The Illinois Appellate Court has affirmed a Cook County trial judge’s order regarding the effect of an attorney’s lien notice sent to a defendant’s attorneys rather than the defendant directly.
Randy Brown was the owner and operator of a Harold’s Chicken Shack in suburban Broadview, Ill., until Jan. 15, 2009. On that date, the building’s roof collapsed, and the restaurant was destroyed.
The building was leased to Brown by Tap Investment LLC. It was managed by Universal Realty Group. Tap and Universal were defendants in this case. Brown sued both companies and their principals. His lawsuit was filed on Aug. 2, 2010, and the complaint was signed by a lawyer with the law firm representing Brown. The law firm was based in Naperville, Ill.
On Dec. 4, 2012, the law firm served notice of an attorney’s lien on Tap and Universal’s attorneys, not on the defendants themselves and was evidenced by a signed certified mail receipt.
In March 2013, the law firm was fired and Brown hired a new law firm. A settlement agreement was signed on Oct. 14, 2013 that provided for a payment of $230,000 once the plaintiffs provided “check payee information, taxpayer identification (numbers) and/or waivers from the original law firm.”
On Dec. 5, 2013, Tap and Universal moved to enforce the settlement. The defendants argued that the lien issue was one between the plaintiff and their former counsel over which the defendant had no control.
Brown filed a pleading asking the court to direct that the check be issued only to Brown and his new lawyers. The former attorneys were permitted to file as an interested party, and they argued that they were owed more than $80,000 in legal fees and that by filing the attorney’s lien they had effectively claimed that portion of the settlement.
Brown argued that the former law firm had no lien because the lien was not served on the defendants in the case, but on their attorneys. In order for the lien to be perfected, the former attorneys were required to serve it on the defendants in the case.
On Jan. 21, 2014, the Circuit Court found that the former lawyers had failed to perfect its attorney’s lien. The court directed that the lien be reduced to zero and dismissed the suit with prejudice. The Circuit Court ordered Tap and Universal to issue the settlement check to Brown and not to his former attorneys.
The appellate court ordered a stay, directing just under $81,000 of the settlement agreement into an escrow account pending the conclusion of the case. On appeal, the former lawyers argued that they could not have served the lien directly on the defendants as it would have violated the rule about attorneys contacting the defendant directly when representation is available. However, the lien statute authorizes such a lien explicitly in that it requires that the lien service be made on the parties against whom the claims are filed. The parties themselves are necessary, not merely their attorneys.
The court emphasized that the attorney’s lien is a “creature of statute” and that therefore this language must be strictly construed. The appellate court found that the former law firm had failed to perfect their lien when they served it on the defense counsel rather than on the defendants themselves and therefore, the trial court’s decision was affirmed and lifted the stay on the last portion of the settlement fund.
Randy Brown v. Universal Realty Group and Tap Investments, LLC, 2014 IL App (1st) 140241-U (Nov. 21, 2014).
Kreisman Law Offices has been handling jury trials, medical malpractice matters, business litigation and commercial litigation for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Justice, Orland Park, Arlington Heights, Elmhurst, Antioch, Tinley Park, Palos Heights, Palos Hills, Round Lake Beach, Deerfield, Schaumburg, Schiller Park, Rosemont, Winnetka, St. Charles and Winfield, Ill.
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