Summary Judgment – Res Judicata Bars Actions Seeking Over $150,000 In Attorneys’ Fees And Interest

In Attorneys’ Fees and Interest Attorney Chris Pickett won summary judgment on behalf of his client, Dr. John Kelsey, arguing that Dr. Kelsey’s former attorneys, the law firm of Weldon-Linne & Vogt (WLV), were barred from seeking attorneys’ fees under the doctrine of res judicata. WLV represented Dr. Kelsey as Peppers counsel in an underlying contract and fraud case, as well the ensuing declaratory judgment action filed by Dr. Kelsey’s insurance company, Nationwide. After Dr. Kelsey terminated WLV as his attorneys, WLV intervened in the declaratory judgment action to pursue Nationwide for attorneys’ fees. Nationwide and Dr. Kelsey then settled their dispute and Dr. Kelsey was dismissed, with prejudice, from the declaratory judgment action. Almost two years later, WLV filed a breach of contract claim against Dr. Kelsey seeking to recover attorneys’ fees directly from Dr. Kelsey. Pickett argued that res judicata barred WLV’s action because the same parties (WLV and Dr. Kelsey) were involved in prior litigation (the declaratory judgment action) involving nearly identical claims (WLV’s attorney fees). WLV argued that res judicata did not apply because WLV sought and was denied leave to file claims against Kelsey in the prior declaratory judgment action. Pickett responded that, according to the transcript from that prior hearing, the WLV attorneys expressly stated they were not seeking leave to file claims against Kelsey and, moreover, acknowledged on the record that they could have filed claims against Kelsey, but chose not to do so. The court noted that res judicata operates to bar not only what was actually decided in prior litigation, but what could have been decided. The court proceeded to enter summary judgment in Kelsey’s favor and against WLV on all claims. WLV v. Kelsey, no. 12 L 11639 (Cook County, September 5, 2014)