Hannafan and Hannafan v. Bloom
2011 IL App (1st) 110722
Ill. App. Ct.2011Background
- Hannafan obtained a $52,190.23 judgment against Bloom and sought turnover of $25,000 Bloom paid to Cotsirilos under an advance payment retainer.
- The advance payment retainer agreement, signed in December 2007, provided funds immediately belonged to the firm and would not be placed in a client trust account.
- In December 2008, $25,000 of the retainer was applied to Bloom’s unpaid balance; Hannafan moved to turn over the remaining funds as security for its judgment.
- Cotsirilos asserted an adverse claim, arguing the funds were Bloom’s advance payment retainer property, not subject to turnover.
- The trial court held the agreement substantially complied with Dowling v. Chicago Options Associates, and granted the adverse claim; Hannafan appealed.
- The court analyzed whether advance payment retainers require strict Dowling compliance or are governed by the parties’ intent and the overall contract language.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Bloom–Cotsirilos agreement substantially comply with Dowling? | Hannafan: strict Dowling elements required; otherwise security retainer. | Cotsirilos: intent to use an advance payment retainer is clear; substantial compliance suffices. | Yes; substantial compliance, with the parties’ intent controlling. |
| Does Rule 1.15(c) require strict Dowling compliance for advance payment retainers here? | Hannafan: Rule 1.15(c) mandates Dowling elements; noncompliance means security retainer. | Cotsirilos: rule not applicable retroactively and not binding here; no waiver to strict form. | No; Rule 1.15(c) not binding on these facts and not required to override intent. |
| Was the $25,000 withdrawal for services a modification of the retainer or a breach of the agreement? | Hannafan: treated as security retainer portion; remaining funds should be turnoverable. | Cotsirilos: modification preserved overall retainer structure; not a change in character of funds. | Modification recognized; overall advance payment retainer terms remained intact. |
Key Cases Cited
- Dowling v. Chicago Options Assocs., Inc., 226 Ill. 2d 277 (Ill. 2007) (defines advance payment retainer and guides required protections; intent governs)
- In re Doyle, 144 Ill. 2d 451 (Ill. 1991) (contract interpretation principle: ascertain intent from language read as a whole)
- Schwinder v. Austin Bank of Chicago, 348 Ill. App. 3d 461 (Ill. App. 2004) (modification of contract requires valid offer, acceptance and consideration)