The former law partner of a current Cook County circuit judge is being sued, accused of conspiring with his daughter and others to convert two years of legal work into a multi-million-dollar payday on the other side of a court fight among former real estate business partners that has stretched over nearly two decades.
On March 15, plaintiffs Dennis Hiffman, E. Thomas Collins Jr. and Richard Hulina, a trio of investors who have been at the center of the long-running legal battle, filed a new lawsuit against attorney Peter Carey, of Chicago, as well as Carey’s daughter, Ellen, a lawyer with the Forde Law Offices LLP, in Chicago.
The lawsuit also named the Forde firm as a defendant, along with attorney Bennett Lasko and his firm, Lasko Legal Services, of Chicago.
The lawsuit claims Peter Carey instigated a civil conspiracy to file and then drag out a lawsuit against the plaintiffs, using his daughter to further the alleged conduct.
The lawsuit asserts claims of legal malpractice against Ellen Carey and the Forde firm, for allegedly failing to disclose Ellen’s alleged conflict of interest while negotiating a settlement with a different defendant, which steered attorneys fees worth “hundreds of thousands of dollars” to her father and his former law partner, current Cook County Judge Patrick Sherlock.
Sherlock is not named as a defendant in the lawsuit, nor is he accused in the complaint of any wrongdoing. His name is also not printed in the complaint at all.
However, the complaint includes references to Peter Carey’s “former partner.” Sherlock was Carey’s former partner, and has been included in fee requests submitted by Carey in the litigation from which the new lawsuit stems.
Lasko is accused of legal malpractice in representing Hiffman, Collins and Hulina, collectively referred to in the complaint as HCH.
LONG-RUNNING LITIGATION
The legal action which spawned the new lawsuit dates back to 2001. At that time, a plaintiff identified as Melissa Pielet filed suit against HCH and another partner, John Shaffer. The lawsuit alleged the group, which ran partnerships in the 1990s to invest in bonds issued by the villages of Broadview and Bedford Park, steered the proceeds away from the partnerships and to themselves.
According to court documents, Pielet and other plaintiffs in the action have alleged the defendants amassed as much as $24 million to $50 million in the process.
The HCH defendants have contested the allegations for more than 17 years.
Initially, Pielet was represented by Peter Carey and Sherlock.
In 2003, Carey and Sherlock stepped away from the case, and were replaced by lawyers with the firm of Edward T. Joyce & Associates, of Chicago, representing a group of additional plaintiffs, identified in the complaint as “intervening plaintiffs.”
According to the new complaint, however, the litigation was spawned in the first place by alleged “collusion” involving Peter Carey, Pielet and Shaffer. According to the complaint, Peter Carey “was essentially representing Pielet as a proxy for Shaffer … plotting with Pielet and Shaffer to sue HCH.”
The complaint asserts Shaffer had a falling out with the HCH partners, leading to the lawsuit, using Pielet, a “former limited partner,” as a proxy.
However, a few months after Pielet filed her complaint, HCH moved to add Shaffer as a defendant in the action, as well. At that point, HCH asserts, Pielet sought to dismiss the case, but was overruled by Peter Carey. According to the complaint, Peter Carey allegedly refused to dismiss the case, and instead transferred it to other legal counsel, with whom the complaint asserts Carey had a “close personal relationship.” The complaint accuses Peter Carey of doing so “for his personal financial gain.”
After more than 15 years of litigation, the intervening plaintiffs settled with Shaffer. Carey in 2017 then submitted a request for attorney’s fees on behalf of himself and Sherlock, who had been elected in the intervening years to a Cook County Circuit Court judgeship.
The court awarded him and Sherlock $560,000 in fees for their work from 2001-2003 on the case.
The case against HCH continued. In December 2018, following a trial, Cook County Associate Judge Neil Cohen ordered HCH to pay more than $116 million, finding they breached their fiduciary duty to the other investors.
However, the judge also ordered further hearings for potential punitive damages, which potentially could increase the final payout by hundreds of millions of dollars. And he ordered further hearings on how much the plaintiffs’ lawyers should be paid for their work on the case.
Among the competing fee requests, Peter Carey submitted another fee request, again on behalf of himself and Sherlock, asking for $2.4 milllion, or 3 percent of the final judgment.
In that fee request, Carey said he and Sherlock withdrew from the case in 2003 after they refused Pielet’s request to end the litigation, saying they rejected her request to submit a “wholly inadequate” settlement deal.
Attorneys for HCH in the Pielet case have asked Judge Cohen to transfer hearings on that fee request to a judge outside Cook County, arguing no judge in Cook County should be allowed to preside over that aspect of the case, because it involves a large payday for Sherlock.
Carey and attorneys from the Joyce firm have argued against that recusal request.
Judge Cohen has not yet ruled on that request. The next hearing in that case is scheduled for May 6.
CONFLICT OF INTEREST?
After asking Cohen to recuse himself and all other Cook County judges from the Carey/Sherlock fee request, the plaintiffs filed their new lawsuit.
They assert they received poor representation from their former lawyers with the Forde and Lasko firms. They particularly centered allegations on the work of Ellen Carey, Peter Carey’s daughter, who helped lead their defense after 2003.
According to the lawsuit, Ellen Carey knew throughout the Shaffer settlement process of her father’s intent to claim fees, yet never disclosed the potential conflict to her clients.
“…HCH submit that E. Carey and Forde Law never fully disclosed all facts regarding P. Carey’s continuing financial claim and other involvement in the (Pielet lawsuit),” HCH wrote in their March 15 complaint.
The HCH litigants noted a member of the Joyce firm even instructed the Forde firm to negotiate Peter Carey’s fees directly with him. Yet, the plaintiffs assert, neither Ellen Carey nor the Forde firm revealed those facts to their clients.
They said Ellen Carey and the Forde firm then abruptly withdrew as HCH’s counsel on March 15, 2017, “while continuing to represent Shaffer after that date through the dismissal of Shaffer as a party to the (Pielet lawsuit) on July 12, 2017 (and perhaps thereafter), essentially abandoning HCH for Shaffer on the eve of the trial.”
The HCH group said they learned of the conduct they have alleged against the Careys and the Forde firm when reviewing the various attorney fee requests, beginning in April 2017.
The lawsuit also accuses Lasko of failing to inform the HCH group of their ability to exercise an option under their partnerships’ agreements, which would have allowed them to buy out some of the intervening plaintiffs and their claims.
The HCH group assert they paid the Forde firm “hundreds of thousands of dollars in fees” and Lasko “millions of dollars in fees.”
The HCH group has requested “compensatory damages in excess of $50,000 but to be determined at trial” and unspecified punitive damages, against each defendant.
Lasko and Forde Law principal Michael Forde said they had not yet seen the lawsuit. They declined to comment on the allegations.
However, in a comment emailed to The Cook County Record, Forde added: “Our conduct in representing these clients, as with all of our clients, met the highest standards.”
Peter Carey and Ellen Carey did not reply to emails from The Cook County Record requesting comment.
HCH is represented in the Pielet litigation by attorneys from the firms of Thompson Coburn LLP, Locke Lord LLP, Ice Miller LLP and Tabet DiVito & Rothstein LLC, all of Chicago.
They are represented in the lawsuit against the Careys and the Forde firm by attorney Donald J. Angelini Jr., of the Angelini Ori and Abate Law Firm, of Chicago.