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Belleville attorney must litigate defamation suit in federal court

By Record News | Mar 22, 2016

Belleville lawyer Charles Stegmeyer, who filed a defamation suit in St. Clair County court against a former client who sued him, must litigate the claim in federal court.

Chief U.S. District Judge Michael Reagan exercised jurisdiction on March 16, after identifying defendant Frederick Peet as a Missouri citizen.

Reagan ruled that Peet properly invoked diversity of citizenship as a basis for federal jurisdiction.

He wrote that Peet has primarily lived in Beaufort, Mo., for 29 years, and has been a registered voter in Missouri all that time.

“The record is devoid of evidence that Peet intends to change his domicile to Illinois,” he wrote.

Peet, a physician with an office in Washington, Mo., removed the case from St. Clair County to federal court in January.

Stegmeyer moved to remand it to St. Clair County, relying on records from a divorce proceeding that resulted in reconciliation.

“In the divorce proceeding, Peet admitted he was an Illinois resident, which may have been true when he admitted it or may have been an oversight or falsehood or a ruse to establish divorce court jurisdiction,” Reagan wrote.

“But as the court has repeated, residence does not equal citizenship for diversity purposes.”

Peet hired Stegmeyer in 2006 to represent him in an action to terminate a judgment lien against real estate.

In four years, Stegmeyer represented Peet in three Missouri courts.

In 2013, Peet filed a malpractice suit against Stegmeyer in St. Louis County.

Peet alleged that in 2009, Stegmeyer falsely told him he could travel out of the country at the time of a trial over the judgment lien.

Stegmeyer, as his own lawyer, sued Peet last December.

He claimed Peet knew the statement about being told he could leave the country was false.

“Said statement by defendant is libel per se and slander per se because the statement accuses plaintiff of an action which injured his reputation and his occupation,” Stegmeyer wrote.

He wrote that Peet sued him with malice, hatred and ill will.

Peet’s lawyer, Larry Bagsby of St. Charles, Mo., removed the suit to federal court on Jan. 26.

In addition to invoking diversity of citizenship, he claimed the amount in controversy exceeded the $75,000 minimum for federal jurisdiction.

He wrote that on Dec. 3, in mediation of Peet’s malpractice claim, Stegmeyer valued his libel claim in excess of $2 million.

Stegmeyer objected to removal, citing Peet’s divorce proceedings for authority that his residence is 25 Rockingham Place in Belleville.

Bagsby responded that Peet and his wife also own residences in Franklin County, Mo., and on Lake of the Ozarks in Missouri.

He wrote that while Stegmeyer represented Peet, Stegmeyer mailed correspondence to the Franklin County address.

“For diversity jurisdiction, it is citizenship of the parties which is at issue, and citizenship means domicile,” he wrote.

Reagan denied Stegmeyer’s objection, writing that a person has one domicile at a time even though he may have several residences.

He wrote that although Stegmeyer denied that he valued his claim at $2 million, he didn’t file an affidavit limiting recovery to $75,000.

Stegmeyer, age 72, wrote in his defamation complaint that he has worked as an attorney in Illinois for 40 years.

“Plaintiff has during all this time enjoyed a good reputation,” he wrote.

The Illinois Supreme Court dented his reputation in 2014, by suspending his license for 60 days.

The Attorney Registration and Disciplinary Commission found he failed to timely repay $15,000 to a company that provides funds to lawyers anticipating fees from settlements.

The commission found he made false statements to the company's attorney.

The commission’s recommendation for discipline took into account Stegmeyer's remorse and cooperation.

The commission noted that he had cancer treatments in 2011 and 2012.

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