Illinois Appellate Court Finds That Attorney Who Signed Consulting Contract in Medical Negligence Lawsuit is Not Personally Liable

Rose Newsome received treatment at the University of Illinois Hospital on March 12, 1995 when she alleged that she sustained a brain injury caused by medical negligence. Newsome and her husband, Hatler, hired attorney Zane Smith and his law firm to represent both of them in a medical malpractice lawsuit against the University of Illinois Hospital and several doctors who were involved in her treatment.

The attorney hired Dr. Bruce Livingston to serve as a consulting medical expert to assist with the Newsomes’ case. Dr. Livingston presented a medical consultation agreement that he had drafted and had signed by Smith and the Newsomes whereby Dr. Livingston would have a lien for the total amount of his fees plus any needed attorney fees.

Dr. Livingston was to be paid directly by the attorneys unless ordered otherwise by the court. Should his fee go unpaid, “the parties authorize Livingston to take a default judgment against them for his entire fee plus costs, interest and attorney fees.”

If an issue arose regarding Livingston’s bill for services under the terms of the agreement, all of Livingston’s fees, plus the attorney’s fee, accrued interest and costs should remain in an escrow account pending a ruling by the court.

The agreement stated that, “Counsel assumes the responsibility of the entire award due Livingston should these funds be dissipated.”

Livingston filed a lawsuit that claimed a breach of contract against Smith, the attorney. Both parties moved for summary judgment, but the trial court denied both, finding that the agreement that the parties had signed was ambiguous and required extrinsic evidence to determine the intent of the parties.

Following a bench trial, the court found that Mr. Smith was not personally liable for Dr. Livingston’s contingency fee, but was only required by the agreement to “safeguard the integrity of any funds that were in dispute.” The trial judge ruled in favor of attorney Smith. Dr. Livingston appealed.

On appeal, Dr. Livingston argued that both the Newsomes as well as Smith were party to the agreement and that both Rose Newsome and Zane Smith, who signed the contract, should be held liable for the doctor’s consulting fees. The appellate court disagreed, affirming the trial court’s holding that the agreement contained ambiguous language and that “there is no language indicating that Smith . . . agreed to pay Livingston’s consulting fees.”

The appeals panel noted that Smith had placed the disputed funds into an escrow account, which fulfilled his obligations under the agreement in the event of a dispute. Dr. Livingston argued that because Smith did not sign the agreement as an agent or attorney for Newsome, that as an individual, he became personally liable for paying Livingston’s fees. The appellate court disagreed, noting that Smith explicitly contacted Dr. Livingston as counsel for Newsome and although his signature was not listed as counsel or representative, he did sign it, including the characters “Esq.” (Esquire) after his name.

The appellate court therefore affirmed the trial judge’s decision finding the agreement to be ambiguous and ruling in favor of attorney Smith.

Bruce Livingston v. Zane Smith, 2016 IL App (1st) 151578-U (June 27, 2017).

Kreisman Law Offices has been handling medical malpractice lawsuits, wrongful death cases, birth trauma injury cases, hospital negligence cases and nursing home negligence cases for individuals, families and the loved ones who have been injured, harmed or killed by the negligence of a medical provider for more than 40 years, in and around Chicago, Cook County and its surrounding areas, including Evanston, Elmhurst, Flossmoor, Gurnee, Round Lake Beach, Bensenville, Barrington, South Holland, South Barrington, Streamwood, Chicago (Gold Coast, Lincoln Square, North Lawndale, Kenwood, Ashburn, Lake Calumet, East Side), Richton Park, Olympia Fields and Orland Park, Ill.