Appeals panel: Gidwitz, family, associates still owe $13M in legal fees to former Ungaretti lawyers

By Scott Holland | Jun 26, 2018

A prominent Illinois businessman and Republican, who was nominated by President Trump to serve as U.S. ambassador to Belgium, and some of his associates remain on the hook to pay millions of dollars in legal fees after an appeals panel upheld a judicial decision.

Ron Gidwitz is a prominent Republican who served as Illinois finance chairman of Donald Trump’s 2016 presidential campaign. In May, Trump nominated him to be ambassador to Belgium.

Gidwitz also is co-founder and partner at private equity firm GCG Partners and his family’s involvement with real estate development, specifically the Evergreen Terrace Apartment Complex in Joliet, has them at odds with Ungaretti & Harris LLP, and its successor firm Nixon Peabody.

The dispute goes back to March 24, 2005, when Herbet Halperin, then president of a collective lumped together as the Burnham Companies, signed a letter of agreement for legal representation with U&H for Fair Housing Act and civil rights litigation, which ultimately led to U&H charging more than $13.5 million for work over the ensuing years.

Justice Nathaniel Howse Jr.

On July 3, 2014, U&H filed a Cook County Circuit Court complaint seeking unpaid legal fees of more than $5 million, and the defendants filed a counterclaim alleging the fees were excessive while also suing for breach of contract, legal malpractice and related. U&H voluntarily dismissed Halperin and his successor, John Paschen, from the action, believing the Gidwitz family to be the responsible party behind the Burnham Companies.

Judge Patrick Foran Lustig ultimately agreed with U&H, and said the family is responsible for paying the legal bills. The family appealed that finding, and the Illinois First District Appellate Court ruled on the appeal in an order issued June 20. Justice Nathaniel Howse wrote the opinion; Justices James Fitzgerald Smith and Terrence Lavin concurred. The order was issued under Supreme Court Rule 23, which restricts its use as precedent, except under limited circumstances permitted by the Supreme Court rule.

According to Howse, the group of defendants raised an issue with U&H charging $13.5 million for losing a lawsuit over property with a net value of $2.5 million. But the panel said the potential benefits at stake, which the defendants didn’t refute, “were not tied to the amount at stake in the condemnation action” at the root of the case.

The panel also said the Gitdwitz group failed to establish how the trial court failed to fully consider the complete spectrum of legal fees in the matter, as opposed to only the unpaid portion, noting Lustig well understood the foundational argument the fees were unreasonable, but still ruled in favor of the law firm.

Specifically, the panel said U&H presented expert testimony supporting the legal theories it used in trying to win the Evergreen Terrace action, as well as information from one of its attorneys discussing how fees are estimated and adjusted over time, such as occurred when the trial was spread out over 13 months, rather than 95 days.

The panel also said U&H’s evidence about the reasonableness of its fees was sufficient, and affirmed trial evidence that led Lustig to “find ‘The Burnham Companies’ was an assumed name or a common law partnership used for the real estate ventures of the Gidwitz family and that when Halperin signed the engagement letter using the name ‘The Burnham Companies’ ‘it was for the benefit, and on behalf of the eight Gidwitz Family members.’ ”

In examining the defendants’ cross-appeal, the panel further said it couldn’t see where Lustig had entered judgment against the manifest weight of trial evidence.

According to Cook County court records, U&H is represented in the matter by attorneys with the firm of Power Rogers & Smith, of Chicago, while the Gidwitz family and other defendants are represented by the Tetzlaff Law Offices, of Chicago.

Want to get notified whenever we write about any of these organizations ?

Sign-up Next time we write about any of these organizations, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

Circuit Court of Cook County Illinois First District Appellate Court Nixon Peabody LLC Power, Rogers and Smith, PC. Tetzlaff Law Ungaretti & Harris

More News

The Record Network