2019 IL App (1st) 181392
Ill. App. Ct.2019Background
- Plaintiffs Meredith and Jason Kroot sued defendants Shu B. Chan and Yvonne Lau over the sale of a Chicago residence, alleging violations of the Residential Real Property Disclosure Act (Act) and common-law fraud.
- Trial court found Chan liable under the Act, found both defendants liable for common-law fraud, and entered judgment for plaintiffs; Lau was found not liable under the Act.
- On initial fee ruling, the appellate court vacated the attorney-fee award and remanded for an evidentiary hearing on fees and costs.
- On remand the trial court entered a single judgment of $67,336.76 for plaintiffs against both defendants, of which $58,712.50 was attributed to attorney fees and $8,624.26 to costs/expenses.
- At the remand hearing plaintiffs’ counsel (from GWC) testified but produced no contemporaneous time records or invoices admitted into evidence; the only invoice-like document was neither admitted nor supported by admissible affidavits. One plaintiff is an attorney at GWC and plaintiffs did not pay any fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether attorney fees may be awarded under §55 of the Act when plaintiff did not actually incur or pay fees | Kroot: §55 allows award of "reasonable attorney fees" and market-rate should apply | Chan/Lau: §55 limits awards to fees "incurred by" prevailing party; no fees were incurred or proved | Court: §55 must be strictly construed; “incurred” limits recoverable fees to those actually incurred; plaintiffs failed to prove fees were incurred, so fee award reversed |
| Whether plaintiffs proved they actually incurred attorney fees | Kroot: affidavits and amended invoice show fees billed | Chan/Lau: affidavits/invoice were hearsay and were not in evidence; no invoices, payments, or agreements proven | Court: affidavits were hearsay and not admitted; no evidence of billing, payment, or agreement — plaintiffs failed burden |
| Whether plaintiffs proved reasonableness and amount of attorney fees | Kroot: GWC counsel testimony and invoice estimates established time and rates | Chan/Lau: counsel testimony was speculative; no contemporaneous time records; estimates insufficient | Court: testimony was speculative/estimates without contemporaneous records; reasonableness and amount not proven; fee award reversed |
| Whether costs/expenses award ($8,624.26) should be disturbed | Plaintiffs: costs/expenses supported (not contested on appeal) | Defendants: did not challenge costs on appeal | Court: Costs/expenses portion not challenged and thus affirmed |
Key Cases Cited
- In re Detention of Powell, 217 Ill. 2d 123 (2005) (statutory construction focuses on legislative intent and plain language)
- Sandholm v. Kuecker, 2012 IL 111443 (2012) (fee-shifting statutes must be strictly construed)
- Palm v. 2800 Lake Shore Drive Condominium Ass’n, 2013 IL 110505 (2013) ("reasonable attorney fees" generally interpreted using prevailing market rate)
- In re Detention of Lieberman, 201 Ill. 2d 300 (2002) (de novo review applies to statutory construction)
- Flynn v. Kucharski, 59 Ill. 2d 61 (1974) (contingent-fee practice does not excuse failure to keep time records)
- House of Vision, Inc. v. Hiyane, 42 Ill. 2d 45 (1969) (absent statute, attorney fees are not recoverable at common law)
- Schorsch v. Fireside Chrysler-Plymouth, Mazda, Inc., 286 Ill. App. 3d 1028 (1997) (burden on party seeking fees to prove entitlement)