Condo board sued by its former law firm
Loop North News

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Photo by Steven Dahlman Condo board sued by its former law firm

Board claims legal fees were for president’s benefit, not association’s

(Left) Marina City from Terrace Lounge at One Eleven on July 18, 2014.

31-May-15 – A condo board in River North wound up on the wrong side of the law firm it fired.

Marina Towers Condominium Association was sued last September over unpaid legal bills from O’Hagan LLC, the association’s law firm from 2009 to 2013.

It was not for lack of money. The condo board at Marina City disputed the charges, saying the work they represented was not for the benefit of the condo association but for the benefit of a condo board president ousted from the board entirely in 2013 after eleven years of service.

According to the lawsuit filed on September 10, 2014, in Cook County Circuit Court, O’Hagan claimed it was owed $11,183.57, mostly for general legal work such as board member elections, unit purchases, assessment delinquencies, court appearances, and transferring files from the association’s previous attorney, former Illinois state representative Ellis Levin.

After the firm was fired on July 11, 2013, O’Hagan says it tried for more than a year to coax payment from the condo association. MTCA, however, refused to pay, claiming, according to O’Hagan, that at least some of the legal work was not approved by the board and was for the sole benefit of Donna Leonard, the condo board president from 2004 to 2013.

O’Hagan calls that “a subjective determination at best” and says that when the firm was hired, it was instructed to take orders from Leonard and former property manager David Gantt.

It would be impractical for all legal work to be approved by the condo board, asserts O’Hagan. “Association counsel need not wait for a board vote on all legal issues to be undertaken, insofar as nothing would ever get done in an even remotely [timely] manner.”

If the board believes its previous president was using O’Hagan’s legal counsel for personal gain, it is a dispute, says O’Hagan, between the board and Leonard.

“MTCA cannot authorize counsel to act at the direction of the president and/or property manager and then when the board make-up changes, disclaim any obligation to pay the resulting bills.”

Donna Leonard Before it was hired on November 19, 2009, O’Hagan requested a $5,000 retainer from the condo association but it was Donna Leonard who convinced the firm to waive the retainer, which is essentially a security deposit.

“To assuage your partner’s concerns,” Leonard (left) wrote to O’Hagan in an email, “please advise them that the MTCA has been in existence since Fall 1977, is well capitalized, liquid, and is well known for prompt payment of its bills.”

Law firm guided condo association during tough and litigious times

O’Hagan assisted Marina Towers Condominium Association during a period of increased litigation resulting from foreclosures. One forcible entry case in particular, involving four units, in which the association got an order of possession for the purpose of renting out the units, cost the association $40,000 in legal fees. In March 2011, evicting one tenant cost the association nearly $25,000. Nearly $105,000 was spent defending three complaints and five counterclaims filed by two unit owners involved in foreclosure and forcible entry cases.

Some of the firm’s time was invested in letters to Marina City Online. In October 2009, Daniel Meyer, a partner at O’Hagan, wrote to this news and information website to detail the board’s handling of condo units owned by convicted money launderer Dr. Gary Kimmel.

In October 2012, Meyer (right) not only provided background and explanations to Marina City Online for changes in condominium rules to accommodate service dogs but also defended MTCA against claims by MCO of plagiarism over text and images borrowed without credit for a soft-cover book that commemorated Marina City’s 50th anniversary as a residence. Daniel Meyer

What most likely caused the relationship to sour between MTCA and Meyer was his explanation in January 2013 to Marina City unit owners of why a petition signed by about 250 people, seeking a special meeting of the condo association, would not be honored. A landslide condo board election the next year ushered in new board members who had supported the petition.

The lawsuit was dismissed on November 10, 2014, after O’Hagan and MTCA agreed to use private arbitration to settle the dispute. O’Hagan did not object to this, as it is in its contract with MTCA, and says it tried to discuss arbitration with the board’s current law firm, Kovitz Shifrin Nesbit, but says they never received a response.

Ryan Benson “Now after having to expend attorney hours preparing a complaint and two court appearances…[MTCA] has agreed that the parties should arbitrate this claim as stated by the contract,” writes a frustrated Ryan Benson (left), an associate attorney with O’Hagan, who estimates the delay cost his firm $1,182. “If [MTCA] would have abided by the contract and consented to arbitration, no lawsuit would have had to been filed.”

Marina Towers Condominium Association has not shared any details of the lawsuit with residents of Marina City. MTCA attorney Kerry Bartell, a principal of KSN, declined to comment on the status of the arbitration.

 Previous story: Kovitz Shifrin Nesbit new counsel for Marina City condo association

By Steven Dahlman | Loop North News | sdahlman@loopnorth.com

Published 31-May-15 3:05 AM

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