{ "id": 2679101, "name": "JOSEPH E. McHUGH, Plaintiff-Appellant, v. RICHARD OLSEN, Indiv. and as a General Partner of Farwell Partners Limited Partnership, et al., Defendants-Appellees", "name_abbreviation": "McHugh v. Olsen", "decision_date": "1989-09-28", "docket_number": "No. 1\u201488\u20141221", "first_page": "508", "last_page": "516", "citations": [ { "type": "official", "cite": "189 Ill. App. 3d 508" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "436 N.E.2d 645", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "106 Ill. App. 3d 1046", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3035984 ], "pin_cites": [ { "page": "1053" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/106/1046-01" ] }, { "cite": "477 N.E.2d 513", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "132 Ill. App. 3d 260", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3443240 ], "pin_cites": [ { "page": "267" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/132/0260-01" ] }, { "cite": "411 N.E.2d 947", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "89 Ill. App. 3d 273", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 5537834 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/89/0273-01" ] }, { "cite": "429 N.E.2d 594", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "102 Ill. App. 3d 38", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3077670 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/102/0038-01" ] }, { "cite": "508 N.E.2d 1102", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "155 Ill. App. 3d 1000", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3465829 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/155/1000-01" ] }, { "cite": "507 N.E.2d 129", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1987, "opinion_index": 0 }, { "cite": "154 Ill. App. 3d 547", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3647233 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/ill-app-3d/154/0547-01" ] }, { "cite": "484 N.E.2d 890", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 3, "year": 1985, "opinion_index": 0 }, { "cite": "137 Ill. App. 3d 406", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3639797 ], "weight": 5, "year": 1985, "pin_cites": [ { "page": "409" }, { "page": "411" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/137/0406-01" ] }, { "cite": "410 N.E.2d 303", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "88 Ill. App. 3d 210", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3174735 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/ill-app-3d/88/0210-01" ] } ], "analysis": { "cardinality": 678, "char_count": 17213, "ocr_confidence": 0.764, "pagerank": { "raw": 1.9704384674996376e-07, "percentile": 0.7392427126060245 }, "sha256": "c2acfc5acdbbf6e294bfac62713bde127f98f5beff73a33fe3fa29edea766209", "simhash": "1:9b6d5da84f885cf6", "word_count": 2772 }, "last_updated": "2023-07-14T20:25:51.894502+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "JOSEPH E. McHUGH, Plaintiff-Appellant, v. RICHARD OLSEN, Indiv. and as a General Partner of Farwell Partners Limited Partnership, et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE McMORROW\ndelivered the opinion of the court:\nPlaintiff appeals from an order of the circuit court awarding him $4,100 plus costs as compensation for legal services he rendered to the various named defendants, both jointly and severally (hereinafter Olsen). Plaintiff contends that the trial court erred in not awarding him the $10,000 fee he requested, based either on a quantum meruit theory or an account stated theory.\nThis cause of action is based upon services performed in connection with three real estate transactions occurring between November 1985 and January 1986. It is undisputed that plaintiff, who had been practicing law for 25 years and concentrated his practice in real estate acquisitions, syndications and tax shelter investments, performed all the legal services for Olsen and the limited partnerships he formed in connection with these three real estate transactions. The dispute arises over the value of these services. Both parties agree that there was no express written contract for payment and that plaintiff agreed to discount the cost of his services because Olsen had been a friend of plaintiff\u2019s son. However, they disagreed about the terms of the informal agreement for payment.\nOlsen testified that he first sought plaintiff\u2019s legal services in 1983 and at that time plaintiff indicated that he would charge no more than $100 per hour. Plaintiff provided legal services involving real estate transactions for Olsen on at least two occasions prior to the three transactions which are the subject of the case at bar. On those two occasions plaintiff sent Olsen a bill for his services upon the completion of that work. The bills stated the number of hours spent in connection with the work performed and the total amount due. According to these figures plaintiff\u2019s services were billed at a rate of $75 per hour on the first transaction and $88 per hour on the second transaction. Olsen paid these accounts in full.\nOlsen further testified that when he contacted plaintiff in October 1985 in regard to the three real estate transactions which are the subject matter of this suit, he believed that the informal agreement for billing at about $100 per hour would still be honored. Thus, when he, in March 1986, received plaintiff\u2019s bill which had no accounting for time spent, he was of the opinion that the charge was unreasonable and refused to pay it.\nPlaintiff, however, testified that he never proposed to Olsen an hourly rate for services. Instead, plaintiff testified that it had always been his policy to charge Olsen on the basis of the value of his services, and that he calculated the value of his services by factoring in his time spent, the complexity of the issues involved, and the typical costs of maintaining his practice. Plaintiff argues that he utilized this same method of billing when he billed Olsen $10,000 for the legal services he performed in connection with the three real estate transactions involved here. Specifically, he argues that he engaged in extensive negotiations with a savings and loan association regarding its loan commitment and that he prepared and reviewed numerous documents, including loan, wrap-around mortgage, assignment, escrow, and partnership agreement documents. Plaintiff states that the three transactions handled by him for Olsen involved real property valued at over $1.7 million. He also argues that his $10,000 fee, which took into account a 40% discount, was the reasonable value of his services based upon the time spent on these matters, the complexity of the transactions and the experience and legal knowledge that was necessary to successfully complete these transactions.\nIn an attempt to establish the value of his services, plaintiff introduced into evidence extensive testimony regarding the transactions and the services he performed. He established that two of the transactions involved the purchase of property by limited partnerships, while the third transaction involved the refinancing of property previously purchased by Olsen.\nWith regard to the first transaction, Olsen, the sole general partner, sought investors to form a limited partnership to purchase rental property at 1519-27 West Harwell in Chicago. After obtaining a commitment for financing through a lender, Olsen sought plaintiff\u2019s services to draft the limited partnership agreement and prepare or review all documents necessary to close the purchase of the property in the name of the limited partnership, Harwell Partnership. Plaintiff performed all the necessary legal services, and the closing on this property took place in November 1985.\nThe second transaction involved the refinancing of rental property located at 1346-66 West Jarvis in Chicago. Olsen had previously purchased the property and requested plaintiff\u2019s advice in reviewing the documents necessary for refinancing the property with a different lender.\nThe third transaction involved the purchase of another rental property, 1500-04 West Farwell, by another group of investors organized by Olsen to form a second limited partnership. In this case Olsen already owned the property but wished to transfer ownership of the property to the newly formed limited partnership, of which he was the sole general partner. The second and third transactions, which were originally scheduled to close in December 1985, did not actually close until January 1986 due to certain documentation errors.\nAfter all the closings on these transactions were successfully completed and after plaintiff prepared and delivered to Olsen the \u201cclosing books,\u201d which contained copies of all the pertinent documents in connection with these transactions, plaintiff forwarded to Olsen invoices for his legal services rendered. Plaintiff established that the first set of billing statements were sent to Olsen in March 1986, with monthly billings thereafter. These statements merely indicated that the amount due for legal services rendered in connection with the property at 1519-27 West Farwell was $3,500, the amount due for legal services rendered in connection with 1346-66 West Jarvis was $3,000 and the amount due for legal services rendered in connection with the property at 1500-04 West Farwell was $3,500. Plaintiff\u2019s statements did not provide a breakdown of the hours expended on the performance of legal services for any of the three real estate matters.\nPlaintiff further testified that in August 1986, after Olsen repeatedly disregarded his requests for payment, he telephoned Olsen regarding the unpaid bills. At this time Olsen, for the first time, related his dissatisfaction with the amounts being requested by plaintiff. Plaintiff then provided Olsen with an oral explanation of his computation of the fees, and this explanation was accepted by Olsen. According to plaintiff, Olsen agreed to pay him a down payment of $3,000 and the balance in monthly installments. As evidence of this arrangement plaintiff submitted to the court a copy of a letter sent to Olsen in November 1986, which outlined the above arrangement for payment and also indicated that Olsen had continued to avoid fulfilling his obligation to pay for the services rendered.\nOlsen\u2019s testimony with respect to the August telephone conversation contradicted plaintiff\u2019s evidence. Although Olsen admitted that a telephone conversation took place in August 1986, he denied that he agreed to pay plaintiff the full $10,000 fee as requested. Instead, Olsen testified that he offered plaintiff $3,000 as payment in full. Olsen also admitted that he never attempted to pay plaintiff any amount for the legal services that were rendered.\nIn addition to the \u201cclosing books,\u201d the copies of the invoices for payment and plaintiff\u2019s letter to Olsen, the only other physical evidence admitted at trial were plaintiff\u2019s time slips, which indicated that in November and December 1985 plaintiff spent a total of 41 billable hours in connection with the three real estate transactions involved here. Plaintiff, however, maintained that his records were incomplete. He testified that he had spent in excess of 75 hours on the work he performed at the request of Olsen. He also argued that the time he actually spent did not reflect the true value of the services rendered, due to the complexity of the issues and the amount of legal sophistication that was necessary to properly complete these transactions. Olsen, on the other hand, challenged the 41 hours, arguing that the time slips were incomplete and duplicative.\nTo establish the true value of his services, plaintiff presented attorney Edward Puzzo as an expert witness. Puzzo began the practice of law in 1980 and concentrated his practice in the area of real estate law. He testified that, based upon his review of the \u201cclosing books,\u201d the complexity of the three real estate transactions involved in the case at bar required the legal services of an experienced professional and that the cost of such services in the community would range between $5,000 and $10,000 for each transaction, or a total amount of between $15,000 and $30,000. He also testified that he believed plaintiff\u2019s fee of $10,000 was reasonable, although he admitted that he had only inspected the documents contained in the \u201cclosing books,\u201d and that he did not know whether plaintiff was required to draft any of these documents or merely review them. Significantly, he testified that he had no knowledge of the amount of time plaintiff actually spent in relation to the three transactions.\nAfter closing arguments, the trial court rendered its judgment in favor of plaintiff in the amount of $4,100 plus costs based on the theory of quantum meruit. Plaintiff appeals, contending that the trial court erred by failing to find that the actual value of his services was $10,000. In the alternative, plaintiff argues that the trial court erred by failing to find that there had been an account stated in the amount of $10,000.\nAn attorney who renders professional services has the right to be compensated for those services. (Greenbaum & Browne, Ltd. v. Braun (1980), 88 Ill. App. 3d 210, 410 N.E.2d 303.) Typically, an express or implied contract for services is the basis for the fee charged. When, however, as in this case, a representation agreement is undisputed, but the evidence reveals that there was no \u201cmeeting of the minds\u201d with regard to the fee arrangement, the trial court must determine a reasonable fee to be awarded. (In re Estate of Healy (1985), 137 Ill. App. 3d 406, 484 N.E.2d 890.) The burden of proof is on the attorney to establish the amount of compensation rightfully due for the services. In re Estate of Healy (1985), 137 Ill. App. 3d 406, 484 N.E.2d 890; Greenbaum & Browne, Ltd. v. Braun (1980), 88 Ill. App. 3d 210, 410 N.E.2d 303.\nThe trial court may determine a proper fee award after considering such factors as the time and labor required, the novelty and difficulty of the issues, the skill required, the preclusion of other employment necessary to accept the case, the customary fee charged in the community, the amount of money involved in the case, the results obtained and the attorney\u2019s reputation, experience and ability. (In re Estate of Healy, 137 Ill. App. 3d at 409; Mireles v. Indiana Harbor Belt R.R. Corp. (1987), 154 Ill. App. 3d 547, 507 N.E.2d 129; Simon v. Auler (1987), 155 Ill. App. 3d 1000, 508 N.E.2d 1102.) The time spent on a case by an attorney is an important factor to be considered in the determination of the fee award. (In re Marriage of Ransom (1981), 102 Ill. App. 3d 38, 429 N.E.2d 594.) Time records, although important, are not conclusive and should be scrutinized to determine whether they represent a reasonable expenditure of time in the context of the work performed. (In re Marriage of Jacobson (1980), 89 Ill. App. 3d 273, 411 N.E.2d 947.) The trial judge\u2019s experience and knowledge may be relied upon in determining what constitutes a proper expenditure of time, and the trial court\u2019s award of fees is not to be disturbed unless contrary to the manifest weight of the evidence. In re Estate of Healy, 137 Ill. App. 3d at 411.\nIn the case at bar it is undisputed that plaintiff is an attorney experienced in real estate law who rendered legal services to Olsen upon request, and that as a result of plaintiff\u2019s services, three real estate transactions were successfully completed. It is also undisputed that two of these transactions involved the formation of limited partnerships and the acquisition of property in the name of these newly formed partnerships. The complexity of the work required a skilled and experienced attorney for proper completion. It appears that plaintiff\u2019s legal work was satisfactorily completed, although there was minor complaint regarding the delay in the closings on the second and third transactions. Therefore, the major dispute before the trial court was the value of plaintiff\u2019s services.\nA review of the record persuades us that the trial court resolved this issue by determining that plaintiff was entitled to a billing rate of $100 per hour, multiplied by the number of hours that plaintiff spent on these matters, as reflected in his time records. Plaintiff testified that his records were incomplete, and the time spent on Olsen\u2019s matters exceeded the time recorded. He argues that the value of his services, irrespective of the number of hours actually expended, should be the standard used to determine a proper fee award. In support of this argument plaintiff\u2019s expert witness, Edward Puzzo, an attorney, testified that it would be customary within the community to charge between $15,000 and $30,000 for the legal services necessary to complete the type of real estate transactions involved in the case at bar. However, since Puzzo testified that he did not know whether plaintiff drafted or merely reviewed the documents examined by Puzzo, and that he had no knowledge of the amount of time plaintiff expended in the performance of his services in connection with the three real estate transactions, the trial court was not bound to accept Puzzo\u2019s testimony in its determination of what constituted a reasonable fee. (In re Estate of Healy, 137 Ill. App. 3d 406, 484 N.E.2d 890.) The trial court could have reasonably determined that the amount of time reflected in plaintiff\u2019s time records was a more appropriate basis for assessing fair compensation.\nBased upon plaintiff\u2019s previous business dealings with Olsen, for which plaintiff charged Olsen less than $100 per hour, we are unable to find that the trial court abused its discretion when it determined that $100 was an adequate hourly billing rate. We are also unable to find that the trial court abused its discretion when it premised its fee award on the recorded time spent on the transactions by plaintiff and a billing rate of $100 per hour. Consequently, we do not find that the $4,100 fee award was against the manifest weight of the evidence.\nWe reject plaintiff\u2019s argument that an account stated was created by Olsen\u2019s alleged acquiescence to plaintiff\u2019s explanation of the charges and Olsen\u2019s continued inaction. \u201cAn account stated has been defined as an agreement between parties who have had previous transactions that the account representing those transactions is true and that the balance stated is correct, together with a promise, express or implied, for the payment of such balance.\u201d (W.E. Erickson Construction, Inc. v. Congress-Kenilworth Corp. (1985), 132 Ill. App. 3d 260, 267, 477 N.E.2d 513.) Plaintiff argues, and Olsen does not dispute, that he sent monthly statements to Olsen from March 1986 to August 1986, and that Olsen failed to respond to those statements. In August 1986, plaintiff called Olsen to inquire about payment. The testimony of the parties regarding the contents of that telephone conversation differs substantially: plaintiff testified that Olsen agreed to pay the entire amount, whereas Olsen testified that the parties agreed to payment of $3,000 in full settlement. We are not persuaded that an account stated was created because it appears that there was no mutual assent or meeting of the minds as to the correctness of the charges. The trial court was free to reject plaintiff\u2019s testimony that Olsen agreed to payment of the $10,000 during the parties\u2019 telephone conversation in August 1986. Whether an account stated exists is a fact question properly resolved by the trial court. (La Grange Metal Products v. Pettibone Mulliken Corp. (1982), 106 Ill. App. 3d 1046, 1053, 436 N.E.2d 645.) Based on our review of the record, we conclude that there was sufficient evidence to support the trial court\u2019s failure to find an account stated.\nFor the foregoing reasons, the judgment of the circuit court is affirmed.\nJudgment affirmed.\nJIGANTI, P.J., and LINN, J., concur.", "type": "majority", "author": "JUSTICE McMORROW" } ], "attorneys": [ "Edward A. Cohen, of Block, Levy & Associates, of Chicago, for appellant.", "Richard B. Edelman, of Law Offices of Brasch & Edelman, of Arlington Heights, for appellees." ], "corrections": "", "head_matter": "JOSEPH E. McHUGH, Plaintiff-Appellant, v. RICHARD OLSEN, Indiv. and as a General Partner of Farwell Partners Limited Partnership, et al., Defendants-Appellees.\nFirst District (4th Division)\nNo. 1\u201488\u20141221\nOpinion filed September 28, 1989.\nEdward A. Cohen, of Block, Levy & Associates, of Chicago, for appellant.\nRichard B. Edelman, of Law Offices of Brasch & Edelman, of Arlington Heights, for appellees." }, "file_name": "0508-01", "first_page_order": 530, "last_page_order": 538 }