Court Opinion

ID: 9543166
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:42:48.287481+00
Date Added: 2024-06-11T15:09:47.455565
License: Public Domain

JUSTICE MURRAY delivered the opinion of the court: This is an appeal by plaintiff, Maria R O’Hara (O’Hara), a non-lawyer, from a summary judgment in a breach of contract action against defendants, who are all lawyers, involving the law practice of plaintiff’s deceased husband, Barratt O’Hara II. Barratt O’Hara II practiced law in the immigration and naturalization field until his death on December 28,1978. In March 1979, plaintiff and defendants, Robert D. Ahlgren (Ahlgren) and Barry E. Blumenfeld (Blumenfeld), partners in a Chicago law firm, entered into a written agreement prepared by the partners wherein the plaintiff transferred to defendants the goodwill associated with the name of her deceased husband, Barratt O’Hara II, in connection with the practice of law. The defendants agreed to pay plaintiff a specified percentage of monies received by them through the transaction. The agreement contemplated the merger of Barratt O’Hara II’s law firm with the law firm of defendants Ahlgren and Blumenfeld and provided that Maria O’Hara was to receive from the defendants as follows: Before physical merger: One third [V3] of the net income derived from Barratt O’Hara’s law practice. The term “income” was defined as fees obtained from cases of Barratt O’Hara’s past or current immigration clients or from future clients developed from past or current clients. After physical merger: Twenty-five percent [25%] of the gross receipts of the O’Hara business as defined above for the first year, decreasing at the rate of 5% per year and terminating five years after the physical merger. O’Hara was to be given an accounting at her request for five years after the physical merger and at least once a year. Ahlgren and Blumenfeld could buy O’Hara’s furniture and fixtures if the parties could agree on a price. She was given the right to sell those items absent such agreement. Defendants were given the right to use Barratt O’Hara’s name on their stationery and office door. Plaintiff instituted the instant action to recover the sums of money due her under the contract. In her prayer for relief, O’Hara seeks an accounting, a judgment of all amounts owing, punitive damages, attorney fees, termination of the contract, and injunctive relief. Defendants answered the complaint and raised three affirmative defenses. Plaintiff replied to the affirmative defenses. Plaintiff filed a motion for partial summary judgment seeking a finding that the business agreement she had with defendants was a valid and enforceable one and for other relief, including partial damages. Defendants replied to plaintiff’s motion with their own motion for summary judgment suggesting the illegality of the agreement.  The state of the record discloses a nonlawyer widow of a lawyer selling the “goodwill” of her deceased husband’s law practice for a percentage of fees obtained by the law firm from the decedent’s past or current clients. The record also discloses that defendant lawyers prepared the agreement. Serious violations of the Illinois Code of Professional Responsibility are suggested by both the plaintiff and defendants. These alleged violations were committed not by plaintiff, but by defendants. Because of at least one of these violations, the trial court should have denied both plaintiff’s motion for partial summary judgment and defendants’ motion, thereby giving relief to neither party. Schnackenberg v. Towle (1954), 4 Ill. 2d 561, 123 N.E.2d 817. The fee-splitting arrangement made by O’Hara with defendants is in stark violation of the Illinois Code of Professional Responsibility, which precludes the splitting or sharing of fees between a lawyer or a law firm and a nonlawyer with certain exceptions not applicable to this case. Rule 3 — 102 of the Code of Professional Responsibility (107 Ill. 2d R. 3 — 102) states: “(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that: (1) An agreement by a lawyer with his firm, partner, or associate may provide for the payment of money, over a reasonable period of time after his death, to his estate or to one or more specified persons. (2) A lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer. (3) A lawyer or law firm may include nonlawyer employees in a retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement.” The Code was adopted June 3, 1980, effective July 1, 1980. The contract involved in this case was made in March 1979, prior to the adoption of this Code. In Corti v. Fleisher (1981), 93 Ill. App. 3d 517, 417 N.E.2d 764, this court held that public policy considerations precluded a fee-sharing arrangement where there was absolutely no showing of sharing of services or responsibilities. The court held such an arrangement to be against public policy even though the agreement was made prior to the effective date of the Code of Professional Responsibility. If a lawyer who shares no services or responsibilities cannot make a split-fee arrangement like the one involved in this case with another lawyer, based on public policy considerations, it is an obvious corollary that a lawyer’s -widow who shares no responsibilities or renders no service cannot split fees with a law firm to which she attempts to sell her husband’s goodwill. To place a judicial imprimatur on such an arrangement would be a perversion of a sound public policy. Plaintiff, in reply to defendants’ defense of unenforceability, raises the issue of estoppel, suggesting that defendants, as drafters of the agreement and receivers of benefits of it, are now barred from raising its illegality. This court in Corti v. Fleisher (1981), 93 Ill. App. 3d 517, 417 N.E.2d 764, rejected the concept of estoppel in a case involving a similar illegal agreement.  An exception to the estoppel theory arising in cases involving some illegal contracts is where the parties are not in pari delicto. (Merchandise National Bank v. Kolber (1977), 50 Ill. App. 3d 365, 365 N.E.2d 688.) In pari delicto is a legal principle that, in some situations, permits the less culpable of various parties to obtain relief from otherwise illegal or tortious transactions or occurrences like those involved in this case. There is case law that indicates a court could grant relief if the parties are not in pari delicto. Corti v. Fleisher (1981), 93 Ill. App. 3d 517, 532, 417 N.E.2d 764.  In this case it was defendants who raised the argument that the parties were in pari delicto because plaintiff knowingly sold the goodwill of her husband. The only suggestion that the plaintiff was not in pari delicto with the defendants is that they were lawyers and drafted the agreement and received the benefits of it. That is not enough. There must be some pleading or evidence that plaintiff had no knowledge of the illegality and that the defendants did. Absent such evidence or pleading disclosing plaintiff’s lack of knowledge of illegality and defendants’ awareness of same, it would appear that the parties were in pari delicto. Since the contract was void as against public policy, the trial court- should have denied both motions for summary judgment, dismissed the complaint, and left the parties where it found them. Where enforcement of an illegal contract is sought, the courts will aid neither party, but will leave them where they have placed themselves, since the parties are in pari delicto and can recover nothing under the contract. Merchandise National Bank v. Kolber (1977), 50 Ill. App. 3d 365, 370, 365 N.E.2d 688. For the above reasons the trial court’s denial of plaintiff’s motion for partial summary judgment is affirmed; its granting of summary judgment for defendants is reversed; and the case is remanded to the trial court with directions to enter an order dismissing plaintiff’s complaint. Affirmed in part; reversed in part and remanded with directions. LORENZ, J., concurs.