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Appellate Law Part III: My Appeal Regarding Disgorgement

Posted by Gina Colaluca | Jun 14, 2017 | 0 Comments

Over the last two posts, I've discussed appeals and the various reasons a client may choose to appeal their case.  Although appeals in general are rare, and appeals to the Supreme Court of Illinois are even more uncommon, I am currently litigating an appeal with the Supreme Court of Illinois. As we last discussed, most cases must be accepted by the Supreme Court in order to be decided by the Supreme Court. In my case, my client appealed a decision made by the Circuit Court to the Appellate Court. My client and I were successful on appeal. Therefore, the Appellate Court reversed the Circuit Court's decision and ruled in our favor. The other party then requested the Supreme Court to review the Appellate Court's decision, and the Supreme Court accepted. As a result, the case is now being litigated before the Supreme Court, which will make a final decision on the matter.

My case involves an attorney fee issue unique to family law called disgorgement. In Illinois, a party to a divorce may be ordered to pay their spouse's attorney's fees if the spouse requesting fees can show: (1) the spouse is unable to pay his or her own attorney's fees; and (2) the other party is financially capable of paying his or her own fees as well as the spouse's fees. However, it is possible for neither party to be able to afford their attorney's fees. If neither party is able to pay their attorney's fees and one attorney has already been paid, the Circuit Court may require the attorney who has already been paid to give some of that money to other attorney. This is called disgorgement, and is intended to ensure both attorneys get paid in situations where neither party can pay their fees. Under the statute, an attorney who has been paid can only be “disgorged,” or required to give some of that money to the other attorney, if that money is “available” to the attorney who has already been paid.  

This begs the question: when is the money “available” to the attorney who has been paid? Surprisingly, there are three Appellate Court cases that address this issue that have reached different conclusions. One case, In re the Marriage of Squire, states that the money is always “available” to the attorney who has been paid because the funds simply “exist somewhere.” Under this case, it would be possible for an attorney to be ordered to give back some of the money even if that attorney has already earned it, spent it, and the money is gone.  In the other case, Altman v. Block, the Appellate Court found that these funds are not “available” to the attorney who has been paid if the funds have been earned by the attorney during the normal course of representation. In other words, if an attorney is paid a retainer up front, but over the course of representing their client, earns the retainer which is now gone, the original retainer is no longer available to the attorney and the attorney cannot be disgorged. The Appellate Court in my case, In re Marriage of Goesel, agreed with this conclusion.

Now that we are litigating this issue before the Supreme Court, my case will answer this question once and for all. Although this topic may not seem exciting, it is very important for both attorneys and their clients to understand how and when an attorney may be disgorged. If an attorney is disgorged and is required to give some of the money they have been paid to the other side,  that does not mean that the attorney does not get paid that amount. To the contrary, although the client previously paid the attorney, if the attorney is disgorged, the client suddenly becomes responsible for the amount the attorney was disgorged. Therefore, the issue of disgorgement affects clients as well as the attorneys. If you are considering appealing your case, or simply need to speak with an attorney regarding the appeals process, feel free to contact our office for your free consultation.

About the Author

Gina Colaluca

Gina L. Colaluca began working as an Associate Attorney at the Law Offices of Laura A. Holwell in 2013, where she focused her practice mainly in Family Law. She now continues to focus on Family Law, as well as Insurance Law and Appellate Law, here at Holwell Law Group, LLC.

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