and 

rates, and costs in the amount of $2,205.66, for an aggregate 

amount of $126,663.66 in fees and costs. Both Needle P.C. and 

Mayer Brown filed objections to Cozen O’Connor’s petition. 

The district court overruled Needle P.C.’s objections and specifically found that, contrary to Needle P.C.’s claims, even after Cozen O’Connor gave notice of its intent to withdraw, the 

firm “continued vigorous efforts on [Needle P.C.’s] behalf—

drafting pleadings, appearing in court, engaging in settlement 

efforts, and communicating with the client—until the court 

granted leave to withdraw.” And as to Mayer Brown’s 

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objection, the court found, in a well-reasoned opinion, that 

Mayer Brown’s prior perfected lien was superior and enforceable against Cozen O’Connor’s later-filed lien. The priority of 

the liens was also later separately and extensively briefed by 

Cozen O’Connor and Mayer Brown, and Cozen O’Connor 

does not appeal the district court’s determination that Mayer 

Brown’s lien was superior to its attorney’s lien. 

II. Discussion 

Needle P.C. haphazardly challenges the district court’s determination that Cozen O’Connor is entitled to an attorney’s 

lien and the award of fees and costs without an evidentiary 

hearing. After wading through a sea of factual misrepresentations, we conclude that none of the legal arguments have 

merit. 

A. Cozen O’Connor’s quantum meruit claim 

Needle P.C. retained Cozen O’Connor pursuant to a contingent fee agreement, but Cozen O’Connor withdrew before 

any contingency came to pass. The contract stated that if Needle P.C. terminates the representation then Cozen O’Connor 

will have a claim for quantum meruit but was silent on any potential fee in the event Cozen O’Connor withdraws. Thus 

Needle P.C. argues—without citation to authority—Cozen 

O’Connor cannot recover any fee. But after Cozen O’Connor 

terminated the representation, the agreement was no longer 

operative here. 

“When an attorney-client relationship that was originally 

established under a contingent fee contract terminates, the 

contract no longer exists and neither party can therefore seek 

to enforce the terms of the nonexistent contract.” Forest Pres. 

Dist. of Cook Cty. v. Cont’l Cmty. Bank & Tr. Co., 98 N.E.3d 459, 

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472 (Ill. App. Ct. 2017). Instead, “when the attorney has withdrawn and the court finds the attorney justifiably withdrew 

from the case, then the attorney is entitled to proceed on a 

claim to recover fees based on quantum meruit.” Id.; Kannewurf 

v. Johns, 632 N.E.2d 711, 716 (Ill. App. Ct. 1994) (holding attorney that withdrew from case “was entitled to the reasonable 

value of his services up to the date of withdrawal”); Leoris & 

Cohen, P.C. v. McNiece, 589 N.E.2d 1060, 1065 (Ill. App. Ct. 

1992) (“If the court finds that the plaintiff justifiably withdrew 

from the case, then the plaintiff will be allowed to proceed on 

its claim for fees on a quantum meruit basis.”); Reed Yates 

Farms, Inc. v. Yates, 526 N.E.2d 1115, 1124–25 (Ill. App. Ct. 

1988) (“We perceive no reason why the quantum meruit standard should not also apply in situations where an attorney 

withdraws from representation of a client for good cause.”). 

Under a quantum meruit theory, the trial court is to award, as 

the term literally means, “as much as he deserves.” Lee v. 

Ingalls Mem’l Hosp., 597 N.E.2d 747, 749 (Ill. App. Ct. 1992). 

Cozen O’Connor’s withdrawal was justifiable under the 

circumstances and it is, therefore, entitled to recover on a 

quantum meruit basis. Needle P.C. retained Cozen O’Connor 

on a contingency arrangement whereby Cozen O’Connor’s 

fees were to come solely from any Needle P.C. recovery in the 

fee action. Unbeknownst to Cozen O’Connor at the time, 

however, Needle P.C. had already given Mayer Brown a secured interest in any recovery from that action. Thus, Cozen 

O’Connor faced the stark reality that it would not be paid for 

its continued legal services even if Needle P.C. recovered 

money. In Reed Yates Farms, the Illinois Appellate Court held 

that a client’s refusal to pay attorney fees during the course of 

litigation was good cause to withdraw and the attorney was 

entitled to compensation on a quantum meruit basis. 

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526 N.E.2d at 1120–21. We see no practical difference here. 

Needle P.C. effectively refused to pay any attorney’s fee to 

Cozen O’Connor, just without Cozen O’Connor knowing it. 

Additionally, in its motion to withdraw, Cozen O’Connor 

cited irreconcilable differences that prevented it from continuing its representation. Needle P.C. has never contested this 

assertion, either in the district court or even now on appeal. 

Irreconcilable differences and a breakdown of the attorney–

client relationship provide good cause to withdraw that allows the attorney to recover the value of his or her services in 

quantum meruit. McGill v. Garza, 881 N.E.2d 419, 421, 423 (Ill. 

App. Ct. 2007); Leoris & Cohen, 589 N.E.2d at 1065. 

B. Illinois’s attorneys lien statute 

Needle P.C. next asserts that, even if Cozen O’Connor can 

recover quantum meruit fees, Cozen O’Connor cannot have an 

enforceable attorney’s lien at all because its actions did not 

“result in recovery” as Needle P.C. contends is required by 

the Illinois lien statute. 

The Illinois Attorneys Lien Act creates a “means of enforcing the right of a lawyer to his fee” in the form of “a lien in 

favor of the lawyer on the proceeds of the litigation or its settlement.” Anastos v. O’Brien, 279 N.E.2d 759, 763 (Ill. App. Ct. 

1972). The statute provides that attorneys “shall have a lien 

upon all claims, demands and causes of action ... which may 

be placed in their hands by their clients for suit or collection, 

or upon which suit or action has been instituted, for the 

amount of any fee” for the services rendered. 770 ILCS 5/1. 

Such lien attaches “to any money or property which may be 

recovered, on account of such suits, claims, demands or 

causes of action, from and after the time of service of the 

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notice.” Id. Because the Illinois attorneys lien is a statutory 

creature, attorneys must strictly comply with that statute’s requirements for perfecting a lien. People v. Philip Morris, Inc., 

759 N.E.2d 906, 911 (Ill. 2001). Needle P.C. does not challenge 

Cozen O’Connor’s compliance with the Attorneys Lien Act to 

perfect its lien. And “[o]nce the attorney’s lien is perfected, 

upon petition ‘any court of competent jurisdiction’ may adjudicate the lien.” Id. (quoting 770 ILCS 5/1). 

Needle P.C. nevertheless argues that the district court 

erred because it enforced Cozen O’Connor’s lien without first 

finding that the firm’s actions resulted in any recovery. It relies on Robert S. Pinzur, Ltd. v. The Hartford, 511 N.E.2d 1281 

(Ill. App. Ct. 1987), to support its so-called resulted-in-recovery test. As pertinent here, the Pinzur court interpreted the 

Act’s phrase that an attorney’s lien shall attach to any money 

or property “recovered, on account of such suits, claims, demands or causes of action.” Id. at 1288. “[W]hen the Act says 

the recovery is to be ‘on account’ of various actions,” the court 

“believe[d] it means the recovery must be a result of action 

taken by the attorney.” Id. “To construe the statutory language otherwise would result in unjust windfalls for attorneys in cases where a defendant acts wholly on its own and 

no attorney services were rendered.” Id. In other words, there 

must be some relation between the attorney’s activities for 

which the attorney seeks a fee and the suit in which the money 

or property is recovered. 

But Needle P.C. takes Pinzur’s “result of action” language 

in isolation and morphs it into a requirement that the attorney’s actions must have “resulted in recovery,” or “substantially or primarily produced” the recovery. First, “result of action” is not synonymous with “resulted in recovery,” which 

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implies a but-for causation standard. Needle P.C. does not offer any support for such a standard. And as we just explained, 

the Pinzur court was concerned with a situation in which an 

attorney rendered absolutely no services in the case, not 

where an attorney in fact rendered services. 

Second, and more fundamentally, Needle P.C. is conflating the requirements for an attorney’s lien under Illinois law 

and a charging lien under Pennsylvania law. In determining 

the priority between Cozen O’Connor’s lien and Mayer 

Brown’s lien, the district court also discussed whether Cozen 

O’Connor had an enforceable charging lien under Pennsylvania law (because Needle P.C. is located in Pennsylvania). The 

court stated that Cozen O’Connor had failed to establish that 

its services “substantially or primarily secured the fund out 

of which it sought to be paid,” which is a requirement of 

Pennsylvania charging lien law. So Needle P.C. attempts to 

take this finding and graft it on to Illinois law. It cannot do 

that. These are two different types of liens under two different 

states’ laws. 

Finally, not only is Needle P.C.’s argument flawed legally, 

it is flawed factually as well. There is no question that Needle 

P.C.’s ultimate recovery was in no small part a result of Cozen 

O’Connor’s actions in the matter. Recall, Needle P.C. was on 

the verge of default judgment and was down to its final day 

to retain counsel—Cozen O’Connor’s representation alone let 

Needle P.C. stay in the game. The district court found that 

Cozen O’Connor “invested substantial time and effort in representing [Needle P.C.] and successfully defending it against 

Royce’s default motion,” which allowed Needle P.C. “to continue pressing its claim that it was entitled to more than fifty 

percent of the fund.” More specifically, the district court also 

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found that Cozen O’Connor’s “services were substantially related to the court’s determination of the share of those funds 

ultimately awarded to [Needle P.C.], and in this sense, resulted in a significant award for Needle.” Cozen O’Connor 

has a valid attorney’s lien. 

C. Reasonableness of Cozen O’Connor’s fees 

Because Cozen O’Connor is entitled to recover its fees in 

quantum meruit, Needle P.C. seeks an evidentiary hearing on 

the reasonableness and amount of the claimed services. We 

review a district court’s decision not to hold an evidentiary 

hearing on attorney’s fees for an abuse of discretion. Pickett v. 

Sheridan Health Care Ctr., 664 F.3d 632, 652 (7th Cir. 2011); 

Small v. Richard Wolf Med. Instruments Corp., 264 F.3d 702, 709 

(7th Cir. 2001). Further, it is not an abuse of discretion to decline to conduct an evidentiary hearing “that would only address arguments and materials already presented to the court 

in the parties’ briefings.” Pickett, 664 F.3d at 652. 

Under Illinois law, the trial court has “broad discretion in 

matters of attorney fees due to the advantage of close observation of the attorney’s work and the trial judge’s deeper understanding of the skill and time required in the case.” 

Kannewurf, 632 N.E.2d at 716; see also Kovitz Shifrin Nesbit, P.C. 

v. Rossiello, 911 N.E.2d 1180, 1187 (Ill. App. Ct. 2009) (“The 

trial court has broad discretionary powers in awarding reasonable attorney fees and its determination is based on the 

evidence presented by the parties.”). The relevant factors include “the time and labor required, the attorney’s skill and 

standing, the nature of the cause, the novelty and difficulty of 

the subject matter, the attorney’s degree of responsibility in 

managing the case, the usual and customary charge for that 

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type of work in the community, and the benefits resulting to 

the clients.” Kannewurf, 632 N.E.2d at 717 (emphasis omitted). 

The district court was intimately familiar with the unique 

difficulties this case presented and the work that Cozen 

O’Connor did in the short time that it represented Needle P.C. 

The court noted Cozen O’Connor’s “vigorous efforts on [Needle P.C.’s] behalf—drafting pleadings, appearing in court, engaging in settlement efforts, and communicating with the client”—continued even after it moved to withdraw and until 

the court granted the motion. And, in several other instances, 

the district court remarked that Cozen O’Connor “worked 

diligently” for Needle P.C., “engaged in substantial efforts reviewing the file and preparing pleadings,” “made a meaningful effort to analyze [Needle’s reconstructed time records] and 

present them to the court,” and even recognized that “the representation was a challenging one.” 

Further, Cozen O’Connor submitted detailed billing records along with an affidavit explaining the requested fees. 

And Needle P.C. filed objections to the reasonableness of 

those fees, which the district court considered and rejected. A 

district court is not required to hold an evidentiary hearing on 

attorney’s fees where a party has an opportunity to respond 

and make specific objections to the fee petition. See Small, 

264 F.3d at 709. Here, the only purpose a hearing would have 

served would be for Needle P.C. to simply reargue its objections. Based on its deep understanding of the case and the materials submitted by the parties, the district court appropriately determined the reasonableness of Cozen O’Connor’s 

fees without an evidentiary hearing. 

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III. Conclusion 

Cozen O’Connor withdrew from the representation of 

Needle P.C. for good cause and is therefore entitled to quantum meruit recovery. The district court correctly granted 

Cozen O’Connor’s petition to enforce its attorney’s lien and 

properly awarded the firm its reasonable fees. We affirm the 

district court’s judgment. 

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