An Illinois appeals panel has ruled Chicago lawyer Mark McNabola should get his expenses and nothing more from a clouded $25 million personal injury settlement, saying his conduct while a jury was deliberating later put the entire settlement in "serious jeopardy."
The June 26 decision was penned by Justice Mary Mikva, with concurrence from Justices Joy Cunningham and Robert Gordon, of Illinois First District Appellate Court in Chicago. A Cook County Circuit Court judge had denied a request by McNabola, who runs McNabola Law Group, for an $8 million cut from a settlement, prompting McNabola to appeal.
"It was appropriate for the circuit court to consider the conduct of the attorneys in deciding what they deserved to be paid in this case," Mikva observed, in turning down McNabola.
McNabola represented Scot and Patricia Vandenberg in a 2010 suit alleging yacht maker Brunswick was to blame for Scot's fall from a yacht, which left him paralyzed. The case went to trial in 2015. While the jury was deliberating, the jury gave a note to the judge, asking a question that suggested it may not find Brunswick at fault. The judge told his clerk to contact the lawyers for both sides to come to her chambers. When McNabola was called, he allegedly told the clerk to hold off contacting Brunswick's lawyers because the case was about to be settled.
McNabola then persuaded Brunswick to settle for $25 million, allegedly without telling Brunswick about the note. Less than one hour later, the jury returned a verdict in favor of Brunswick. The yacht company failed in court to vacate the settlement. They won at the circuit level, but an appellate court reinstated the settlement.
The Vandenbergs filed a motion in 2018 to bar McNabola from collecting his $8 million fee and costs, saying he "engaged in misdeeds" that caused the initial loss of their settlement money. The couple stated it would be "unfair" to "reward" him with fees, because he placed the settlement in "jeopardy through service toward his own self-interest." The Vandenbergs further said they eventually secured the settlement, through their present attorneys, Power Rogers & Smith, of Chicago.
Judge James O'Hara refused to grant fees and costs to McNabola. On appeal, McNabola argued any alleged conduct breach on his part did not provide a basis for withholding his fees.
Justice Mikva first noted the fee dispute largely involves McNabola and the Vandenbergs' attorneys, because only a small amount of the money sought by McNabola would come from the Vandenbergs, who have already collected their share of the settlement with Brunswick.
Mikva found McNabola did not deserve attorney fees, as his firm's "conduct put in serious jeopardy" the Vandenbergs' case. Mikva pointed out the circuit court found 11 instances in which McNabola violated his duty to the Vandenbergs, such as by allegedly failing to inform them he had retained outside lawyers for their suit, and not telling them their settlement with Brunswick was in peril.
Nonetheless, Mikva determined McNabola should receive $169,009 for his expenses in handling the case and $111,715 for working out the settlement of the suit against yacht charter company RQM. Before going to trial against Brunswick, the Vandenbergs settled with RQM for $2.3 million.
Justice Gordon added that McNabola’s conduct "illustrated a willful and deliberate breach of his fiduciary duty to the plaintiffs."
The case was remanded to circuit court for calculation of the interest on McNabola's expenses.
The Illinois Attorney Registration and Disciplinary Commission is pursuing disciplinary action against McNabola in connection with the Vandenberg matter. McNabola has been a licensed lawyer in Illinois since 1985.
Besides Power, Rogers & Smith, the Vandenberg couple have been represented by the Chicago firm of Kralovec, Jambois & Schwartz.
McNabola has been represented by Miller, Shakman, Levine & Feldman, of Chicago.