2021 IL App (1st) 200877
Ill. App. Ct.2021Background
- Seiden Law represented Joy Segal on a contingency-fee basis to recover assets seized by the U.S. government; the signed engagement agreement left the contingency percentage blank.
- Seiden Law performed substantive work in federal court but did not obtain any recovery for Segal while retained; Segal discharged the firm in early 2016.
- Seiden Law demanded $98,655.50 for services rendered; Segal refused and the firm sued in state court for quantum meruit and unjust enrichment.
- The circuit court dismissed the amended complaint with prejudice under 735 ILCS 5/2-619, finding the engagement agreement enforceable despite the missing percentage and that an express termination clause (¶6) barred recovery.
- The appellate court reversed and remanded: it held the omission of the contingency percentage violated Rule 1.5(c) and rendered the contingency-fee agreement unenforceable, but the violation did not make the agreement void as a matter of public policy; therefore Seiden Law may pursue quantum meruit and unjust enrichment on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of the contingency-fee agreement with the percentage omitted | Agreement is unenforceable because an essential term (fee %) is missing | Agreement is enforceable; courts may supply reasonable terms | Court: omission violated mandatory Rule 1.5(c) and rendered agreement unenforceable |
| Can Seiden recover under quantum meruit if no enforceable contract exists | Yes — quantum meruit applies where no valid contract; alternatively, discharge terminates contingency agreement so quantum meruit applies | No — the written contract (or its termination clause) precludes recovery | Court: quantum meruit claim may proceed; dismissal with prejudice reversed |
| Does a Rule 1.5(c) violation automatically bar recovery under quasi-contract theories | Plaintiff: even if rule violated, may still recover because issue was an inadvertent oversight | Defendant: compliance with Rule 1.5(c) makes contingency agreements mandatory and enforceable; omission means client owes nothing | Court: Rule 1.5(c) violation made the agreement unenforceable but not so egregious as to bar quantum meruit on public-policy grounds |
| Does unenforceability as a matter of public policy bar recovery in quantum meruit/unjust enrichment | Plaintiff: no public-policy violation here; omission was inadvertent so equitable recovery permitted | Defendant: enforcement of contractual expectations should prevent quasi-contract recovery | Court: because the agreement did not violate public policy, quantum meruit and unjust enrichment claims are available; unjust enrichment claim reversed as well |
Key Cases Cited
- In re Spak, 188 Ill. 2d 53 (1999) (Rule 1.5(c) requires contingent-fee terms in writing; failure raises client-protection concerns)
- In re Estate of Callahan, 144 Ill. 2d 32 (1991) (quantum meruit considers benefit conferred to client in valuing attorney services)
- Academy Chicago Publishers v. Cheever, 144 Ill. 2d 24 (1991) (court may supply reasonable terms where agreement sufficiently definite)
- In re Marriage of Schmidt, 292 Ill. App. 3d 229 (1997) (court can imply a reasonable price when contract silent as to price)
- Hayes Mechanical, Inc. v. First Industrial, L.P., 351 Ill. App. 3d 1 (2004) (quantum meruit available when no valid enforceable contract exists)
- First Nat'l Bank of Springfield v. Malpractice Research, Inc., 179 Ill. 2d 353 (1997) (contracts unenforceable as matter of public policy may bar quantum meruit recovery)
- O'Hara v. Ahlgren, Blumenfeld & Kempster, 127 Ill. 2d 333 (1989) (public-policy invalidation requires contract to tend to injure public welfare)
- Wildman, Harrold, Allen & Dixon v. Gaylord, 317 Ill. App. 3d 590 (2000) (only reasonable attorney fees are allowed; trial court has discretion in fee reasonableness)