Opinion ID: 1722606
Heading Depth: 1
Heading Rank: 3

Heading: Dismissal With Just Cause

Text: The case before us involves dismissal with just cause. In Beaumont v. J.H. Hamlen & Sons, 190 Ark. 630, 632, 81 S.W.2d 24, 25 (1935), we wrote: The law is well settled in this and most other jurisdictions that, if an attorney ... commits a material breach of his contract of employment, he thereby forfeits all right to compensation. The reasoning of the opinion was that a client employs the attorney to perform the entire contract, and when the entire contract is not performed, the attorney forfeits the stipulated compensation. Id. at 632, 81 S.W.2d at 25. As a result of the above language, cross-appellant Courson argues that the Crockett and Brown firm is not entitled to any fee whatsoever. At first blush, the argument seems to have merit. However, the case was written before our cases held that a client has an implied right to terminate a contract at any time, and that does not amount to a breach of contract. Thus, the case at bar is essentially a matter of first impression for this court. The majority opinion holds that Crockett and Brown is entitled to compensation based upon quantum meruit, and the standard for that award is based on the amount of time and expense devoted to the case by the attorney. That is not the correct standard for this type of case. As set out in Johns v. Klecan, 198 Ill.App.3d 1013, 145 Ill.Dec. 71, 556 N.E.2d 689 (1990), the rationale underlying the doctrine of quantum meruit in this type of case is that the client who benefits from the attorney's services should be required to pay the reasonable value of those services to the attorney. It is a doctrine designed to prevent the unjust enrichment of the client. An example of this is found in Phelps v. Elgin, Joliet & Eastern Ry., 70 Ill.App.2d 89, 217 N.E.2d 519 (1966), where the attorney was discharged for cause and under the established law was entitled to recover under the doctrine of quantum meruit. The trial court ruled that under the theory of quantum meruit the attorney was not entitled to a fee, and the appellate court affirmed stating: Nothing of value has been recovered by reason of any act done or suit brought by the respondents. On the basis of this record, we must conclude, as did the trial judge, that the respondents are not entitled to recover any fees. Id., 217 N.E.2d at 523. It did not matter how much time the attorney devoted to the case because the client did not unjustly benefit. The same reasoning should be applied to this case. Crockett and Brown may have devoted many hours to building the file, but they refused to turn that file over to the Wilson firm, and the work product in that file was of no value to the client in the settlement of his case. Crockett and Brown was discharged with just cause, and is entitled to a fee only for those services that were of benefit to the client, and, on cross-appeal, this case should be reversed for a determination of that amount, if any. The rule has been stated as follows: It has been held that a lawyer who unjustifiably terminates his employment, or gives the client cause to discharge him prior to completion of the services for which he was engaged, can recover against the client only the amount by which his services have benefited the client, who, in the absence of recovery by the attorney, would be unjustly enriched by such services. 7 Am.Jur.2d Attorneys at Law § 299 (1980). Under the majority opinion a lawyer might commit some act that is inimical to the best interest of his client, but he would still be paid a windfall as compensation for his time expended in committing that act. Suppose that an attorney was representing a plaintiff against an insurance company, but failed to disclose to the client that also he was representing the insurance company in the same case, and the client eventually found out about the conflict of interest and discharged the attorney with just cause. See Miller v. Solomon, 49 Ill. App.2d 156, 199 N.E.2d 660 (1964). Under the rationale of majority opinion the attorney could collect for all the work he had done in the client's name, regardless of whether it was of benefit to the client. The majority opinion will lead to windfalls for attorneys who are discharged with just cause because it fails to recognize that the basis for quantum meruit in this type of case is to prevent the unjust enrichment of the client. Many of the cases cited in the majority opinion offer no support for the opinion. The majority opinion cites the case of Covington v. Rhodes, 38 N.C.App. 61, 247 S.E.2d 305 (1978), as supporting its position. However, that case involved an attorney who had performed in a reasonably professional manner, and the court discussed discharge in terms of being without cause. The majority opinion cites Sohn v. Brockington, 371 So.2d 1089 (Fla. Dist.Ct.App. 1979), but, again, that case was one in which the attorney was discharged without cause. The majority opinion also cites In re Estate of Poli, 134 NJ.Super. 222, 338 A.2d 888 (1975), but, in that case, even though the client contended that the attorney was discharged with cause, the court discussed the case in terms of discharge without cause. The case of Fracasse v. Brent, 6 Cal.3d 784, 100 Cal. Rptr. 385, 494 P.2d 9 (1972), also involved discharge of the attorney without cause. In that case, the Supreme Court of California said that the attorney had been discharged without cause and was entitled to receive the value of his services up to the time he was discharged. While the discussion about cases involving discharge with cause is dicta, the opinion does allude to a different standard for the fee when an attorney is discharged with cause, as follows: Amicus contends that there will be substantial difficulty in ascertaining the amount of recovery under a quantum meruit theory. The same difficultyif such it beis also present, however, in cases in which an attorney has been discharged with cause and yet such difficulty does not appear to have been insurmountable. Id., 100 Cal.Rptr. at 389, 494 P.2d at 13. In summary, the majority opinion provides a windfall to attorneys who are discharged with just cause. It allows them to recover reasonable fees based primarily on the amount of time expended by the attorney, regardless of whether the work benefitted the client. Such a standard is not in comport with the rationale for quantum meruit in this type case. The holding should be that when an attorney is discharged with just cause, he might recover on the basis of quantum meruit for the amount that his services has enriched the client. Accordingly, I dissent on cross-appeal. NEWBERN, J., joins in this concurrence and dissent.