Contempt Order Against Law Firm Reviewed De Novo

Hadley and David Newton were getting divorced. Grund, an attorney had met with David concerning the divorce, and took notes of the conversation with David. Nonetheless, Grund and Leavitt agreed to represent Hadley in the divorce case.

Grund and Leavitt asked the trial court for an award of Hadley’s attorney fees from David, about $250,000. But David asked the trial court to disqualify Grund and Leavitt from representing Hadley because of a conflict of interest from Grund’s representation of David. Before it ruled on the fee request, the trial court disqualified Grund and Leavitt.

A week later the trial court denied the fee request based on the conflict of interest. At the court hearing, the law firm refused to obey the disqualification order, so the trial court found Grund and Leavitt to be in direct contempt of court.

The law firm appealed the contempt order, and the parties fought over the proper standard of review. Grund and Leavitt argued for de novo review (no discretion to the trial court) because, they claimed, the correctness of the contempt order was purely a question of law. David argued for the more lenient abuse-of-discretion standard.

The First District Illinois Appellate Court sided with the law firm. Here is the court’s reason for choosing the abuse-of-discretion standard:

When the facts of a contempt finding are not in dispute, their legal effect may be a question of law, which we review de novo. … “As a general rule, a trial court’s decision to award fees is a matter of discretion and will not be disturbed on appeal absent an abuse of discretion.” … Here, however, the circuit court indicated its belief that it could not award attorney fees once Grund and Leavitt were disqualified. Meanwhile, Grund and Leavitt argue that, although they were disqualified, they are still entitled to their fees accrued for work performed for Hadley under section 508 of the [Marital Dissolution] Act before the disqualification and assert that nothing in the ethical rules explicitly states that no fees are allowed if an attorney is disqualified. The legal question is thus whether the circuit court properly denied attorney fees from the beginning of Grund’s representation of Hadley. Whether a court or administrative agency has the authority to award attorney fees is a question of law that we review de novo. …” Furthermore, whether a party may recover attorney fees and costs pursuant to any specific act is a question of law.” … Thus, since the facts of the contempt are not in dispute and since Grund and Leavitt are not appealing the disqualification, we are presented with a question of law and we review this issue de novo.

Grund and Leavitt won the battle over the standard of review, but lost the war. The appellate court affirmed the contempt order, in effect depriving the firm of attorney fees. Read the whole case, IRMO Newton, No. 1-09-0684 (6/30/11), by clicking here.

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