Schmude v. Sheahan

Decision Date04 May 2004
Docket NumberNo. 00 C 4580.,00 C 4580.
CourtU.S. District Court — Northern District of Illinois
PartiesJoan SCHMUDE, Administrator of the Estate of Louis Schmude, Plaintiff, v. Michael SHEAHAN, in his official capacity as Cook County Sheriff, William Spatz, Patricia Pultz, and Lawrence Koscianski, Defendants.

Brian Thomas Nash, John T. Karnezis, Clifford Law Offices, P.C., Chicago, IL, Patrick Joseph Doherty, Farano, Wallace & Doherty, Palos Hills, IL, for plaintiff.

Michael K. Forde, Mayer, Brown, Rowe & Maw LLP, Steven J. Thompson, Michael Andrew Ficaro, Ungaretti & Harris, John Francis Kennedy, Brian F. Hynes, Shefsky & Froelich, Ltd., Michael D. Smith, Foley & Lardner, Robert H. King, Jr., Sonnenschein, Nath & Rosenthal, LLP, Ruth A. Bahe-Jachna, Daniel T. Fahner, Francis A. Citera, Greenberg Traurig, LLP., Edward R. Theobald, Law Offices of Edward R. Theobald, Anthony Pinelli, Law Offices of Anthony Pinelli, Chicago, IL, Alan R. Brunell, Attorney at Law, Orland Park, IL, for defendants.

Gina T. Marotta, Thomas M. Breen and Associates, Chicago, IL, for respondent.

FINAL JUDGMENT IMPOSING SANCTIONS AGAINST ANTHONY PINELLI, ALAN R. BRUNELL AND EDWARD R. THEOBALD

NORGLE, District Judge.

This matter comes before the court upon the court's Opinion and Order of March 29, 2004, which, inter alia, ordered Anthony Pinelli, Alan R. Brunell and Edward R. Theobald to submit detailed accountings of improperly obtained attorneys fees in order that a final sanction could be imposed.

I. INTRODUCTION

In an order dated October 2, 2003, the court advised and gave notice to attorneys Edward R. Theobald, Alan R. Brunell and Anthony Pinelli (collectively "counsel") that the court intended to proceed on a Rule to Show Cause as to why sanctions should not issue. See Minute Order of October 2, 2003 [116-1]. In that order the court stated that a Rule to Show Cause would be issued expeditiously. On October 8, 2003, the court issued the Rule to Show Cause, detailing the allegedly sanctionable conduct of counsel, and allowed counsel 45 days to respond in writing. See Rule to Show Cause [117-1].

On November 24, 2003, counsel filed their responses to the Rule to Show Cause, as well as numerous motions to dismiss the Rule to Show Cause and a motion for recusal. On March 29, 2004, the court denied counsels' motions to dismiss the Rule to Show Cause and the motion for recusal. See Schmude v. Sheahan, 312 F.Supp.2d 1047 (N.D.Ill.2004). In that order the court proceeded to find that counsels' conduct was sanctionable, stating:

The court finds that attorneys Edward R. Theobald, Alan R. Brunell and Anthony Pinelli have disobeyed the orders of the United States District Court and acted improperly by seeking and obtaining numerous awards of attorney fees, as improperly appointed counsel, in the Circuit Court of Cook County, after the entire cause of action had been removed to the United States District Court. Further, counsel proceeded with that conduct after a motion to remand had been denied, while that issue of remand was on appeal in the Seventh Circuit and after the Seventh Circuit's decision, after they were aware that the court was handling issues of appointments and awards of attorney fees pursuant to 55 Ill. Comp. Stat. § 5/3-9008 for other attorneys in the case, and despite the court's repeated admonitions that further litigation in the state court would be in contravention of the federal court's jurisdiction and improper. Additionally, the court finds that the statements and actions of each attorney violated their duty of candor to the court. The sanctionable conduct of each officer of the court was willful, intentional and repeated, and was an attempt to circumvent the United States District Court's removal jurisdiction. Attorneys Edward R. Theobald, Alan R. Brunell and Anthony Pinelli are hereby sanctioned pursuant to the court's inherent powers.

Id. at 639-40. The court sanctioned counsel, ordering disgorgement of all improperly acquired attorney fees and payment of a $5,000.00 fine. See id. at 640-41. In order to assess the exact amount of disgorgement, the court ordered that counsel file "a detailed accounting of all fees requested and received in the Circuit Court of Cook County which relate to this civil matter, including copies of all pleadings filed by counsel, orders entered by the Circuit Court of Cook County, and all fee petitions submitted to date" within 28 days of the court's order. See id. (emphasis added). The court stated that "[o]nce counsel submit such accountings, the court will enter an order requiring counsel to disgorge those improperly acquired attorney fees in a specific dollar amount to the source of such funds by May 28, 2004." See id.

On April 26, 2004, counsel submitted their accountings to the court. See Accounting of Fees, Expenses and Costs Requested and Received by Anthony Pinelli [168-1]; Accounting of Fees, Expenses and Costs Requested and Received by Alan R. Brunell [170-1]; Accounting of Fees, Expenses and Costs Requested and Received by Edward R. Theobald [169-1].

In order to fully understand the sanctionable conduct underlying this judgment and the protracted nature of this matter, with an abundance of caution, the court finds that a recitation of the facts underlying the Rule to Show Cause is again necessary.

II. BACKGROUND OF RULE TO SHOW CAUSE

This case arises out of the death of Louis Schmude. Schmude died on May 7, 2000, while in the custody of the Cook County Sheriff's Department. In the resultant lawsuit, Plaintiff (hereinafter "the Estate") claimed that Defendants1 were liable under 42 U.S.C. § 1983 and various state law theories for damages arising out of Schmude's death. A detailed background concerning the procedural history of this case is necessary to place the Rule to Show Cause and the instant judgment in context.

A. The State Court Civil Action and Subsequent Removal to Federal Court

On June 20, 2000, the Estate filed its original complaint in the Circuit Court of Cook County, naming only one Defendant, Cook County Sheriff Michael Sheahan (hereinafter "the Sheriff"). On June 27, 2000, the Sheriff was served with process. The Cook County State's Attorneys Office determined that a conflict of interest would exist if it represented the Sheriff, and so on July 6, 2000, Tyrone C. Fahner, Brian F. Hynes and Michael K. Forde of the law firm of Mayer, Brown & Platt were appointed to represent the Sheriff as Special State's Attorneys in the Circuit Court of Cook County by the Honorable David R. Donnersberger, the judge before whom the case was pending.

On July 26, 2000, a Cook County Circuit Court judge granted the Estate leave to file an amended complaint, naming three individual Sheriff's Deputies, William Spatz, Patricia Pultz and Larry Koscianski, as additional Defendants. On that same day, the Estate had summonses issued for all three additional Defendants.

On July 27, 2000, one day after the Estate filed its amended complaint, the Sheriff filed a Notice of Removal in the United States District Court for the Northern District of Illinois. Attached to the Sheriff's Notice of Removal was a copy of the original complaint, which named only the Sheriff as Defendant. At the time of removal, the Sheriff was the only Defendant served with process. Several weeks after the removal, the Cook County Sheriff's Department served Koscianski and Pultz with notice of the state court proceeding and a copy of the amended complaint. Spatz was never formally served with process in this case.

After removal, on December 22, 2000, attorneys Theobald and Brunell filed their personal appearances in the federal court, along with motions to be appointed as Special State's Attorneys to represent Defendants Spatz and Koscianski. One week later, on December 27, 2000, attorney Michael Ficaro filed his personal appearance in the federal court, along with a motion to be appointed as a Special State's Attorney to represent Defendant Pultz. In these motions, counsel indicated that the individual Defendants would ordinarily have been represented by the Cook County State's Attorneys Office; however, due to a conflict of interest, the Cook County State's Attorneys Office could not represent them. Counsel further indicated that an Illinois statute provided that the court in which a case is pending may appoint an attorney as a Special State's Attorney for the limited purpose of representing a party in that case. On December 27, 2000, the court took these motions under advisement. The Rule to Show Cause had its roots in these motions.

B. The State Court Criminal Action and Resultant Stay of Proceedings in Federal Court

One month before removal, on June 22, 2000, Spatz, Pultz and Koscianski were indicted and charged with first-degree murder in connection with the death of Louis Schmude. Thus, in addition to defending themselves against civil claims in the federal court, all three individual Defendants were defending themselves against criminal charges brought by the Cook County State's Attorneys Office in the Circuit Court of Cook County. On December 29, 2000, the federal court stayed all proceedings in the civil case pending the outcome of the criminal prosecution.

On January 22, 2002, the criminal trial began. On March 12, 2002, in a bench trial before the Honorable Ronald A. Himel, all three Sheriff's Deputies were acquitted of the charges against them.

C. The Stay of Proceedings in Federal Court Lifted

With the criminal trial concluded, the court returned to the civil matter. On March 18, 2002, after the conclusion of the criminal prosecution, attorney Theobald, on behalf of Spatz, filed a Renewed Motion to Remand to the Circuit Court of Cook County. At the March 22, 2002 hearing on the matter, the following exchange took place:

COURT:

One of the issues the Court must deal with before...

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