However, Clients Had To Reimburse Certain Hard Costs To Attorneys.
Although we generally do not post on out-of-state cases, Vandenberg v. RQM, LLC, No. 10 L 003188, 2020 Ill. App. (1st) 190544 (Ill. App. June 26, 2020) is a sobering reminder of what contingency attorneys must do to obtain substantial fees where a settlement is obtained under suspicious circumstances and the lawyers then fail to support a quantum meruit recovery with substantiating evidence.
Boiled down to essential facts, plaintiffs sued a deep pocket defendant, with plaintiffs’ counsel doing so under a contingency agreement. Before a jury verdict was obtained during trial, the defense offered a $25 million settlement, but there were suspicious circumstances showing the plaintiff’s main attorney obtained “insider” information from a court clerk that a defense verdict might be upcoming so as to prompt an acceptance of the offer. After a lot of adversarial hearings and an appeal, the settlement stood. However, a lower court eventually awarded zero dollars to plaintiffs’ counsel under a quantum meruit theory, although the appellate court did allow recovery of some hard litigation expenses.
The “zero dollars” award was affirmed. The overriding issue was that plaintiff’s counsel relied solely on the contingency arrangement and provided no support for its work effort under a quantum meruit recovery. Huge, huge mistake—this lack of evidence cemented the lower court’s decision to award nada. Consistent with the California case of Sheppard, Mullin et al. v. J-M Manufacturing Co., Inc., 6 Cal.5th 59 (2018), Illinois case law authority does not prevent quantum meruit recovery for attorneys engaging in ethical violations unless they are so egregious as to require forfeiture. However, the nature of the ethical breaches here was a factor to weigh in deciding if zero dollars was the proper remedy. But the failure to substantiate the fees was the real dagger in fee recovery in this particular case—a bitter pill for plaintiffs’ counsel to swallow, as they had to.