King Koil Licensing Co. v. Harris
84 N.E.3d 457
Ill. App. Ct.2017Background
- King Koil licensed sleep-product designs; royalties/marketing fees were based on licensees’ sales. David Roberts (King Koil president) negotiated terms; Roger Harris (attorney) drafted agreements and routinely sent both red-lined and clean drafts to Roberts.
- Blue Bell, King Koil’s largest U.S. licensee, had long‑term low‑royalty contracts; renewal negotiations lasted 2008–2009 and culminated in a November 3, 2009 agreement effective January 1, 2010.
- An October/April 2009 drafting change altered the contract’s definition of “Total Annual Sales” to exclude private‑label sales (by referring only to “King Koil Proprietary Sleep Products”), which reduced royalties due on private‑label sales.
- Roberts later claimed he did not agree to that change and asserted Harris had inserted it (Harris blamed a commingling with a White Dove form). Harris described the change as a “mistake” and offered to prosecute Blue Bell (and at one point offered to represent King Koil free of charge), then acknowledged King Koil might have a malpractice claim against him.
- King Koil sued Harris and his firm for legal malpractice. At trial, competing experts testified about breach of the standard of care and proximate causation; the jury returned a general verdict for defendants. Trial judge excluded certain documents as work product and excluded offers of free representation under Ill. R. Evid. 408.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the jury verdict was against the manifest weight of the evidence | Harris admitted the change was a "mistake" and thus breached the standard of care; that breach proximately caused King Koil’s damages | Even if Harris made a mistake, he met the standard of care; Roberts had multiple opportunities to catch the change and there was no proof Blue Bell would have agreed to higher royalties/marketing fees | Affirmed: jury verdict not against manifest weight. Evidence supported finding defendants met standard or lack of proximate cause (or both). |
| Admissibility under Rule 408 of Harris’s offers to represent King Koil free of charge | Offers were evidence of defendants’ admissions/liability and refusal to accept mitigation defenses was relevant | Offers were compromise/settlement communications made during an existing dispute and thus inadmissible under Rule 408 | Affirmed exclusion: communications were offers to compromise and properly excluded. |
| Privilege: whether certain emails/notes must be produced (attorney‑client or work product) | Documents should be produced; no sufficient showing they are protected work product or privileged communications | Documents reflect defense litigation plans and mental impressions and are protected work product; produced in camera for review | Affirmed withholding: documents properly withheld as work product; any error would be harmless. |
| Use of special jury interrogatories | Interrogatories were improper and conflicted with proximate cause instruction; prejudiced King Koil | Interrogatories were permissible; court allowed redrafting and plaintiff submitted its own interrogatories | No reversible error: plaintiff accepted and submitted redrafted interrogatories; jury verdict for defendants made interrogatories moot. |
Key Cases Cited
- Snelson v. Kamm, 204 Ill. 2d 1 (Ill. 2003) (standard for reversing a jury verdict as against manifest weight of the evidence)
- Wolfe v. Wolf, 375 Ill. App. 3d 702 (Ill. App. 2007) (elements of legal malpractice claim)
- Fox v. Seiden, 2016 IL App (1st) 141984 (Ill. App. 2016) (standard for attorney competence: reasonable, well‑qualified attorney)
- Control Solutions, LLC v. Elecsys, 2014 IL App (2d) 120251 (Ill. App. 2014) (abuse of discretion review for Rule 408 evidentiary rulings and factors for Rule 408 application)
- Green v. Papa, 2014 IL App (5th) 130029 (Ill. App. 2014) (proximate cause in malpractice requires proof that but for attorney’s negligence plaintiff would have succeeded)
- Maple v. Gustafson, 151 Ill. 2d 445 (Ill. 1992) (consequences of general jury verdicts and inability to determine basis of jury decision)
- Knauerhaze v. Nelson, 361 Ill. App. 3d 538 (Ill. App. 2005) (withdrawn or amended pleading may be admissible as evidentiary admission subject to admissibility rules)
- People v. Sifuentes, 248 Ill. App. 3d 248 (Ill. App. 1993) (inadmissible confession does not become admissible because an expert relied on it)
- Fox Moraine, LLC v. United City of Yorkville, 2011 IL App (2d) 100017 (Ill. App. 2011) (review of privilege rulings for harmless error)