Wealthy people who have been through the divorce-court wringer sometimes joke about the high cost of leaving.
Successful businessman Richard Stephenson can identify with that. Despite a solid prenuptial agreement, he was ordered by a McHenry County judge to, among other things, give his former wife, Alicia, a non-taxable lump sum of $6.5 million and another $400,000 to pay for a new residence. On top of that, Stephenson was ordered to pay monthly alimony of $55,000.
Since Stephenson, the founder of Cancer Treatment Centers of America, is a multimillionaire, the damage could have been far worse.
In fact, it eventually did get worse, in a bizarre way. He’s in the middle of a long legal fight with his former divorce lawyers at the Chicago law firm of Grund & Leavitt.
Stephenson paid Grund & Leavitt lawyers $3.4 million in fees and costs to handle his divorce. But he’s resisting the firm’s “final bill” of $9.75 million on the grounds that they’ve already been paid for the work they did.
After the law firm sued Stephenson to force payment, a trial judge dismissed the complaint against him. Cook County Circuit Judge Margaret Brennan found the $9.75 million bill represented a contingency fee, which is illegal to charge in divorce cases.
But a unanimous First District Appellate Court panel recently overturned the trial judge’s decision, characterizing the “final bill” not as an illegal contingency fee but a permissible “enhanced fee.”
The appellate court sent the issue back to the trial court to work out, meaning it could eventually be put to a jury to decide.
The fee dispute is just a part of the Stephensons’ matrimonial warfare that played out from 2015-17 in McHenry County Circuit Court. The conflict drew widespread attention in the news media.
The Stephensons — Richard, then 77, and Alicia, then 52 — were unable to reach an out-of-court settlement over eight years, forcing the trial judge to resolve the financial arrangements.
To give just one hint of the divide between the couple, she wanted alimony of $400,000 a month while he proposed $9,000.
They met when she was a teenager working as a sales clerk, and, after their marriage, lived what the trial judge called the “lifestyle of the rich and famous.” Testifying on Alicia’s behalf, a “lifestyle analyst” testified that she required $5 million a year in alimony to maintain herself in the same manner she enjoyed during her 26-year marriage.
Richard Stephenson’s contract with his divorce lawyers is the source of the dispute. It not only called for Stephenson to pay for the hourly legal fees and costs his lawyers charged but stated “upon final resolution of the case, G&L shall tender a final bill” beyond hourly fees and costs.
The contract said the final bill shall be determined by “taking into account various factors” that include “the time and labor involved,” “novelty and difficulty of the questions involved” and the “skill requisite to perform the legal services properly.”
Court filings show Stephenson “rebuffed” the idea of paying a “final bill” by refusing to engage in any discussion of a mutually satisfactory amount. That led to the lawsuit and the additional bill of $9.75 million.
Stephenson’s new lawyer argued that the language surrounding the “final bill” is unenforceable because it “does not state a definite” price and gives the law firm “unmitigated discretion to charge any fee it wants” beyond the $3.74 million Stephenson already paid.
Writing for the appellate court, Justice Bertina Lampkin noted that Stephenson signed a contract providing for a “final bill” in addition to the hourly rates he was charged based on the permissible standard of the “results obtained.”
In that context, the appellate court ordered the trial court to reconsider Stephenson’s motion to dismiss based on several factors that include what he already paid and the “reasonableness and enforceability of the final bill given the factors it is to consider.”
So it’s back to square one for Stephenson. Having shed his wife at a high price, he’s still trying to do the same to his former lawyers at a price that remains, for now at least, undetermined.
Jim Dey, a member of The News-Gazette staff, can be reached at email@example.com or 217-351-5369.