Court Requires Divorce Lawyer to Disgorge Earned Fees to Opposing Counsel

Money

It has been a long-standing principle that the courts have the authority to “level the playing field” in terms of fees in divorce litigation.  Under the Illinois Marriage and Dissolution of Marriage Act, the courts, upon a motion being brought for interim and prospective attorney’s fees, look at the funds available to each party and the amount each party has already spent in legal counsel, and attempt to “level the playing field.”  This, many times, results in one litigant paying for their spouse’s legal counsel.

However, the Illinois Appellate Court has now expanded the reach of the “leveling the playing field” provision.  In In re Squire, 2015 IL App (2d) 150271, the court ruled that the law required a spouse’s attorney to disgorge fees already earned to help cover the other spouse’s attorney’s fees.

In Squire, neither party had substantial financial sources of their own to pay for counsel.  The Husband had filed for bankruptcy and the Wife was unemployed.  However, the Wife borrowed a large sum of money from her parents to pay for her lawyers at The Stogsdill Law Firm, P.C.  The trial court order that Stogsdill disgorge funds that they earned and hand them over to Husband’s attorney.  Stogsdill argued that the funds were no longer available because they were earned fees and, as such, were in the firm’s general account.

The trial court looked to the Illinois Supreme Court’s ruling in In re Marriage of Earlywine, 2013 IL 114779, that held that a broad construction of the leveling law was necessary to effectuate its purpose.  Thus, the Squire court found that by exempting earned funds from “available funds” would allow a financially advantaged spouse to file voluminous pleadings and motions early in the case, ensuring that the retainer was earned, while leaving the other spouse to respond to a mountain of paperwork.

Despite the funds being in Stogsdill’s general account, the Squire court maintained “[f]rom this, it is clear that ‘available’ as used in the statute simply means that the funds exist somewhere.”  The disgorgement was upheld by a unanimous panel.

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