No Defense Obligation for Motion to Adjudicate Attorney Lien

September 4, 2019 / News

By Don R. Sampen, published, Chicago Daily Law Bulletin August 26, 2019

The 1st District Appellate Court recently held that a client’s motion to adjudicate his attorney’s claimed attorney’s lien, even though alleging wrongful conduct by the attorney, is not a suit for damages that a professional malpractice insurer has a duty to defend.

The case is Illinois State Bar Association Mutual Insurance Co. v. McNabola Law Group P.C., 2019 IL App (1st) 182386 (June 21, 2019). The insurer, ISBA Mutual, was represented by Pretzel & Stouffer Chtd. Morse, Bolduc & Dinos LLC represented the law firm, McNabola.

McNabola’s client, Scot Vandenberg, retained McNabola to represent him in an underlying personal-injury action. That action eventually was settled for $25 million during trial. McNabola served notice of his attorney’s lien prior to trial pursuant to the Attorneys Lien Act.

Subsequent to the settlement, however, the defendant in that lawsuit learned that a court clerk read McNabola a jury question prior to the settlement becoming final. The defendant thus moved to vacate the settlement. The motion to vacate was initially granted at which time Vandenberg retained new counsel to seek reconsideration. After a hearing before a different judge, reconsideration was allowed and the settlement reinstated.

Vandenberg then filed a legal malpractice action against McNabola, which ISBA Mutual, McNabola’s professional liability insurer, agreed to defend. Vandenberg also filed a motion to adjudicate McNabola’s claimed attorney’s lien on the underlying settlement.

As part of the motion, Vandenberg contended that McNabola engaged in misdeeds that resulted in the initial loss of the $25 million settlement and that the eventual reinstatement of the settlement occurred only because of the efforts of the new counsel obtained by Vandenberg.

He further argued that McNabola should not be entitled to any fee, but that if any fee were to be paid, it should be reduced by the amount Vandenberg had to pay his new counsel.

McNabola tendered defense of the motion to ISBA Mutual. The malpractice policy obligated the insurer to defend any suit against the insured seeking damages arising out of a wrongful act. The policy defined “damages” as sums an insured is legally obligated to pay, but not including legal fees.

A “wrongful act” was defined as any alleged negligent act or omission in the rendering of professional services. The policy did not define “suit.”

ISBA Mutual declined to undertake the defense of the motion and filed the instant action for a declaratory judgment. Upon cross-motions for judgment on the pleadings, the trial court held for McNabola and ordered ISBA Mutual to defend. ISBA Mutual took this appeal.


In an opinion by Justice Sheldon A. Harris, the 1st District reversed. He initially addressed ISBA Mutual’s position that the motion to adjudicate the lien did not constitute a “suit” and disagreed.

In doing so, Harris examined two cases involving environmental liability, Lapham-Hickey Steel Corp. v. Protection Mutual Insurance Co., 166 Ill.2d 520 (1995), and Employers Insurance of Wausau v. Ehlco Liquidating Trust, 186 Ill.2d 127 (1999).

Based on these decisions, he concluded that a “suit” consists of a proceeding in court, including complaints, petitions and other court filings. Since the motion here involved a court proceeding, it could be considered a “suit.”

He then considered whether Vandenberg’s motion to adjudicate sought damages for a wrongful act. While Vandenberg claimed misdeeds by McNabola, Harris said, the relief being sought was not for damages. Rather, by filing the lien, McNabola effectively became a joint claimant with its client in the proceeds of the settlement.

Nothing in the Attorneys Lien Act authorized a wronged client to seek compensatory damages for an attorney’s misdeeds. Rather, Harris said, Vandenberg was effectively disputing his attorney’s claimed right to the lien but was not seeking actual payment from McNabola for damages resulting from misconduct.

In sum, the motion to adjudicate McNabola’s attorney’s lien did not seek to impose liability on McNabola for damages due to his misconduct. Seeking damages, instead, was the function of Vandenberg’s separate malpractice action, which ISBA Mutual was defending under the policy.

The court, therefore, reversed the trial court judgment, finding that ISBA Mutual had no duty to defend against the motion to adjudicate.

Key point

A client’s motion to adjudicate an attorney’s lien, in which the client claims that the attorney is not entitled to a lien due to the attorney’s misdeeds, is not a suit seeking damages that entitles the attorney to a defense under a malpractice insurance policy.

  • Chicago

    Illinois 60603

    10 South LaSalle Street

    Chicago, Illinois 60603

    T: 312.855.1010 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Dennis D. Fitzpatrick

  • New York

    New York 10005

    28 Liberty Street 39th Floor

    New York, New York 10005

    T: 212.805.3900 TF: 800.826.3505 F: 212.805.3939 Office Managing Partner: Carl M. Perri

  • Mission Viejo

    California 92691

    27285 Las Ramblas

    Suite 200

    Mission Viejo, California 92691

    T: 949.260.3100 TF: 800.826.3505 F: 949.260.3190 Office Managing Partner: Ian R. Feldman

  • Florham Park

    New Jersey 07932

    100 Campus Drive

    Florham Park, New Jersey 07932

    T: 973.410.4130 TF: 800.826.3505 F: 973.410.4169 Office Managing Partner: Carl M. Perri

  • Michigan City

    Indiana 46360

    200 Commerce Square

    Michigan City, Indiana 46360

    T: 219.262.6106 TF: 800.826.3505 F: 312.606.7777 Office Managing Partners: Paige M. Neel, Kimbley A. Kearney

  • Milwaukee

    Wisconsin 53202

    250 E. Wisconsin Avenue

    Suite 1800

    Milwaukee, Wisconsin 53202

    T: 414.279.5525 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: James M. Weck

  • Stamford

    Connecticut 06902

    68 Southfield Avenue

    2 Stamford Landing Suite 100

    Stamford, Connecticut 06902

    T: 203.921.0303 TF: 800.826.3505 F: 212.805.3939 Office Managing Partner: Matthew J. Van Dusen

  • Tampa

    Florida 33609

    4830 West Kennedy Boulevard, One Urban Center

    Suite 600

    Tampa, Florida 33609

    T: 813.509.2578 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Dennis D. Fitzpatrick Co-Managing Partner: Kelly M. Vogt

  • San Francisco

    California 94111

    100 Pine Street

    Suite 1250

    San Francisco, California 94111

    T: 415.287.2744 TF: 800.826.3505 F: 949.260.3190 Office Managing Partner: Ian R. Feldman

  • Houston

    Texas 77019

    2929 Allen Parkway

    American General Center, Suite 200

    Houston, Texas 77019

    T: 346.229.4612 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Ramy P. Elmasri

  • Dallas

    Texas 75201

    325 N. Saint Paul Street

    Suite 3100

    Dallas, Texas 75201

    T: 469.942.8635 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Ramy P. Elmasri

  • Boca Raton

    Florida 33434

    7777 Glades Road

    Suite 405

    Boca Raton, Florida 33434

    T: 561.765.5305 TF: 800.826.3505 F: 312.606.7777 Office Managing Partner: Dennis D. Fitzpatrick Co-Managing Partner: Kelly M. Vogt