Supreme Court Summaries

Opinion filed May 3, 2007

No. 102578     Dowling v. Chicago Options Associates, Inc.

            Appellate citation: 365 Ill. App. 3d 89.

            JUSTICE GARMAN delivered the judgment of the court, with opinion.

            Chief Justice Thomas and Justices Fitzgerald and Karmeier concurred in the judgment and opinion.

            Justice Freeman concurred in part and dissented in part, with opinion, joined by Justices Kilbride and Burke.

            In February of 2003, Michael Davis had matters as to which he wanted to retain legal counsel. He needed representation against a judgment creditor, Brian Dowling, the plaintiff here, and he also needed legal assistance to purchase a home in Florida. He entered into a written agreement with Piper Rudnick, placing $100,000 with that law firm in connection with its services on these projects. Dowling, who had successfully sued Davis and Chicago Options Associates for breach of contract, had obtained judgments in 2002 for a total of $817,830.

            Dowling theorized that monies paid to the law firm were the debtor Davis’ assets which he could pursue. A citation to discover assets was issued to Piper in October of 2003. Ultimately, the circuit court of Cook County agreed with Dowling, ordering Piper Rudnick to turn over a total of $133,576, consisting of the $87,576 balance held by Piper Rudnick on October 27, 2003, and also $50,000 withdrawn by Davis’ wife from a Florida account and given to Piper in June of 2004. All of the amounts placed with Piper have now been exhausted to pay legal fees.

            The appellate court upheld the turnover order, but the supreme court, in this appeal, reversed, finding that the funds transferred to the law firm no longer belonged to Davis. This construction is supported by a reading of the parties’ written agreement. The funds were placed in the firm’s general account, rather than a client trust account. The supreme court recognized this type of retainer as an “advance payment retainer.” The court noted that this kind of retainer can be appropriate where a client wishes to hire counsel for representation against judgment creditors. It would be difficult for such a debtor to hire counsel if sums placed with a lawyer remained client property, subject to creditor claims. The same would hold true as to a criminal defendant whose property might be subject to forfeiture. The court announced future standards for the making of such agreements, which should be in writing.

            In connection with the $50,000 payment, the supreme court found that it had been made to the firm at a time when no citation to discover assets was pending and that it was fully applied to legal fees before a second citation was issued.

            The courts below were reversed.