Friday, November 7, 2014

Can I Make My Opponent Pay My Legal Fees?

Another question that is asked all the time is: Can I make my opponent pay my legal fees? 

In general, the answer is no. We follow the so-called American Rule in this country. Each party is responsible for his/her own costs and fees. There are exceptions when contracts or statutes that are pertinent to the controversy provide for shifting of costs and fees. Apartment leases, as an example, typically recite that if the landlord must pursue the tenant for the rent, the tenant will also be chargeable for the attendant costs and fees. Many of the statutes which govern discrimination in the workplace also make allowance for fee-shifting.

There are some who assume that because a fee-shifting agreement or statute is available, their own attorney will have no recourse against them but only against their opponent. It does not work that way, however, unless the attorney agrees to look solely to the opposition for compensation. 

Prudent counsel will make it clear early on that the obligation to compensate the attorney is on the client, not on the client's opponent; that the attorney will look to the client for that compensation; and that the client may, in  turn, invoke the fee-shifting to pursue reimbursement from the opposition. 

Thursday, November 6, 2014

Do I Need a Lawyer?

One of the questions we are frequently asked is: Do I need a lawyer? An individual is free to represent himself or herself as to any legal matter, whether it is a business transaction, initiating a lawsuit, defending a lawsuit, or what have you.

Business organizations are not nearly as free on that score. As a rule they must, by law, be represented by attorneys. Some exceptions apply in certain small claims cases. Smalls claims court in Illinois is limited to cases that seek money only, and not more than $10,000.00.

Having said that, there are any number of situations in which it makes sense for an individual to be represented by an attorney even though the law does not require it. One sort of situation in which this would be true is the situation which entails an attorney representing the opponent, so that it makes sense to engage legal counsel in order to "level the playing field" and avoid a mis-match. An arrangement of that sort makes more and more sense as the stakes of the case increase.

We were recently informed about a case that arose out of a home remodeling project that went awry. The homeowners had spent lavishly on a purely elective improvement to their house but they saw no value in engaging an attorney to help them at the contract formation phase of the transaction. The problem surfaced when the project was nearly complete. The amount at stake, only a few thousand dollars, was far too small to justify a legal fee. But the contractor had an attorney. The attorney had submitted what was, in fact, a modification of the construction contract, five dense, single-space pages that called for further construction work on the part of the contractor. The homeowner airily misdescribed this document as a mutual release, as if to say that anyone with a license to practice law could tell in two minutes whether the document was sufficient for the task.

The upshot: There was not enough money involved to warrant paying an attorney but there was too much work in prospect on the part of the attorney to justify giving a "freebie" to a stranger who had tens of thousands of dollars available to improve the house but no budget at all for legal work.

Friday, September 26, 2014

Probate II: A Tool to Avoid Probate Becomes Even More User Friendly

by David McCarthy

One of the many probate-avoidance devices available in Illinois has just been amended to make it easier for homeowners to transfer ownership of the home without going through probate.

 The Illinois Residential Real Property Transfer on Death Instrument Act (755 ILCS 27/1 et seq.) permits residential real estate to be conveyed outside probate by the use of a document that blends the features of a deed and the features of a will and is known as a transfer-on-death-instrument ("TODI").

The amendment, which became effective on August 1, 2014, made a transfer simpler and easier in at least two ways. It eliminated an inference that the beneficiary must accept the transfer during the owner's life time in order for the transfer to take effect. It also altered the nature of the so-called notice of death affidavit. The recording of that document is now required in order for the beneficiary to confirm his or her title to the property where before it was required to perfect title. Failure to record the document is still risky and could be fatal. If it is not recorded within 30 days of the death of the owner, the personal representative of the estate of the owner may take possession of the property, assert control over it, and gain rights to reimbursement and to lien the property; and if the document is not recorded within two years of the death of the owner, the TODI will become void and ineffective.

The amendment also imparted some protection to the so-called BFP -- bona fide purchaser for value: Persons, groups, and organizations who acquire an ownership or mortgage interest in the property for value and without notice before the recording of a lis pendens for an action to set aside or challenge a TODI, take free of the contest.

The amendment also removed the authority of agents acting under a durable power of attorney from creating or revoking a TODI.

The TODI is a handy item in the probate-avoidance tool box, alongside living trusts, the use of joint tenancies, and the small-estate affidavit. Picture this: A married couple raised their family in a house they owned as tenants by the entireties. One of them dies. That would terminate the tenancy, and the house would become part of the probate estate of the survivor unless it is put in a trust or sold. The survivor wants to stay in the house and does not have a trust. And but for the house, the probate estate would be modest enough to qualify for treatment under the small estate affidavit provisions of the Probate Act. That is not a far-fetched hypothetical. And the TODI is an almost perfect solution to the problem.