On December 27, 2018 the Illinois Appellate Court for the First District affirmed an award of attorney’s fees and costs to plaintiff which was nearly twenty times the damages awarded at trial for an Illinois Wage Act claim. The Court ruled that the trial court did not abuse its discretion by awarding $178,449.97 in attorneys’ fees after a trial ending in a $9,226.52 judgment against the defendant.
Plaintiff Raymond Thomas sued defendant Weatherguard Construction Company, Inc. for $47,666.00 in commissions for contracts that he had procured on Weatherguard’s behalf. A key issue at trial was whether Weatherguard employed Thomas. Plaintiff claimed violations of the Illinois Sales Representative Act and the Illinois Wage Payment Act, breach of contract and unjust enrichment. The trial court granted summary judgment to Weatherguard on one count, and, after nearly ten years of litigation, the matter proceeded to trial on the remaining claims. The trial court found that Thomas was indeed an employee of Weatherguard, but awarded Thomas only $9,226.52. The verdict was upheld on appeal but remanded to the trial court for a determination of an attorneys’ fee award to Plaintiff pursuant to the Wage Payment Act. Upon briefs submitted by the parties, the trial court awarded plaintiff $178,449.97 in attorney’s fees and $1,124.68 in costs. Weatherguard appealed the award arguing that the award by the trial court was “excessive.” The Court of Appeals affirmed the award.
The Attorney Fee Award.
On appeal, Weatherguard argued, amongst other things, that the fee award was excessive because it represented work for claims for which there was no basis for Thomas to recover attorney fees. Weatherguard contended the recovery of fees should be limited only to work done to further the Wage Payment Act claim. Additionally, Weatherguard argued that the disparity between the amount of the damages award and the amount of the fee award constituted an abuse of discretion by the trial court. The Court rejected Weatherguard’s argument that Thomas was entitled only to fees for his statutory Wage Payment Act claim. The statute allows for employees successfully recovering under the Act to “also recover costs and all reasonable attorney’s fees.” Weatherguard argued that, because attorney fees are ordinarily not recoverable without contract or statutory authority, plaintiff should only be entitled to recover for work by his attorney directly attributable to pursuing the statutory Wage Act Claim.
The Appellate Court found that Thomas could recover fees and costs for all of his claims involving a common core of facts and related legal theories, even where he was successful only on some of the claims. The Wage Payment Act calls for recovery of “all reasonable attorney’s fees” in a “civil action.” The Court noted that the only limiting language in the statute was that the attorney fees be “reasonable,” and concluded that the statute did not contain an exception to the rule allowing for attorney fees for claims stemming from the same common core of facts and related legal theories. The Court stated that an exploited worker ordinarily would not be in a position to bring a civil action against his employer without the statutory incentive of fee recovery by the prevailing attorney.
The Court also determined that legislative history of the Wage Payment Act supported the finding that Thomas was entitled to fees for all of his claims. The Illinois legislature contemplated that litigation costs associated with bringing claims under the Act would not be borne by plaintiff employees.
The Court rejected Weatherguard’s argument that the vast difference between the amount of the damages award and the amount of the fee award constituted an abuse of discretion. Noting that in a matter involving fee shifting either by contract or statute an abuse of discretion does not automatically justify rejection of the amount sought in fees, the Court considered the conduct of Weatherguard in making the choice “to aggressively litigate the case” for ten years on a suit seeking “only $47,666 in commissions.” While courts may look to whether there is a reasonable connection between the fees and the amount involved in the litigation, the Appellate Court found that the “years of attorney time expended and the amount at issue was deemed reasonable by defendant” in defending the claims, and defendant “cannot be heard to complain now.”
Weatherguard also argued that Thomas only received a fraction of the recovery that he sought and should receive only a fraction of the fees incurred. While the Appellate Court agreed that the amount of the fees in relation to the benefit is a relevant consideration, it noted that Thomas was successful on the primary issues of employment and compensation. Accordingly, the Court found no abuse of discretion.
Guidance for the Future
This case underscores that when litigating cases involving either contractual or statutory fee-shifting provisions, it is possible that fees may be awarded far exceeding the damages award. This possibility should be considered when assessing case value.