Marshall Auerbach isn`t only a well-known, very fine, high-priced Chicago divorce attorney who takes credit for writing the Illinois divorce law.
He also views himself as a romantic at heart who recently noted that he can`t help but suffer ”pangs of sympathy for both parties” during divorces. Well, one can safely assume that he feels pangs of some sort at the mention of June Barry. She`s an ex-client who has set her sights on Auerbach in what the attorney characterizes as merely a ”garden variety fee dispute” with an ungrateful client.
It involves an eye-popping $250,000 fee that Auerbach received for working six months on her case, thanks partly to a cozy provision in Illinois divorce law that allows lawyers to include their fees as part of the final divorce agreement sworn to by both parties when the divorce is granted.
Critics of the practice say that clients frequently learn the fee amount for the first time upon reading the proposed divorce agreement. And that often happens right before they are to appear in court to end the case, a time when they are too emotionally tired and anxious to finish things to question an attorney`s fee.
That`s what Barry claims happened to her, resulting in a request that Circuit Judge Barbara Disko either order Auerbach to return the $250,000 or order a hearing on the propriety of his fee. Citing other Illinois court decisions, Barry says there is an often-overlooked provision of the law that requires some evidence of the ”reasonableness and necessity” for requested fees. There was no such evidence in her case, Barry says.
Barry is not fighting her battle alone. She has hired the services of another attorney, Joanne Pitulla, who is no stranger to these sorts of matters.
You may remember that in the spring of 1984 we wrote about how Pitulla, then a recent law school graduate who had not yet taken the bar exam, took on Richard Rinella, another heavy hitter in the city`s fraternity of divorce attorneys. Pitulla made Rinella`s life miserable for a time by challenging his $10,000 fee for work in handling the dissolution of her 23-year marriage.
Former Circuit Court Judge John Reynolds, who was indicted in the recent round of Greylord indictments, rejected her arguments and ordered her to pay Rinella an additional $3,500 for the time it supposedly took him to defend himself against her charges. Pitulla appealed, and her case is awaiting a decision by the Illinois Appellate Court.
Barry was divorced from her husband of 20 years last September and received a handsome settlement, which Auerbach said included the couple`s Oak Brook residence, three condos in Florida, an Excalibur and a Cadillac and a lump-sum payment of $1.7 million.
Auerbach said his fee, which was included in the separation agreement ratified by Barry under oath, was negotiated with her former husband, Wilfred Barry, who paid it in addition to the $1.7 million lump-sum payment she received.
In an affidavit filed before Disko, however, Wilfred Barry said the $250,000 was paid out of marital funds and were part of June Barry`s share of their marital estate. He said he and his former wife had agreed that each was to be solely responsible for his or her own attorney`s fee.
Auerbach sees absolutely nothing wrong with his conduct in the Barry case or with settlement agreements between divorcing couples that incorporate provisions for attorney fees. He said June Barry had more than three weeks to review the fee agreement.
”She testified that they were reasonable under oath and, honestly, she was not emotionally distraught,” said Auerbach. ”This was an extremely complicated case that involved 7 corporations, 16 partnerships, 35 pieces of real estate, several retirement plans, about 15 bank accounts and a number of other assets.
”She was very happy with the settlement. I`m the one who got the fortune for her. She couldn`t thank me enough for the settlement. I think, very simply, it`s ingratitude on her part. After getting an extremely substantial settlement, she turns around now and wants to get the fees that were paid by her husband.”
Auerbach`s firm was the third to represent June Barry in the 2 1/2-year-old proceedings. She claims she was not told the amount of fees he intended to charge or that the amount would appear in the separation agreement until the day she approved the agreement orally in court.
In asking Disko to reject or review Auerbach`s fees, June Barry said the amount was ”an arbitrary figure plucked out of thin air without any justification” just before the final court hearing and amounts to a fraud perpetrated by Auerbach on the court in violation of professional ethics.
Pitulla said June Barry has paid $30,000 in fees to two attorneys who were involved in the case for about a year and is contesting $39,000 in fees sought by another onetime attorney of hers, Michael Minton. A hearing on Barry`s request in the spat with Auerbach is scheduled for Jan. 29.
Slow justice,
Part 1 . . .
As predicted two weeks ago, Circuit Judge Donald O`Connell, acting presiding judge of the 1st Municipal District, has issued an order to hold prompt hearings for criminal defendants arrested without a warrant. It`s a requirement that`s been around since a 1975 U.S. Supreme Court decision, Gerstein vs. Pugh, which held that a defendant arrested on criminal charges without a warrant is entitled to a prompt hearing to determine if there`s enough reason to keep holding him. It seems that some judges had not been holding Gerstein hearings and that defendants were being held for as long as three days, according to a class action lawsuit filed in U.S. District Court. Three days? That`s nothing, says veteran criminal defense attorney Sam Adam, who read our recent item and dropped a note. How about two months?
Adam represented Noe Martinez and Antonio Olaguez, who were arrested July 30, 1982, on a charge of delivering two pounds of heroin. They were ordered held on bonds of $1 million. An assistant state`s attorney said the case was ready for trial, and it was continued until Oct. 14. On Oct. 1, the defendants were indicted. Adam filed a motion to dismiss the indictment because of the excessive delay. Circuit Judge Earl Strayhorn agreed that the state had violated the defendants` rights to due process by failing to comply with the
”statutory constitutional requirements of a prompt preliminary hearing.”
The state appealed, and the Illinois Appellate Court reversed Strayhorn and reinstated the indictment. Judges John Stamos, Maurice Perlin and Allen Hartman ruled that while Adam had shown that his clients` right to a prompt hearing or indictment was denied, ”they have neither asserted that the delay resulted in substantial prejudice nor claimed prejudice.” They cited an Illinois Supreme Court case which held that dismissal of an indictment was not to be used as a sanction for pre-indictment delay and said it was the legislature`s duty ”to determine a statutory remedy for such a defendant.”
Slow justice,
Part 2 . . .
That the wheels of justice do turn ever so slowly is also evidenced in the bank fraud case against William Patterson, former lending officer at the now-defunct Penn Square Bank of Oklahoma City.
Patterson was indicted Sept. 27, 1984, along with John Lytle, former vice president in the oil and gas lending department of Continental Illinois National Bank and Trust Co. of Chicago, and Jere Sturgis, an Oklahoma oil and gas driller, on charges of wire and bank fraud involving more than $1 billion in loans bought by Continental from Penn Square.
Patterson had been indicted in Oklahoma City on charges of defrauding Penn Square and was acquitted the day after the Chicago indictment was returned. He argued before District Judge John Grady that his prosecution here was a violation of the federal double jeopardy clause, which forbids prosecution twice for the same crime. Grady set a trial date for last November, and the U.S. Court of Appeals granted what it called an expedited appeal. The case was argued before the appeals court on Sept. 11.
Everyone waited. And they waited. And waited some more. The original trial date passed, so Grady rescheduled the case for the supposedly firm date of Feb. 3. And now that`s out the window, too.
The appeals court has finally ruled, and it`s back to square one. Judges John Coffey, Kenneth Ripple and Harlington Wood directed Grady to read the entire Oklahoma City trial transcript to determine if any issues there that had been found in Patterson`s favor were present in the Chicago indictment. So prosecutors Joseph Duffy and James Ferguson will be cooling their heels for a while as the trial definitely will be put off for months. And Patterson, the bank executive famous for scribbling loan transactions on cocktail napkins and declaring, ”Let`s do the deal,” can avoid Chicago`s winter.
