A review board of the Illinois Attorney Registration and Disciplinary Commission (ARDC) has recommended a nine-month and six-month suspension for two attorneys accused of bringing a lawsuit for the purpose of harassment.
East St. Louis attorney Lawrence Joseph Hess and Valparaiso, Ind. attorney Bruce Alan Carr filed exceptions to the hearing board's June 2011 suspension recommendations and on Thursday, the review board issued its final report in which a majority of its members affirmed the proposed sanctions.
The majority of the board determined that the recommended suspensions are appropriate because neither Hess nor Carr "has given us reason to believe that he will not repeat his misconduct. Accordingly, we conclude that a nine-month suspension for Carr and a six-month suspension for Hess are necessary to protect the public and the integrity of the legal profession."
James Grogan, deputy administrator and chief counsel at the IARDC, said the parties now have 35 days to file a petition for leave to file exceptions with the Illinois Supreme Court.
If the court grants the petition, it could decide to consider the case after full briefing and oral argument. The state high court could choose to enter an order. If neither party files a petition, Grogan said the administrator will file a motion for the Supreme Court to approve the recommendations.
The disciplinary matter stems from three-count misconduct complaints brought against Hess and Carr in 2010. The IARDC accused the pair of filing a frivolous lawsuit against Hess' former clients, Ronald and Cathy Loyd, in an attempt to get his former law firm to settle a fee dispute.
Hess represented the Loyds during his time at Kanoski & Associates, which he joined in 2001. The Loyds entered into a contingency fee agreement with Ron Kanoski's firm in 2002 to represent them in a medical malpractice case that Hess was assigned to handle.
IARDC records show that in 2007, Kanoski terminated Hess's employment for not generating enough revenue and referred the Loyds' case to Danville attorney Ken Blan, who settled the suit. The ARDC website shows that Hess now works for the law firm of Carr's father, Rex Carr.
On behalf of Hess, Carr sent a letter to the Loyds in 2008, stating that Hess remained responsible for the suit. Ronald Loyd sent a response, telling him otherwise.
Carr then filed notices of attorney's lien in Macon, Macoupin and Montgomery counties in relations to three matters in which Hess previously represented the plaintiffs. Carr claimed that Hess's attorney-client relationships continued despite his termination from the firm.
The circuit courts, as well as the Fifth District Appellate Court, struck the notices of attorney's liens. In oral arguments in one of the cases, an appellate court justice characterized Carr's argument over attorney-client relationships as "the most absurd, ridiculous argument I think I've heard in 21 years on this court."
On Hess's behalf, Carr also filed a lawsuit against the Loyds in Montgomery County for breach of contract, unjust enrichment and tortious interference with an attorney's lien. Kanoski's firm, which provided free defense to Loyd in the matter, moved for judgment on the pleadings and sanctions.
Carr sent a letter to the firm, offering to settle if Kanoski and Blan would pay Hess a portion of the fees received in the Loyds' case. Carr sought about $165,000, half of an escrow deposit from the Loyds' medical malpractice case.
After finding that the Loyds retained Hess's former firm, not Hess, the circuit court in 2008 granted the motion filed by Kanoski's firm and imposed nearly $10,000 in sanctions. On appeal, the Fifth District Appellate Court affirmed.
In 2009, Carr filed a complaint in Missouri federal court on behalf of Hess and his wife and against Hess' former firm, Kanoski and Blan. The district court dismissed the complaint for lack of jurisdiction and Carr re-filed it in the U.S. District Court for the Central District of Illinois, where it remains pending. The federal lawsuit was the subject of the third count in the ARDC complaint, but both the hearing and review boards found the administrator did not prove the charges over the federal lawsuit.
After the hearing board recommended suspensions, Hess and Carr filed exceptions with the ARDC. They argued that they were denied due process because the hearing board made findings of misconduct not included in the original complaint and that the findings were against the manifest of the weight of evidence.
In its report released Thursday, a majority of the review board said, "We have compared the allegations of the complaint to the hearing board's findings and do not discern any violation of respondents' due process rights. Respondents' arguments are technical in nature and do not establish that they were disciplined for uncharged misconduct."
In addition to determining that Hess and Carr "misused the courts and harmed Hess's former clients in an effort to obtain an advantage in Hess's employment dispute with Kanoski & Associates," the majority noted that several aggravating factors contributed to its recommendation.
Citing a 1988 ruling in an Illinois disciplinary matter, the majority of the board said the attorneys' "indifference to their misconduct is troublesome and requires a greater degree of discipline" in order for them to "appreciate the wrongfulness" of their conduct and to "not again victimize members of the public with such misconduct.'"
Further, the majority said that the attorneys' actions were not an isolated occurrence, but rather "an ongoing course of conduct in which they made unsupportable and unprofessional decisions that needlessly burdened the opposing parties, opposing counsel, and the courts."
Chicago attorney Anna M. Loftus and Wheaton attorney Keith E. Roberts, Jr. made up the majority of the board. The third member of the ARDC hearing board in this case, Carbondale attorney Richard A. Green, concurred with the majority's finding on the count dealing with the attorneys' lawsuit against the Loyds and dissented on the count related to their attempt to recover attorney's lien on the proceeds of the settlements in three past cases, including Loyds.
"In dissenting I do not mean to suggest that I approve of what the attorneys did here," Green wrote. "Indeed, I find what was done here to be clearly erroneous but I cannot say that it was without a non-frivolous basis."
Green reasoned that while Hess was terminated from Kanoski & Associates, his appearance as the Loyds' attorney was never withdrawn or substituted and "thus, when the suit was settled Hess was an attorney of record." When Blan filed his entry of appearance in the case after Hess was fired, he did so as an additional counsel, Green said.
"Hess had a contract with Kanoski & Associates that included a bonus of 40% of fees generated on work he did over $100,000. The Loyd case may well have entitled Hess to a bonus from Kanoski & Associates based on a portion of the fees in Loyd case," Green wrote. "While filing the lien was ill advised and, as it turned out, unsuccessful, there was, at least, some colorable claim such that, I believe, it cannot be said to be brought without a basis that was not frivolous."
Saying that he would have reversed the findings of the hearing in respect to the ARDC count over the attorneys lien, Green wrote that "the fact that we disagree with respondents' arguments and with their reasoning in taking the actions does not equate with the conclusion that they acted wrongly. Certainly we cannot, nor should we, discipline lawyers from taking a position that does not prevail."
The disciplinary matters are In re Bruce Alan Carr and In re Lawrence Joseph Hess, Commission Nos. 2010 PR 46 and 2010 PR 47.