Hess v. Kanoski & Assoc.s
| Decision Date | 14 March 2011 |
| Docket Number | No. 09-3334,09-3334 |
| Court | U.S. District Court — Central District of Illinois |
| Parties | LAWRENCE J. HESS and VICKIE C. WARREN, Plaintiffs, v. KANOSKI & ASSOCIATES, A Professional Corporation, RONALD J. KANOSKI, and KENNITH W. BLAN, JR., Defendants. |
This matter comes before the Court on the Defendants' Motion for Summary Judgment Or In the Alternative Motion to Dismiss. See d/e (36) (the "Motion"). For the reasons stated below, the Motion is ALLOWED.
Plaintiff Lawrence J. Hess ("Hess"), a Missouri resident, was an associate at a Springfield, Illinois area law firm Defendant Kanoski & Associates, A Professional Corporation (the "Firm"). Hess, who specialized in medical malpractice cases, worked at the Firm pursuant to an Employment Agreement. Among other things, the Employment Agreement set forth Hess' salary and bonus pay. It also stated that Hess"has no proprietary right or interest in any client." Furthermore, the Employment Agreement stated that "where the [Firm] retains clients upon [e]mployee's termination that [e]mployee has no proprietary interest in fees to be earned since the [e]mployee is to be fully compensated through his salary and/or bonus for all work done while an [e]mployee of the [Firm]." The Employment Agreement also provided that employees, upon termination, would not "notify, advise, solicit[,] or otherwise contact clients of the [Firm]" and "not to interfere in any manner with the contractual relationship between [the Firm] and its clients."
In addition to the Employment Agreement, the Firm issued an Employee Manual. The Employee Manual contained the Firm's various policies regarding office administration, etc.
Defendant Ronald J. Kanoski ("Kanoski"), the Firm's principal, terminated Hess on February 14, 2007. Kanoski explained that the Firm would no longer handle medical malpractice cases. Hess did not collect his professional and personal items from his office at that time. Rather, he was permitted to come back at a later date to retrieve those items. When Hess returned to pick up his things, he found that his office had been cleaned out and his affects (i.e. business cards, birthday cards, copies of pleadings, etc.) were thrown away.
The cases Hess worked on and the clients he serviced for the Firm includedRonald O. Loyd, Cathy Loyd, Robert K. Thompson, 170 Dow Corning Breast Implant Plaintiffs, Denise Lowery, Cathy Fetterman, Penny Eller (as Special Administrator for the Estate of Terry Eller), Julie Hoelscher and Carl Hoelscher (collectively the "Clients"). Several of the Clients signed contingent fee contracts with the Firm. The Firm executed these via its principal Kanoski. Hess was never a signatory.
Upon Hess' termination, the Clients and their cases were handled by Kanoski, the Firm and Defendant Kennith Blan (an attorney who had his own private practice, but who worked on some of the Firm's cases under a fee sharing arrangement).1
Following his termination, Hess became "of counsel" with The Rex Carr Law Firm in East St. Louis, Missouri. Several of the cases Hess worked Kanoski and the Firm were tried or settled during Hess' employment with The Rex Carr Law Firm. Thus, Hess filed liens against those cases and asserted a right to be paid a percentage of all sums recovered. Hess maintained that his Employment Agreement entitled him to a percentage of all cases he worked on even though recoveries in those cases did not occur until after Hess' termination.
Hess demanded that Kanoski and the Firm pay him $316,616.21 for all salary, bonus pay and vacation time it owed him. Hess asserted that he was entitled to that sum pursuant to his Employment Agreement and a June 21, 2002, letter whichpurportedly increased his bonus rate from that which was originally specified in the Employment Agreement.
The contractual, statutory and equitable liens Hess filed were adjudicated by various state courts and held invalid. See, e.g., Loyd v. Billiter, et al., 5-09-0065 (Ill.App.Ct. (Oct. 15, 2010)). While that was occurring, Hess filed the instant case wherein he alleged claims under the Illinois Wage Payment and Collection Act, the Illinois Consumer Fraud Act, wrongful discharge, breaches of contract, inducing breaches of contract, various types of tortious interference, unjust enrichment/quantum meruit, spoliation, breach of fiduciary duty and civil conspiracy. See Complaint at 1418 (d/e 1). Hess' wife, Plaintiff Vickie C. Warren, also filed a loss of consortium claim as part of the Complaint. Id. at 18.
The Defendants have collectively moved for summary judgment under Federal Rule of Civil Procedure 56(c) or dismissal under Federal Rule of Civil Procedure 12(b)(6). See d/e 36. The Plaintiffs responded by filing Plaintiffs' Brief In Opposition to Defendants' Motion for Summary Judgment. See d/e 46 (the "Opposition Brief").2 Thereafter, the Defendants collectively replied to the Plaintiff'sOpposition Brief. See d/e 47. The matter is now ripe for this Court's ruling.
All Defendants are Illinois residents, all Plaintiffs are Missouri residents and the amount in controversy exceeds $75,000. Therefore, the Court has subject matter jurisdiction under 28 U.S.C. § 1332(a)(1). Personal jurisdiction exists because the Defendants, conducted their business in Illinois. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (), quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958). Venue exists because Defendants Kanoski and the Firm reside in Illinois and within this judicial district. See 28 U.S.C. §1391(a)(1).
A court may grant summary judgment when the "pleadings, the discovery, and discovery materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d202 (1986). The movant bears the burden of establishing that there exists no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the movant meets this burden, the non-movant must set forth specific facts demonstrating that there is a genuine issue for trial. Fed.R.Civ.P. 56(e); Anderson, 477 U.S. at 252.
In deciding a motion for summary judgment, the court can only consider sworn statements based on personal knowledge and other evidence that would be admissible at trial under the Federal Rules of Evidence. Stinnett v. Iron Works Gym/Executive Health Spa, Inc., 301 F.3d 610, 613 (7th Cir. 2002). The evidence is viewed in the light most favorable to the non-movant and "all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255, 106 S.Ct. 2505. Summary judgment is inappropriate when alternate inferences can be drawn from the evidence, as the choice between reasonable inferences from facts is a jury function. Id.; Spiegla v. Hull, 371 F.3d 928, 935 (7th Cir. 2004).
As this case is founded on diversity jurisdiction, the Court "must apply the law of the state as it believes the highest court of the state would apply it if the issue were presently before that tribunal." State Farm Mut. Auto. Ins. Co. v. Pate, 275 F.3d 666, 669 (7th Cir. 2001). Absent controlling authority from the State's highest court, federal courts exercising diversity jurisdiction may consider decisions of the State's lower courts, courts of other jurisdictions and other persuasive authority. See Stephan v. Rocky Mountain Chocolate Factory, Inc., 129 F.3d 414, 417 (7th Cir. 1997). Thus, the Court will apply controlling Illinois authority.
The Court first considers all of Hess' claims. It will then address his wife's loss of consortium claim.
The Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et seq. ("IWPCA") does not confer any rights to recovery of final compensation in the absence of a contractual right." Byker v. Sequent Computer Sys., Inc., 96 C 2297, 1997 WL 639045, at *7 (N.D.Ill. Oct. 1, 1997); Rakos v. Skytel Corp., 954 F.Supp. 1234, 1240 (N.D.Ill.1996)(same).
Section 5 of the IWPCA provides that "[e]very employer shall pay the final compensation of separated employees in full, at the time of separation, if possible, but in no case later than the next regularly scheduled payday for such employee." 820 ILCS 115/5 (West 2006). The IWPCA states that an employer must pay an employee his final compensation at the time of separation. Id. at 115/1. Final compensation isdefined to include "wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays, and any other compensation owed by the employer pursuant to an employment contract or agreement between the 2 parties." Id. at 115/2.
In relevant part, Hess' Employment Contract states that Hess' salary is $60,000 and he is to receive bonus pay equal to . See Employment Contract at 3-4. On June 21, 2002, Kanoski wrote Hess a letter (the June 21 Letter) promising a new bonus structure. The June 21 Letter purportedly increased Hess' salary to $100,000 and made him "eligible to receive a bonus of 40% of all fee revenue generated except as follows: a) no bonus will be paid on the first $100,000 of all annual fee revenue generated; and b) if it is otherwise eligible, only a 10% bonus will be paid for fees generated on the Robert Thompson file."...
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