White v. Richert

Filing 512

MEMORANDUM Opinion and Order. Signed by the Honorable Heather K. McShain on 9/6/2022. Mailed notice. (pk, )

Case: 1:15-cv-08185 Document #: 512 Filed: 09/06/22 Page 1 of 19 PageID #:8496

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
KATHLEEN WHITE MURPHY, ET AL.,
Plaintiffs,
No. 15 CV 8185

v.
ELIZABETH RICHERT,

Magistrate Judge McShain

Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the Court are motions for attorney’s fees filed by plaintiffs
Kathleen White Murphy and Thomas White [475]1 and by defendant Elizabeth
Richert [497]. For the following reasons, plaintiffs’ motion is granted in part and
denied in part, and defendant’s motion is denied.
Background
After a bench trial, this Court entered judgment in favor of plaintiffs on their
claim that defendant breached her fiduciary duty, as trustee of the Robert L. Richert
Trust (the Robert Trust), to Anna White, a beneficiary of the Robert Trust who was
also plaintiffs’ mother and defendant’s aunt. The Court found that plaintiffs proved
that defendant “create[ed] a fake version of the Robert Trust in order to steal fortyseven percent of the trust estate to which she was not entitled” under the authentic
trust instrument, “including $95,850.83 that belonged to Anna White.” Murphy v.
Richert, No. 15 CV 8185, 2021 WL 2156448, at *28 (N.D. Ill. May 27, 2021). The Court
then found that plaintiffs proved that defendant “engaged in reprehensible conduct
and acted with an evil mind,” which entitled plaintiffs to an award of punitive
damages under Arizona law. Id. (internal quotation marks omitted). Finally, the
Court found that defendant–who at all relevant times was licensed to practice law by
the State of Florida–failed to prove that the Receipt and Release (a document that
she and Anna White had signed) either extinguished Anna White’s claim against her
or required plaintiffs to indemnify her for the attorney fees and costs she incurred in
this case. The Court awarded plaintiffs $246,152.76, which comprised $95,850.83 in
compensatory damages, $95,850.83 in punitive damages, and $54,451.10 in
Bracketed numbers refer to entries on the district court docket. Referenced page numbers
are taken from the blue CM/ECF header placed at the top of the filings.
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prejudgment interest.2 Thereafter, the Court denied both parties’ post-trial motions.
Murphy v. Richert, No. 15 CV 8185, 2021 WL 4963604 (N.D. Ill. Oct. 26, 2021).
Discussion3
I.

Plaintiffs’ Petition for Attorney’s Fees and Costs

Plaintiffs seek an order directing defendant to pay all attorney’s fees and costs
they incurred during this litigation, for a total of $443,127 in fees and $19,541.82 in
costs. [475] 1. Plaintiffs bring this request under 28 U.S.C. § 1927, which permits the
Court to sanction an attorney who unreasonably and vexatiously multiplies the
proceedings in a case, and under the Court’s inherent authority to sanction bad-faith
litigation conduct. [Id.] 2-3. They rely primarily on the Court’s finding that defendant
counterfeited a version of the Robert Trust that purported to award her 47% of the
trust’s assets while “concealing authentic copies of the Robert Trust[.]” [Id.] 1-2.
Plaintiffs also contend that, throughout the litigation, defendant lied about her role
in preparing Anna White’s estate plan. [Id.].
In response, defendant first argues that the Court should strike plaintiffs’
petition because it does not comply with certain requirements of Fed. R. Civ. P. 54(d).4
See [497] 3. Defendant next contends that plaintiffs cannot recover the fees or costs
they incurred in prosecuting count one of their amended complaint–which sought an
accounting of the Robert Trust and an order transferring title to Anna White’s home
in Buffalo Grove from defendant, in her capacity as trustee of the Robert Trust, to
Anna White–because defendant obtained summary judgment on that claim. [Id.] 3,
6, 7. [Id.] 6-7. Third, defendant objects that plaintiffs cannot recover certain costs
incurred in connection with her February 2017 deposition because the Court
previously awarded those costs to plaintiffs. [Id.] 6, 7 (citing [131]). Defendant also
contends that the fees sought by plaintiffs are excessive under Illinois law. [Id.] 8.

2

Defendant’s appeal of the Court’s judgment is pending in the Seventh Circuit.

This decision presumes familiarity with the overall history of the litigation, the Court’s
Memorandum Opinion and Order entering judgment for plaintiffs, and its decision denying
the parties’ post-trial motions.
3

Defendant did not file a timely response to plaintiffs’ petition. See [466] (setting deadline
for defendant’s response to petition for July 10, 2021). Rather, when defendant filed her own
motion for attorney fees in September 2021, she raised arguments in opposition to plaintiffs’
petition. Despite their untimeliness, the Court will exercise its discretion to consider
defendant’s arguments.
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A.

Legal Standards
1.

28 U.S.C. § 1927

Under § 1927, “[a]ny attorney . . . who so multiplies the proceedings in any case
unreasonably and vexatiously may be required by the court to satisfy personally the
excess costs, expenses, and attorneys’ fees reasonably incurred because of such
conduct.” 28 U.S.C. § 1927. “Sanctions awarded under § 1927 are to be paid by the
lawyer, who must satisfy personally the excess costs, expenses, and attorneys’ fees
reasonably incurred because of such conduct.” Estate of Perry v. Wenzel, 872 F.3d 439,
463 (7th Cir. 2017) (internal quotation marks omitted). “The statute is applicable not
only to lawyers who represent clients but also to a lawyer who represents himself.”
Carr v. Tillery, 591 F.3d 909, 919 (7th Cir. 2010).
To merit a fee award under § 1927, the attorney conduct “must multiply the
proceedings, meaning prolong the case.” DR Distribs., LLC v. 21 Century Smoking,
Inc., 513 F. Supp. 3d 839, 951 (N.D. Ill. 2021). In addition, “the attorney’s actions
must be both unreasonable and vexatious.” Id. “If a lawyer pursues a path that a
reasonably careful attorney would have known, after appropriate inquiry, to be
unsound, the conduct is objectively unreasonable and vexatious.” Gravitt v. Mentor
Worldwide, LLC, 17 C 5428, 2021 WL 5564862, at *2 (N.D. Ill. Nov. 29, 2021)
(internal quotation marks omitted). Fees may also be awarded where “a claim is
without a plausible legal or factual basis and lacking in justification.” Estate of Perry,
872 F.3d at 463. Any award of sanctions under § 1927 requires a “causal link between
the misconduct and fees.” Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178,
1186 n.5 (2017).
Section 1927 is “permissive, not mandatory. The court is not obligated to grant
sanctions once it has found unreasonable and vexatious conduct. It may do so in its
discretion.” Catalina Holdings (Bermuda) Ltd. v. Muriel, Case No. 18-cv-5642, 2020
WL 1675464, at *14 (N.D. Ill. Apr. 6, 2020).
2.

Inherent Authority

The Court also has the inherent authority to impose sanctions for “conduct
which abuses the judicial process.” Chambers v. NASCO, Inc., 501 U.S. 32, 44-45
(1991). “[S]anctions imposed pursuant to the court’s inherent authority must be
premised on a finding that the culpable party willfully abused the judicial process or
otherwise conducted the litigation in bad faith.” Ebmeyer v. Brock, 11 F.4th 537, 546
(7th Cir. 2021) (internal quotation marks omitted).
“[O]ne permissible sanction is an assessment of attorney’s fees–an order . . .
instructing a party that has acted in bad faith to reimburse legal fees and costs
incurred by the other side.” Haeger, 137 S. Ct. at 1186 (internal quotation marks
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omitted). Because sanctions imposed under the Court’s inherent authority “must be
compensatory rather than punitive,” a court can “shift only those attorney’s fees
incurred because of the misconduct at issue.” Id. “That kind of causal connection . . .
is appropriately framed as a but-for test: The complaining party . . . may recover only
the portion of his fees that he would not have paid but for the misconduct.” Id. at 1187
(internal quotation marks omitted). “This but-for causation standard generally
demands that a district court assess and allocate specific litigation expenses–yet still
allows it to exercise discretion and judgment.” Id. In “exceptional cases,” however, the
but-for standard “permits a trial court to shift all of a party’s fees, from either the
start or some midpoint of a suit, in one fell swoop.” Id. at 1188. In such a case, the
Court “escapes the grind of segregating individual expense items (a deposition here,
a motion there)–or even categories of such items (again, like expert discovery)–but
only because all fees in the litigation, or a phase of it, meet the applicable test: They
would not have been incurred except for the misconduct.” Id.
B.

Defendant’s Egregious Misconduct Warrants the Imposition of
Sanctions.

The Court concludes that this is one of the “exceptional cases” envisioned by
the Supreme Court in Haeger where a party should be required to pay all of its
opponent’s fees and costs from “some midpoint of a suit, in one fell swoop.” 137 S. Ct.
at 1188. This case began in late 2015 as a contentious but otherwise unremarkable
intra-family dispute in which a beneficiary of a trust sought an accounting of the trust
and an order compelling the trustee to turn over certain property that allegedly
belonged to the beneficiary. See [1-1] 3-4. The case proceeded in the normal course
through April 2016, during which time the parties expended substantial time on
settlement efforts. See, e.g., [20, 27, 29, 32, 37]. When settlement efforts faltered, “the
litigation began in earnest,” Murphy, 2021 WL 2156448, at *9, with multiple rounds
of motion practice beginning in May 2016. [42, 53].
But this case became something entirely different on February 15, 2017, when
defendant produced the document known as Version C of the Robert Trust. [146] 4.
Holding this document out as the authentic trust instrument, defendant testified at
her deposition the next month that the original Version C had been stolen from her
home in Florida at a time she could not recall, and that a copy of Version C appeared
one day inside a plastic bag that had been left in her mailbox. [Id.] 5-6. Version C
purported to distribute to defendant not only Robert Richert’s home in Carefree,
Arizona, but also an additional 47% of the Robert Trust’s assets, which amounted to
$287,552.79. In response to this surprising development,5 plaintiffs undertook
Defendant never before disclosed the existence of Version C or that it had allegedly been
stolen from her home, despite a September 2016 court order directing her to produce any
copies of the trust in her possession, custody, or control. See Murphy, 2021 WL 2156448, at
*21.
5

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additional discovery related to Version C. See [146] (motion to compel supplemental
deposition of defendant); [149] (plaintiffs’ motion for leave to issue subpoenas to
custodian of Robert Richert’s trust account and designate expert to opine on
authenticity of Version C). This discovery, in turn, led not only to the production of
the authentic versions of the trust instrument (referred to as Versions A and B of the
Robert Trust)–which distributed to defendant only the Carefree home–but also to
plaintiffs’ motion for leave to file an amended complaint, which alleged that
defendant breached her fiduciary duties by creating a counterfeit trust instrument
and using it to withhold trust assets that belonged to Anna White. [165]. At the bench
trial, the Court found that the evidence overwhelmingly established that Version C
was a forgery that defendant had created to justify her brazen theft of trust assets to
which she had no claim:
[T]he Court is convinced that Version C of the Robert Trust is a forgery
that defendant created to steal the forty-seven percent of the trust estate
for which Version A did not identify a named beneficiary. This finding
is based primarily on the Court’s conclusion that defendant’s testimony
about the disappearance and re-emergence of Version C is completely
incredible and entirely fabricated.
*

*

*

The Court does not believe a single piece of this testimony.
First, there is absolutely no evidence in the record to corroborate
defendant’s account about the creation of Version C, her possession of
that document in her house in Florida, or the theft of that document
from and its fortuitous return to her home. Second, the Court finds it
incredible that defendant would not remember the date of the burglary–
or even roughly when it had occurred–given her testimony that this was
“the only time [her] home was subject to a theft,” [451] 50, and the
significance that such an event is likely to have for a homeowner. Third,
the Court rejects as unconvincing defendant’s claim that she could not
report the burglary to police because of her past involvement in an
abusive relationship–particularly when coupled with the fact that
defendant must have disclosed her address to her former client-turnedburglar. While the Court has no reason to doubt defendant’s claim that
she had a genuine fear for her safety, the Court does not find that this
fear would explain why defendant could not or would not report the
crime to police. Fourth, the Court emphasizes the fantastical nature of
defendant’s claim that Thomas White found the copy of Version C that
defendant had allegedly sent to Anna White, hired a private detective to
find defendant’s address, and planted the copy of Version C to “set
[defendant] up.” But this claim is not just fantastical; it is illogical.
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Based on their conversations with defendant, plaintiffs believed that
Anna White was entitled to half of the Robert Trust’s assets, including
the Carefree home. Under Version C, however, plaintiffs were in a worse
position because that document distributes the Carefree home to
defendant alone. The Court fails to see how plaintiffs stood to gain from
“planting” a copy of Version C in defendant’s mailbox, and the Court[ ]
concludes that defendant’s preposterous account of the re-emergence of
Version C only underscores her false and misleading testimony on this
subject.
The Court also bases its credibility finding on the circumstances
surrounding the production of Versions A and B of the Robert Trust.
Fidelity Investments, the custodian of Robert’s trust account, produced
only these versions of the trust documents in response to plaintiffs’
subpoenas in May 2017. The Court concludes that Version A is the
version Robert provided to Fidelity in order to open the trust account,
while Version B is the version that defendant faxed to Fidelity in order
to be recognized as the successor trustee after Robert was incapacitated.
That Robert, defendant, and Fidelity all possessed the same version of
the trust documents supports the Court’s finding that Versions A and B
are genuine, while Version C–which only defendant possessed–is a fake.
The Court recognizes that defendant testified that she did not discover
Version C until “months after” her uncle died, and that defendant
believed that Robert had simply substituted a new version of paragraph
5.4.1 into the version of the trust he originally executed in June 2008.
But there is no credible evidence to link Version C to Robert Richert;
only defendant’s testimony places Version C in Robert’s house, and the
Court does not find any part of defendant’s testimony respecting Version
C to be credible. Moreover, paragraph 4.1 of all versions of the Robert
Trust provides that the trust could be amended “by an instrument in
writing signed by the Settlor and delivered to the Trustee.” [PX 26] 5
(Version A); [id.] 37 (Version B); [PX 29] 1 (Version C). There is no
evidence that Robert ever sought to amend the trust in this fashion, and
defendant’s testimony that Robert decided to make a page substitution
“rather than go to the trouble of re-executing a document and finding
witnesses and a notary” [458] 37, is rejected as entirely self-serving and
speculative.
The Court also finds that defendant’s failure to disclose the existence or
whereabouts of any version of the Robert Trust during the first yearand-a-half of the litigation further undermines the credibility of her
testimony about Version C and supports the Court’s finding that Version
C is counterfeit. Defendant admitted that she never contacted Fidelity
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to obtain copies of the trust [450] 155-57, despite the Court’s order of
September 15, 2016 directing her to produce any copies of the trust that
were in her possession, custody, or control. [71] 2-3. Likewise, defendant
acknowledged at trial [451] 49-50, that none of her discovery responses
mentioned the existence of Version C or defendant’s contention that
Version C had been taken during a burglary of her home. Defendant’s
failure to mention or produce Version C during the first seventeen
months of this litigation is likewise consistent with the Court’s finding
that defendant forged Version C in an effort to steal forty-seven percent
of the trust assets.
Murphy, 2021 WL 2156448, at *20-21.
In its award of punitive damages, the Court emphasized that defendant
obviously knew that Version C was a fake, but nevertheless fought the litigation for
years by contending that it, rather than the authentic Versions A and B, governed
the disposition of the Robert Trust’s assets:
Defendant possessed the authentic trust instrument and knew that she
was entitled only to the Carefree home while Anna was entitled to both
forty-seven percent of the trust estate and a further one-third share of
the forty-seven percent of the trust estate not distributed to a named
beneficiary. Nevertheless, or more likely because of this, defendant
created a fake version of the trust document that redirected forty-seven
percent of the trust estate to herself alone . . . Defendant could not but
be consciously aware of the wrongfulness or harmfulness of her conduct,
and yet she has persisted for years in claiming that the fake document
controls.
Murphy, 2021 WL 2156448, at *28 (internal quotation marks, citation, and brackets
omitted).
Based on these findings, which rest on clear and convincing evidence,6 the
Court now holds that defendant knowingly introduced false evidence into the case
and perjured herself at trial in an effort to defeat plaintiffs’ claims. This egregious,
bad-faith litigation conduct cannot be tolerated and must be met with the imposition
Plaintiffs were required to prove their claim for breach of fiduciary duty only by a
preponderance of the evidence. Murphy, 2021 WL 2156448, at *18-19. To obtain punitive
damages, however, Arizona law required that plaintiffs prove by clear and convincing
evidence that defendant’s breach was “truly reprehensible” and committed with “an evil
mind.” Id., at 28-29. In finding that plaintiffs met that standard, the Court found that there
was “clear and convincing evidence to prove that defendant breached her fiduciary duty by
creating a fake trust instrument[.]” Id., at *19 n.17.
6

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of sanctions under the Court’s inherent authority. Defendant will be ordered to pay
all of plaintiffs’ attorney’s fees and costs that “would not have been incurred except
for the misconduct.” Haeger, 137 S. Ct. at 1188. Likewise, the Court will impose
sanctions under § 1927 and order defendant to pay the attorney’s fees and costs that
plaintiffs incurred while defendant represented herself and in response to defendant’s
injection of the counterfeit trust document into the litigation. Defendant knowingly
built her case around a piece of false evidence that she herself created and her own
perjured testimony. Reasonable litigants–especially litigants who are themselves
attorneys–do not build cases on fake documents and perjury, yet that is exactly what
defendant did in an ultimately fruitless attempt to defeat plaintiffs’ claim. The Court
would be hard-pressed to identify a clearer example of unreasonable and vexatious
litigation that needlessly drew out the proceedings, and defendant will be sanctioned
accordingly.
Defendant’s injection of the fake trust document into the case on February 15,
2017 fundamentally transformed the litigation. For purposes of its sanctions
analysis, the Court has divided the litigation into four distinct phases and explains
below whether plaintiffs are entitled to an award of fees and costs during that phase
as well as the Court’s authority for imposing sanctions.
1.

Removal of the Case in September 2015 through
Defendant’s Production of the Counterfeit Trust
Document on February 15, 2017

Plaintiffs are not entitled to recover any of the attorney’s fees and costs that
were incurred from the removal of this case to federal court on September 18, 2015,
see [1], through defendant’s production of Version C on February 15, 2017.
First, § 1927 does not permit the Court to sanction defendant directly for any
unreasonable multiplication of proceedings during this time because defendant was
continuously represented by counsel. See [3, 4] (appearances of defendant’s first and
second attorneys on September 18, 2015); [90] (appearance of third attorney on
October 25, 2016); [119] (appearance of fourth attorney on January 15, 2017). Section
1927 authorizes an award of sanctions against an attorney only; a represented client
cannot be sanctioned. See Carr, 591 F.3d at 919; see also Flip Side Prods., Inc. v. Jam
Prods., Inc., 843 F.2d 1024, 1035 n.12 (7th Cir. 1988) (Ҥ 1927 provides only for the
imposition of sanctions against counsel”); Rentz v. Dynasty Apparel Indus., Inc., 556
F.3d 389, 396 n.6 (6th Cir. 2009) (Ҥ 1927 does not authorize the imposition of
sanctions on a represented party”).7
Second, sanctions are not warranted under the Court’s inherent power because
plaintiffs have not established that defendant was litigating the case abusively or in
Plaintiffs’ petition seeks an award of fees and costs against defendant personally, and not
against any of the attorneys who represented her during the litigation.
7

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bad faith before she produced Version C in February 2017. To begin, most of this
phase of the litigation consisted of settlement discussions in which both sides were
active participants. Moreover, once the parties’ settlement efforts stalled, the only
claim pending in the case was plaintiffs’ claim for an accounting of the Robert Trust
and an order transferring title to Anna White’s Buffalo Grove home from defendant
to Anna White. In sharp contrast to how she would later oppose the breach-offiduciary-duty claim, defendant opposed this claim on statute-of-limitations grounds.
This defense was first raised in her motion to dismiss, filed in May 2016, see [42], and
later in her answer to plaintiffs’ complaint, filed in July 2016, see [49] 7-9.
Furthermore, this defense ultimately proved to be a winner: in August 2018, the
Court granted summary judgment for defendant on count one of the amended
complaint because the undisputed evidence showed that it was time-barred. See
White v. Richert, No. 15 CV 8185, 2018 WL 4101512, at *5-6 (N.D. Ill. Aug. 28, 2018).
Defendant’s reliance on a valid, and ultimately successful, statute-of-limitations
defense is critical because it shows that defendant had a good-faith basis for litigating
this phase of the case. Cf. Ebmeyer, 11 F.4th at 546 (district court abused its
discretion by using inherent authority to sanction plaintiff “without finding that [he]
willfully abused the judicial process or otherwise conducted the litigation in bad
faith”).
Plaintiffs–who acknowledge neither the different standards that apply to
§ 1927 and the Court’s inherent sanctioning power nor their own obligation to prove
a causal connection between defendant’s misconduct and the requested fees–appear
to suggest that other instances of defendant’s misconduct justify a fee award during
this phase of the case. They observe that, while settlement negotiations were
underway in 2015, defendant had “already drained the Robert Trust,” failed to
disclose that “she had made no accounting to the Whites,” and had misled “everyone
by having them think that [under the authentic trust document] the Carefree home
would be sold and they would get a share of the house.” [475] 2. However blameworthy
this conduct may be, it cannot form the basis of a sanctions award under the Court’s
inherent power because it occurred “in the events giving rise to the litigation[,]” and
not during the litigation itself. Zapata Hermanos Sucesores, S.A. v. Hearthside
Baking Co., Inc., 313 F.3d 385, 391 (7th Cir. 2002). As the Seventh Circuit explained
in Zapata, “[t]he inherent authority of federal courts to punish misconduct before
them is not a grant of authority to do good, rectify shortcomings of the common
law . . . or undermine the American rule on the award of attorneys’ fees to the
prevailing party in the absence of statute.” Id. at 390-91. Rather, a federal court’s
inherent power “is a residual authority, to be exercised sparingly, to punish
misconduct (1) occurring in the litigation itself, not in the events giving rise to the
litigation (for then the punishment would be a product of substantive law—designed,
for example, to deter breaches of contract), and (2) not adequately dealt with by other
rules[.]” Id. at 391; see also Carr, 591 F.3d at 919 (“section 1927 is inapplicable to
misconduct that occurs before the case appears on the federal court’s docket, or in
other words to improper conduct in the run up to litigation”). Here, the misconduct
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alleged by plaintiffs occurred long before the litigation began: defendant had drained
the Robert Trust by February 2010; it was defendant’s failure to provide an
accounting of the trust that precipitated plaintiffs’ lawsuit in August 2015; and both
plaintiffs testified that, in conversations with defendant after Robert Richert’s death
in November 2009, she told them that Anna White would receive a one-half interest
in the Carefree home. See Murphy, 2021 WL 2156448, at *3, *6. Such instances of
pre-litigation conduct do not support a sanctions award. Carr, 591 F.3d at 919;
Zapata, 313 F.3d at 391.
Third, the Court observes that defendant filed an amended counterclaim on
August 2, 2016. See [51]. The counterclaim included eight counts, including (1) a
claim against Anna White that was voluntarily dismissed by defendant on August 28,
2019, see [332, 333]; and (2) the indemnification claim that defendant failed to prove
at the bench trial. Plaintiffs do not contend that defendant’s filing of the counterclaim
was abusive or in bad faith, and the Court finds that the substance of the
counterclaim was essentially independent of, and unrelated to, defendant’s later
production of Version C. Therefore, plaintiffs are not entitled to recover any fees or
costs incurred in connection with the counterclaim during this or any other phase of
the litigation.
Finally, defendant specifically disputes whether plaintiffs can recover the costs
they incurred in connection with counsel’s travel to Florida in early February 2017 to
take defendant’s deposition. See [497] 6-7. As defendant notes, the Court previously
awarded some of these costs to plaintiffs, see [131], but later rescinded that order as
a sanction for plaintiffs’ counsel’s violation of a court order barring any disclosure of
defendant’s personal medical information to Thomas White. See [151]; [158] 5-8. The
Court concludes that defendant’s argument is moot considering the Court’s
determination that plaintiffs are not entitled to recover any fees or costs they incurred
before February 16, 2017.
In sum, plaintiffs are not entitled to recover any fees or costs incurred from
September 18, 2015 through February 15, 2017.
2.

Production of the Forged Trust through the Court’s
August 28, 2018 Summary Judgment Ruling

Plaintiffs are entitled to an award of attorney’s fees and costs they incurred
from February 16, 2017, the day after defendant produced Version C to plaintiffs’
counsel, through August 28, 2018, when the Court granted summary judgment to
defendant on count one of plaintiffs’ amended complaint. Under Haeger, however,
plaintiffs may recover only those fees and costs that “would not have been incurred
except for the misconduct,” 137 S. Ct. at 1188–that is, the fees and costs that plaintiffs
incurred responding to defendant’s production of Version C. Haeger, 137 S. Ct. at
1188.
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First, as was true of the first phase of the litigation, no fees or costs may be
awarded under § 1927 during this second phase because defendant was represented
by counsel through the time of the Court’s summary judgment ruling on August 28,
2017. See [229] (defense counsel’s motion to withdraw filed September 11, 2018).
Second, defendant’s knowing use of a forged trust instrument to defend this
suit was an egregious abuse of the judicial process that warrants the imposition of
sanctions under the Court’s inherent power. The “submission of falsified evidence” is
among “the most egregious abuses of the judicial process[.]” Kinzy v. Howard &
Howard, PLLC, No. 16 C 8230, 2017 WL 168480, at *2 (N.D. Ill. Jan. 17, 2017).
“[F]alsifying evidence to secure a court victory undermines the most basic foundations
of our judicial system. If successful, the effort produces an unjust result. Even if it is
not successful, the effort imposes unjust burdens on the opposing party, the judiciary,
and honest litigants who count on the courts to decide their cases promptly and
fairly.” Secrease v. W. & S. Life Ins. Co., 800 F.3d 397, 402 (7th Cir. 2015). That
defendant held a license to practice law at this time only exacerbates the
wrongfulness of her conduct. See In re Dealer Mgmt. Sys. Antitrust Litig., No. 18 CV
864, 2018 WL 6413199, at *3 (N.D. Ill. Dec. 6, 2018) (courts expect attorneys to “abide
by . . . the highest duties and ethical standards required of them as members of the
bar”). The Court is therefore well within its discretion to order defendant to pay the
attorney’s fees and costs that plaintiffs incurred in response to her injection of false
evidence into the case. See Martin v. Redden, 34 F.4th 564, 568 (7th Cir. 2022)
(affirming district court’s imposition, pursuant to inherent sanctioning authority, of
two-year filing ban on litigant who “knowingly submitted a fraudulent grievance
form” in effort “to defeat summary judgment”); Jackson v. Murphy, 468 F. App’x 616,
620 (7th Cir. 2012) (affirming district court’s use of inherent sanctioning power to
dismiss plaintiff’s claims where plaintiff “both perjured himself and forged a
document critical to the prosecution of his case”).
Third, as Haeger instructs, the sanctions award may include only those
attorney’s fees and costs that plaintiffs “would not have paid but for the misconduct.”
137 S. Ct. at 1187. Consequently, plaintiffs must exclude from their request any fees
or costs that were incurred in connection with either their prosecution of count one of
their amended complaint or their defense of the amended counterclaim. As the Court
discussed above, defendant had a good-faith basis for opposing count one of the
amended complaint and ultimately prevailed on that claim. Likewise, plaintiffs have
not shown (or even tried to show) that the fees and costs incurred in defending the
counterclaim was caused by defendant’s production of the fake trust document.
Accordingly, for the period from February 16, 2017 through August 28, 2018,
plaintiffs are entitled to an award of attorney’s fees and costs that were incurred in
response to defendant’s injection of the fake trust instrument into the case. Plaintiffs
may not recover any fees or costs incurred in their prosecution of count one of the
amended complaint or their defense of the amended counterclaim.
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3.

August 29, 2018 through the December 21, 2020 Conclusion
of Post-Trial Briefing

The same reasons that warranted the imposition of sanctions during the
second phase of the litigation also warrant the imposition of sanctions from August
29, 2018 through December 21, 2020, when the final post-trial briefs were filed. The
Court reiterates its finding that defendant knowingly used false evidence to defend
this case, and the Court necessarily concludes that defendant’s trial testimony about
the origins of Version C, its theft from her home, and its reappearance in her mailbox
shortly before her deposition was perjured. See Martin, 34 F.4th at 568; Jackson, 468
F. App’x at 620. “Perjury is among the worst kinds of [litigation] misconduct,” Rivera
v. Drake, 767 F.3d 685, 686 (7th Cir. 2014), and “no one”–especially not an attorney–
“needs to be warned not to lie to the judiciary.” Ayoubi v. Dart, 640 F. App’x 524, 52829 (7th Cir. 2019). In imposing sanctions for this stage of the litigation, the Court
relies primarily on its inherent authority. However, for the periods when defendant
represented herself–September 18, 2018 through February 4, 2019, and May 28, 2019
through May 27, 20218–the Court also bases its sanctions award on § 1927. Defendant
needlessly and unreasonably prolonged the proceedings in this case by choosing to
oppose plaintiffs’ breach-of-fiduciary-duty claim with a counterfeit trust document
and her own perjured testimony.
Accordingly, from August 29, 2018 through December 21, 2020, plaintiffs are
entitled to an award of attorney’s fees and costs that were incurred in response to
defendant’s injection of the fake trust document into the case. Plaintiffs may not
recover any fees or costs incurred with their defense of the amended counterclaim.
The Court’s ruling for this phase of the litigation is subject to the following
limitation. For the period between September 1, 2020 and December 21, 2020,
plaintiffs are entitled to recover only one-third of the fees and costs that are claimed
in the motion and supporting declarations currently before the Court. The Court
concludes that this across-the-board reduction–which will apply to counsel’s work
during the month in which the bench trial began (presumably when counsel were
seriously preparing for trial), the trial itself, and the post-trial briefing–is warranted
because only a small fraction of the case that plaintiffs presented to the Court during
the bench trial concerned whether Version C of the Robert Trust was a fake. The
Court bases this determination primarily on its experience presiding over the bench
trial and its review of the trial record that was conducted as the Court prepared its
May 2021 Memorandum Opinion and Order. Cf. REXA, Inc. v. Chester, 42 F.4th 652,
See [233] (order of September 18, 2018 granting motion by defendant’s fourth attorney to
withdraw from representation); [242] (order of February 5, 2019 granting motion by
defendant’s fifth attorney to file appearance); [279] (order of May 28, 2019 granting motion
by defendant’s fifth attorney to withdraw from representation and entering defendant’s pro
se appearance).
8

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673 (7th Cir. 2022) (“A district court is accorded significant deference in matters
concerning attorneys’ fees because,” inter alia, “the trial court possesses a superior
understanding of the factual matters at issue.”).
As the Court explained in its decision entering judgment for plaintiffs–and as
the Court reiterated in its ruling denying the parties’ post-trial motions–the scope of
the bench trial was narrow. The only claims to be adjudicated were plaintiffs’ claim
for breach of fiduciary duty and defendant’s indemnification claim. See Murphy, 2021
WL 2156448, at *1; Murphy, 2021 WL 4963604, at *8-12; see also [333] (order of
August 28, 2019 identifying these as “the only remaining claims in the case”).
Nevertheless, plaintiffs’ presentation of their case went well beyond that narrow
scope, and plaintiffs devoted substantial trial time to introducing evidence that (they
hoped) would entitle them to recover, not only the $95,850.83 that defendant stole
from Anna White, but also title to Anna White’s home in Buffalo Grove and an
interest in the Carefree home. See Murphy, 2021 WL 2156448, at *6-7, *8
(summarizing some, but by no means all, of the trial testimony concerning ownership
of Buffalo Grove home); id., at *6 (summarizing testimony on which plaintiffs would
base their equitable claim to one-half interest in Carefree home); see also id., at *9
n.8 (observing that conflicting evidence of whether defendant had acted as Anna
White’s estate-planning attorney was only “arguably relevant” to enforceability of
Receipt and Release).9 Even recognizing that plaintiffs were entitled to a certain
amount of latitude in deciding how best to present their case to the Court, much of
that case had nothing to do with establishing that Version C was a counterfeit.10
The Court further finds that plaintiffs’ pretrial and post-trial submissions
confirm this conclusion. For example, in their pretrial proposed findings of fact and
conclusions of law and their post-trial brief, plaintiffs asked the Court to order
defendant to transfer title to the Buffalo Grove home to them, appoint a receiver to
take custody of and sell the Carefree home, and award them an additional
$228,550.63 in compensatory damages. See [328] 39; [460] 1-5. The Court dismissed
these requests, holding that (1) plaintiffs were precluded by the August 2018
summary-judgment ruling from obtaining any relief respecting the Buffalo Grove
home; (2) plaintiffs had never sought control of the Carefree home during the
The Court rejects plaintiffs’ argument that defendant’s “lies” during the litigation that she
was not Anna White’s estate attorney warrant sanctions. The Court has made no finding
whether defendant was Anna White’s attorney, as that issue was largely immaterial to the
two claims tried at the bench trial. Plaintiffs have not shown that defendant’s decision to
dispute their claim that she was, in fact, Anna White’s attorney was abusive or in bad faith,
such that the Court declines to impose additional sanctions on that basis.
9

In hindsight, the Court also recognizes that it should have exercised a tighter grip on each
side’s presentation of evidence at the bench trial, and that it is thus partly responsible for
the trial time expended on extraneous matters. But any error in that regard does not permit
plaintiffs to recover attorney’s fees and costs that were not causally connected to defendant’s
use of false evidence and perjury. See Haeger, 137 S. Ct. at 1186 n.5, 1187-88.
10

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litigation (and had even “represented to the Court . . . that the home was ‘off the table’
because it ‘goes to the defendant’” under all three versions of the Robert Trust); and
(3) any failure by defendant to distribute Anna White’s forty-seven-percent share of
the trust assets as a named beneficiary was “not causally connected to the breach of
fiduciary duty that plaintiffs proved in this case.” Murphy, 2021 WL 2156448, at *36.
Similarly, plaintiffs’ Rule 59(e) motion argued that the Court should have awarded
them a 62.51% interest in the Buffalo Grove home, entered an order quieting title to
the Buffalo Grove home in their favor, reinstated count one of their amended
complaint based on evidence developed at trial, and conformed the amended
complaint to the trial evidence supposedly establishing their entitlement to a onehalf interest in the Carefree home. See Murphy, 2021 WL 4963604, at *7-12. None of
these issues had anything to do with defendant’s production and use of the forged
trust instrument.
Based on its experience presiding over this case and the bench trial, the Court
determines that a two-third reduction in the amount of fees and costs claimed by
plaintiffs from September 1, 2020 through December 21, 2020 is warranted.
4.

December 22, 2020 through Entry of Judgment and
Adjudication of Post-Judgment Motions

Finally, in accordance with § 1927 and the Court’s inherent sanctioning
authority, the Court orders that plaintiffs are entitled to an award of attorney’s fees
and costs incurred in response to defendant’s injection of the fake trust document into
the litigation between December 22, 2020 and the Court’s decision denying the
parties’ post-judgment motions on October 27, 2021. See Haeger, 137 S. Ct. at 1188.
However, the Court orders that plaintiffs may not recover any fees and costs incurred
with the following: (1) plaintiffs’ responses to defendant’s motions to enforce
judgment and for judgment on Count I [463, 477]; and (2) plaintiffs’ motion to alter
judgment and reply in support [483, 488]. The associated fees and costs are excluded
from the sanctions award because they were incurred in connection with plaintiffs’
pursuit of relief on count one of the amended complaint or other theories that were
unrelated to defendant’s injection of the forged trust instrument into the case.
C.

Reasonableness of Counsel’s Rates

“In order to arrive at the amount to be awarded as reasonable fees, this court
must determine the reasonable hourly rate to be applied and the number of hours
reasonably expended, and then multiply the two figures.” Haywood v. Wexford Health
Sources, Inc., No. 16 CV 3566, 2021 WL 2254968, at *10 (N.D. Ill. Jun. 3, 2021)
(internal quotation marks omitted). “This calculation, known as the lodestar rate,
yields a presumptively reasonable fee, but the court may nevertheless adjust the fee
based on factors not included in the computation.” Id. (internal quotation marks
omitted).
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“The Seventh Circuit has defined a reasonable hourly rate as one that is
derived from the market rate for the services rendered.” Melikhov v. Drab, No. 16 C
9332, 2018 WL 3190824, at *3 (N.D. Ill. May 21, 2018) (internal quotation marks
omitted). “The best evidence of the market rate is the amount the attorney actually
bills for similar work, but if that rate can’t be determined, then the district court may
rely on evidence of rates charged by similarly experienced attorneys in the community
and evidence of rates set for the attorney in similar cases.” Montanez v. Simon, 755
F.3d 547, 553 (7th Cir. 2014); see also People Who Care v. Rockford Bd. of Educ., Sch.
Dist. No. 205, 90 F.3d 1307, 1310 (7th Cir. 1996) (“The attorney’s actual billing rate
for comparable work is ‘presumptively appropriate’ to use as the market rate.”). The
fee applicant “has the burden of proving the market rate; however, once the attorney
provides evidence of the market rate, the burden shifts to the opposing party to show
why a lower rate should be awarded.” Vega v. Chicago Park Dist., 12 F.4th 696, 705
(7th Cir. 2021).
Plaintiffs have submitted declarations from their primary attorneys, Paul
Koacky and Christopher Saternus, in support of their claimed hourly rates. See [4751, 475-2]. In his declaration, Kozacky, who has been licensed for more than 35 years
and focuses his practice on civil and maritime litigation in state and federal court,
states that his billing rate is $425. [475-1] 1-2, at ¶¶ 1, 5. Kozacky’s declaration also
provides the billing rates for three associates in his firm who also worked on the case:
•

Jessica Fricke Garro: licensed for 11 years and billed at $175 per hour until
October 10, 2018, when her rate increased to $275 per hour. [Id.] 2, at ¶ 2.

•

Brian P. O’Connor: licensed for more than 7 years and billed at $165 per hour
until August 28, 2018, when his rate increased to $225 per hour. [Id.], ¶ 3.

•

Elizabeth Sawyer: newly licensed attorney who billed at $150 per hour. [Id.],
at ¶ 4.

For his part, Saternus, who has been licensed since 1977, states that his
ordinary billing rate grew to $250 during the course of the litigation, but that he
charged Anna White and plaintiffs only $200 per hour because the White family was
among his long-time clients. [475-2] 2, at ¶ 8. Saternus also states that plaintiff
Thomas White has paid Saternus’s billed rate for 123.85 of the 307.10 attorney hours
that Saternus expended on this case, after which Saternus and plaintiffs shifted to a
contingency agreement. [Id.] 1, at ¶ 3.
The Court concludes that the declarations from Kozacky and Saternus are
sufficient to meet their burden to establish the reasonableness of their rates.
See Shakman v. Cook Cnty. Clerk, No. 1:69-cv-2145, 2021 WL 5140500, at *6 (N.D.
Ill. Nov. 4, 2021) (attorneys’ affidavits constituted “credible evidence of their firms’
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billable rates”); City of Chicago v. Garland, Case No. 18 C 6859, 2021 WL 1676387,
at *5 (N.D. Ill. Apr. 28, 2021) (relying on “evidence of the firm’s 2018 billable rates
via attorney affidavit” to award fees at requested hourly rates); Herrera v. Grand
Sports Arena, LLC, 2018 WL 6511155, at *3 (N.D. Ill. Dec. 11, 2018) (“Because an
attorney’s actual billing rate is presumptively appropriate for use as the market rate,
the billing statements and attorneys’ affidavits are sufficient to shift the burden to
the Defendants to show that Plaintiff’s requested rates are not reasonable and that
lower rates are appropriate.”); see also Montanez, 755 F.3d at 553; People Who Care,
90 F.3d at 1310.
However, defendant has not provided the Court with any convincing basis to
conclude that lower hourly rates are warranted. For example, defendant argues that
attorney Sawyer did not enter an appearance in this case, that attorney O’Connor’s
appearance was limited to the bench trial, and that attorney Garro allegedly made
“false representations to the Court during [a] July 18, 2017 hearing.” [497] 5.
However, these allegations have nothing to do whether the attorneys’ claimed rates
are reasonable. Defendant also claims that Kozacky’s and Saternus’s fees are
“excessive pursuant to Il. Sup. Ct. R. 1.5(a)” [497] 6, 8, but defendant offers no
argument or evidence to support that contention–nor does she explain why an Illinois
procedural rule would apply to the Court’s assessment of attorney’s fees as a sanction
under § 1927 and its inherent power. Nor does defendant argue that any of the
attorney hours claimed by plaintiffs were unreasonable or unnecessarily incurred.
Accordingly, the Court holds that, to the extent plaintiffs are entitled to an
award of attorney’s fees, those fees may be recovered at the following rates: Kozacky–
$425 per hour; Saternus–$200 per hour11; Garro–$175 per hour until October 10,
2018, and $275 per hour thereafter; O’Conner–$165 per hour until August 28, 2018,
and $225 per hour thereafter; and Sawyer–$150 per hour.
D.

Defendant’s Rule 54(d) Arguments Lack Merit

Defendant’s argument that plaintiffs’ fee application is improper because it is
labeled a “petition,” rather than a “motion,” is baseless. See [497] 3. Local Rule
54.3(a)(1) recognizes that a request for attorney’s fees may be made by “motion,
complaint or any other pleading seeking only an award of attorney’s fees[.]”
Defendant does argue that plaintiffs’ captioning of the fee request as a petition, rather
than a motion, prejudiced her in any way. And “in the federal courts, pleadings,
motions, and supporting memoranda are measured by their content, not their title.”
In re Sulfuric Acid Antitrust Litig., 446 F. Supp. 2d 910, 914 (N.D. Ill. 2006). Likewise,
defendant’s arguments that the fee petition fails to identify “the judgment and the
statute, rule or other grounds entitling the movant to the award,” Fed. R. Civ P.
54(d)(2)(B)(ii), is frivolous. See [497] 3. The petition refers to the Court’s entry of
Because this is the rate at which Saternus billed plaintiffs, the Court declines to set his fee
at his claimed market rate of $250 per hour.
11

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judgment in plaintiffs’ favor and expressly invokes both § 1927 and the Court’s
inherent authority to sanction bad-faith litigation conduct. See [475] 2-3, 4-5.
E.

Summary

In sum, the Court grants plaintiffs’ fee petition in part and denies it in part as
follows:
•

Plaintiffs are not entitled to recover any fees or costs incurred from September
18, 2015 through February 15, 2017.

•

For the period from February 16, 2017 through August 28, 2018, plaintiffs are
entitled to an award of attorney’s fees and costs that were incurred in response
to defendant’s injection of the fake trust instrument into the case. Plaintiffs
may not recover any fees or costs incurred in their prosecution of count one of
the amended complaint or their defense of the amended counterclaim.

•

For the period from August 29, 2018 through December 21, 2020, plaintiffs are
entitled to an award of attorney’s fees and costs that were incurred in response
to defendant’s injection of the fake trust document into the case. Plaintiffs may
not recover any fees or costs incurred with their defense of the amended
counterclaim. However, for the period between September 1, 2020 and
December 21, 2020, plaintiffs are entitled to recover only one-third of the fees
and costs that are claimed in the motion and supporting declarations currently
before the Court.

•

For the period from December 21, 2020 through October 27, 2021, plaintiffs
are entitled to an award of attorney’s fees and costs incurred in response to
defendant’s injection of the fake trust document into the case. However, the
Court orders that plaintiffs may not recover any fees and costs incurred with
the following filings: (1) plaintiffs’ responses to defendant’s motions to enforce
judgment and for judgment on Count I [463, 477]; and (2) plaintiffs’ motion to
alter judgment and reply in support [483, 488].

The fees will be awarded at the rates claimed by plaintiffs in their supporting
declarations. Within fourteen days of the date of this decision, plaintiffs must submit
a revised fee statement that complies with the Court’s ruling, and any supporting
materials must be sufficiently specific to demonstrate that the claimed fees and costs
were incurred in response to defendant’s injection of the fake trust instrument into
the case. The Court will not entertain any further submissions from defendant
regarding the amount of plaintiffs’ attorney’s fees and costs that will be awarded.
Defendant not only failed to file a timely opposition to the original fee petition, but
her untimely response brief failed to identify any hours or costs claimed by plaintiffs
that, in defendant’s view, were not reasonably incurred or were unnecessary,
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duplicative, or otherwise non-compensable. Defendant has thus forfeited any such
objections, and defendant will not be given another opportunity to raise arguments
that she should have raised earlier. See John K. MacIver Inst. for Pub. Policy, Inc. v.
Evers, 994 F.3d 602, 614 (7th Cir. 2021) (“A party who does not sufficiently develop
an issue or argument forfeits it.”).
II.

Defendant’s Motion for Attorney’s Fees

In her own motion for attorney’s fees, defendant makes the remarkable claim
that plaintiffs should be required to pay her at least $557,152.94 in attorney’s fees
and $3,709.99 in costs. See [497-4] 1-2. Defendant appears to base her request on the
fact that the Court awarded her summary judgment on count one of plaintiffs’ first
amended complaint. [497] 11. Defendant also suggests that the Robert Trust itself
and the Receipt and Release also authorize an award of fees. [Id.] 12.
The Court has no trouble in concluding that defendant’s fee request is
frivolous. The Court has laid out in detail, both in this decision and its prior decisions,
the overwhelming evidence showing that defendant forged a trust instrument to steal
assets of the Robert Trust to which she had no valid claim. This Court entered a
judgment of $246,152.76 against defendant. The American Rule bars her from
recovering any of the fees she incurred in this litigation, even though she prevailed
on one of the claims in this case. See Garland, 2021 WL 1676387, at *2 (“The
American Rule is that parties to litigation pay their own fees.”). Paragraph 7.1.9 of
the Robert Trust, relied on by defendant, merely authorizes the trustee to engage an
attorney’s services on behalf of the trust; it does not purport to shift the legal fees
that the trust incurs onto another party. See [PX 26] 21. And defendant’s contention
that the Receipt and Release entitles her to an award of fees fails to come to grips
with the reality that the Court found that document to be unenforceable for multiple
reasons.
Defendant’s motion for attorney’s fees is accordingly denied.

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Conclusion
For the reasons set forth above, plaintiffs’ petition for attorney’s fees and costs
[475] is granted in part and denied in part, and defendant’s motion for attorney’s fees
and costs [497] is denied.
Plaintiffs are not entitled to recover any fees or costs incurred from September
18, 2015 through February 15, 2017. For the period from February 16, 2017 through
August 28, 2018, plaintiffs are entitled to an award of attorney’s fees and costs that
were incurred in response to defendant’s injection of the fake trust instrument into
the case. Plaintiffs may not recover any fees or costs incurred in their prosecution of
count one of the amended complaint or their defense of the amended counterclaim.
For the period from August 29, 2018 through December 21, 2020, plaintiffs are
entitled to an award of attorney’s fees and costs that were incurred in response to
defendant’s injection of the fake trust document into the case. Plaintiffs may not
recover any fees or costs incurred with their defense of the amended counterclaim.
However, for the period between September 1, 2020 and December 21, 2020, plaintiffs
are entitled to recover only one-third of the fees and costs that are claimed in the
motion and supporting declarations currently before the Court. For the period from
December 21, 2020 through October 27, 2021, plaintiffs are entitled to an award of
attorney’s fees and costs incurred in response to defendant’s injection of the fake trust
document into the case. However, the Court orders that plaintiffs may not recover
any fees and costs incurred with the following filings: (1) plaintiffs’ responses to
defendant’s motions to enforce judgment and for judgment on Count I [463, 477]; and
(2) plaintiffs’ motion to alter judgment and reply in support [483, 488]. The fees will
be awarded at the rates claimed by plaintiffs in their supporting declarations.
Within fourteen days of the date of this decision, plaintiffs must submit a
revised fee statement that complies with the Court’s ruling, and any supporting
materials must be sufficiently specific to demonstrate that the claimed fees and costs
were incurred in response to defendant’s injection of the fake trust instrument into
the case. No further submissions from defendant regarding the amount of attorney’s
fees and costs to be awarded to plaintiffs will be entertained.
_____________________________________
HEATHER K. McSHAIN
United States Magistrate Judge
DATE: September 6, 2022

19