Filed August 13, 2007
In re Ernest Thomas Rossiello
Commission No. 03 CH 33
Synopsis of Review Board Report and Recommendation
Respondent-Appellant Ernest Thomas Rossiello was charged in a three-count complaint with misconduct related to three clients. Count I alleged that Rossiello failed to consult with a client as to whether to accept an offer of settlement, in violation of Rule 1.2(a) of the Illinois Rules of Professional Conduct, and failed to keep a client reasonably informed about the status of a matter or to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation, in violation of Rule 1.4. The charges of Count II were dismissed prior to the hearing. According to Count III, Respondent failed to abide by a client's wishes concerning settlement of a matter, in violation of Rule 1.2(a) and engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4). Both Counts I and III also alleged that Respondent engaged in conduct that was prejudicial to the administration of justice, in violation of Rule 8.4(a)(5), and in conduct that tended to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 771, which has since been renumbered as Rule 770.
Respondent admitted some of the factual allegations of Counts I and III and denied some of them. He denied the allegations of misconduct.
The Hearing Board found that all of the charges of Count I had been proved by clear and convincing evidence. It found in addition that none of the charges of Count III had been sufficiently proved, and recommended that those charges be dismissed. The Hearing Board recommended that Respondent be suspended for six months.
The case was before the Review Board on Respondent's exceptions. He challenged the Hearing Board's findings and claimed that even if those findings were affirmed, he deserved no more than censure or reprimand. The Administrator argued that the Hearing Board's findings and its recommended sanction should be affirmed.
The Review Board affirmed the Hearing Board's findings of fact and findings of misconduct. As it did not find all of the aggravating factors found by the Hearing Board, the Review Board recommended that Respondent be suspended from the practice of law for a period of four months.
BEFORE THE REVIEW BOARD
ILLINOIS ATTORNEY REGISTRATION
|In the Matter of:
ERNEST THOMAS ROSSIELLO,
Commission No. 03 CH 33
REPORT AND RECOMMENDATION OF THE REVIEW BOARD
The Administrator-Appellee filed a three-count complaint against Respondent-Appellant Ernest Thomas Rossiello, charging him with misconduct related to three clients. Count I alleged that Rossiello failed to consult with a client as to whether to accept an offer of settlement, in violation of Rule 1.2(a) of the Illinois Rules of Professional Conduct, and failed to keep a client reasonably informed about the status of a matter or to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation, in violation of Rule 1.4. The charges of Count II were dismissed prior to the hearing. According to Count III, Respondent failed to abide by a client's wishes concerning settlement of a matter, in violation of Rule 1.2(a) and engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Rule 8.4(a)(4).
Both Counts I and III also alleged that Respondent engaged in conduct that was prejudicial to the administration of justice, in violation of Rule 8.4(a)(5), and in conduct that tended to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 771, which has since been renumbered as Rule 770.
Respondent admitted some of the factual allegations of the complaint and denied some of them. He denied the allegations of misconduct.
The Hearing Board found that the Administrator proved by clear and convincing evidence that Respondent committed all of the misconduct charged in Count I. As for Count III, Respondent's client died before the hearing in this matter. Although a transcript of her testimony in a prior unrelated proceeding was admitted into evidence, the Hearing Board found that it did not address all of the questions that were raised before it. The Hearing Board determined that her prior testimony was not sufficient to satisfy the Administrator's burden of proof, and therefore recommended that the charges of Count Three be dismissed.
The Hearing Board further recommended that Respondent be suspended from the practice of law for six months. The case is now before the Review Board on the exceptions of the Respondent, who objects to the Hearing Board's findings as to Count I and to the recommended sanction. The Administrator urges us to affirm the Hearing Board's findings as to Count I as well as its recommendation of a six-month suspension.
No objection is made to the Hearing Board's findings concerning Count III, and we therefore affirm those findings. The facts of Count I are briefly summarized below.
In August 1997, James Baudin consulted attorney Sandra Quello. He believed that his former employer, Courtesy Litho Arts, Inc., had wrongfully deprived him of overtime pay plus compensation for three hours of work and two unused vacation days that were due to him at the time that he left the company. Baudin had calculated the unpaid overtime at $5,508.
Quello was admittedly inexperienced in employment law, but she had both a personal and professional relationship with Respondent, who concentrated his practice in this area. Baudin agreed with her suggestion that Respondent be brought into the case.
On August 11, 1997, Baudin signed an agreement with both attorneys which stated in part that he would pay them one-third of the full amount recovered from any lawsuit, whether recovered by settlement or otherwise. Additionally, Baudin agreed that his attorneys could apply for statutory fees under Title 29 United States Code sec.216(b), or any other fee-shifting provision, which they could keep as additional compensation.
On August 18, 1997, Respondent filed suit on behalf of Baudin and "all other employees similarly situated," although no other plaintiffs were ever joined to the suit. Baudin v. Courtesy Litho Arts, Inc., United States District Court for the Northern District of Illinois, case number 97 C 5808. The relief requested included unpaid overtime, liquidated damages and attorneys' fees pursuant to Title 29 U.S.C. secs.207(a) and 216(b) of the Fair Labor Standards Act, (FLSA). Section 216(b) provides in part that when an employer is found to have violated the overtime provisions of the FLSA (Title 29, U.S.C. sec.207(a)), the court shall allow reasonable attorney's fees and costs to be paid by the defendant in addition to any other award to the plaintiff.
Respondent wrote Courtesy's lawyer, Jeffrey Hupert, on October 24, 1997, suggesting settlement of the case for $16,666. This included $5,508 in unpaid overtime, the same amount in liquidated damages pursuant to the statute, court costs of $150 and $5,000 in attorney's fees. On November 18, 1997, as Hupert had not replied, Respondent instructed Quello to try to reach a settlement with him. Respondent apparently was already willing to eliminate $5,658 to which his client would be entitled as a prevailing plaintiff under the FLSA, suggesting that "[o]ur attorney's fee is a good starting point for the bottom line, plus the straight overtime without the liquidated damages."
Respondent advised Quello to try to settle it as Baudin was probably exempt from overtime requirements, writing that "if we get anything out of this, it will be a miracle. We've got to settle before anyone puts too much time into this." Hupert's client was not interested in settlement at that point, however.
Discovery in this matter continued. Bob Ingo, a Courtesy employee, was deposed in January 1998. Following his deposition, Quello, Baudin, Hupert and Courtesy Litho's owner, Dave Curcio, engaged in informal settlement discussions which resulted in Curcio's offer of $2,500. That offer was rejected, but in conversation with Quello afterward, Baudin agreed that he would "listen to" an offer of approximately $4,000 plus attorneys' fees. There is no evidence that such a proposal was ever made to the defendant.
On April 15, 1998, Hupert wrote a letter to Respondent which contained in part an offer to settle Baudin's case for $18,000. Hupert asked Respondent to "[p]lease pass this on to your client and let me know the response." Respondent testified that by this point, his assessment of Baudin's chances of success had become more favorable, due to some research by Quello. Respondent sent a fax to Hupert on April 16th, stating that "Plaintiff rejects your settlement offer of yesterday." According to Respondent, it was rejected because it was "insufficient to pay a significant portion of the attorneys' fees incurred to date."
Baudin first learned of Courtesy's offer and Respondent's rejection of it when he received a telephone call from Ingo on April 16th or 17th. He was shocked, and called Quello the following day. Quello professed to know nothing about the offer, but promised to find out.
According to Baudin, when he called her again on April 20th, Quello explained that the offer had been turned down because "there was too much time invested and money invested in the case by the attorneys." Baudin was unhappy that Respondent had rejected the
offer without consulting him, but did not tell Quello to take the offer because he did not think it was an option at that time. He thought that he had to take his lawyers' advice. Baudin did not consider terminating his attorneys' representation, as he did not know at that time that he could.
After discovering that Baudin had not known about the settlement offer, Curcio sent him a letter which stated in part that if Baudin was "interested in settling, feel free to give me a call or have your lawyers call mine (although I'm now a little nervous about the lawyers here)." When Baudin saw that the return address was Courtesy Litho, he put the letter in his file without opening it. He did not read the letter because after questioning the rejection of the settlement offer, Baudin received a letter dated April 23, 1998 from Respondent instructing him as follows:
As we advised you at the inception of this suit, please do not discuss your case with anyone expect (sic) Miss Quello and me.
The communications you have had are unauthorized under court rules and are a devious attempt to get you to settle for less. At present, we have approximately $28,000.00 in time in your case, plus about $3,000.00 in court reporters' charges. In addition, Curcio and I are sharply divided over the amount of overtime to which we believe you are entitled. We are endeavoring to have Mr. Curcio pay these expenses, rather than take them out of your overtime settlement.
Both Baudin and Courtesy filed motions for summary judgment and agreed with the district court's suggestion that it decide the case based on those motions. On November 10, 1998, the court denied Baudin's motion in its entirety, granted Courtesy's motion and dismissed the case with prejudice. Baudin v. Courtesy Litho Arts, Inc., 24 F.Supp.2d 887 (N.D.Ill. 1998). Respondent wrote Baudin to inform him of the court's decision, and suggested that he appeal. Instead, Baudin wrote Quello terminating his attorneys' services.
At that point, Respondent sent Baudin his bill for costs in the amount of $2,2ll.33. When the bill went unpaid, Respondent filed suit against him. Rossiello, et al. v. Baudin, Circuit
Court of Cook County case number 99 M1 105558. The case was dismissed upon Baudin's payment of $2,368.03.
When Respondent gave his sworn statement early in these proceedings, he testified that he called Baudin on "something like" April 15, 1998 and told him what was going on. In his initial answer to the complaint, Respondent admitted that he did not inform Baudin of the settlement offer before rejecting it, but he believed that Quello did so. At the beginning of the hearing he amended his answer to deny the complaint's allegation that he had failed to inform Baudin before rejecting the offer..
On the first day of Respondent's hearing testimony, he recounted his conversation with Baudin the day he received the offer. According to Respondent, Baudin agreed with his recommendation to "go for more." He described the charges against him as spurious, because Baudin knew about the settlement. However, on cross-examination, which did not take place until nine months later, Respondent remembered that he had not advised Baudin of the offer until approximately a week later, on either April 22nd or 23rd, after he returned from an out of town trip, which apparently was on April 23rd. Before the Review Board, Respondent states that Baudin was informed of the offer sometime between April 18th and 23rd, but no later than the 23rd, dates after Respondent had rejected the offer on April 16th. It is clear, therefore, that Respondent's latest version of events before the Hearing Board and this Board is consistent with the Administrator's—that Respondent did not consult with Baudin before rejecting the settlement offer.
Respondent takes the position that the fee-shifting provision of the FLSA is a complicated one, and that he appears before the Review Board because of the inability of the Administrator and the Hearing Board to understand it. While attorney's fees awarded pursuant
to Title 29, U.S.C. sec.216(b) belong to the plaintiff, the Supreme Court held in Venegas v. Mitchell, 495 U.S. 82, 86-87, 110 S.Ct. 1679, 109 L.E.2d 74 (1990), which concerned a discretionary fee-shifting provision in civil rights cases, that a plaintiff had the right to award his rights to the fees to the attorney, should the plaintiff prevail.
Baudin assigned his rights to sec.216(b) fees to Respondent in this case. Respondent claims that he therefore had "the legal right to settle [his] fees without the participation of the client." He rejected Courtesy's settlement offer "because [it] was insufficient to pay a significant portion of the attorney's fees incurred." In Local 174 v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962), the court held that due to federal interest in the smooth functioning of the collective bargaining process, Congress intended the provisions of the Labor Management Relations Act of 1947 to take precedence over any inconsistent local rules. "Incompatible doctrines of local law must give way to principles of federal labor law." Id., 369 U.S. at 101, 104, 82 S.Ct. 571, 7 L.Ed.2d 593. Respondent attempts to extend that holding, claiming that his "rights" under the federal statutes take precedence over Illinois Rules of Professional Conduct.
We review issues of law de novo. In re Discipio, 163 Ill.2d 515, 527, 645 N.E.2d 906, 206 Ill. Dec. 654 (1994).
While Respondent contends that his assignment pursuant to 29 U.S.C. sec.216(b) gives him the right to settle the fee issue without Baudin's participation, his interpretation of his rights under the statute would allow him to settle not only his fees, but Baudin's claims without any input from his client. Respondent cites no authority that supports his claim. While not in a fee-shifting situation, the Seventh Circuit has held that "the final decision whether to settle or not is the client's alone." Clarion Corporation v. American Home Products Corporation, 494 F.2d 860, 864 (7th Cir. 1974); see also McKnight v. Dean, 270 F.3d 513, 518 (7th Cir. 2001).
In the practice of law, it is elementary that a lawyer "shall abide by a client's decisions concerning the objectives of representation….and shall consult with the client as to the means by which they are to be pursued." Rule 1.2(a). This requires him to "abide by a client's decision whether to accept an offer of settlement of a matter." Id. A lawyer also has an affirmative duty to communicate with his client, and to make sure that his client is sufficiently informed about his case that he can make intelligent decisions concerning it. In re Smith, 168 Ill.2d 269, 282, 659 N.E.2d 896, 213 Ill. Dec. 550 (1995); Rule 1.4.
Therefore, Rule 1.2(a) and Rule 1.4, taken together, necessarily require an attorney to communicate an offer to his client before accepting or rejecting it. Respondent failed to do so, and so has violated both rules. Neither our rules, nor L.R. 83.51.2(a) of the Rules of Professional Conduct for the United States District Court for the Northern District of Illinois, which contains language almost identical to Rule 1.2(a), provide exceptions to their requirements when a fee-shifting statute is involved.
Next Respondent argues that the Hearing Board's findings that he engaged in conduct prejudicial to the administration of justice and that tended to defeat the administration of justice or bring the courts or legal profession into disrepute, in violation of rule 8.4(a)(5) and Supreme Court Rule 770, respectively, were against the manifest weight of the evidence. A finding is against the manifest weight of the evidence when the opposite conclusion is apparent or the fact found appears unreasonable, arbitrary and not based on the evidence. Leonardi v. Loyola University, 168 Ill.2d 83, 106, 658 N.E.2d 450, 212 Ill. Dec. 968 (1995). Unless we determine that this is the situation, we must affirm the Hearing Board's factual findings. In re Timpone, 157 Ill.2d 178, 196, 623 N.E.2d 300, 191 Ill. Dec. 55 (1993).
Respondent's argument results from Baudin's testimony that he had not "lost faith in lawyers per se'," or in the legal system. However, a finding of misconduct under these two rules does not result solely from the impact upon the victim of the misconduct. A violation of Rule 8.4(a)(5) requires clear and convincing evidence of actual prejudicial effect upon the administration of justice. In re Vrdolyak, 137 Ill.2d 407, 425, 560 N.E.2d 840, 148 Ill. Dec. 243 (1990). Rule 770 proscribes conduct tending to have that effect. In re Stern, 124 Ill.2d 310, 315, 529 N.E.2d 562, 124 Ill. Dec. 581 (1988). Respondent's misconduct deprived his client of his right to decide for himself whether or not to accept the offer to settle his lawsuit. The Hearing Board's findings that Respondent violated Rule 8.4(a)(5) and Supreme Court Rule 770 were not against the manifest weight of the evidence.
We also reject Respondent's attempt to escape these findings of misconduct by suggesting that Baudin "ratified" his rejection of the offer, since in the six months between when Baudin learned of the rejection and when the case was dismissed, he "never….instructed, demanded or insisted that Respondent accept the $18,000 offer." On the contrary, Baudin testified that he never understood that he could override Respondent's decision to reject the offer, and Respondent's letter of April 23rd reinforced Baudin's lack of understanding. (See p. 5, supra.) There is no authority for Respondent's position, and he suggests none.
Finally, we consider the appropriate sanction. The Hearing Board recommended that Respondent be suspended for six months, but that recommendation is advisory only. In re Imming, 131 Ill.2d 239, 260, 545 N.E.2d 715, 137 Ill. Dec. 62 (1989). In making our recommendation, we consider the case based on its own particular facts and circumstances, while keeping in mind that the purpose of discipline is not to punish the individual respondent, but to protect the public, to maintain the integrity of the profession and to protect the administration of
justice from reproach. In re Timpone, supra, 157 Ill.2d at 197, 623 N.E.2d 300, 191 Ill. Dec. 55. Aggravating and mitigating factors are relevant. In re Gorecki, 208 Ill.2d 350, 360-61, 802 N.E.2d 1194, 280 Ill. Dec. 673 (2003).
The Hearing Board considered in mitigation the fact that Respondent had not been disciplined before. That he had practiced for 34 years without incident was significant. Five witnesses testified to his reputation for honesty and integrity.
While we also view this evidence as mitigating, we do not agree entirely with the Hearing Board's assessment of the factors in aggravation. Specifically, we question its finding that Respondent "clearly and unequivocally lied" under oath and disagree with its conclusion that this finding should be considered an aggravating factor.
Respondent initially testified that he informed Baudin of the settlement offer the day that he received it, and that Baudin agreed the offer should be rejected. Approximately nine months later, on the second day of his testimony, Respondent stated that he did not speak to Baudin until after he rejected the offer. We conclude that Respondent was extremely reckless in his initial testimony, and corrected himself when the hearing reconvened. Before this Board, Respondent continues to take the position that he did not speak to Baudin until after the offer was rejected. Thus, Respondent ultimately conceded the truth of the Administrator's factual claim that Respondent rejected the offer without discussing the matter with his client.
In our judgment, respondents in ARDC proceedings should be encouraged to testify truthfully and to correct earlier testimony that was inaccurate or untruthful, whether the result of a deliberate lie, mistake or recklessness. To hold in this case that Respondent's ultimate truthful testimony should result in a finding of aggravation and thereby enhance his sanction would be a precedent that might encourage respondents to stick with their original testimony and
make no corrections. We note that in a criminal prosecution an admission in the same trial of the falsity of a contradictory statement bars prosecution for perjury. See 720 ILCS 5/32-2(c). Undoubtedly, that statute embodies the same policy sought to be achieved by our holding in this case.
While the Hearing Board maintained that Respondent did not specifically state that he was correcting his earlier testimony or admitting its falsity, when asked if "some of your prior testimony as to a specific date when you communicated with the client or somebody else" could have been wrong, Respondent acknowledged that "[it] could have been." His conversation with Baudin had taken place seven years earlier. According to Respondent, his previous testimony had been based on his belief at the time that he testified, and the same was true when the hearing reconvened.
There are other serious aggravating factors, however. Respondent deprived his client of the right to determine the outcome of his case. After he did so and the $18,000 settlement offer had been rejected, the case was dismissed and his client received nothing. Respondent shows no remorse for this outcome and instead attempts to shift the blame for this result to Baudin, because of Baudin's decision not to appeal. He continues to believe that he has "a legal right" to reject an offer under these circumstances without his client's consent.
While Respondent contends that he deserves no discipline, or should receive a censure or reprimand at most, due to the "tenuous nature of the alleged violation and complaint," we find nothing tenuous about Respondent's misconduct. He placed his own interests before those of his client, and his client was harmed as a result. We cannot ignore this fact in making our determination.
We also reject Respondent's plea that he has suffered enough due to the legal fees he has incurred and the sullying of his reputation, and his claim that a suspension would be a hardship for him. Our recommendation is made primarily with the intent of protecting the public and maintaining the reputation and dignity of the legal profession, not of punishing Respondent. In re Nesselson, 35 Ill.2d 454, 462, 220 N.E.2d 409 (1966). We conclude that the circumstances require a period of suspension.
The Hearing Board's determination that Respondent lied when testifying before it was a significant factor in its recommendation. Since we have rejected this finding as an aggravating factor we decline to recommend a suspension of that length.
We have examined the cases cited by the Administrator. They involve respondents who acted contrary to the express wishes of their clients, (In re Dombrowski, 71 Ill.2d 445, 376 N.E.2d 1007, 17 Ill. Dec. 678 (1978); In re Sturgeon, 98 CH 10 (Review Board, June 22, 2000), Administrator's petition for leave to file exceptions denied, No. M.R. 16935 (September 25, 2000)), or who acted dishonestly, in a way that was detrimental to their clients, (In re Kauffman, 91 CH 633 (Review Board, December 30, 1994), Respondent's petition for leave to file exceptions denied, No. M.R. 11009 (May 26, 1995); In re Myles, 94 CH 497 (Hearing Board, February 7, 1995), approved and confirmed, No. M.R. 12178 (March 26, 1996)). Unlike some of the conduct in those cases, Respondent's misconduct results from his stubborn, mistaken belief that he had the "legal right" to behave as he did.
After consideration of all the evidence, we recommend that Respondent Ernest Thomas Rossiello be suspended from the practice of law for four months.
Date Entered: 13 August 2007
Daniel P. Duffy