Court Opinion

ID: 3147060
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:25:43.716542+00
Date Added: 2024-06-11T12:14:52.835757
License: Public Domain

FIRST DIVISION
                                              April 21, 2008

No. 1-06-1432

BRANDON APPAREL GROUP, ERIC P.           )    Appeal from the
LEFKOFSKY and BRADLEY A. KEYWELL,        )    Circuit Court of
                                         )    Cook County.
     Plaintiffs-Appellants               )
     Cross-Appellees,                    )
                                         )    No. 00 CH 16669
     v.                                  )
                                         )
KIRKLAND AND ELLIS,                      )    The Honorable
                                         )David R. Donnersberger,
     Defendant-Appellee                  )    Judge Presiding.
     Cross-Appellant.                    )

     JUSTICE GARCIA delivered the opinion of the court.

     The plaintiffs, Brandon Apparel Group (Brandon), Bradley A.

Keywell, and Eric P. Lefkofsky, retained the defendant law firm

Kirkland & Ellis (Kirkland) to represent them in a dispute over

certain loans.   After a default judgement was entered against

Brandon, Keywell, and Lefkofsky in that litigation, they filed

the instant legal malpractice action against Kirkland.

     The trial court granted Kirkland's amended motion for

summary judgment, finding the plaintiffs had improperly assigned

their legal malpractice claim.   The court denied Kirkland's

motion for partial summary judgment as to the plaintiffs'

damages.
No. 1-06-1432

     The trial court entered an order pursuant to Supreme Court

Rule 304(a) (210 Ill. 2d R 304(a)), finding there was "no just

reason for delaying either enforcement or appeal or both" of its

grant of summary judgment.   The trial court also stayed

proceedings on Kirkland's counterclaim pending appeal.     For the

reasons that follow, we reverse and remand.

                             BACKGROUND

     The alleged legal malpractice at issue in this case stems

from the defendant law firm's representation of Brandon, Keywell,

and Lefkofsky in Johnson Bank v. Brandon Apparel Group, Inc., No.

00-CV256 (August 9, 2000), filed in the circuit court of Rock

County, Wisconsin, in 2000 (the underlying litigation).

                   I. The Underlying Litigation

     In 1997, Brandon, a company specializing in the manufacture

and sale of athletic apparel, obtained two loans from Johnson

Bank.   The loans included a $5 million term loan and a $4 million

revolving credit loan.   These loans were secured by Brandon's

assets.   Keywell and Lefkofsky, Brandon's principals, were

guarantors of the loans.

     In May 1999, Brandon entered into the "First Amendment to

Term Loan Agreement" and the "First Amendment to Revolving Credit

Loan Agreement" with Johnson Bank.   As part of these amendments,

Brandon acknowledged the total principal of its loans was

approximately $10.1 million.   Brandon also agreed to release
No. 1-06-1432

Johnson Bank from "all claims, demands or causes of action of any

kind."    Although Lefkofsky expressed concern about the release's

"broad-based waiver" as to "all *** legal rights" with regard to

the loans, he and Keywell signed the amendments.    Keywell and

Lefkofsky also signed an "Acknowledgment and Agreement of

Guarantors" for each loan.   The acknowledgments released Johnson

Bank from all "defenses, claims, offsets and counterclaims ***

accrued to date."

     Soon after, Johnson Bank determined Brandon was in default

of the loans.   Brandon and Johnson Bank attempted to resolve the

matter.   On September 1, 1999, Brandon entered into the

"Moratorium Agreement" with Johnson Bank.    Keywell and Lefkofsky

signed the agreement as guarantors.   As part of this agreement,

Brandon acknowledged $6.5 million was due and owing on the

revolving credit loan and approximately $3.8 million was due and

owing on the term loan.

     Brandon retained Kirkland after the execution of the

Moratorium Agreement.   Kirkland represented Brandon in connection

with the negotiation of the "Second Moratorium Agreement" with

Johnson Bank.   Pursuant to this agreement, Brandon, Keywell, and

Lefkofsky acknowledged approximately $6.4 million plus interest

due and owing on the revolving credit loan and $3.8 million plus

interest due and owing on the term loan.    As part of the

agreement, Brandon, Keywell, and Lefkofsky released Johnson Bank
No. 1-06-1432

from all "claims, demands or causes of action of any kind."

     On March 8, 2000, counsel for Johnson Bank filed a complaint

against Brandon, Keywell, and Lefkofsky in the circuit court of

Rock County, Wisconsin.   The complaint alleged Brandon was in

default of the Second Moratorium Agreement.    The complaint also

alleged Keywell and Lefkofsky, as guarantors, were liable

pursuant to their guarantees.   The complaint asked for relief of

approximately $10.7 million.

     Kirkland attorney James Stempel entered into an agreement

with Johnson Bank's counsel to answer or otherwise plead in the

underlying litigation by April 14, 2000.    This agreement was

memorialized in a March 31, 2000, letter.    When an answer was not

filed by the agreed-to deadline, Johnson Bank filed a motion for

a default judgment.

     On May 18, 2000, Kirkland filed a motion in opposition to

the entry of a default judgment.   The motion (1) requested the

court "enlarge" the time to answer or otherwise plead, (2) asked

the court for leave to file an answer instanter, and (3) opposed

the motion for a default judgment.   In support of the motion,

Kirkland attorney Stempel submitted an affidavit alleging the

existence of an oral agreement with Johnson Banks's counsel,

Albert Solochek, that further extended the time to answer the

complaint.

     Brandon's answer, which Kirkland sought leave to file
No. 1-06-1432

instanter, denied the complaint's allegations of money due and

owing and asserted affirmative defenses.

     On August 9, 2000, the Wisconsin circuit court granted

Johnson Bank's motion for a default judgment.     In September 2000,

a judgment of approximately $11 million was entered against

Brandon, Keywell, and Lefkofsky.     A timely appeal was filed.1

     The Wisconsin appellate court reversed the entry of default

judgment and remanded the case to the circuit court for an

evidentiary hearing to determine whether the alleged oral

agreement to extend the time to answer existed.

     On January 4, 2002, the Wisconsin circuit court conducted an

evidentiary hearing.     Following the hearing, the circuit court

concluded there was no oral agreement to extend the time to

answer.     The circuit court held that the entry of a default

judgment was appropriate.     On February 14, 2002, the circuit

court entered a default judgment in the amount of $12,353,784

against Brandon, Keywell, and Lefkofsky.     This amount included

interest due and owing on the loans through January 14, 2002.

Costs of approximately $37,000 were also entered against Brandon,

     1
         Shortly after the appeal was filed in the underlying

litigation, Brandon, Keywell, and Lefkofsky filed this

malpractice action against Kirkland in the circuit court of Cook

County.     The parties agreed to stay the malpractice action

pending the outcome of the underlying litigation.
No. 1-06-1432

Keywell, and Lefkofsky, with attorney fees to be determined at a

later date.

     On May 22, 2002, a Johnson Bank executive was appointed as a

supplemental receiver of Brandon's property pursuant to a

receivership order entered by the Wisconsin circuit court (the

receivership order).   The receivership order defined "property"

to include "any and all proceeds from any actions, claims or

interests by or of [Brandon, Keywell, and Lefkofsky] against or

as to Kirkland & Ellis."

     The receivership order also required Brandon, Keywell,

Lefkofsky, and their attorneys to confer with the receiver

regarding the course of any malpractice claim against Kirkland.

Should the two sides disagree as to litigation decisions, either

party could seek a judicial remedy in the Wisconsin circuit

court.   Pursuant to the receivership order, Brandon, Keywell, and

Lefkofsky could not "settle, compromise, dismiss, or

substantially impair [the malpractice litigation] without the

express written consent" of the receiver or of the Wisconsin

circuit court after notice and a hearing.

                  II. The Malpractice Litigation

     On November 17, 2000, Brandon, Keywell, and Lefkofsky (the

plaintiffs) filed a declaratory judgment action against Kirkland

in the circuit court of Cook County.   The plaintiffs alleged

Kirkland's failure to file a timely answer in the underlying
No. 1-06-1432

litigation led to the entry of a $12 million default judgment.

Kirkland's answer denied the legal malpractice and asserted a

counterclaim for unpaid attorney fees and costs.

     In September 2002, the plaintiffs filed a five-count first-

amended complaint.   Count I sought a judicial declaration that

the Wisconsin circuit court had made no determination denying

Brandon's affirmative defenses against Johnson Bank and, as a

result, Kirkland may be held liable for damages proximately

caused by Kirkland's negligence.    Count II sought a judicial

declaration that (1) Kirkland breached its duty to the

plaintiffs, (2) the plaintiffs had no further obligations to

Kirkland, and (3) Kirkland must reimburse the plaintiffs for all

sums previously paid to the firm.    Count III alleged fraud, count

IV alleged professional negligence, and count V alleged breach of

contract.   On February 18, 2003, the trial court entered an order

dismissing counts I and III.

     After the filing of the first-amended complaint, the

plaintiffs wished to retain new counsel.    Johnson Bank disagreed

with the plaintiffs' initial decision to retain counsel based on

a continency fee arrangement.   Johnson Bank preferred the

plaintiffs retain a firm based on an hourly billing arrangement.

Johnson Bank's counsel stated Johnson Bank and the receiver

"would consider the [contingency] fee arrangement *** provid[ed]

[Keywell and Lefkofsky] deposit[ed] sufficient sums *** to cover
No. 1-06-1432

and protect the Bank and the Receiver" from any additional amount

that would be taken from the recovery because of a contingency

fee arrangement as opposed to an hourly fee arrangement.    Johnson

Bank's counsel reminded Keywell, "you *** have acknowledged on

many occasions, the Bank is the real and only beneficiary in the

Kirkland case."   Johnson Bank's counsel suggested the plaintiffs

seek a judicial determination of the dispute in the Wisconsin

circuit court pursuant to the receivership order.   The plaintiffs

did not seek a judicial remedy, instead retaining a firm pursuant

to an agreement that included aspects of both billing

arrangements.

     The firm currently representing the plaintiffs, Connelly

Roberts & McGinvey, was retained in 2004.   In the engagement

letter, plaintiffs' current counsel, Michael Connelly,

acknowledged that any recovery in the malpractice litigation was

the property of the receiver and that Johnson Bank would be

paying his firm's invoices.   The engagement letter also

recognized that Johnson Bank could discontinue paying the

plaintiffs' legal fees at any time.    While the letter stated the

firm would advance Brandon, Keywell and Lefkofsky's interests, it

also acknowledged the firm could be discharged by Brandon,

Keywell, Lefkofsky, or Johnson Bank.

     Johnson Bank's counsel and Connelly corresponded during the

instant litigation regarding litigation strategy and
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expenditures.    After receiving a litigation budget in the fall of

2004, Johnson Bank's counsel suggested that Connelly "temper the

time *** put in this case."    Counsel also "suggest[ed] that

[Connelly] defer what [he could,] for now."    Should plaintiffs'

counsel have "any questions as to whether a particular task

should be undertaken," he was invited to discuss the matter with

Johnson Bank's counsel.    Johnson Bank's counsel also corresponded

with Connelly regarding the cost, preparation, and filing of a

potential motion for summary judgement.

     While the malpractice litigation was pending, Brandon,

Keywell, and Lefkofsky entered into the "Common Interest

Agreement" with the receiver and Johnson Bank.    In this

agreement, the parties determined it was in their "best interest"

to consult regarding the malpractice litigation and such

"consultations" would be "subject to the attorney-client

privilege."

     The trial court recognized this privilege in a February 4,

2005, order.    In that order, the trial court denied Kirkland's

motion to compel the production of documents and testimony

regarding all communications between Johnson Bank, the receiver

or its counsel, and the plaintiffs and their attorney.      The trial

court found the documents at issue were protected subject to the

"common interest doctrine" because the documents were prepared in

order to further the parties' "joint litigation strategy."
No. 1-06-1432

     On March 17, 2005, Kirkland filed a motion for summary

judgment which alleged the plaintiffs had improperly assigned

their legal malpractice claim to Johnson Bank.

     In their response to Kirkland's motion for summary judgment,

the plaintiffs attached an affidavit from their attorney, Michael

Connelly.   Connelly stated that while he had "consulted" with

counsel for Johnson Bank regarding litigation strategy, he had

not yielded control over decision making in the malpractice

litigation to Johnson Bank or its counsel.

     Kirkland moved for and was granted discovery regarding

communications between Johnson Bank's counsel, Connelly, and the

plaintiffs regarding the direction and control of the malpractice

litigation.

     During this discovery, Kirkland deposed Connelly.     Connelly

testified in his deposition that when he was retained, he

understood that while Johnson Bank would receive the proceeds of

the malpractice litigation, Brandon, Keywell, and Lefkofsky were

his clients.    Connelly believed he had some "fiduciary

obligations" to Johnson Bank because the bank was entitled to any

recovery in the malpractice litigation.    Because of this interest

in the recovery, he consulted with Johnson Bank's counsel

regarding progress in the malpractice litigation.    Connelly

further testified that when he was retained "the one thing that

was made clear was that [he] could not settle the case without
No. 1-06-1432

consulting" Johnson Bank's counsel.

     Connelly testified that when he was told by Johnson Bank's

counsel to defer work, he responded that he would do what was

necessary to effectively represent his clients, Brandon, Keywell,

and Lefkofsky.   Connelly also testified he filed pleadings and

conducted depositions, including the depositions of Kirkland

attorneys involved in the underlying litigation, without

receiving Johnson Bank's counsel's approval in advance.

     After the conclusion of the discovery regarding the

communications between the plaintiffs, Connelly, and Johnson

Bank, Kirkland filed an amended motion for summary judgment on

January 11, 2006.    The amended motion argued that summary

judgment was appropriate because Johnson Bank, a third-party

judgment creditor, was the "real" beneficiary of the malpractice

litigation and the malpractice claim had been improperly assigned

to Johnson Bank.    Kirkland argued the documentary evidence

attached to its amended motion for summary judgment, including

the deposition transcripts of Connelly and Johnson Bank's

counsel, the receivership order, and correspondence between

Johnson Bank, the plaintiffs, and Connelly, established that

Johnson Bank controlled the malpractice litigation.    In the

alternative, Kirkland argued it was entitled to partial summary

judgment on the issue of damages.    According to Kirkland, it

could not be held responsible for the $10.1 million Kirkland
No. 1-06-1432

contended the plaintiffs owed Johnson Bank before Kirkland was

retained.

     In their response, the plaintiffs argued they remained the

beneficiaries of the malpractice litigation and they had not

assigned their legal malpractice claim to Johnson Bank.

     Attached to the plaintiffs' response to the amended motion

for summary judgment was a copy of the "Settlement Agreement and

Release" executed between Johnson Bank, Brandon, Keywell and

Lefkofsky.    The settlement agreement released and resolved all

claims and obligations between Johnson Bank, Keywell and

Lefkofsky, "as well as any claims Brandon Apparel Group *** may

have against [Johnson] Bank."    Keywell and Lefkofsky agreed to

pay Johnson Bank $1.125 million and in turn were released from

the judgment entered in the underlying litigation and dismissed

from all other litigation between Johnson Bank and Brandon.

     Additionally, Keywell and Lefkofsky executed the "Agreement

of Cooperation" as an addendum to the Settlement Agreement and

Release.    Pursuant to the Agreement of Cooperation, if Johnson

Bank continued to fund the malpractice litigation, Keywell and

Lefkofsky

            "each [agreed] to provide a minimum of 100

            hours to assist the law firm of Connelly

            Roberts & McGivney, LLC (or any other firm

            that is acting on behalf of the Plaintiffs)
No. 1-06-1432

          in case and trial preparation, such

          assistance to be provided at the request and

          direction of the law firm.   The 100 hours

          would include any deposition time in the

          case, but would not include time at trial.

          If necessary, in the opinion of trial

          counsel, *** Keywell and Lefkofsky would

          agree to attend each day of the trial

          proceedings in the case."

     As a condition of the agreement, Keywell and Lefkofsky

agreed to take no action that was inconsistent with the best

interests of the malpractice litigation.   If either Keywell or

Lefkofsky breached the agreement, Johnson Bank was entitled to

$400,000 in damages.

     The cooperation agreement addressed how any potential

recovery in the malpractice litigation would be divided.    If

Johnson Bank continued to fund the malpractice litigation, any

recovery would first be used to reimburse Johnson Bank for

amounts expended on attorney fees and costs.    From any funds

remaining after the payment of attorney fees and costs, Johnson

Bank would receive the first $1 million.   Any amount in excess of

$1 million, but less than $2 million would be apportioned 95% to

Johnson Bank and 5% to Keywell and Lefkofsky.    Any recovery more

than $2 million would be apportioned 90% to Johnson Bank and 10%
No. 1-06-1432

to Keywell and Lefkofsky.

     If Johnson Bank discontinued funding the malpractice

litigation, Keywell and Lefkofsky could, but were not required

to, pursue the litigation at their own expense.   Should a

recovery be made under those circumstances, it would be

apportioned 90% to Keywell and Lefkofsky and 10% to Johnson Bank.

     On March 29, 2006, the trial court granted Kirkland's

amended motion for summary judgment as to the assignment of the

legal malpractice claim but denied Kirkland's alternative motion

for partial summary judgment as to damages.   The court found that

although the plaintiffs had not formally assigned the legal

malpractice claim to Johnson Bank, in effect, an assignment had

occurred.   The court concluded that with the entry of the

receivership order on May 22, 2002, Johnson Bank became the party

entitled to any recovery in the malpractice litigation, as well

as the party in control of the malpractice litigation.    Thus, the

court found a de facto assignment of the malpractice litigation

had occurred.

     The court also relied on the cooperation agreement entered

into between Keywell, Lefkofsky, and Johnson Bank to determine

that a de facto assignment had occurred.   The court reasoned that

if Keywell and Lefkofsky were still the "real parties in

interest" to the malpractice litigation, there would be no reason

to require their cooperation with routine case matters and trial
No. 1-06-1432

preparation.

     The trial court entered an order pursuant to Supreme Court

Rule 304(a) (210 Ill. 2d R 304(a)), finding there was "no just

reason for delaying either enforcement or appeal or both" of the

March 29, 2006, order.   The plaintiffs filed a notice of appeal

from the trial court's grant of summary judgment.   Kirkland filed

a notice of cross-appeal from the trial court's denial of its

motion for partial summary judgment.

                              ANALYSIS

     The plaintiffs assert the trial court erred in granting

summary judgment in favor of Kirkland.   The plaintiffs contend no

assignment to Johnson Bank of their legal malpractice claim

occurred because the receivership order entered by the Wisconsin

circuit court was not an assignment.

     In its cross-appeal, Kirkland contends it was entitled to

partial summary judgment as to the amount of damages actually

suffered by the plaintiffs as a result of Kirkland's alleged

negligence.    Kirkland contends that $10.1 million of the judgment

entered against the plaintiffs in the underlying litigation was

based on loan documents signed between the plaintiffs and Johnson

Bank before Kirkland was retained and therefore not subject to

challenge as a matter of law.   Kirkland asks this court to

consider its cross-appeal only if we reverse the trial court's

entry of summary judgment.
No. 1-06-1432

     "Summary judgment is appropriate only where 'the pleadings,

depositions, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment

as a matter of law.' "    Governmental Interinsurance Exchange v.

Judge, 221 Ill. 2d 195, 214-15, 850 N.E.2d 183 (2006), quoting

735 ILCS 5/2-1005(c) (West 2004).   The court "must construe all

evidence strictly against the movant and liberally in favor of

the nonmoving party."    Larry Karchmar, Ltd. v. Nevoral, 302 Ill.

App. 3d 951, 956, 707 N.E.2d 223 (1999).

     "On appeal from a grant of summary judgment, a reviewing

court's function is to determine whether the trial court properly

concluded that there was no genuine issue of material fact, and

if there was not, whether the judgment was correct as a matter of

law."   People ex rel. Burris v. Memorial Consultants, Inc., 224

Ill. App. 3d 653, 656, 587 N.E.2d 34 (1992).    This court reviews

the grant of summary judgment de novo.     Governmental

Interinsurance Exchange, 221 Ill. 2d at 215.

                  I. The Legal Malpractice Claim

     Legal malpractice claims are not assignable in Illinois.

Wilson v. Coronet Insurance Co., 293 Ill. App. 3d 992, 995, 689

N.E.2d 1157 (1997).   This court has held that "sound public

policy prohibits the assignment of [legal malpractice claims]

since an assignee would be a stranger to the attorney-client
No. 1-06-1432

relationship, who was owed no duty by the attorney and who

suffered no injury from the attorney's actions."    Clement v.

Prestwich, 114 Ill. App. 3d 479, 480-81, 448 N.E.2d 1039 (1983).

     Here, the plaintiffs contend they have not assigned their

legal malpractice claim to Johnson Bank.    The plaintiffs contend

the receivership order did "not constitute or effect an

assignment of the plaintiffs' malpractice claim."   Rather, it

merely gave "Johnson Bank a lien upon the proceeds" of the

malpractice litigation.   Additionally, the plaintiffs argue that

even if they had improperly assigned their legal malpractice

claim to Johnson Bank, the trial court erred by entering summary

judgment rather than merely voiding the assignment and allowing

the plaintiffs to continue the malpractice litigation.

                    A. The Receivership Order

     The receivership order entered by the Wisconsin circuit

court appointed an executive at Johnson Bank as the supplemental

receiver of Brandon's property.   The receivership order defined

property to include, "any and all proceeds from any actions,

claims or interests by or of [Brandon, Keywell, and Lefkofsky]

against or as to Kirkland & Ellis."   It is undisputed that the

receivership order made Johnson Bank the party entitled to the

recovery in the malpractice litigation.    The dispute between the

parties centers on whether the receivership order, in light of

the other circumstances present in this case, also effectively
No. 1-06-1432

assigned the legal malpractice claim to Johnson Bank.

     The receivership order required Brandon, Keywell, Lefkofsky,

and their attorneys to consult with the receiver regarding

litigation strategy and settlement.   The order provided for

resolution by the Wisconsin circuit court of any litigation

disputes between the parties.   The Agreement of Cooperation

entered into between plaintiffs Keywell and Lefkofsky and Johnson

Bank, at the time of their settlement agreement, provided a

formula for the division of any recovery in the malpractice

litigation.   The trial court below concluded that the combination

of the receivership order and the cooperation agreement gave

Johnson Bank such control over the malpractice litigation that a

de facto assignment occurred.   Consistent with the trial court's

ruling, Kirkland contends "the undisputed facts demonstrate that

Johnson Bank has used its rights under the Receivership Order,

and its funding of this litigation, to direct major decisions

regarding the prosecution of this lawsuit."   According to

Kirkland, Johnson Bank's priority claim to any recovery from the

malpractice suit and its control "over virtually all major

litigation decisions establishes a de facto assignment."

     Neither our research nor that of either of the parties has

disclosed a case addressing the precise question before us: when

is de facto assignment of a legal malpractice claim established

as a matter of law?   We look to cases involving the assignments
No. 1-06-1432

in other areas of the law for guidance.

     The legal landscape regarding what constitutes an assignment

is fairly clear.    An assignment occurs when "there is a transfer

of some identifiable interest from the assignor to the assignee."

Klehm v. Grecian Chalet, Ltd., 164 Ill. App. 3d 610, 616, 518

N.E.2d 187 (1987).    "Generally, no particular form of assignment

is required; any document which sufficiently evidences the intent

of the assignor to vest ownership of the subject matter of the

assignment in the assignee is sufficient to effect an

assignment."    Stoller v. Exchange National Bank of Chicago, 199

Ill. App. 3d 674, 681, 557 N.E.2d 438 (1990).    A valid assignment

"needs only to assign or transfer the whole or a part of some

particular thing, debt, or chose in action and it must describe

the subject matter of the assignment with sufficient

particularity to render it capable of identification."     Klehm,

164 Ill. App. 3d at 616.    The assignment transfers to the

assignee all the " 'right, title or interest of the assignor in

the thing assigned.' "     Owens v. McDermott, Will & Emery, 316

Ill. App. 3d 340, 350, 736 N.E.2d 145 (2000), quoting Litwin v.

Timbercrest Estates, Inc., 37 Ill. App. 3d 956, 958, 347 N.E.2d

378 (1976).    Thus, the assignee stands in the "shoes" of the

assignor.   City of Chicago in Trust for the Use of Schools v.

Fischer, 52 Ill. App. 2d 55, 61, 201 N.E.2d 660 (1964).

     More difficult is determining whether a de facto, rather
No. 1-06-1432

than a formal, assignment has occurred.    The "creation and

existence of an assignment is to be determined according to the

intention of the parties, and that intention is a question of

fact to be derived not only from the instruments executed by

them, but from the surrounding circumstances."     Rivan Die Mold

Corp. v. Stewart Warner Corp., 26 Ill. App. 3d 637, 642, 325

N.E.2d 357 (1975); Northwest Diversified, Inc. v. Desai, 353 Ill.

App. 3d 378, 387, 818 N.E.2d 753 (2004).    "Whether an assignment

has occurred 'is dependent upon proof of intent to make an

assignment and that intent must be manifested.'"     Northwest

Diversified, Inc. v. Desai, 353 Ill. App. 3d 378, 387, 818 N.E.2d

753 (2004), quoting Strosberg v. Brauvin Realty Services, Inc.,

295 Ill. App. 3d 17, 30, 691 N.E.2d 834 (1998).

     The language of the agreement between the plaintiffs and

Johnson Bank as set out in the receivership order and the

cooperation agreement is not disputed; however, the parties to

the agreement itself reject that an assignment occurred.    It is

Kirkland, a stranger to the agreement, that contends the

agreement constituted a de facto assignment of the plaintiffs'

legal malpractice claim.   Kirkland contends the receivership

order effectively assigned the legal malpractice claim to Johnson

Bank because the plaintiffs acknowledged that Johnson Bank was

the "real and only beneficiary" of the litigation, and under the

extant circumstances, the plaintiffs ceded control to Johnson
No. 1-06-1432

Bank over the litigation.

     The plaintiffs contend to the contrary; the receivership

order provided no more than "a right to be heard" to the

lienholder, Johnson Bank, regarding the subject of the lien.

Brandon, Keywell, and Lefkofsky deny they ever intended to assign

their legal malpractice claim to Johnson Bank.

     There are strong arguments on both sides of the issue.

     The Wisconsin circuit court entered the receivership order

on May 22, 2002.   At that time, the malpractice litigation had

been pending in Cook County for almost two years.   If, as the

plaintiffs contend, this litigation was their most valuable

asset, they would presumably not enter into an agreement that

created an assignment void under Illinois law, thereby possibly

undoing the litigation the plaintiffs had filed two years prior.

If the receivership order were an assignment of the legal

malpractice claim, there would be no point in requiring Brandon,

Keywell, and Lefkofsky to consult with the receiver regarding

litigation strategy and settlement because the receiver, as

assignee, would presumably be entitled to make those decisions.

Although Connelly consulted with Johnson Bank's counsel and

recognized a fiduciary duty to Johnson Bank as the recipient of

any recovery in the malpractice litigation, he also acknowledged

that Brandon, Keywell, and Lefkofsky were his clients and it was

their interests that he sought to advance in this litigation.
No. 1-06-1432

While the plaintiffs and their counsel admitted Johnson Bank's

counsel was vocal regarding the malpractice litigation, the

plaintiffs' counsel characterized the comments as suggestions.

In his deposition and again at oral argument, the plaintiffs'

counsel denied surrendering control of the malpractice litigation

to Johnson Bank or its counsel.   Viewing the receivership order

in the light most favorable to the plaintiffs, it may only have

given Johnson Bank, through the receiver, the ability to delay

litigation decisions or settlement, as there was no guarantee the

Wisconsin circuit court would agree with Johnson Bank's position

on a particular issue should judicial intervention be required.

The receivership order, itself, did not give Johnson Bank the

final word in the case of a disagreement with the plaintiffs.

     On the other hand, Kirkland focuses on the exchange between

Johnson Bank's counsel and the plaintiffs regarding the retention

of new counsel as evidence of Johnson Bank's control of the

litigation.   While it is true Johnson Bank's counsel did not

forbid the hiring of the plaintiffs' initial candidate as

counsel, it is also clear Johnson Bank swayed the decision.

Indeed, Johnson Bank's counsel suggested the plaintiffs take the

disagreement before the Wisconsin circuit court.   Of course, had

the legal malpractice claim been truly assigned to Johnson Bank,

it could have ended the discussion with a refusal rather than

suggest presenting the dispute to the Wisconsin circuit court.
No. 1-06-1432

The record does not reveal whether Johnson Bank went before the

Wisconsin circuit court for a judicial determination of this

matter.   The fact that Johnson Bank could not unilaterally decide

who to retain as new counsel indicates the receivership order did

not transfer all rights in the malpractice litigation from

Brandon, Keywell, and Lefkofsky to Johnson Bank.

     The determination of the extent of the consultation with

Johnson Bank and whether that consultation became control is a

factual question that needs further development.   The creation of

an assignment is determined according to the parties' intentions.

These intentions are a question of fact derived from the

instruments executed and the surrounding circumstances.    Rivan

Die Mold Corp., 26 Ill. App. 3d at 642.   The intent to make an

assignment must be manifest.   Northwest Diversified, Inc. v.

Desai, 353 Ill. App. 3d at 387.   Where the agreement at issue is

capable of being understood in more than one sense, "evidence of

extrinsic facts and circumstances" is necessary to determine the

intent and agreement of the parties.   Rivan Die Mold Corp., 26

Ill. App. 3d at 642.

     Viewing the receivership order in the light most favorable

to the plaintiffs, whether the receivership order created a de

facto assignment of the instant legal malpractice claim is a

question of fact not properly determined pursuant to a motion for

summary judgment on the state of the record before us.
No. 1-06-1432

                B. Remedy for an Improper Assignment

     The parties have presented two lines of cases that provide

opposing consequences of an improper assignment.

     The plaintiffs contend the proper remedy of an improper

assignment would be to void the assignment and allow them to

continue with the malpractice litigation.   The plaintiffs rely on

Mallios v. Baker, 11 S.W.3d 157, 159 (Tex. 2000), and Weston v.

Dowty, 163 Mich. App. 238, 241, 414 N.W.2d 165, 167 (1987), for

the proposition that a former client's right to bring his own

cause of action for malpractice is not extinguished by the

invalid assignment of a legal malpractice claim.

     Kirkland, on the other hand, argues nothing "could remove

the taint resulting from years of litigating under an

impermissible assignment" and that the proper remedy would be the

entry of a judgment against the plaintiffs.   Kirkland relies on

Gurski v. Rosenblum & Filan, LLC, 276 Conn. 257, 278-79, 885 A.2d

163, 174 (2005), for the proposition that the proper remedy for

an improper assignment of a legal malpractice claim is to

terminate the litigation in the defendant's favor.

     Because we conclude a question of fact remains whether the

plaintiffs' intentions underlying the receivership order and the

surrounding circumstances was to create an assignment of the

plaintiffs' legal malpractice claim, which must be determined

upon remand below, we do not express an opinion as to which of
No. 1-06-1432

the opposing lines of cases Illinois would follow.

                      II. Kirkland's Cross-Appeal

     Kirkland contends the trial court erred by denying its

motion for partial summary judgment as to $10.1 million of the

judgment entered in the Wisconsin litigation based on loan

documents signed between the plaintiffs and Johnson Bank before

Kirkland was retained.

     Ordinarily, a trial court's order denying a summary judgment

motion is not appealable as such an order is interlocutory.

Arangold Corp. v. Zehnder, 187 Ill. 2d 341, 357, 718 N.E.2d 191

(1999).   There are circumstances under which such an order may

warrant review; for instance, when the trial court has ruled on

cross-motions for summary judgment "on the same claim."

(Emphasis omitted.)     Arangold, 187 Ill. 2d at 358.

     The plaintiffs here did not file a cross-motion for summary

judgment on the partial damages issue.    Also, the trial court

determined that the release as part of the loan documents signed

between the plaintiffs and Johnson Bank before Kirkland was

retained "was silent as to the waiver of any defenses in the

event the Plaintiffs were sued by Johnson Bank."    Consistent with

the trial court's ruling, we find Kirkland's attempt to apportion

the default judgment amount between the damages proximately

caused by any negligence by Kirkland and the indebtedness of

plaintiffs to Johnson Bank flowing from the loan documents to be
No. 1-06-1432

unamenable to resolution by summary judgment.   Finally, we are

remanding for further proceedings regarding whether a de facto

assignment occurred.   Consequently, we see no purpose in further

addressing Kirkland's cross-appeal and we decline to do so.   See

Price v. Hickory Point Bank & Trust, 362 Ill. App. 3d 1211, 1222,

841 N.E.2d 1084 (2006).

                              CONCLUSION

     For the reasons stated above, we reverse the trial court's

judgment and remand for further proceedings consistent with this

decision.

     Reversed and remanded.

     WOLFSON and R. GORDON, JJ., concur.
         REPORTER OF DECISIONS - ILLINOIS APPELLATE COURT
     _________________________________________________________________

          BRANDON APPAREL GROUP, INC., et al.,
              Plaintiffs-Appellants-Cross-Appellees,

                  v.

          KIRKLAND & ELLIS,
              Defendant-Appellee-Cross-Appellant.

     ________________________________________________________________

                                 No. 1-06-1432

                           Appellate Court of Illinois
                          First District, First Division

                             Filed: April 21, 2008
     _________________________________________________________________

              JUSTICE GARCIA delivered the opinion of the court.

                   WOLFSON and R. GORDON, JJ., concur.
     _________________________________________________________________

                 Appeal from the Circuit Court of Cook County
               Honorable David R. Donnersberger, Judge Presiding
     _________________________________________________________________

For DEFENDANT -        Michael L. Shakman
APPELLEE-              Thomas M. Staunton
CROSS-APPELLANT        Miller Shakman & Beem, LLP
                       180 North LaSalle Street, Suite 3600
                       Chicago, Illinois 60601

For PLAINTIFF -        Michael P. Connelly
APPELLANT-             William E. Snyder
CROSS-APPELLEE         Connelly Roberts & McGiveny, LLC
                       One North Franklin Street, Suite 1200
                       Chicago, Illinois 60606