In re Hess

• Decision Date: 27 August 2013
• Docket Number: No. SC 92923.,SC 92923.
• Citation: 406 S.W.3d 37
• Parties: In re Lawrence Joseph HESS, Respondent.
• Court: Missouri Supreme Court

406 S.W.3d 37

In re Lawrence Joseph HESS, Respondent.

No. SC 92923.

Supreme Court of Missouri,

En Banc.

Aug. 27, 2013.

Alan D. Pratzel and Sharon K. Weedin, Chief Disciplinary Counsel's Office, Jefferson City, for Chief Disciplinary Counsel.

Lawrence Joseph Hess, pro se.

ZEL M. FISCHER, Judge.

The Office of Chief Disciplinary Counsel (OCDC) filed an information and motion for reciprocal discipline recommending that this Court indefinitely suspend Lawrence Hess's Missouri law license with no leave to reapply for six months. The Illinois Supreme Court suspended Hess's Illinois license to practice law for six months for filing frivolous lawsuits in violation of Illinois Rules 3.1 and 8.4(a)(5), which are analogous to Missouri Rules 4–3.1 and 4–8.4(d), respectively.

The evidence ¹ overwhelmingly demonstrates that Hess violated Rule 4–3.1, Meritorious Claims and Contentions, by expressly authorizing the filing of attorney's liens and lawsuits alleging breach of contract, breach of promise, interference with attorney's liens, and unjust enrichment, when all of those liens and claims were frivolous and without merit. Hess also violated Rule 4–8.4(d)'s admonition not to, “engage in conduct prejudicial to the administration of justice” because those liens and claims were frivolous, without merit, wasted the time and resources of the courts, delayed the clients' receipt of their settlement money, required the hiring of additional legal counsel, and harmed the integrity of the profession.

Hess's Illinois license was suspended for six months by the Illinois Supreme Court in an order dated September 17, 2012. The plain language of Rules 4–3.1 and 4–8.4(d) does not differentiate between an attorney acting as an advocate or an attorney acting in his own business and personal affairs, and the policy supporting reciprocal discipline, which is in place to protect the public, must be given proper weight and consideration by this Court. Therefore, Hess's Missouri license is suspended indefinitely without leave to apply for reinstatement for a period of six months.

Factual and Procedural Background

Lawrence Hess was admitted to the Missouri bar in 1975. Hess became an employee of Kanoski & Associates in 2001. Hess signed an employment agreement providing that he would receive a base salary plus a bonus based on the amount of fees he generated. That employment agreement also provided, in pertinent part:

Employee acknowledges that while licensed attorneys must perform all legal services, the clients contracting for said services are clients of the Corporation and not of any individual employee[.]

* * *

All proceeds received by [Employee] for professional services rendered for Corporation clients shall be the property of the Corporation.

* * *

Furthermore, Employee acknowledges that the service nature of the business of the Corporation requires close client contact, and that he has no proprietary right or interest in any client[.]

* * *

Employee agrees that, in the event employment is terminated, Employee will not notify, advise, solicit, or otherwise contact clients of the Corporation.

* * *

Corporation and Employee acknowledge that each client of the Law Firm has the right to freely choose representation in the event of a separation of employment by Employee from the Corporation and that choice should be allowed to take place without interference from either the Corporation or the Employee.

* * *

Employee acknowledges that where the Corporation retains clients upon Employees [sic] termination that Employee has no proprietary interest in fees to be earned since the Employee is to be fully compensated through his salary and/or bonus for all work done while an Employee of the Corporation.

In 2002, Ronald and Cathy Loyd entered into a contingency fee agreement with Kanoski & Associates, not Hess, to represent them in a medical malpractice action. The fee agreement provided that the Loyds would pay “the firm” a contingent fee, the firm could assign associate counsel to work on their case, and the associate's fees would be paid by the firm.

Hess was assigned to work on the Loyds' case. Hess filed suit on behalf of the Loyds against Dennis Billiter, M.D., and Litchfield Family Practice Center, L.L.P., in February 2004. Hess was terminated from employment with Kanoski & Associates in February 2007. Hess performed most of the work on the Loyd case prior to termination but did not perform any work on the case after February 2007.

Kenneth Blan was asked to handle some of Hess's cases, and Blan became “of counsel” to Kanoski & Associates. The Loyds chose to stay with Kanoski & Associates and have Blan represent them. They signed an agreement to that effect in March 2007. Blan entered an appearance as counsel in their case.

From January to October 2008, Hess was not authorized to practice law in Illinois, choosing not to pay the Illinois attorney registration fee to reduce expenses and practice law only in Missouri. He later changed his mind, and his Illinois license was reinstated in October.

A mediation of the Loyds' case took place in March 2008, and a settlement agreement was finalized in June 2008. Hess contends he had a breach of contract claim against Kanoski & Associates and was owed compensation from the firm. Hess hired an attorney, Bruce Carr, to represent him on that claim in April 2008.

On May 15, 2008, Carr sent a letter to the Loyds informing them that Hess had retained Carr as his attorney and stating: “Hess remains responsible for the lawsuit you entrusted to him.” Carr and Hess knew at the time the letter was sent that Hess had done no work on the Loyd case since February 2007 and that, as of January 2008, Hess did not have an active Illinois law license. On the same day, Carr sent notice of Hess's attorney's lien to the defendant in the Loyds' lawsuit, Dr. Billiter. A copy of the notice of lien was sent to Ron Kanoski at Kanoski & Associates. Loyd responded to Carr by letter, stating: “Mr. Hess is not responsible for my lawsuit. I have a very competent attorney. Do not contact me again regarding this matter.” Hess said he received Loyd's letter on May 19, 2008, and, even though the letter did not say Hess was fired, Hess and Carr treated this letter as Loyd's attempt to terminate his relationship with Hess.

On May 21, 2008, Carr filed Hess's notice of attorney's lien with the clerk of the circuit court of Montgomery County, Illinois, in the case captioned Loyd v. Dennis Billiter, M.D., et al., No. 04–L–10. A copy was sent to the Loyds. The Loyds, through their attorneys, filed a petition on June 24, 2008, to strike or adjudicate the lien. The petition asserted, among other things, that Ronald Loyd told Hess during their telephone conversation in March 2007 that Ronald “wanted nothing further to do with” Hess and that the Loyds “had competent representation with whom they were very pleased.” The Loyds both signed the attestation certifying the statements in the petition were true.

Hess then filed a complaint on July 21, 2008 and later testified that he expressly gave Carr permission to file the attorney's lien against the Loyds. Hess and Carr discussed the claims against the Loyds, but Hess said he did not read the complaint until after it was filed.

Kanoski testified that he felt “stunned” and “embarrassed” when he learned of the complaint against the Loyds. He told the Loyds that his firm would defend them at no charge. Attorney Todd Bresney, an associate at Kanoski & Associates, handled the Loyds' defense.

In September 2008, Carr sent a letter to Bresney stating “we could probably settle Mr. Hess'[s] claim against the Loyds in exchange for Kanoski & Blan's payment to Mr. Hess of Mr. Hess'[s] portion of the Loyd fee.” Carr sent a second letter to Bresney on October 2, 2008, stating that the defendants in the Loyds' medical malpractice case deposited $330,625 in escrow for attorney's fees and costs with the Montgomery County clerk and that “I will recommend that Mr. Hess dismiss his claim against the Loyds in exchange for half of the money now on deposit-$165,312.” Bresney found Carr's demand appalling and “nothing but extortion.”

On December 5, 2008, the circuit court, finding that Hess's claims against the Loyds were “legally deficient” and that Hess “does not have a valid legal basis for his claims against these defendants,” dismissed them with prejudice. The court also found the Loyds were entitled to sanctions. The circuit court ultimately awarded the Loyds “$9,275 in attorney fees and $114.82 in expenses from plaintiff [Hess] or his attorney, Bruce Carr.” The Illinois Appellate Court, Fifth District, affirmed the circuit court's judgment. Loyd v. Billiter, 403 Ill.App.3d 1120, 373 Ill.Dec. 156, 993 N.E.2d 156 (2010) (unpublished order under Supreme Court Rule 23).

Carr also filed notices of attorney's liens in other matters that Hess handled while at Kanoski & Associates. Two of those matters are the subject of charges of misconduct: Eller v. Villegas, No. 05L24, filed in the circuit court of Macoupin County, Illinois, and Thompson v. Skeffington, No. 02L51, filed in Macon County, Illinois. During oral argument in the Thompson case, one of the appellate judges characterized Carr's assertion that Hess's attorney-client relationship with Thompson continued despite Hess's termination from Kanoski & Associates as “the most absurd, ridiculous argument I think I've heard in 21 years on this court.” (emphasis added).

The Findings of the Hearing Board

The hearing board found “it was clearly and convincingly established that” Carr and Hess “filed the lawsuit against [the Loyds] knowing it was frivolous and without legal merit, and for the purpose of harassing and burdening the Loyds because of an employment dispute with Kanoski.”

The complaint filed by Hess against the Loyds asserted that the Loyds breached their contract with Hess and their promises to Hess regarding compensation for Hess's legal services...