Frankel v. Bedstone Co.

1

2024 IL App (1st) 221404-U

ERIC FRANKEL, Plaintiff-Appellant, v. BEDSTONE COMPANY and JOHN PENN, Defendants-Appellees.

No. 1-22-1404

Court of Appeals of Illinois, First District, Third Division

March 13, 2024

This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

Appeal from the Circuit Court of Cook County. No. 2018 M1133801 The Honorable Jamie Guerra Dickler, Judge Presiding.

PRESIDING JUSTICE REYES delivered the judgment of the court. Justices Lampkin and Van Tine concurred in the judgment.

ORDER

REYES PRESIDING JUSTICE.

¶ 1 Held: The trial court's determination that defendants had made a valid tender to plaintiff such that plaintiff was foreclosed from seeking further attorney fees or costs is reversed, as defendants' attempted payment was not sufficient to constitute a tender.

¶ 2 The instant appeal arises from a landlord-tenant dispute between plaintiff Eric Frankel, the tenant, and defendants Bedstone Company and John Penn, the building owner and its property manager. After plaintiff filed a complaint alleging several violations of Chicago's Residential Landlord and Tenant Ordinance (RLTO) (Chicago Municipal Code § 5-12-010 et seq. (amended Mar. 31, 2004)), defendants' counsel offered plaintiff a check for $4000, which plaintiff refused; counsel later offered another check, for approximately $7700, which plaintiff also refused. After lengthy litigation, plaintiff ultimately prevailed on two of his RLTO counts, while defendant prevailed on the remaining two. Plaintiff sought an award of attorney fees, as permitted by the RLTO. The trial court, however, awarded attorney fees only through the date that defendants' counsel had offered the $4000 check finding that this check operated as a tender and that plaintiff was not entitled to any attorney fees after that date. Plaintiff now appeals, arguing that defendants' checks did not constitute a valid tender and that he was entitled to attorney fees for the entirety of the litigation. For the reasons that follow, we reverse the trial court's fee award and remand the matter for a new determination of appropriate attorney fees and costs.

¶ 3 BACKGROUND

¶ 4 Plaintiff rented an apartment in Chicago from defendants from 2015 through 2018. Beginning in 2017, plaintiff began complaining of problems with the apartment, including a collapsing ceiling and mold. Eventually, in August 2018 plaintiff contacted 311 and the city scheduled an inspection of the property. The same day that plaintiff contacted 311 defendants served plaintiff with a five-day notice terminating his tenancy, purportedly due to rent arrearages, which plaintiff disputed.

¶ 5 In October 2018, plaintiff filed a four-count complaint based on violations of the RLTO, in which plaintiff's total "Amount Claimed" was $7712.50, plus attorney fees and costs. Count I was for violation of section 5-12-080 of the RLTO (Chicago Municipal Code § 5-12-080 (amended July 28, 2010)) and alleged that defendants had failed to pay plaintiff interest on his security deposit. Count I requested an award of $2300-twice his security deposit-plus attorney fees and costs. Counts II and III were for violations of section 5-12-110 of the RLTO (Chicago Municipal Code § 5-12-110 (amended Sept. 6, 2017)), with count II alleging failure to maintain the apartment based on the ceiling collapse and count III alleging failure to maintain the apartment based on mold. Count II requested an award of $2375 plus attorney fees and costs, and count III requested an award of $487.50 plus attorney fees and costs. Finally, count IV was for violation of section 5-12-150 of the RLTO (Chicago Municipal Code § 5-12-150 (amended Nov. 6, 1991)) and alleged that defendants had engaged in retaliatory conduct after plaintiff reported the problems with the apartment to city authorities. Count IV requested an award of $2500 plus attorney fees and costs.

¶ 6 As the issue on appeal revolves around the parties' communications after the commencement of litigation, we relate the facts concerning those communications in some detail.

¶ 7 The record on appeal demonstrates that the parties began communicating with respect to the merits of the litigation in late January 2019. It appears that plaintiff's counsel and defendants' counsel spoke on the telephone on January 23, 2019, and an e-mail from plaintiff's counsel to defendants' counsel sent the same day indicated that "I look forward to reviewing the settlement proposal you intend to send tonight or tomorrow. I am hopeful we can swiftly settle this matter." According to plaintiff's counsel, he and defendants' counsel had another telephone conversation on January 25, 2019, in which defendants' counsel "relayed an offer from [defendants] to settle the case for $4,000.00." Plaintiff's counsel indicated that he would speak with his client regarding the offer, and called defendants' counsel back shortly thereafter. Plaintiff's counsel "advised that [plaintiff] rejected the offer of $4,000, but would settle for $9,500.00." Defendants' counsel responded" 'ok, we'll litigate.'" A January 25, 2019, e-mail from defendants' counsel "reiterate[d]" defendants' "offer," providing, in full:

"Hi Bill,

Thank you for speaking with me today.

To reiterate, our offer is as follows:

$1150 xx [ sic ] 2 = $2300

$100 for the summary

$1100 in fees, which is probably more than what you spent but I am assuming this number.

$500 in costs, which is probably more than you spent but I'm rounding up.

So I will send your office a check for $4000.

Your client countered and wanted $9000. I assume the deposit was already returned, since you did not sue for that.

Please be aware that we will object to your attorney fees after today. If you believe we have not sent enough to cover your fees and costs, please send us the billing and receipts.

Thank you."

Plaintiff's counsel immediately responded to the e-mail, indicating that "[t]he settlement offer is rejected. No need to send a check. Take whatever position you need to take in court." Defendants' counsel responded, "I will mail it regardless," and counsel dropped off a check in person shortly thereafter; the check is made out to plaintiff's counsel in the amount of $4000, with a memo line providing "Memo: Frankel vs. Bedstone."

¶ 8 On January 28, 2019, defendants' counsel sent plaintiff's counsel an e-mail, in which counsel indicated that, "since your client wishes to litigate, I will be filing a counter suit against him for breach of contract." Counsel further stated that "as noted, I have resolved your RLTO claims to the best of my ability given the limited information I have. Indeed I believe we overpaid you on costs, which I want to verify, so please send over receipts. Also please send your billing."

¶ 9 On February 13, 2019, plaintiff's counsel sent defendants' counsel a letter, which counsel claimed was written "in furtherance of the settlement discussions between our clients on this case" and "to clear up any confusion there may be on your or your clients' part concerning where we stand on settlement." After relating the facts concerning counsels' January 25 and January 28 communications, plaintiff's counsel stated that he was "left to interpret this behavior. It appears to be an attempt to make a re-offer [of] $4,000.00 in settlement. In response to said offer, my client is not willing to settle for $4,000.00. I will bring the check with me to today's hearing so I can hand it back to you." Along with the letter, plaintiff's counsel also included a payoff statement, which contained "an itemization of [plaintiff's] claims, which total $12,194.64 as of yesterday." Plaintiff's counsel also addressed defendants' counsel's request for documentation as to fees and costs:

"Your emails to me of 1/25/2019 also requested 'billing and receipts' regarding the attorney fee portion of the claim. At this stage of the case we are not going to disclose our itemized billing information, as it would present an untenable risk of disclosing privileged and/or attorney work product information. Furthermore, the entries could give insight into litigation strategy which I consider confidential since this case is still pending. We are under no obligation to disclose the details of our billing and work to you at this stage.

Of course, if and when my client prevails on the merits, we expect to present a fully detailed fee petition to the Court. At that time you will have the opportunity to review and object to same as you see fit. I understand the Court will only award 'reasonable' attorney fees and am confident that our billing practices comply with this standard."

¶ 10 Plaintiff's counsel then reiterated plaintiff's willingness to settle:

"We do not have to reach 100% agreement on every penny of every claim in order to settle the case. My client is ready, willing and able to continue settlement discussions. However, your clients' outright declination of our prior offer, without any counter-proposal, leaves us at a standstill. My client will not negotiate against himself.

I believe settlement would be in your clients' best interest, and remain hopeful you can review this information and respond with a counteroffer to settle the matter. Please note that my client is uninterested in settlement offers that do not entail a basic written settlement agreement with a standard mutual release clause. Do not send checks with your offers. I would like to agree to a settlement figure and then negotiate a written agreement which clarifies how and when payment is due. I have settled many cases this way and I see no reason that this case cannot resolve in the same fashion, assuming we can reach a mutually agreeable figure."

¶ 11 In ...