An Illinois appellate court has ruled a suburban lawyer's former firm, Schiff Hardin LLP, does not have to make up the difference between what disability insurance paid the lawyer when he was suffering from cancer and what he otherwise would have earned with the firm if he had not been ill.
The court found the lawyer's claimed oral agreement with two top members of Schiff Hardin was too nebulous to support his case.
The May 29 ruling was penned by Justice Mary Rochford, with concurrence from Justice Mathias Delort and Justice Thomas Hoffman, of Illinois First District Appellate Court. The decision favored Chicago law firm Schiff Hardin in a lawsuit brought by one of its former partners, Robert I. Berger.
Berger joined Schiff Hardin in 2003 as an equity partner. He was diagnosed with cancer six months later, with the firm's insurance carrier, Prudential, then finding him partially disabled. To meet Prudential's criteria for the highest possible tax-free yearly disability payments of $240,000, Berger requested, and Schiff Hardin agreed, to change him from an equity partner to an income partner. The firm also reduced its expectations of Berger's output.
Under the Prudential policy, the maximum annual salary that Schiff Hardin could pay Berger while he was receiving disability payments was $117,600, which was 20 percent of his pre-disability income. In October 2011, Schiff Hardin increased Berger’s annual compensation to $138,000, upon learning Prudential allowed a cost-of-living adjustment.
In February 2012, Schiff Hardin paid Berger $55,000 as a retroactive cost-of-living catch-up for the years 2006-2010. When Berger turned 66 in 2015, his Prudential payments ended per the policy and Schiff Hardin could again pay him any amount of compensation, as the 20 percent rule no longer applied.
Schiff Hardin increased Berger’s annual compensation from $138,000 to $450,000 in 2015. In 2017, his pay was raised to $300,000. Berger was terminated in December 2017.
Berger alleged Schiff Hardin's then-Managing Partner Ronald Safer and then-Chairman Robert Riley both orally agreed in 2007 to pay the difference between the 20 percent he received from 2006 to 2014, and what he would have made with the firm if he had not been disabled. Berger claimed Safer and Riley backed up this pledge in later informal communications.
However, Schiff Hardin's executive committee, in charge of setting salaries, did not go along with the claimed oral agreement, prompting Berger to take the dispute to an arbitrator. The arbitrator found "Berger can prove no oral agreement at all" and "had not identified an agreement definite enough to determine the intention of the parties." The arbitrator denied money to Berger.
In December 2018, Berger filed action against Schiff Hardin in Cook County Circuit Court to vacate the arbitrator's decision, seeking more than $6 million in damages. Circuit Judge Celia Gamrath sided with the firm, and Berger appealed.
Justice Rochford found no reason to upset the circuit court and the arbitrator's rulings.
"No gross error of law appears on the face of the arbitration award as to the breach of oral contract claim, as the arbitrator correctly cited case law holding that for an oral contract to be binding, the material terms of the agreement must be definite enough to determine the parties’ intent," Rochford said.
Rochford added, "The arbitrator’s factual findings were not erroneous on their face, let alone grossly erroneous."
The justice also brushed aside Berger's other contentions the arbitrator refused to compel Schiff Hardin to identify the three equity partners who voted against discharging him, as well as to furnish documents pertaining to the performance and compensation of other income partners. Rochford said Berger failed to show this material was relevant to the matter at hand.
Rochford also rejected Berger's argument Schiff Hardin should have been ordered, in the circuit court case, to turn over certain documents the firm deemed privileged. Rochford said Berger forfeited this argument, because he never raised it during arbitration.
Berger has represented himself. According to state records, Berger now heads Berger Legal Consulting in Deerfield.
Schiff Hardin has been represented by the Chicago firm of Goldberg Kohn.