Guerrant v. Roth
777 N.E.2d 499, 267 Ill. Dec. 696, 334 Ill. App. 3d 259 (2002)
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Rule of Law:
When a contingent fee agreement drafted by an attorney contains an ambiguous provision regarding recoverable expenses, the ambiguity will be construed against the attorney and in favor of the client.
Facts:
- D. Stephen Guerrant and Marcia Guerrant hired the law firm D’Ancona & Pflaum to represent them in a professional malpractice lawsuit concerning a real estate claim starting in March 1996.
- On June 25, 1999, the Guerrants and D'Ancona & Pflaum executed a written contingent fee agreement.
- The agreement stated the Guerrants would pay for 'all customary costs and reasonable out-of-pocket expenses,' and specified that 'These expenses include court reporting services, expert witness fees, reasonable travel expenses, if any, fees paid to trial witnesses and the cost to create demonstrative trial exhibits.'
- The lead attorney on the case, Dean Dickie, left D'Ancona & Pflaum in June 2000, taking the Guerrants' case with him.
- The Guerrants' underlying malpractice case settled for $210,000 in November 2000.
- A dispute then arose between the Guerrants and D'Ancona & Pflaum over whether the firm could recover expenses that were not specifically listed in the fee agreement, such as charges for computer-assisted legal research (Westlaw/LEXIS), photocopying, and telephone tolls.
Procedural Posture:
- The Guerrants' underlying malpractice case, filed in the circuit court of Cook County, settled for $210,000.
- D'Ancona & Pflaum asserted an attorneys' lien, leading to a dispute with the Guerrants over $20,704.91 in claimed costs and expenses.
- The trial court entered an agreed order resolving the firm's professional fees but leaving the expenses in dispute.
- The case was transferred from the trial court's law division to the municipal division after the amount in controversy fell below the jurisdictional threshold.
- Following a trial on the disputed expenses, the municipal division judge awarded D'Ancona & Pflaum only $2,940.92, denying recovery for computer research, photocopying, and other items not expressly listed in the fee agreement.
- D'Ancona & Pflaum, as appellant, appealed the trial court's order to the Appellate Court of Illinois. The Guerrants are the appellees.
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Issue:
Does a contingent fee agreement that allows for the recovery of 'customary costs and reasonable out-of-pocket expenses' and lists specific examples using the word 'include,' permit the drafting law firm to recover expenses not explicitly enumerated in the agreement?
Opinions:
Majority - Presiding Justice Gallagher
No. When a contingent fee agreement drafted by an attorney is ambiguous as to which expenses are recoverable, the agreement must be strictly construed against the attorney. The word 'include' is ambiguous, as it could be interpreted as either a term of limitation or a term of expansion. Applying the principle of contra proferentem (construing ambiguity against the drafter), which is particularly applicable to attorney-client fee agreements due to the attorney's fiduciary duty and superior bargaining position, the list of expenses is interpreted as exclusive. Therefore, expenses not expressly listed, such as photocopying and telephone charges, are not recoverable. Furthermore, computer-assisted legal research is considered part of the attorney's professional services and is compensated through the contingency fee itself—not as a separate cost or expense—because it is a substitute for the attorney's time that benefits the attorney, not the client, in a contingent fee arrangement.
Analysis:
This decision solidifies the application of the contra proferentem doctrine to attorney-client contingent fee agreements in Illinois, placing a significant burden on attorneys to draft these contracts with absolute clarity. The ruling establishes that attorneys cannot rely on general terms like 'expenses' to recover costs not explicitly enumerated; any ambiguity will be resolved in the client's favor. The case also sets a key precedent by classifying computer-assisted legal research costs as attorney overhead subsumed within a contingency fee, rather than as a separately billable client expense, unless the agreement expressly and clearly provides otherwise. This holding protects clients from surprise charges and forces attorneys to be transparent and exhaustive in listing all recoverable costs.
