Court Opinion

ID: 4023568
Source: CourtListenerOpinion
Date Created: 2016-08-11 18:05:12.96613+00
Date Added: 2024-06-11T14:37:35.322861
License: Public Domain

2016 IL App (2d) 151148
                                  No. 2-15-1148
                           Opinion filed August 10, 2016
______________________________________________________________________________

                                            IN THE

                              APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

FERRIS, THOMPSON, AND ZWEIG, LTD., ) Appeal from the Circuit Court
                                       ) of Lake County.
      Plaintiff-Appellant,             )
                                       )
v.                                     ) No. 13-L-483
                                       )
ANTHONY ESPOSITO,                      ) Honorable
                                       ) Thomas M. Schippers,
      Defendant-Appellee.              ) Judge, Presiding.
______________________________________________________________________________

          JUSTICE BIRKETT delivered the judgment of the court, with opinion.
          Justices McLaren and Hudson concurred in the judgment and opinion.

                                           OPINION

¶1        Plaintiff, Ferris, Thompson, & Zweig, Ltd., and defendant, Anthony Esposito, had a

longstanding work relationship. During that relationship, plaintiff referred a number of workers’

compensation clients to defendant in return for a portion of the attorney fees defendant received.

Each such referral was evidenced by a written agreement that each of the parties and the clients

signed.    When defendant refused most recently to pay plaintiff pursuant to some of these

agreements, plaintiff sued defendant. Defendant moved to dismiss, claiming that the agreements

did not comply with Rule 1.5(e)(1) of the Illinois Rules of Professional Conduct of 2010 (eff.

Jan. 1, 2010) in that they did not expressly state that the parties assumed “joint financial
2016 IL App (2d) 151148

responsibility” in representing the clients. The trial court granted the motion to dismiss. We

reverse and remand.

¶2      The relationship between the parties began sometime around 2007. In 2012, before this

appeal arose, defendant refused to pay plaintiff pursuant to two referral agreements, and plaintiff

sued defendant in circuit court for breach of contract. Defendant moved to dismiss, arguing that

the Worker’s Compensation Commission, not the circuit court, had jurisdiction over the case.

The trial court denied the motion, defendant appealed, and the trial court’s decision was affirmed

by this court (see Ferris, Thompson, & Zweig, Ltd. v. Esposito, 2014 IL App (2d) 130129) and

our supreme court (Ferris, Thompson, & Zweig Ltd. v. Esposito, 2015 IL 117443) (Ferris I).

¶3      While Ferris I was pending in this court, defendant refused to pay plaintiff pursuant to 10

other referral agreements. As a result, plaintiff filed a 10-count complaint against defendant.

Attached to the complaint were the referral agreements executed in each case.                  These

agreements, which were executed between 2007 and 2010, provided, like the agreements in

Ferris I, that the clients had retained plaintiff and that plaintiff had contracted with defendant for

defendant to pursue the clients’ workers’ compensation cases on their behalf. The agreements

also outlined which services each attorney would provide, and each agreement was signed by

plaintiff, defendant, and the client. Nowhere did the agreements state that the attorneys assumed

“joint financial responsibility” for representing the clients. Ill. R. Prof’l Conduct (2010) R.

1.5(e)(1) (eff. Jan. 1, 2010).

¶4      Defendant moved to dismiss pursuant to section 2-615 of the Code of Civil Procedure

(735 ILCS 5/2-615 (West 2014)), arguing, among other things, that the agreements were

unenforceable. Specifically, defendant claimed that the agreements did not comply with Rule

1.5(e)(1) in that the agreements did not state that plaintiff and defendant agreed to assume “joint

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financial responsibility.” Ill. R. Prof’l Conduct (2010) R. 1.5(e)(1) (eff. Jan. 1, 2010). Plaintiff

responded, claiming, among other things, that Rule 1.5(e), which governs referral agreements,

does not mandate that a written referral agreement contain such an express statement. Ill. R.

Prof’l Conduct (2010) R. 1.5(e) (eff. Jan. 1, 2010).

¶5     The trial court granted defendant’s motion. Plaintiff moved the court to reconsider, the

court denied the motion, and this timely appeal followed.

¶6     At issue in this appeal is whether plaintiff’s complaint should have been dismissed. A

section 2-615 motion to dismiss attacks the legal sufficiency of a pleading. Vernon v. Schuster,

179 Ill. 2d 338, 344 (1997). We review de novo an order granting a motion to dismiss under

section 2-615. Marshall v. Burger King Corp., 222 Ill. 2d 422, 429 (2006).

¶7     Resolving whether defendant’s motion to dismiss should have been granted is

problematic, because, unfortunately, defendant has not filed a brief on appeal. While we may

not reverse summarily on that basis alone, we need not serve as defendant’s advocate or search

the record for a basis upon which to affirm.           First Capitol Mortgage Corp. v. Talandis

Construction Corp., 63 Ill. 2d 128, 133 (1976); Orava v. Plunkett Furniture Co., 297 Ill. App. 3d
635, 636 (1998). As relevant here, unless the record is simple and the issues can be easily

decided without the aid of an appellee’s brief, we may reverse “if the appellant’s brief

demonstrates prima facie reversible error and the contentions of the brief find support in the

record.” Talandis, 63 Ill. 2d at 133; see Orava, 297 Ill. App. 3d at 636. “ ‘Prima facie means,

“at first sight, on the first appearance, on the face of it, so far as can be judged from the first

disclosure; presumably; a fact presumed to be true unless disproved by some evidence to the

contrary.” [Citation.]’ ” Talandis, 63 Ill. 2d at 132 (quoting Harrington v. Hartman, 233 N.E.2d
189, 191 (Ind. App. 1968)).

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¶8     We do not believe that the issue raised in this case can be easily decided. Therefore, we

consider whether plaintiff’s brief establishes prima facie reversible error. We hold that it does.

¶9     In so holding, we must examine Rule 1.5(e). In interpreting Rule 1.5(e), we apply the

same principles that we employ in construing a statute. In re Marriage of Nettleton, 348 Ill.

App. 3d 961, 967 (2004). Our primary goal in construing a rule is to ascertain and give effect to

the drafters’ intent. Id. The surest and most reliable indicator of the drafters’ intent is the

language used in the rule. Macknin v. Macknin, 404 Ill. App. 3d 520, 530 (2010). Accordingly,

when the language in the rule is clear and unambiguous, we must apply it as written, giving the

rule’s language its plain and ordinary meaning. Id. However, if the rule is ambiguous, we may

look beyond the rule’s language to discern the drafters’ intent, and we may consider the purpose

of the rule and the evils that the rule was designed to remedy. People v. King, 349 Ill. App. 3d
877, 879 (2004). Moreover, when a rule is ambiguous, courts may look to the rule’s committee

comments to ascertain the drafters’ intent. In re Estate of Burd, 354 Ill. App. 3d 434, 437

(2004). Regardless, whenever possible, we will avoid a construction that leads to absurd or

unjust results, and we will presume that the drafters intended a sensible result rather than an

absurd one. In re Marriage of Nettleton, 348 Ill. App. 3d at 967. Like a ruling on a motion to

dismiss, we review de novo the construction of a rule. See In re Marriage of Webb, 333 Ill. App.
3d 1104, 1108 (2002).

¶ 10   Rule 1.5(e) provides:

       “A division of a fee between lawyers who are not in the same firm may be made only if:

                        (1) the division is in proportion to the services performed by each lawyer,

               or if the primary service performed by one lawyer is the referral of the client to

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               another lawyer and each lawyer assumes joint financial responsibility for the

               representation;

                       (2) the client agrees to the arrangement, including the share each lawyer

               will receive, and the agreement is confirmed in writing; and

                       (3) the total fee is reasonable.” (Emphases added.) Ill. R. Prof’l Conduct

               (2010) R. 1.5(e) (eff. Jan. 1, 2010).

¶ 11   In ascertaining the meaning of Rule 1.5(e), we note that, in order for any fee-sharing

agreement to be enforceable, the attorneys involved in the agreement must strictly comply with

Rule 1.5(e). See Donald W. Fohrman & Associates, Ltd. v. Mark D. Alberts, P.C., 2014 IL App

(1st) 123351, ¶ 41. For the purposes of this appeal, the question is whether strict compliance

with Rule 1.5(e) occurs when a written referral agreement does not expressly state that the

attorneys assume “joint financial responsibility” for representing the client.        Ill. R. Prof’l

Conduct (2010) R. 1.5(e)(1) (eff. Jan. 1, 2010).

¶ 12   At first sight, as plaintiff argues, the unambiguous language of Rule 1.5(e) does not

provide that a written referral agreement must contain an express statement that the lawyers

assume “joint financial responsibility” for representing the client. Id. Rather, Rule 1.5(e)(2),

which mentions a writing, states that the writing must include only the client’s agreement to the

“arrangement, including the share each lawyer will receive.” Ill. R. Prof’l Conduct (2010) R.

1.5(e)(2) (eff. Jan. 1, 2010). “[T]he share each lawyer will receive” (id.) seems to require the

writing to show that “the division [of fees] is in proportion to the services performed by each

lawyer,” which is mentioned in Rule 1.5(e)(1) (Ill. R. Prof’l Conduct (2010) R. 1.5(e)(1) (eff.

Jan. 1, 2010)). If the drafters had wanted the writing to expressly provide also that the attorneys

assume “joint financial responsibility,” as is provided also in Rule 1.5(e)(1) (id.), they could have

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so stated in Rule 1.5(e)(2). Reading into Rule 1.5(e)(2) a requirement that the writing must

expressly provide that the lawyers assume “joint financial responsibility” would violate a

cardinal rule of construction. See State Farm Mutual Automobile Insurance Co. v. Hayek, 349
Ill. App. 3d 890, 892 (2004) (in construing a court rule, “courts may not alter the rule or read into

it exceptions or limitations, no matter how beneficial or desirable the result”).

¶ 13   Moreover, even if the language of Rule 1.5(e) is seen as ambiguous, we believe that the

last-antecedent rule, which should be employed only when the language is ambiguous, helps to

illustrate what is arguably the proper construction of Rule 1.5(e). Pursuant to the last-antecedent

rule, “ ‘relative or qualifying words, phrases, or clauses are applied to the words or phrases or

clauses immediately preceding them and are not construed as extending to or including other

words, phrases, or clauses more remote,’ ” unless the language requires such an extension.

Department of Transportation v. Singh, 393 Ill. App. 3d 458, 465 (2009) (quoting In re E.B., 231
Ill. 2d 459, 467 (2008)). Applying that rule here shows that the only thing that the written

referral agreement must contain is an express statement that the client agrees to the referral and

the proportion of attorney fees that each attorney involved in the referral agreement will receive.

¶ 14   The committee comments to the rule seem to support this conclusion. The comments

provide that “[j]oint financial responsibility for the representation entails financial responsibility

for the representation as if the lawyers were associated in a general partnership.” Ill. R. Prof’l

Conduct (2010) Rule 1.5(e) cmt. 7 (eff. Jan. 1, 2010). That is, like lawyers in a general

partnership, the attorneys involved in a referral agreement agree that, if one of them is sued by

the client for legal malpractice, the other attorney is also liable. See In re Storment, 203 Ill. 2d
378, 392 (2002) (concluding that the term “[same] legal responsibility” (internal quotation marks

omitted) in a prior version of Rule 1.5(e) “indicates that the rule is concerned with the financial

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responsibility of the referring lawyer for potential malpractice actions against the receiving

lawyer”); see also 805 ILCS 206/305(a) (West 2014) (“A partnership is liable for loss or injury

caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other

actionable conduct, of a partner acting in the ordinary course of business of the partnership or

with authority of the partnership.”). This “joint financial responsibility” does not concern the

client and would apply regardless of whether it was provided for in the written referral

agreement. Accordingly, it makes sense that the term “joint financial responsibility” would not

need to be expressly included for in the written referral agreement the attorneys have with the

client.

¶ 15      Finally, a review of the history of Rule 1.5(e) suggests that the written referral agreement

need not contain an express statement that the attorneys agree to assume “joint financial

responsibility” in representing the client. Rule 1.5(e) arose from section 2-107(a) of the Illinois

Code of Professional Responsibility (Ill. S. Ct. Code of Prof’l Res., canon 2, R. 2-107 (eff. July

1, 1980)). That section provided in part:

                 “(a) A lawyer shall not divide a fee for legal services with another lawyer who is

          not a partner in or associate of his law firm, unless

                         (1) the client consents in a writing signed by him to employment of the

                 other lawyer, which writing shall fully disclose (a) that a division of fees will be

                 made, (b) the basis upon which the division will be made, including the economic

                 benefit to be received by the other lawyer as a result of the division, and (c) the

                 responsibility to be assumed by the other lawyer for performance of the legal

                 services in question;

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2016 IL App (2d) 151148

                      (2) the division is made in proportion to the services performed and

              responsibility assumed by each, except where the primary service performed by

              one lawyer is the referral of the client to another lawyer and (a) the receiving

              lawyer fully discloses that the referring lawyer has received or will receive

              economic benefit from the referral and the extent and basis of such economic

              benefit and (b) the referring lawyer agrees to assume the same legal

              responsibility for the performance of the services in question as if he were a

              partner of the receiving lawyer; and

                      (3) the total fee of the lawyers does not exceed reasonable compensation

              for all legal services they rendered to the client.” (Emphases added.) Id.

¶ 16   Thereafter, in August 1990, the law was modified. The modification provided:

              “(f) Except as provided in Rule 1.5(j), a lawyer shall not divide a fee for legal

       services with another lawyer who is not in the same firm, unless the client consents to

       employment of the other lawyer by signing a writing which discloses:

                      (1) that a division of fees will be made;

                      (2) the basis upon which the division will be made, including the

              economic benefit to be received by the other lawyer as a result of the division;

              and

                      (3) the responsibility to be assumed by the other lawyer for performance

              of the legal services in question.

              (g) A division of fees shall be made in proportion to the services performed and

       responsibility assumed by each lawyer, except where the primary service performed is

       the referral of the client to another lawyer and

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                         (1) the receiving lawyer discloses that the referring lawyer has received or

               will receive economic benefit from the referral and the extent and basis of such

               economic benefit, and

                         (2) the referring lawyer agrees to assume the same legal responsibility for

               the performance of the services in question as would a partner of the receiving

               lawyer.

               (h) The total fee of the lawyers shall be reasonable.” (Emphases added.) Ill. R.

       Prof’l Conduct (1990) R. 1.5(f)-(h) (eff. Aug. 1, 1990).

¶ 17   An examination of the history of Rule 1.5(e) reveals that, from the beginning, referral

agreements had to be in writing. However, nothing in any of the prior versions of Rule 1.5(e)

indicated that the attorneys involved in the referral agreement must expressly state that they will

assume “joint financial responsibility” for representing the client. Given that the last-antecedent

rule mandates that the term “writing” modify the clause immediately preceding it, and as the

term “joint financial responsibility” does not immediately precede the term “writing” in any of

the variations of Rule 1.5(e), it is arguable that the written referral agreement need not contain an

express statement that the attorneys involved in the referral agreement assume “joint financial

responsibility” for representing the client. See Department of Transportation, 393 Ill. App. 3d at

465.

¶ 18   The history of Rule 1.5(e) is also relevant for another reason. In contrast to what plaintiff

suggests, a prior version of the rule might apply here. Given that the referral agreements were

executed between 2007 and 2010, it might well be that the August 1990 version applies to all the

agreements except the ones executed in 2010. Compare Paul B. Episcope, Ltd. v. Law Offices of

Campbell & Di Vincenzo, 373 Ill. App. 3d 384, 394 (2007) (a “supreme court rule is applied

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retroactively, even though it was different from its predecessor rule”), with Naughton v. Pfaff,

2016 IL App (2d) 150360, ¶¶ 58-59 (discussing when supreme court rules apply retroactively).

However, that said, we observe that, regardless of which version of Rule 1.5(e) applies, it

appears that a written referral agreement might not need to contain an express statement that the

attorneys involved assume “joint financial responsibility” for representing the client.

¶ 19   In reaching our conclusion, we recognize that one court, in addressing a different issue

under Rule 1.5(e), determined that a written referral agreement must contain an express

statement that the attorneys will assume “joint financial responsibility.” See Fohram, 2014 IL

App (1st) 123351, ¶ 55 (“[W]e would not find there was substantial compliance with Rule 1.5(e)

in this case where the attorney-client agreements did not inform the clients of the fee-sharing

arrangement based on referrals, the exact split in fees, and that [the attorneys] had assumed equal

financial responsibility.”). The trial court here relied on Fohram in finding that the written

referral agreements executed in this case were unenforceable.

¶ 20   Given Fohram, we see how an argument could be made that the term “joint financial

responsibility” must be contained in a written referral agreement. However, as outlined above,

we believe that plaintiff has presented a prima facie case of error.         Because plaintiff has

presented a prima facie error on this point, we will not address the other issues it raises on appeal

in support of its claim that the trial court should have denied defendant’s motion to dismiss.

¶ 21   Because we find that plaintiff’s brief on appeal demonstrates prima facie error, we

reverse the judgment of the circuit court of Lake County and remand the case.

¶ 22   Reversed and remanded.

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