Contracts; Attorneys and Clients

Owens v McDermott, Will & Emery, 316 Ill App 3d 340, 736 NE 2d 145, 249 Ill Dec 303 (1st D 2000).

Facts: Perry Owens, former CEO of Utilities, Inc. ("Utilities"), was represented by the law firm of McDermott, Will and Emery during his divorce in 1988. From the divorce, his former wife received stock in Utilities, to which Owens retained the right of first refusal if she ever wanted to sell it. When he was forced to leave the CEO position at Utilities in 1996, Owens signed a settlement agreement with the corporation. The agreement said Owens "will not acquire or agree, offer or seek or propose to acquire, directly or indirectly, alone or in concert with any other Person, by purchase or otherwise ... any securities of the Company." McDermott, Will and Emery represented Utilities during settlement discussions with Owens. In 1997, Owens' former wife hired the law firm to remove restrictions on the stock and then sold it to a third party. Owens filed suit against the firm for breach of fiduciary duty and tortious interference with his right of first refusal of the stock. The trial court granted the law firm's motion to dismiss.

Holding: Affirmed. When the agreement is unambiguous, it is inappropriate for the court to look at extrinsic evidence to determine the parties' intent in making the agreement. The language of the agreement states Owens shall not own "any" securities in the corporation except as provided by the agreement. "Any" is a broad term that precludes Owens from purchasing stock from his former wife. A legal malpractice complaint must allege the following: (1) an attorney-client relationship; (2) a breach of duty; (3) which proximately caused the plaintiff to be unsuccessful in the underlying action; and (4) damages. Owens established the firm breached Rule 1.9 of the Illinois Rules of Professional Conduct, which states that lawyers are prohibited from representing a client whose interests are "adverse to the interest of [a] former client" in a matter which substantially relates to that of the former client. However, Owens failed to demonstrate "but for" the law firm's breach he would have successfully retained his right to first refusal of his former wife's shares.

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