FIRST DIV ISION December 15, 2008

No. 1-07-0435

ROBERT E. KEHOE, JR. ) Appeal from the Plaintiff-Appellee and ) Circuit Court of Cross-Ap pellant, ) Co ok Co un ty. ) v. ) ) WILDMAN , HARROLD, AL LEN AND, ) DIXON, JOHN L . EISEL , MICHAEL ) Nos. 97 CH 12226 and L. Mc CLUG GAG E, R OBE RT L. ) 02 L 13398 (cons.) SHUFTAN, MICHAEL

DOCKTERMAN, ) AND DAVID J. F ISCHER, ) Defendants-Appellants and ) Cross-Ap pellees , ) ) and ) The Honorable ) Allen S. Go ldber g, RICHARD BARTELT, ) Judge Presiding. Defend ant. )

JUSTICE GARCI A deliver ed the opi nion of the

court. This appeal arises from Robert E. Kehoe, Jr.'s suit ag ainst his former law firm, Wildman, Harrold , Allen &

Dixon (the F irm), and

six of his for

mer law p artner s, Richar

d C. Bart elt, Mi cha el R . Do ckt erm an, Jo hn L. Eis el, Dav id J. Fis che r, M ich ael L. Mc Cl ugga ge a nd R obe rt L. Shuftan, for alleged breach of the partnership agreement and a lleged breach of their fiducia ry duty to the pla intiff ar ising fr om a vote t

o chang e the pla

intiff' s status fr

om equity to nonequ

ity partner.No. 1-07-0435

2

The jury returne d its verd

ict for th e plaintif

f. The jur y f ound the F irm and fo

ur of the six partner defendants breache d the partnership agreement and the four partner defendants breac hed their fiduciary

duty to the plaintiff. The jury found in favor of Bartelt on both claims. The jury found in favor of Eisel on the breach of contra ct claim, but made contradictory findings as to the breach of fiduciary

duty claim. The jury

answered the "Jury

Question on Plaintiff's Claim for Breach of Fiduciary

Duty" that the pla

intiff did not prove the elements of his claim for breach of fiducia ry duty agains t Eisel. B ut the jury returne d a verdi ct aga

inst Eisel on the fidu

ciary duty verdict form. The trial court, treating the " Jury Question" as a spec ial interrogatory , entered judgment in favor of Eisel. The trial court entere d judgment on the jury' s verdict against the Firm and the same four partner defenda nts the jury found liable on the two cla ims. Posttrial motions were filed by both sides. The trial cour t denied the posttrial motions filed by the Fir

m and the four partner defendants. On the plaintiff' s posttrial motion, the trial court re versed i tself on the fiduci ary

duty claim as t

o Eisel: "[The] jury question did not act as a spec ial interrogatory , and therefore judgment should not have been e ntered based on the jury's ne gative answer to the question of whether Plaintiff prove d the eleme nts of his c laim of br

each of fiducia ry duty agains t Defendant John L. Eisel but should have, instead, been e ntered based on the j ury verdict, which fo und in favor of Plaint iff." The trial court, however, denied the plaintiff' s motion that he receive prejudgment interest. The Firm and the partner defenda nts contend the trial court erred in deny ing their motionNo. 1-07-0435

3

for judgment notwithstanding the verdict as to the brea ch of contract claim because cha nging the plaintiff's status from an equity to nonequity partner was not the equivalent of an involuntary withdrawal under

the part nership a greement. The

four par tner def endants c ontend the

manifest weight of the evidence does not support a finding that a breach occurred on the c ontract action. The partner defendants, including def endant Eisel, contend the manifest weight of the evidenc e does not support a finding that a breach occur red on the fiduciary

duty count. Rega

rding the breach of fiduciary

duty count, the partner

defendants contend the plaintiff failed to establish that the votes taken by the pa

rtner defendants proximately caused injury to the pla

intiff. Defendant John Eisel contends the trial court erred in reconsidering its initial judgment enter ed in his favor. The par tner def endants c ontend the

trial cou rt committe d rever sible err ors on the fiducia ry duty count in refusing their proposed jury instructions and allowing irrelevant and prejudicial evidenc e concerning the separation of pa rtners in 1994. Finally, the F irm and partner defendants contend the trial court erred in awarding the plaintiff costs for trial transcripts. On cross-appeal, the plaintiff contends he is entitled to interest under the I nterest Act (815 IL CS 205/2 (West 2006)) because the damages he was a warded are liquidated damage s. The plaintiff argue s the tria

l court e rred in f inding he was proc edurall

y ba rred fr om rece iving int

erest under the Act because he did not file his motion before judg ment was entered. For the reasons that follow, on the defendants' appeal, we affirm the judgment of the circuit court only a s to the judgment entered against the Fir m. On the plaintiff's cross-appeal, we

revers e the cou

rt's or der deny ing the p laintiff

's motion for pre judgmen t interes t.No. 1-07-0435

4 BACKGROUND The defendant Wildman, Harrold, Allen & Dixon is a Chicago law fir m. The plaintiff became an equity

partner of the Firm in 1979. At trial, the plaintiff introduced evidence that in 1994, the Firm's ma nagement committee conducted a review of the productivity of the Firm's partners. Following the review, 10 partners were ide ntified a nd offer ed separ ation pac kages . The par

tners re signed a

nd rece ived pay

ments pursuant to nego tiated se

paratio n agre ements. M ost of the agree ments pro vided the

partners with the article VII

benefits normally paid to an involuntar ily withdrawn partne

r according to the 1991 partnership agreement. During the 1994 review, the plaintiff's productivity was discussed, but he remained an equity

partner. In 19 95, th e Fi rm m et w it h se ver al b ank s t o ne got iat e re st ruc tu rin g it s fi nan cin g. In November 1995, the partnership approved a loan a greement with American National B ank (ANB). Partner defendant F ischer negotiated the loan ag reement. The original ANB loan agree ment req uired ea ch equity partner to execute

a personal guar

anty "in a form acce

ptable to the bank. " By

Februa ry 1996, eve

ry partner , except th e plaintif f, had exe cuted an

accept able personal guaranty . The plaintiff expressed objections to some of the provisions of the guaranty

. The plaintiff testified he informed Eisel that he would sign a g uaranty if his conc erns were met. The plaintiff further testified he offered to dr aft papers that would eliminate his objections, but Fischer refused him access to the file. The loan closed without a personal guaranty from the plaintiff. Later, the Firm negotiated with ANB to eliminate or modify some, but not all, of theNo. 1-07-0435

5

provisions the plaintiff objected to. An amendment to the loan agree ment was made in July 1996 (the ame ndment). The amen

dment fur ther def ined the i ndividual partners' oblig ations sho

uld ANB seek to enforce the g uaranty. The

plaintiff testified the amendment eliminated the requirement that every

partner provide a guara

nty, but specifically

noted that any par

tner not providing a guaranty

would be exposed to personal liability for the full amount of the de bt. ANB never approached the plaintiff about his failure to execute a guaranty . At trial, Eisel admitted ANB allowed the Firm to use the line of credit eve n though the plaintiff had not signed a p er so na l g ua ra nt y. In November 1996, Eisel informed the plaintiff ANB wanted personal gua ranties. However, the plaintiff believed the amendment re moved that requirement. The plaintiff testified no one approached him regar ding his failure to sign a personal g uaranty be

tween July 1996, when the amendment was executed, and November 1996. On November 25, 1996, the management committee held a meeting and proposed a resolution to the partnership that allowed the partnership to chang e any e quity partner' s status to a non-equity partne

r should he or she fail to execute a personal guar anty for the A

NB loan. Eisel was the Management committee chairman a nd four of the other partner defenda nts were committee members, Fischer being the only individual partner defendant in this suit not to be a member o f the com

mittee. The propose d resolut ion was to t

ake eff ect Janua ry 1, 1997. Pr

ior to the reso lution bein

g adopt ed, the pa rtnersh ip agre ement all owed for

a chang e of an e quity partner 's statu s to nonequ

ity p artner

by a n affirmative vot

e of at le ast 67% of

the part nership interests.No. 1-07-0435

6

Eisel presented the resolution at the partnership meeting. The presentation was recorded in a voice-mail message Eisel left for all the pa rtners unable to attend the meeting. The plaintiff was present at the meeting and g iven an opportunity to ask questions and addr ess the partners who were present. The plaintiff explained his objections to the resolution. After the mee ting, the plaintiff was given the opportunity to present his objections to the partners not present at the meeting ; he chose

not to. The

resolution was put to

a vote an d approv ed by

55 of the 6 1 equity partners, representing 88% of the outstanding partnership interests. After the resolution passed, certain partner de fendants encouraged the plaintiff to sig n the ANB guaranty

to protect his status as an equity par tner, but he refused. As of January 1, 1997, the Firm considered the plaintiff a nonequity partner. On January

2, 1997, the plaintiff requested his equity be paid out under a rticle VII , paragraph Q, of the par tnership agreement. The Firm claims it received requests on January 3, 1997, from clients to transfer their files to the plaintiff, who had established his own law firm. The committee chair sent the plaintiff a me mo dated January 3, 1997, advising him the F irm considered him a nonequity pa rtner. The management committee refused to pa y the plaintiff his share of the equity in the Firm. The

plaintiff sued alle ging the defen

dants bre ached their oblig ation to dis tribute hi s equity and the individual partner defendants breache d their fiduciary duties when they re commended voting in favor of the resolution. At the time the plaintiff left the Firm, it was governed by a partnership agreement da ted July 21, 1995 (partnership ag reement). The pertinent portions of the partnership ag reement state: "I. Definitions.No. 1-07-0435

7 C. Withdrawal of a Partner. (1) The t erm 'in voluntar y withdrawa

l' wher ever use d herein shall mean the withdrawal of a partner from the f irm as a result of (i) action taken by

the other partners, which action shall be by not less than sixty-seven perce nt of the share interest held by the partners; (ii) compelling reasons of health, which sha ll be defined as any condition pre

venting said individual from practicing law or engaging in any

other gainful employ

ment anywher

e, or (iii) death. * * * G. Other definitions. * * * 'Partner' or 'Par

tners' means a member or members of the firm. The term shall refer to equity partners only, e

xcept when the context clearly indicates tha t non-equity partners are being referenced. * * * II . Partnership I

nterests

. * * * I. Equity Partner. (4) Upon recommendation by the Management Committee and approval by

67% of all Schedule A shares, an equity partnerNo. 1-07-0435

8 ma y be co me a n on -e qu it y pa rt ne r a s o f J an ua ry 1 st of the following year. T he provisions of paragraph H [Non-Equity Partner] above shall app ly to

any such equ ity p artner

who becomes a non- equity partner except as follows: (a) Any separation benefits will be vested (provided a person is a partner, equi

ty or non-eq

uity , for the

requisite number of

ye ars) an d will be f

rozen at th

eir existin g level

. *** The obligation to make such payments shall be nonrecourse to the in

dividual e quity

partners of the f

irm; * * * VI I. Sepa rati on Pay

ments to Par tner s Who I

nvolu ntar [il]y Withdraw ***. Q. Invol untar y Withdr awal. If an equi ty partne r's separa tion resu lts from hi s or her i

nvoluntar y withdrawa

l, the firm shall pay to the withdra wn partner (or his or her successor in interest, as appropriate) a sum equa l to twice his or her Base Amount. Pay ment shall be made in one hundred twenty (120) eq ual monthly

installme nts, commencing on the last day of the month following the month in which separation occurred.

* * *No. 1-07-0435

9 IX. L imitations o

n Pay ments. T. The tot al pay ments pro vided by

this agr eement to be made by the

Chicago firm to any

withdrawn partner *** shall be made only fr

om the net income of the firm." The plaintiff introduced into evidence a redlined version of the agreement to show the chang es between the 1991 and 1995 agree ments. The parties offered testimony regarding the intent of the agreement and in particular, wha t was meant by the ter

m "involuntary withdra

wal." The parties stipulated that if the involuntary withdrawal provision applied, the plaintiff was entit led to re ceive $4 05,116. The trial c ourt foun d the par tnership agree ment "a mbiguous " and charged the jury

with determining whether the defendants' removal of the plaintiff as an equit y partner c onst itut ed an "i nvol untar y withdra wal" un der th e agreem ent. If t he pla inti ff's removal was found to be an involuntary withdrawal, then he was entitled to receive a distribution of his equity under the se paration payme

nts provision of the partnership agreement. Ba sed on the parties' stipulation, the only dispute wa s whether a pay out was required. The jury wa s charged with deciding two ca uses of action, breach of contract a nd breach of fiduciary

duty. The court provide d the jury with the partne rship agreement and instructed the jurors that the terms of the agreement we re the terms of the parties' contrac t. The court instructed the jury that the p laintiff

allege d the def

endants breache d that con tract by refusin g to pay him under paragraph Q of a

rticle VII . Regarding the fiduciary duty claim, the court instructed the jury that the plaintiff alleg ed the defendants' use of the re solution to avoid paying him separa tion benefits breached that duty

.No. 1-07-0435

10

On January 18, 2006, the jury returned a verdict in favor of the plaintiff on both counts. The cour t entere d judgme

nt on the ju

ry verdict agains t the Fir

m, and ce rtain pa rtner de fendant s for the stipulated amount of $405,116. The court denied the defenda nts' posttrial motion but granted the plaintiff's reque st to enter judgment against defendant John Eisel for brea ch of fiduciary duty . However, the trial court denied the plaintiff' s motion for prejudgment interest. The def endants, the Firm

and the f ive part ner def endants, timely

appeale d. The pla

intiff crossappealed. ANAL YSIS The Firm and the partner defenda nts raise six issues on appeal. Their primary argument is that the y w ere ent

itled to jud

gment no twithstanding the verdict on both co

unts. Acc ording t

o the partner defendants, if the Firm did not wrongly deny the plaintiff separation benefits under the partnership agreement, then, a s a matter of law, the plaintiff cannot establish a breac h of fiduciary duty . In the alternative, the pa rtner defendants (but not the Firm) contend they are entitled to a new trial based on four separate g rounds: (1) the manifest weight of the evidence favore d the def

endants; (2) irre levant te stimony was intro duced; ( 3) the jur y w as improp erly instructed; and (4) the trial court improperly reconsidered the judgment it entered in Eisel' s favor. All defendants contend the trial court erred in awarding court reporter expenses to the plaintiff. The plain tiff cro ss appea

ls the den ial of pre judgmen t interes t. I. Breac h of Contract A. Judgment Notwithstanding the Verdict The plaintiff's theory

is that the defendants failed to pay the separation benefits he wasNo. 1-07-0435

11

entitled to under the partnership agreeme nt when he withdrew from the Firm in January 2007. The failure of the Firm to pay the separation benefits constituted a breach of c ontract. The failure to pay also formed the

basis for his breach of fiduciary duty claim beca

use over 67% of the partners voted to pass the resolution that precipitated the plaintiff's withdra wal from the Firm and the voting partners were provided misinformation by the partner defendants. The Firm and the partner defenda nts argue they

were entitled to judgment notwithsta

nding the verdict based on the express terms of the partnership agre ement and the resolution adopted by the pa rtners, which resulted only in the change of status of the plaintiff from equity to nonequity

partner. In essenc e, the defendants contend because the pla intiff was allowed to continue to practice with the Firm as a nonequity partner, the plaintiff was not entitled to any separ

ation benefits. When the plaintiff chose to leave the Firm, he did so voluntarily, and the separation benefits provision of the partnership ag reement was never trigg ered. "'Judgment notwithstanding the verdict should not be entere d unless the evidence, when viewed in the light most favorable to the opponent, so overwhelmingly favors the movant that no contrary verdict based on that evi dence could ev er stand.'" McClure v. Owens Corning Fiberglass Corp. , 188 Ill . 2d 10 2, 132 , 720 N .E.2d 242 (1 999), quot ing Holton v. Memorial Hospital , 176 Ill. 2d 95, 109, 679 N.E.2d 1202 (1997). We apply a de novo standar

d of revi ew to the trial court' s denial o f the def

endants' motion for

judgmen t n.o.v. See McClure , 188 Ill. 2d at 132. B. The F irm's L iability In the ir main br

ief, the defenda nts arg ue the change in

the plain tiff's s tatus to a n

onequityNo. 1-07-0435

12

partner was not a

n "involu ntary withdrawal" trig

gering separa tion pay ments unde

r the par tnership agree ment bec ause "i

t did not re quire the

plaintiff to withdra

w. [The re solution] changed his status to non-equity partner be cause he failed to provide a personal g uaranty a s all of the other equity partners did. The evidence was undisputed that Plaintiff was welcome to, and indeed expected t o, practice l aw at the firm after Januar y 1, 1997." The circ uit court f ound the p artner ship agr

eement a mbiguous as to the e

vent that would trigger the separa

tion benefits. Conflicting testimony was pre sented by the plaintiff a nd the Firm on this point. Accordingly, if the partnership agreement was pr operly ruled a

mbiguous, then whether the separation benefits provision was trigg ered under the facts adduced in this case was for the jury to dec ide. See Farm Credit Bank of St. Louis v. Whitlock , 144 Ill. 2d 440, 447, 581 N.E.2d 66 4 (1991) ( once a d ocument i s ruled a

mbiguous and conf licting e xtrinsic ev

idence i s presented on the intent of the parties, the construction of the contra ct becomes a question of fact for the jury to dec ide). In the ir reply

brief, the defen

dants con tend "th e trial c ourt err

ed in find ing the p artner ship agreeme nt amb iguou s and i n allo wing t he jur y to inte rpret its t erms, thus abrogat ing th e court 's role to int erpret contracts as a mat

ter of la w." The plaintiff correctly p oints out tha

t the Fir m did not arg ue in its ma

in brief " that the tr

ial cour t's find ing of a mbiguity was err or." Th e Firm, w

hile not conceding this point, responds that it challenged the ambig uity ruling by

the circuit court by its conten tion that it

is entitle d to judgm

ent n.o.v. , which raises a question of law. Because we find the circuit cour t's "ambiguity " ruling to be dispositive of this issue, we elect to a ddress th at ruling

directly . Put simply

, we must de

termine w

hether t he partnershipNo. 1-07-0435

13

agreement "is capab le of being und erstood in more sense th an one." Farm Cre dit Bank of St. Louis , 144 Ill. 2d at 447. Notably , the Fir m focuse s on the " separa

tion pay ments" provision o f the ag reemen t, contending no term within that provision is ambiguous. The plaintiff focuses on the " involuntary withdrawal" provision, contending that the force d drop in his status from equity to nonequity can be interpreted to be an involuntary withdrawal. To the extent these positions are not irreco ncilable , we ag

ree with both part ies. The s eparat

ion provis ion is clea

r and una mbiguous : separation pay

ments are due only

when "an equity

partner's separation results from his or her involuntary withdrawa

l." However, the question remains, what constitutes an " involuntary withdrawal." For that answer, the jury had to look to the definition of the term "involuntary withdrawal" in the partnership agr eement and, there, as the plaintiff arg ues, we find ambiguity

. According to the salient portion of article I , paragraph C, an involuntary withdrawal means "the withdrawal of a partner from the firm as a result of *** action taken by the other partners." While the Firm insists that an involuntary withdrawal cannot occur without the affected partner being

"required to withdraw," we f ind no such requirement in the definition of the term. Under a literal reading of the definition of the term, a "withdrawal of a par tner" need not be compelled or required by the action of the other partners. Absent clear and unambiguous language that a withdrawa l by a partner , done wilfully y et precipitated by

action taken by the requisite percen tage of his fellow

partners, was notan "involuntary withdrawal," it was for the jury to decide whe

ther the withdrawal of the plaintiff from the Firm was involuntary . Under the facts presented by

the parties, it was for the jury to decide whether the passage of the resolutionNo. 1-07-0435

14

making t he plaint iff a nonequity

partner on January

1, 2007, w

hich in tur

n caused the plain tiff to withdraw from the p artner ship immedi ately thereafter, tr

igge red the s eparat

ion benef its provision. The jury dec ided "ye s," and we are unpersuade d that only a contrar y verdict base d on the record evidence in this case could stand. See McClure , 188 Ill. 2d at 132. The controlling provision appears to provide that wheneve r the withdrawal of a partner from the Firm occurs, rega rdless of his personal motivation (such as to start his own practice), as a result of action taken by at least 67% of the other partners, the withdrawa l may be an "involuntary withdra

wal." Here, the plaintiff withdrew as pa rtner from the Firm as a result of the vote take n on Novem

ber 25, 1 996 on the

resolution, droppin

g his sta tus from e quity

to nonequ

ity partner effective January

1, 1997. The Firm contends that because the plaintiff could have remained with the Firm as a nonequity partner, his departure was voluntary , not an involuntary withdrawal. Yet, t

he evide nce sug gests th at had the

plaintiff been g iven his dr

uthers, h e would have re mained wi

th the Fir m as an eq

uity partner , a status , howeve r, that wa s forec losed to hi m based on th e affir mati ve vot e on th e resol utio n. The plain tiff, in fact , argued agains t the p assage of the resolution to the partners present for the vote on Novembe r 25, 1996. The vote went against the plaintiff, and as a result of the vote by more than the requisite percentage of partners adopting the resolution, the plaintiff withdrew as a partner

. We are unpersuaded by

the Firm's contention that because only the plaintiff's status in the partnership was subject to change as a result of the action taken by the other partners in adopting the resolution, his withdrawal from the Firm within two day s of the effective date of the resolution was voluntary. The definition of "voluntary

withdrawal" in the agree ment providesNo. 1-07-0435

15

little, if any, support for the F irm's contention. According to the partnership agreement, a voluntary withdrawa

l means any " withdrawal of a partner from the firm for any rea son that does not consti tute an inv oluntary withdrawal ." Once the trial court determined that the event her e could reasonably

fall within the definition of an involuntary withdra wal, then it was for the jury to decide whether the withdrawal was involuntary re gardless of the deliberate ac t on the part of the plaintiff to withdraw. If the jury decided tha

t the plaintiff's withdrawal was involuntary to the extent withdrawal was forced upon him by the passag e of the resolution, then the separation benefits provision was triggered and the Firm was liable for the stipulated amount of damag es. We agree with the trial judge that at be st the "involuntary withdra wal" provision was ambiguo us and, thu s, prese

nted a que stion for t

he jury to resolv e. The " involunta ry withdrawal" provision was cap able of b eing understood as apply ing to a w ithdrawa l of a par tner whe n his withdrawal is required by the requisite vote of the other partners or where the action taken by

the requisite vote of the other partners forced, but did not compel, the w ithdrawal of a partner. Contrary to the Fir m's implie d argu

ment, the express pr

ovisions of

the agr eement d o not, as a matter of law, req uire tha t at least 67% of the

partners "vote t

o termina te" the plaintiff as a partner with the Firm before separa tion benefits are owed. The jury was well within its province to conclude that the event involving the plaintiff was no differe nt than the forced withdrawal of equity partners in 1995. That these same 1995 partners could have been subseque ntly rehired a s nonequity partners would not in any way have called into question their receipt of separa tion benefits. That the plaintiff was "welcome to, and indee d expected to, practice law at the firmNo. 1-07-0435

16

after January

1, 1997" as a nonequity

partner did not preclude the jury from deciding that the plaintiff was entitled to separation benefits because he was forced to withdraw by the passage of the reso lution by

at least 6 7% of the

partners. The trial court was correct to let the jury decide; it decided that the withdrawal was involuntary. Evidence

was presented in favor and ag ainst such an interpretation. That

assessme nt of the e

vidence preclud es a judg ment n.o.v. See. Maple v. Gustafson , 151 Ill. 2d 445, 453 (1992 ) ("I

n ruling on a motion

for a jud gment n.o.v. , a court does not weigh the evidence" ). To be clear, we agre e with the trial court that the controlling provision for purposes of requirin g the pa yme nt of sepa ration be nefits wa s ambigu

ous as a ma

tter of la w. Once ambigui ty is found, a

nd confli cting extrinsic ev idence i s introduc ed with re spect to the partie s' inten t, it is for the jury to dete

rmine whether the plaintiff's departure from the Firm is involuntary. See Farm Credit B ank of St. L

ouis , 144 Ill. 2d at 447. The jury concluded that the plaintiff's withdrawal from the Firm was involuntary , a determination we see no basis to challenge based on the record evidenc e. The tr

ial cour t proper ly d enied the Firm's motion for

judgmen t n.o.v. on the breach of contract count. C. The Par tner Def endants' Liab ility The partner defendants contend that eve n if the Firm is liable to the plaintiff for separation benefits, they

are not. The partner defendants a rgue the plain languag e of the partnership agreement expressly states the Firm, not the individual partners, is obligated to pay all separation benefits from its net income. As support, the partner def endants direct our att ent io n t o ar ti cle VII, p ara gra ph Q , an d ar ti cle IX, p ara gra ph T , i n t he a gre eme nt . Ar ti cle VII,No. 1-07-0435

17

parag raph Q, o f the ag

reemen t provide s: "If any equity partner

's separation results from his or her involuntary withdrawa

l, the firm shall pay to the withdraw n partner *** a sum equal to twice his or her Base Amount." Article IX, p aragr

aph T, of the agr eement s tates: "The total pay

ments provided by this ag reement to be made by the Chicag o firm to any withdrawn pa rtner *** shall be made only from the net income of the firm." The par tner def endants f urther a rgue there is no

evidenc e they

agree d to become individu ally liable to make such a pay ment. Therefore, the partner def endants contend the trial court erred by instructi ng the ju ry on their in

dividual li ability

for bre ach of c ontract

. The plaintiff argues that because article VII

does not specifically e

xclude individual partners from an obligation to pay such monies, a practical reading of the section is that the Firm itself is to pay any judgmen t based on

the artic le VI I be

nefits an d that only

if the Fi rm refus es to pay, or bec omes unable to pay, will the individual partne rs become liable. The plaintiff argue s this is a fair reading of the section beca use partnership law provides that partners are liable for the general obligations of their par tnership. See 805 IL CS 205/15 (West 1996) (provides for joint and several liability of par tners). The pl ainti ff cont ends a rticl e IX, paragr aph T, of the agreeme nt pu ts li mits on th e Firm's pay ments to pr

otect the Firm's cash flow. The pla

intiff ar gues thi s article

would only

become relevant if the Firm had agre ed to make pay ments to him as mandated by article VII , paragraphNo. 1-07-0435

18

Q. Then, rely

ing on article IX , paragraph T, the Firm could limit how such pay ments would be made to him. The plaintiff further argues the pa rtner defendants were parties to the c ontract, a fact he claims they admitted in the pleading s, and, therefore, are liable for a ny promise in the contrac t not fulfilled. The plaintiff argues the partner de fendants admitted in their answer that they promised to make se

paratio n pay

ments bec ause the

y di d not conte st the lang uage in his complaint alleging they

made such a promise. The plaintiff argue s the defendants only c ontested whether the plaintiff's departure f rom the Firm was an involuntary withdrawal requiring separa tion pay ments, not

whether they persona lly p romised to

make such pay

ments. The partner defendants deny their pleadings admitted individual liability for se paration payments. They

argue the plaintiff's original complaint discussed liability under the 1991 partnership agreement. Thus, they contend their answer failing to deny liability under the 1991 agreement became irr

elevant once the trial court determined the 1995 ag reement controlled. They also ar

gue merely

being a party

to the contract does not supersede the langua ge of the agreement that states the Firm is responsible for making separation pay

ments. The partner defendants find support for their argument in the jury 's finding that Eisel and Bartelt wer e not liable for breach of contract, eve n though, according to the plaintiff, they were both parties to the contract. The trial court specifically rejected the partner defenda nts' argument that article I X, paragraph T, of the ag

reement applies. The court found the partner de fendants admitted an individual promise to pay in their answer by failing to de

ny the plaintiff' s allegation. The trialNo. 1-07-0435

1 While not a factor in our holding, we note the Firm is well established and re covery of the damages from the Firm is not questioned. 19 court also noted the partner defendants admitted approving and executing both the 1991 and 1995 agreements. The trial court held the pa rtner defendants personally liable under the contract because each partner de fendant signed the contract in his personal ca pacity. The pa

rtner defenda nts arg ue there is no evide

nce they signed t he 1995 a greement or tha

t they did so in the ir persona l capac ities. Based on the express terms of the agre ement, we agree with the par tner defendants that the plaintiff must look to the Firm for pay ment. Having successfully argued that the Firm was liable to h im under e

xpress pro visions of

the agr eement a t issue, the

plaintiff is not fre e to jettison the provisions in the agreement that expressly limit the payment of separa tion benefits by the Firm only. We are

unpersuaded that the express provision that sets the amount of separation payments to which he is entitled is enfor ceable, but the limitation that "the firm shall pay to the withdraw n partne r" said sum is not. 1 While the plaintiff is correct that partnership law provides th at pa rt ne rs ar e l ia bl e f

or th e g en er al ob li ga ti on s o f t he ir pa rt ne rs hi p, th e p la in ti ff as se rt ed on ly a contract cause of action, not one founded on pa rtnership law. Under partnership law, to the extent a jud

gment is entere d again st the Fir

m, presumably

all partners are

jointly and seve rally liabl e for t hat ju dgment . The p laint iff do es not expl ain wh y Dockterm an, Fi scher, McCl uggage and Shuftan are the only

partners that should be required to pay the plaintiff his separation benefits. In any

event, being liable for a judgment a mount under partnership law is anNo. 1-07-0435

20

insufficient showing that each of the remaining partner defendant is personally liable to pay damages that, under the contract, the F irm was required to pay , even though the partner defend ants p layed a rol e in th e breach of the contr act it self. We are u npers uaded by the pla inti ff's contention that paragraph T of article IX is only

relevant if the Firm had agre ed to make payments to him as mandated by paragraph Q of article

VII

. We are also unpersuaded that personal liability for breach of contract on the par t of the partner defendants could be based on a pur ported admission by the defe ndants in their answer. Either the sued party

has a duty under

the contract or the party

does not. We cannot leap over the terms of the contract to the partner defenda nts' answer to determine whether liability under the contract lies. "I

t is well se

ttled that where, as here , a writte

n agre ement pur

portedly repres ents the part ies' complete expr

ession of their re lationship , neither is at liber ty to modify any of its terms by parol evide nce." Day v. Ave ry , 548 F.2d 1018, 1025 (D.C. Cir. 1976). We agre e with the

partner defenda nts that jud

gment n.o.v. should hav e been e ntered i n their favor on the breach of contra ct count as insufficient evidence was presente d to establish that each pa rtner de fendant

was a pa rty to the con

tract. T his is a contract a

ction and only those parties t o the cont ract ha ve a duty under the contract, the bre ach of w hich woul d result in liability. Our review of the record fails to disclose any evidence that each of the partner defendants, in his personal capacity, was a party under the partnership agree ment. Accord ingly , we find

the part ner def endants a re entitl ed to judg

ment n.o.v. on the breach of contract claim.No. 1-07-0435

21 II. Br ea ch of

Fi du ci ar y Du ty Th e p la in ti ff

al le ge d t he pa rt ne r d ef

en da nt s b re ac he d t he ir fi du ci ar y du ti es by: "(a) not advising the partners of the July amendment to the guara nty ; (b) advising the partners that Kehoe wa s unwilling to sign a guara nty ; (c) not advising that not all partners supplied personal financi al statements; (d) implying that the f

irm's financing was in jeopardy because the failu re to sig n; (e) not advising partners that there mig ht be a satisfactory resolution; (f) recommending the conversion re solution because of a desire to terminate Kehoe's partner ship; and (g) providing a pretextual rationale for the resolution." The par tner def endants' response is twofold : the plain

tiff fai led to pre sent any

evidenc e to support an alleged breach of a fiduciary duty

and, second, assuming a breach, ther e is no evidence that their alleged bre ach of any fiduciary duty

proximately caused any

injury to the plaintiff. See Martin v. Heinold Commodities, Inc. , 163 Ill. 2d 33, 59-60, 643 N.E.2d 734 (1994) (proximate cause is a necessary element in breach of fiduciary duty action). Thus, the par tner defenda nts arg ue judg ment n.o.v. is warranted.No. 1-07-0435

22

The trial court informed the jury the plaintiff had to prove the partner defenda nts' actions adverse ly influence d the res olution se eking to terminat e his equi ty p artner ship in ord

er to pre vail on this cla

im. In deny ing the d efenda nts' motio n for judg ment n.o.v. , the court found the

ev id en ce wa s s uf

fi ci en t t o p re se nt th is is su e o f f ac t t o t he ju ry. To begin our discussion, we seriously question whether the allegations relied upon by the plaintiff are sufficient to raise a violation of a duty owed between law firm partners as fiduciaries. "An examination of the case law on a pa rtner's fiduciary

duties *** reveals that courts have been primarily concerned with partners who make sec ret profits at the expense of the partnership. Part

ners hav e a duty

to make a

full and f air discl osure to o ther par tners of all informati on which may be of valu e to their par tnership. " Day v. Sidley & Austin , 394 F. Supp. 986, 993 (D.D.C. 1975), citing 1 R. Rowley on Partnership §20.2, at 512-13 (2d ed. 1960). "The

essence of a bre ach of f

iduciar y du ty b etween

partners is that one

partner has adva ntaged himself at the exp ense of the fi rm." Day , 394 F. Supp. at 993. In a dif fere nt co ntext , our supreme court has made similar observations regarding fiduciary oblig ations involving a partnership business. "The fi duciary

relation prohibits a

ll forms of

tricker y, s ecret d

ealing s and pre ferenc e of self in matters rela ting to and co nnected wit h a partnershi p and joint venture." Bakalis v. Bressler , 1 Ill

. 2d 72, 79, 11 5 N.E. 2d 323 (1953 ), cit ing Seligson v. Weiss , 222 A.D. 634, 227 N.Y.S. 338 (N.Y. App. Div. 1928); Dike v. Ma rtin , 85 Okla. 103, 204 P. 1106 (1922). The allegations set forth by the plaintiff do not come remotely close to the fundamental duty recog

nized by the court in Day and noted by our supre

me court in Bakalis

that involves "secret dealings" a

gainst the partnership interests. There is no alleg ation, much less evidentiaryNo. 1-07-0435

23

support, that whatever wrongful action the par tner defendants engag ed in at the November 25, 1996, meeting somehow deprived the partnership of prof its it would have otherwise have earned or tha t the p artn er de fend

ants s omeh ow ad

vantage d the mselv es at

the e xpens e of t

he Fi rm. We have been presented with no authority that because the plaintiff was subject to a future loss in status, a n event he

controlle d, arisin

g from t he partner defe

ndants'actions a

t the meet ing, tha t a sufficient showing has been made for a breach of fiduciary

duty claim. The req uisite numb er of pa

rtners mi ght wel l have vot ed in fav or of the

resolution even if they had bee

n provided with the information the plaintiff contends was either concea led or misstated for the most obvious reason: to remain an equity partner, one had to agree to share the same risks with the other partners. The plaintiff elected to take a different path. His implied claim that more than 67% of the partners would not have voted to cha nge his status had they been inf ormed of (a) the July a mendment

to the gu aranty , or (b) t hat the pl aintiff w as willing to sign a guaranty

(though not the same one all other partners sig ned), or (c) that not all partners supplied p ersonal

financi al statements or, f inally , (d) tha

t the firm 's fina

ncing w as not in jeopard y, c alls us to qu

estion whe

ther the se alleg ations ar

e suffic ient to ra

ise a fidu ciary duty owed to the plaintiff. Allegations (e), (f) a nd (g) appear to be no more than a n offering of speculation by the plaintiff. Nor does the plaintiff point to the evidence in the record that supports any of these a

llegations. In fac

t, we question whether the allegations on which the plaintiff relies raise even an inferenc e of a violation of a fiduciary duty to allow the claim to be decided by a

jury. See American Environmental, Inc . v. 3-J Co. , 222 Ill. App. 3d 242, 251, 583 N.E.2d 649 (1991) (no inference could be dra wn on factual allegations in complaint thatNo. 1-07-0435

24

defendant's alleged f

ailure to conduct search was a brea ch of duty). We further note, as the partner defenda nts point out, the plaintiff was provided an opportunity to arg

ue his position against the adoption of the resolution at the meeting. The plaintiff either failed to present his case completely , or if he did, he failed to persuade. Having made his case to the other partners and lost, we question his rig ht to carry on his fig

ht based on a fiducia ry duty claim to th e circu

it court. Nonetheless, without expressly deciding the legal viability of

the plaintiff's allegations purportedly showing

a breach of fiduciary

duty, we ag

ree with the partner defendants that no evidence was adduced that their alleg ed breach of a fiduciary duty proximately

caused the claimed injury to the plaintiff. As made clear by the circuit court's instruction to the jury on the fiducia ry duty claim, at the hear t of the pla

intiff' s fiducia

ry claim is the resolution itself. The fiduciary

duty claim, based on the a doption of the resolution, is only lega lly sufficient if coupled with the breach of contract cla im. The plaintiff's damages on the fiduciar y claim are based solely on the de fendants' failure to pay the plaintiff separation benefits. I n fact, the parties stipulate d that the

amount of

damage s to which t

he plaint iff would be entitle d was the

same under either count. We fail to see how the passag e of the resolution caused, either factually or legally , the damages the plaintiff has claimed. See City of Chicago v. B eretta U.S.A. Corp. , 213 Ill. 2d 351, 395-96, 821 N.E.2d 1099 (2004) (" the lack of proximate cause may be determined by the cour t as a matt

er of la w where the fac ts alleg ed do not su fficien tly d emonstra te both ca use in fact and legal cause" ). Had the F irm read

the contr olling pr ovisions a s the jury

did, it woul d have c oncluded itNo. 1-07-0435

25

owed the plaintiff the sepa ration be nefits up on his withd

rawal. Wi

th the pay ment of tho se benefit s, we fa

il to see ho

w a leg ally

sufficie nt claim a lleging a violation of a fid

uciary duty based on the passa ge of the resolu

tion could

be made. Nor has the plaintif f sugg ested an

yth ing to separate his fiduciary

duty claim from the dama ges he was awarded unde r his contract claim. In a real se nse, it wa s the plain

tiff himse lf that tr

igge red his da mages w hen he e lected to withdraw from the Firm because, as the de fendants made clear, the plaintiff was " welcome to, and indeed expected to, practice law at the firm af ter January 1, 1997." Even after the passage of the resolution, the plaintiff could have continued practicing with the F irm as a nonequity par tner, with his separation benefits "frozen at their existing level" until his involuntary withdrawal would trigger their payment. Whil e the p assage o f the r esolu tion precip ated t he pla inti ff's withdrawal from the Firm a month or so later, its passage did not proximately cause him the liquidated damages he has claimed. See Bermudez v. Martinez Trucking , 343 Ill. App. 3d 25, 30, 796 N. E.2d 1074 (2003) (" 'circ umstantia l evidenc e is suffi cient to e stablish pr oximate ca

use * * * as long as the inference in question may reasonably

be drawn from the evidence' and 'the mere possibility of a ca

usal connection is insufficient to raise the requisite inference of fact' "), quot ing Nowak v. Coghill , 296 Ill. App. 3d 886, 896, 695 N.E.2d 532 (1998). The par tner def endants a re entitl ed to judg

ment n.o.v. on the bre ach of f iduciar y du ty claim becaus e there is no causal conne ction betwe en the passa ge of th e resol utio n and t he Firm 's failure to pay the plain tiff sepa ration be nefits. III. Trial Errors Becau se we fin

d in favor of the pa rtner de fendant s on the contract a nd fiduci ary

dutyNo. 1-07-0435

26

counts, there is no need to review their arg uments for a new trial based on claimed trial errors. IV. Award of Court Reporte r Expenses The defendants argue the tria l court erred in awarding cour t reporter attendance and transcr ipt fees t o the plai ntiff. Se ction 5-1 08 of the I llinois Code

of Civil Pro cedure

permits a prevail ing litig ant to re cover c ertain c osts. 735 I LCS 5/5 -108 (Wes t 2006). T he term " costs" is not defined in the statute. In awarding the plaintiff court reporter expenses, the trial court relied on Burmac Metal Finishing Co. v. West Bend Mutual I nsurance Co. , 356 Ill. App. 3d 471, 825 N.E.2d 1246 (2005). In Burmac , the Second District addressed whether court re porter fees are considered "court costs" as taxable under section 5-108, an issue of first impression. Burmac , 356 Ill. App. 3d at 486. The appellate c ourt affirmed the trial court's awar d of court reporter fees as a "necessary " expense of litigation. Burmac , 356 Ill. App. 3d at 486. The court found the expenses taxable to the losing party be cause the transcripts were essential to the trial, provide d a record of the trial, and benefitted both parties. Burmac , 356 Ill. App. 3d at 486. The defendants argue Burmac was incorrectly decided. In so arg

uing, they r

ely on our supreme court's decision in Vicencio v. Lincoln-Way Builders, Inc. , 204 Ill. 2d 295, 302, 789 N.E.2d 290 (2003). In Vicenc io , the Illinois Supreme Court explained, "I t is undisputed that section 5-108 mandates the taxing of costs commonly understood to be 'court costs,' such as filing fees, subpoena fees, and statutory witness fees, to the losing party ." T he supreme court ad dr es se d a tr ia l c ou rt 's po we r t o a wa rd co st s i n t he sp ec if ic co nt ex t o f " th e f

ee ch ar ge d b y a nonparty treating physician for attendi ng an evidence dep osition ." Vicenc io , 204 Ill. 2d at 299. In concluding the tria

l court did not have authority to award such an expense, the Supreme CourtNo. 1-07-0435

27

noted "[t]h e statute s allowing recove ry of costs a

re in der ogation of the co mmon law" and, thus, "must be narro wly construed." Vicenc io , 204 I ll. 2d at 30 0. The tri al court has authority

to award the preva

iling pa rty 's requ ested expe

nses, only if a statu te speci fically

designa tes the c ost as one that may be

recovered by

the prevailing party

. Vicenc io , 204 Ill. 2d at 300-11. The defendants here argue

court reporter transcript fees ar e not "court costs" taxable under section 5- 108, but rather litigation expenses, which are not recover able. We agree with the defendants. B ased on the supreme court's decision in Vicenc io , where it made clear that court costs are only those cost commonly understood to be in the nature of "filing fees, su bpoena f ees, and statutory witness f ees," w e canno t agre e that the term cost s, which "must be narrowly construed," should be expanded to those costs a court may deem "nece ssary ." Until t

he supre me court directs o therwise , we dec line to fol low the ho lding in Burmac

. The trial court erred in awarding court reporter expenses as court costs to the plaintiff. IV. The Plaintiff's Cross-Appe al On cross-appeal, the plaintiff contends the trial court er red in denying

prejudgment interest under the Intere st Act (the Act) (815 IL CS 205/2 (West 2006)). According to the plaintiff, he is entitled to receive prejudgment interest bec ause the trial court awarded liquidated damages based the breac

h of a written agreement. The tria l court agreed interest was due unde r the Act, but barred the plaintiff's claim beca use he did not file his claim before judgment was entered. In re aching its decision, the trial court relied on Kansas Quality Construction, I nc. v. Chiasson , 112 Ill. App. 2d 277, 287-88, 250 N.E.2d 785 (1969), wher e the court allowedNo. 1-07-0435

28

prejudgment interest but noted that the request was made a fter verdict but before judgment was entered. The plaintiff disagrees with the trial court' s reading of Chiasson . He directs our attention to John Kubinski & Sons, Inc. v. Dockside Development Corp. , 33 Ill. App. 3d 1015, 339 N.E.2d 529 (1975), for clarification on Chiasson

. We agree with the plaintiff that the trial court rea d Chiasson too narrowly. The timing of the petition for interest in Chiasson was not critical because "the Act, whe re applicable, will be read into the complaint ." (Emphasis added.) Chiasson , 112 Ill. App. 2d at 288. I n Dockside Development Corp. , we rejected the argume nt to limit the holding of Chiasson to award interest to cases only whe

re the petition for interest was filed before judg ment was entered to be a "distinction *** without a d ifference." Dockside Development Corp. , 33 Ill. App. 3d at 1024. Because the contract was a written instrument within the meaning of the statute, the contract was breached, and the damage s were liquidated, we held in Dockside Development Corp. that the plaintiff was entitled to interest. Dockside Development Corp. , 33 Ill. App. 3d at 1024. We find the same result is warranted here. The plaintiff is entitled to prejudgment interest on the liquidated damage s, to which the parties stipulated. CONCLUSIO N On the defendants' appeal, we affirm the judgment of the circuit court on the bre ach of contract count as

to the Fir m only . We reve

rse the c ircuit co

urt in all o ther re spects. With respect to the plaintiff's cross-appeal, the judgme nt of the circuit court deny ing theNo. 1-07-0435

29

plaintiff's motion for interest is reversed and rema nded with directions to award interest under the Interest Act to the date of the breach. Affirmed in part and reversed in part; ca use remanded. R. GORDON, P.J., and HALL, J., concur.No. 1-07-0435

30

REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT

______________________________________________________________________________ ROBERT E. KEHOE, JR. Plaintiff-Appellee and Cross-Appellant,

v. WILDMAN,

HARROLD, A

LLEN & DIXO N, JOHN L. EI SEL, MICHAE L L. McCLUGGAGE, ROBERT L. SHUFTAN, MICHAEL DOCKTERMAN , AND DAVID J. FISCHER, Defendants -Appellant s and Cross- Appellee s, and RICHARD BARTELT, Defendant.

________________________________________________________________ No. 1-07-0435 Appellate

Court of Ill

inois First District, First Division Filed: December 15, 2008

_________________________________________________________________

JUSTICE GARCIA delivered the opinion of the court. R. GORDON, P.J., and HALL, J., concur.

_________________________________________________________________

Appeal from the Circuit Court of Cook County Honorable M ark Lopez, Allen S. G oldberg, J

udge Pre siding

_______________________________________________________________ __ For P LAINTIF F-AP PELLEE Michael W. Rathsack and CROSS-APPELLANT 111 West Washington, Suite 962 Chicago, IL 60602 For DEF ENDANTS-A

PPELLA NTS Michael T. Trucco and CROSS-APPELLEES George M. HoffmanNo. 1-07-0435

31 Julie N. Howie Stamos &

Trucco LLP 30 West Monroe Street, Suite 1600 Chicago, IL 60606