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Illinois Appellate Court Upholds Dismissal of Divorce Lawyer’s Claim for $9.75 million bonus

The Illinois Appellate Court adopted Gair Eberhard’s argument and ruled that divorce law firm, Grund & Leavitt, was not entitled to charge a client a bonus fee of almost $10 million pursuant to its standard contract because there was no price established for the bonus fee and no practicable, objective method of determining a price.

Gair’s client, a highly successful and wealthy entrepreneur, had been represented by the Grund firm in a contention divorce trial. The client had signed the Grund firm’s standard fee agreement, which called for the client to pay fees at hourly rates plus an unspecified bonus fee to be determined unilaterally by that law firm at the end of the case.

Previously, Gair Eberhard had convinced the trial court to dismiss the case with prejudice on the grounds that the bonus fee was an unlawful contingent fee in a divorce case. The Appellate Court overturned that decision and sent the matter back to the trial court for evaluation of the other arguments raised in the dismissal motion.

After remand, Gair Eberhard argued that the fee agreement was invalid because there was no price term specified and there was no practicable, objective method for determining the price and because the bonus fee was left entirely to the discretion of the divorce firm. While the divorce firm contended that the contract was valid because it stated that the bonus should be determined by employing the factors set forth in the ethical rules for determining reasonable fees, Gair argued that those factors were not objective and provided no practical guidance. The Appellate Court adopted our arguments and reasoning and held that the complaint for breach of contract was dismissed with prejudice because there was no agreement on the price term.

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