Filed June 24, 2011

BEFORE THE HEARING BOARD
OF THE
ILLINOIS ATTORNEY REGISTRATION
AND
DISCIPLINARY COMMISSION

In the Matter of:

BRUCE ALAN CARR,
No. 6291148,

LAWRENCE JOSEPH HESS,
No. 6274416,

Attorney-Respondents.

 

Commission No. 2010PR00046,


Commission No. 2010PR00047

REPORT AND RECOMMENDATION OF THE HEARING BOARD

INTRODUCTION

The hearing in this matter was held on November 17, and December 13, 2010, at the offices of the Attorney Registration and Disciplinary Commission, Springfield, Illinois before a Hearing Board Panel consisting of Claire A. Manning, Chair, George E. Marron III, and Carolyn Berning. The Administrator was represented by Deborah Barnes. Both Respondents appeared pro se.

PLEADINGS

On April 27, 2010, the Administrator filed a three-count Complaint against the Respondents.

Count I charged that Respondent Hess, while being represented by Respondent Carr, brought a baseless claim against Ronald and Cathy Loyd in the case of Hess v. Loyd, No. 08- L-11, Circuit Court of Montgomery County.

Count II alleged that Respondent Hess, while being represented by Respondent Carr, asserted baseless attorney liens against the defendants in three personal injury cases: Loyd v.

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Billiter, No. 04- L-10, Montgomery County; Eller v. Villegas, No. 05- L-24, Macoupin County; and Thompson v. Skeffington, No. 02- L-51, Macon County.

Count III alleged that Respondent Hess, while being represented by Respondent Carr, filed a baseless lawsuit in the United States District Court for the Eastern District of Missouri, against his former employer, as one of the plaintiffs in the case of in Hess and Warren v. Kanoski & Associates, et al., No. 4:09-CV-295, and filed a similar baseless lawsuit in the United States District Court for the Central District of Illinois in Hess and Warren v. Kanoski & Associates, et al., No. 3:09-CV-3334.

The Complaint charged that Respondent Hess committed the following misconduct: (a) bringing a proceeding, or

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asserting or controverting an issue therein without a basis for doing so that is not frivolous and which includes a good-faith argument for an extension, modification or reversal of existing law, in violation of Rule 3.1 of the Illinois Rules of Professional Conduct (1990); (b) engaging in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990); and (c) engaging in conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute in violation of Supreme Court Rule 770.

The Complaint charged that Respondent Carr committed the following misconduct: (a) filing a suit, asserting a position, or taking other action on behalf of a client when the lawyer knows or reasonably should know that such action would serve merely to harass or maliciously injure another, in violation of Rule 1.2(f)(1) of the Rules of Professional Conduct (1990); (b) advancing a claim that the lawyer knows is unwarranted under existing law and not supported by a good-faith argument for an extension, modification, or reversal of existing law, in violation of Rule 1.2(f)(2) of the Illinois Rules of Professional Conduct (1990); (c) bringing a proceeding, or asserting or controverting an issue therein without a basis for doing so that is not frivolous and which includes a good-faith argument for an extension, modification or reversal of existing law, in violation of Rule 3.1 of the Illinois Rules of Professional Conduct (1990); (d) representing a client and using means that have no substantial purpose other than to embarrass, delay, or burden a third party, in violation of Rule 4.4 of the Illinois Rules of Professional Conduct (1990); (e) engaging in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990); and (f) engaging in conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute in violation of Supreme Court Rule 770.

The Respondents filed separate Answers. Both Respondents admitted some of the factual allegations, denied others, and denied all of the charges of misconduct.

THE EVIDENCE

The Administrator presented the testimony of Ronald J. Kanoski, Ronald Loyd, Cathy Loyd, Todd Bresney, and Kenneth Blan. The Administrator also called the Respondents as adverse witnesses. The Administrator's Exhibits 1 through 15, 20 through 23, 25, 29, and 36 through 40 were received into evidence. (Tr. 26-28, 309). The Respondents testified in their own behalf. Respondent Carr's Exhibits 1 through 25 were received into evidence. (Tr. 147, 513). Respondent Hess' Exhibits 1 through 14 were received into evidence. (Tr. 595).

The following facts were adduced at the hearing from the testimony of witnesses and evidence presented, as follows.

Ronald J. Kanoski

Ronald Kanoski has been an attorney since 1974. He is the principal of the law firm of Kanoski & Associates, and is the sole shareholder. Kanoski & Associates has been in existence

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since 1978, and is a corporation permitted to practice law under Supreme Court Rule 721. The law firm represents plaintiffs in workers' compensation, medical malpractice, and personal injury cases. (Tr. 62-64, 68).

In May 2001, Kanoski hired Respondent Hess to primarily handle medical malpractice cases. Hess lived in Missouri and drove to Springfield, Illinois, four days a week to work in the offices of Kanoski & Associates. An Employment Agreement (Adm. Ex. 1) was entered into by Kanoski & Associates and Hess. Pursuant to the Agreement, Hess was to be paid $60,000 per year and a bonus of 15% of fees generated above his base salary, with a guarantee of $125,000. The base salary was modified by way of a letter and increased to $100,000. (Tr. 63, 95-96, 127, 143; Adm. Ex. 1 at 2-3: Carr Ex. 3).

As Kanoski explained, other relevant provisions in the Employment Agreement read as follows:

Kanoski & Associates is a professional corporation which practices law in the State of Illinois and other states by and through its shareholder-employees and other employees who are licensed to practice law in the State of Illinois and other states. (Tr. 100; Adm. Ex. 1 at1).

[E]mployees acknowledge 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. (Tr. 64; Adm. Ex. 1 at1).

[A]ll proceeds received by [employee] for professional services rendered for Corporation clients shall be the property of Corporation. (Tr. 64; Adm. Ex. 1 at 2).

The employee ‘has no proprietary interest in any client.' (Tr. 65; Adm. Ex.1 at 4) Section 8(c)).

An employee, upon termination, ‘will not notify, advise, solicit, or otherwise contact clients of the Corporation.' (Tr. 65; Adm. Ex. 1 at 4).

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Additionally, each client of the law firm has the right to freely choose a representation in the event of a separation of an employee, and that the Corporation would take no action to interfere with the employee's relationship with a client. (Tr. 105-06; Adm. Ex. 1 at 4-5).

Kanoski testified that he did not interfere with Hess' relationship with clients. (Tr. 106).

Kanoski also expressed his understanding of the contract: that the attorneys employed by Kanoski & Associates have an attorney-client relationship with the client on whose cases they work as "an employee of Kanoski & Associates;" appearances for clients are entered by Kanoski & Associates employees; and "once they were no longer employees of Kanoski & Associates, they no longer had a right of representation." (Tr. 103, 107, 129-30)

In February 2007, Hess was discharged from his employment with Kanoski & Associates. (Tr. 66-67). Kanoski acknowledged that Hess was not given a written notice of termination or 30-day severance pay, as set out in the Employment Agreement. Kanoski also expressed his belief that the Employment Agreement was fulfilled with regard to other respects the law firm's responsibility to Hess. (Tr. 86, 105, 140, 142-43).

In August 2002, Kanoski & Associates was approached and retained by Ronald Loyd and his wife, Cathy, for legal representation related to a medical malpractice action. A contingent fee agreement was entered into between Loyd and Kanoski & Associates. (Tr. 78-79; Adm. Ex. 29 at 1). Kanoski said that, although Loyd knew that an attorney employee of the law firm would work on the case, Loyd did not know which employee would be assigned. (Tr. 117). After the contingent fee agreement was executed, Kanoski assigned Hess to work on the Loyd case. (Tr. 130). Hess did most of the work on the Loyd case, including the preparing of the complaint on behalf of Mr. and Mrs. Loyd against the medical providers. (Tr. 117, 124; Adm. Ex. 3). Kanoski said that the Loyds were not clients of Hess, but were clients of the law firm. Thus,

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Hess represented the Loyds "on behalf of the corporation," and Hess had an attorney-client relationship with the Loyds "on behalf of Kanoski & Associates." (Tr. 82, 129). After Hess was terminated as an employee of Kanoski & Associates, the Loyd case was settled. (Tr. 124).

Following the discharge of Hess, Kanoski talked with attorney Ken Blan about going forward with some of Hess' cases. Blan had an office in Danville, and had previously handled a couple of medical malpractice cases referred by Kanoski. The Loyds met with Blan, liked him, and entered into a contract for Blan to go forward with their case. The contingent fee agreement was executed on March 13, 2007, and was signed by Ronald Loyd, Blan, and Kanoski on behalf of Kanoski & Associates. (Adm. Ex. 29 at 8-9). Subsequent to Hess' discharge, the Loyds never contacted Kanoski about having Hess represent them. Blan became "of counsel" for Kanoski & Associates, and their fees and costs were split on the cases Blan handled. (Tr. 67-69,118-19, 141-42).

In July 2008, Kanoski spoke with Ronald Loyd about a complaint that Carr filed on Hess' behalf against the Loyds (Hess v. Ronald and Cathy Loyd, No. 08-L-11, Montgomery County). Loyd sent a copy of the complaint to Kanoski. Kanoski said that, upon reading the complaint, he was "stunned" and "embarrassed." He knew the Respondents had "a beef" against him, "but I couldn't imagine that they wanted to use a client for leverage to try and put themselves in a better position." Kanoski told the Loyds that he "would provide a free defense for them." (Tr. 70-71).

Kanoski assigned attorney Todd Bresney to the Loyd matter. Kanoski said that Bresney devoted "well in excess of 300 hours for the defense of various complaints and attending hearing and writing briefs to help the law firm to defend itself against these issues. And that would

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include the time spent on the Loyds." Additionally, Kanoski and staff members of the law firm were distracted, frustrated, and aggravated by the Respondents' actions. (Tr. 71-72, 80, 86-87).

Paragraph 4 of the Hess v. Loyd complaint asserts, as fact, that the Loyds were "clients" of Hess. Paragraph 5 asserts that the Loyds "placed their claims . . . in the hands of" Hess. (Adm. Ex. 8 at 1-2). Consistent with the Loyds' contingent fee agreement and Hess' Employment Agreement, Kanoski testified that the foregoing statements were not factual, but were "totally bogus," because the Loyds hired the law firm of Kanoski & Associates, not Hess, to represent them. Hess was the employee of the law firm who was assigned to represent the Loyds "on behalf of the corporation." (Tr. 81-82). Also, at the time the Loyds hired Kanoski & Associates, they did not know which attorney-employee would be assigned to their case and, in fact, at that time Hess had not yet been assigned to the Loyd case. (Tr. 116-18).

In February 2009, Hess, while being represented by Carr, filed a complaint against Kanoski & Associates, Kanoski, and Blan in the United States District Court, for Eastern District of Missouri. (Adm. Ex. 23). The complaint was dismissed without prejudice, and the complaint was refiled in the United States District Court for the Central District of Illinois. (Adm. Ex. 25). The defendants' motion to dismiss was denied, and the case is currently pending. (Tr. 75-76, 90, 136).

Paragraph 28 of the Hess's federal complaint asserts that, while Hess was employed by Kanoski & Associates, Kanoski and others "referred" cases to him, including the cases of the Loyds, Terry Eller, Julie Hoelscher, Dorothy Fetterman, Denise Lowery, Robert Thompson, and the 170 Dow Corning Breast Implants. (Adm. Ex. 25 at 8). Kanoski testified that he would not describe the above cases as being "referred" to Hess, but rather that the cases "were assigned to an employee of Kanoski & Associates" who "happened to be employee Larry Hess." (Tr. 76).

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Paragraph 29 of the complaint asserts that the Loyds and others "placed their claims into the hands of Lawrence J. Hess for suit." (Adm. Ex. 25 at 8). Kanoski testified that the foregoing was "not a correct statement" because the clients had contracts with Kanoski & Associates, not with Hess. The attorney employee, such as Hess, represents the clients "on behalf of the corporation." (Tr. 78-79). Paragraph 24 of the complaint asserts that Kanoski & Associates and Hess had a "joint representation of their clients." (Adm. Ex. 25 at 7). For the reasons previously stated, Kanoski said there was no joint representation. (Tr. 85).

On cross-examination, when Kanoski was asked whether a letter from Carr to Ronald Loyd, dated May 15, 2008 (Adm. Ex. 6), was harassing, Kanoski replied "I think it is harassing to tell clients that they have the representation that they don't welcome and that they don't have an awareness of or don't want." He further stated that as of May 15, 2008, Hess had no responsibility for the Loyd case because Hess' responsibility to the Loyds ended when he was fired by Kanoski & Associates (in February 2007). (Tr. 110-12, 66-67).

Ronald Loyd

Ronald Loyd is 44 years of age and resides in Litchfield, Illinois. After being injured at his place of work, Ronald contacted the law firm of Kanoski & Associates to represent him in a workers' compensation cases and then a medical malpractice case. He signed a contingent fee agreement with Kanoski & Associates in August 2002. (Adm. Ex. 29 at 1). Ronald was aware that Kanoski & Associates assigned Hess to his medical malpractice case. Ronald first met Hess after Ronald hired Kanoski & Associates. Ronald said he had no contract with Hess. (Tr. 153-55, 167, 187-89).

Ronald testified that he was not satisfied with the representation by Hess, and considered hiring a different law firm. He called the Kanoski firm to "let them know how unhappy I was,"

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and was told that Hess had been discharged. Ronald was told that he could hire a new law firm, but he decided to stay with the Kanoski firm. (Tr. 156-57). Ronald met with Kanoski and attorney Kenneth Blan. They told him he had no obligation to stay with Kanoski & Associates. Ronald went home, did some research on Blan, and found him to be very competent. On March 13, 2007, Ronald signed a contingent fee agreement (Adm. Ex. 29 at 8-9) retaining Blan to represent him in the medical malpractice case. (Tr. 158-60).

Ronald testified to three telephone calls he received from Hess subsequent to Hess' discharge from Kanoski & Associates. While he did not recall the dates of the calls, on the basis of other evidence in the record, it appears that they took place in about March 2007. (Tr. 201-02, 545, 550; Adm. Ex. 39 at 2, 7). Ronald said that during the first call, he told Hess that Hess "wasn't my attorney and that I didn't want nothing to do with the guy." (Tr. 157, 200). Ronald denied that he asked Hess to take over his case again. (Tr. 201). The second telephone call from Hess took place after Ronald had hired attorney Blan. Ronald said that, during this second telephone conversation, he told Hess that he "was not interested for [Hess] being my attorney" and that "I had already got an attorney and signed with Ken [Blan] and Ron [Kanoski]." (Tr. 158, 162). Ronald stated that even during their third telephone conversation, which was subsequent to Ronald's retention of Blan, Hess continued to maintain that he was still Ronald's attorney. (Tr. 158).

More than a year later, Ronald received a letter, dated May 15, 2008, from Carr, identifying himself as Hess' attorney and stating that Hess "remains responsible for the lawsuit you entrusted to him." (Adm. Ex. 6). Ronald testified that prior to this letter he had told Hess, in the telephone conversations described above, that he (Ronald) had hired another attorney. Ronald described the letter as "a bunch of BS. I had never seen anything like that before because . . .

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[Hess] didn't work at the Kanoski law firm and that's who I hired to represent my cases was the Ron Kanoski law firm. I didn't hire Larry Hess." The next day, May 16, 2008, Ronald sent Carr a letter, which stated that Hess "is not responsible for my law suit" and "I have a very competent attorney." (Tr. 161-63). Ronald said he believed Carr sent the May 15 letter "to harass me." (Tr. 174).

In late May 2008, Ronald received a Notice of Attorney's Lien in his medical malpractice case. (Adm. Ex. 12). At the time, he did not know what the notice meant. Later, he realized that Carr and Hess had "put a lien on . . . my settlement to where I couldn't get my settlement until the attorney liens were settled." (Tr. 163). Ronald explained that he had waived his right in his workers' compensation case in order to receive the settlement for his medical malpractice case, and was to receive "my money on a certain day." However, after the lien was asserted, there were court hearings, and Ronald got a bank loan until the settlement funds were finally released, which was about three months later. (Tr. 164, 166-67, 176-77, 182-83).

A hearing regarding the attorney's lien was held at the courthouse in Hillsboro. Ronald, who attended the hearing, stated that Carr told "the judge repeatedly that me and my wife were liars and that we were committing perjury and [he] kept calling us liars." (Tr. 164-66).

When asked on cross-examination whether Carr told him, at the above proceeding, that he could get all of his money right then, Ronald replied, "that's not exactly how I seen it, no." When asked whether Carr told the judge that there was no point in the Loyds not getting their money, Ronald replied "that was after awhile." (Tr. 172-73).

In addition to the lien proceeding, Hess, represented by Carr, also filed a lawsuit against the Loyds in Montgomery County on July 17, 2008, Lawrence Hess v. Ronald and Cathy Loyd, Montgomery County, No. 08-L-11. (Tr. 166). While the Complaint (Adm. Ex. 8) asserted that

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Ronald and Cathy breached a contract with Hess, Ronald's position was that they "had no contract with Larry Hess." Ronald testified that he did not know anything about the employment arrangement between Hess and Kanoski & Associates. (Tr. 167). Kanoski told Ronald that the lawsuit would be defended without charge to the Loyds. Kanoski assigned Todd Bresney to handle the case. (Tr. 168-69).

The circumstances relating to the lawsuit had Ronald "pretty stressed for awhile." He testified that he "about had a nervous breakdown," and "ended up having to go see a psychologist over this." (Tr. 168-69). He also said his wife "lost many days of work over this." (Tr. 170). Finally, Ronald said he believed Carr and Hess "have done nothing but try to extort money out of me just because [Hess] and the law firm he worked for has a beef and they've taken it out personally on me and my wife." (Tr. 170-71).

Cathy Loyd

Cathy Loyd is married to Ronald Loyd. She and Ronald were involved in a medical malpractice lawsuit against Dr. Billiter. She said they hired Ron Kanoski as their attorney in that case. (Tr. 209, 217).

Hess worked on their medical malpractice case. After Hess was no longer employed at the Kanoski law firm, Cathy and Ronald met with attorney Ken Blan. They decided that they wanted Blan to represent them in the medical malpractice case. (Tr. 211-12).

Hess filed a lawsuit against the Loyds. (Adm. Ex. 8). Cathy said she did not understand why Hess was suing them because "I couldn't figure out anything that we had done wrong." She also said the lawsuit by Hess caused her to be "scared" and "aggravated." She said she is now "skeptical" of lawyers. (Tr. 212-13).

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Kennith Blan

Mr. Blan is 63 years of age and has been an attorney since 1972. His office is in Danville. He has represented plaintiffs in personal injury and medical malpractice cases since the early 1980s. Ron Kanoski has referred cases to him over the years. In early 2007, Blan became "of counsel" to the law firm of Kanoski & Associates. (Tr. 246-47, 274).

Blan was aware that Hess was employed at Kanoski & Associates. After Hess was discharged by Kanoski & Associates, Kanoski asked Blan to look at some of the cases previously handled by Hess. Two of the cases were Loyd v. Billiter and Thompson v. Skeffington. The Thompson case remained with Kanoski & Associates, with Blan handling the medical aspects of it and attorney Todd Bresney handling the liability aspects. (Tr. 247-49, 261, 274).

When Blan indicated to Kanoski that he was willing to go forward with the Loyd case, arrangements were made to meet the Loyds and determine if they wanted Blan involved in their case. Thereafter, a contingent fee agreement was signed by Ronald Loyd, Blan, and Kanoski on March 13, 2007. (Tr. 250-52; Adm. Ex. 29 at 8-9). A mediation was held for the Loyd case in March 2008. Because there were still some issues to be resolved, the mediation was adjourned. In mid June, Loyd's workers' compensation contract was approved, which "was the final thing we needed to have happen to finalize the settlement." The settlement funds were then to be disbursed by mid July 2008. (Tr. 250-51, 288-91).

Meanwhile, in late May 2008, Blan received a telephone call from Ronald Loyd, who was "frantic because he had gotten the Notice of Lien" from Carr. (Tr. 251; Adm. Ex. 12). Blan filed two motions to strike, and adjudication of lien proceedings commenced. The matter was not resolved quickly, and Kanoski hired attorney George Riplinger to handle the adjudication of lien matter. Blan had to file the motion to adjudicate the attorney's lien because Hess had served

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notice of his attorney's lien. (Tr. 291). Blan said that, because of the adjudication of lien proceedings, the Loyds did not receive their settlement funds until about October 2008, which was "roughly a three or four month delay." (Tr. 290-91).

On cross-examination, when Blan was questioned as to whether Carr had indicated a willingness to have the Loyds receive their settlement money quickly, Blan admitted that Carr said something to that effect in the judge's chambers. Blan also testified that when he later confronted Carr in the hallway and offered to escrow the attorney's fees, Carr responded "no, we want our money." Blan explained that this incident "might have been the final straw" leading to the decision to hire attorney Riplinger to handle the lien matter. (Tr. 291-95).

Blan also testified to the facts related to Hess' federal suit against him and Kanoski. (Adm. Ex. 25; Tr. 253-59). Blan's out of pocket expenses for the two actions filed by Carr on Hess' behalf (in Missouri and in Illinois), were between $20,000 and $25,000. As the case is still pending in Illinois, he may have additional expenses. (Tr. 260).

Todd Bresney

Todd Bresney is an attorney and has worked at the law firm of Kanoski & Associates for about eight years. (Tr. 218).

In mid 2008, Ron Kanoski asked Bresney to represent the Loyds in the lawsuit filed against them by Hess. (Adm. Ex. 8). The Loyds were not going to be charged for the representation, but Kanoski & Associates would receive compensation if the court entered sanctions against Hess. Bresney met with the Loyds and explained the compensation with them. Bresney said the Loyds were very "angry" and "upset" about the lawsuit filed by Hess. (Tr. 219-20).

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On behalf of the Loyds, Bresney filed a motion for judgment on the pleadings and a motion for sanctions. On or about September 22, 2008, Bresney had a telephone conversation with Hess' attorney, Bruce Carr. Carr indicated that he thought the matter could be quickly resolved without court intervention. (Tr. 221). On September 23, 2008, Carr sent a demand letter to Bresney. The letter stated that Hess' claim against the Loyds could be settled if Kanoski and Blan would pay Hess a portion of the fees they received in the Loyd medical malpractice case. (Adm. Ex. 9). Bresney was "appalled" by Carr's demand letter and viewed it as "nothing but extortion." (Tr. 222). He explained that Carr was demanding that the Loyds require their attorneys, who were not parties in the pending lawsuit to "come up with cash that they don't have any control over in order to dismiss this lawsuit against them." (Tr. 222).

Carr sent a second demand letter to Bresney on October 2, 2008. (Adm. Ex. 10). In this letter, Carr specified an amount of $165,312 to settle the Loyd litigation that he instituted. That amount represents one-half of the attorney fees deposited in escrow in the Loyd medical malpractice case. Bresney said his reaction to Carr's second letter was the same as his reaction to the first letter. (Tr. 223).

On December 5, 2008, the court in Montgomery County granted Bresney's motion for judgment on the pleadings. The court also assessed sanctions and ordered a hearing on the appropriate amount. (Adm. Ex. 11). On January 30, 2009, the court entered a second order, awarding the Loyds specific amounts in attorney fees and expenses "from plaintiff" (Hess). (Adm. Ex. 26 at 6-7). On March 2, 2010, the court entered a third order, which amended the earlier order to require payment from "plaintiff or his attorney, Bruce Carr."(Adm. Ex. 26 at 8). At the time of the disciplinary hearing, the case was on appeal in the Fifth District Appellate Court. (Tr. 224-25).

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Bresney further testified that he spent "many hours" on the Hess v. Loyd case and that it increased his workload considerably. (Tr. 219, 224).

Respondent Bruce Carr

Respondent Carr is 55 years of age, married, has three daughters, and has seven grandchildren. (Tr. 311-12, 461). He graduated from Valparaiso Law School in 1991, and was admitted to the practice of law in Indiana the same year. He became licensed in Illinois in 2006. (Tr. 311-12; Carr's Answer at 9). His main areas of practice are civil rights, constitutional law, product liability, breach of contract, and personal injury matters. (Tr. 312). He discussed various aspects of his background, including that he clerked for a federal judge while he was in law school; he was pastor at churches in Chicago and Indiana; he has preached in Central and South America and in many states; he was a missionary and lived in Mexico from 1980 to 1987; and he taught and preached in Pakistan for a year. (Tr. 467-72).

In April 2008, Respondent Hess came to Carr about a breach of contract matter. Hess had been discharged by the law firm of Kanoski & Associates in February 2007. Carr reviewed Hess' employment contract with the firm and the firm's employment manual. Carr said he believed Hess had a valid claim and agreed to represent him on a contingent fee basis. Subsequently, in early 2009, Hess became "of counsel" to the Rex Carr law firm. (Tr. 313-16, 471, 497, 521).

Regarding his May 15, 2008 letter to the Loyds, Carr testified that he spent about 30 hours researching it before sending it. (Tr. 477, 487). Carr testified that the letter was not intended to harass the Loyds; rather, Carr stated that he had a good faith belief that Hess still represented the Loyds. (Tr. 333, 480, 484-85, 517). He based that belief on the following facts. Hess had appeared on behalf of the Loyds. No one had filed a motion for Hess to withdraw. The Loyds never notified Hess that he was discharged as their attorney. Hess was still listed as

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attorney of record in the court documents. (Tr.333, 340-42, 345-46, 379-80, 480, 484-85, 498, 516). Carr also noted that when attorney Kennith Blan entered his appearance on behalf of the Loyds on March 12, 2007, he did so as "additional counsel." (Adm. Ex. 4). Thus, according to Carr, Blan "was coming into the case in addition to Mr. Hess' representation." (Tr.340, 380).

At the time Carr wrote the letter to the Loyds on May 15, 2008, Carr was aware that Hess had not worked on the Loyds' case since Hess was discharged from Kanoski & Associates more than a year earlier. He was also aware that Hess was not licensed to practice law in Illinois because he had not paid his 2008 attorney registration fee. However, Carr said the foregoing facts did not preclude Hess from having an attorney-client relationship with the Loyds. Carr pointed out that Hess was still licensed to practice law in Missouri and could have been allowed to appear in Illinois pro hac vice. Also, Hess could have renewed his Illinois license by paying the registration fee. (Tr. 316-17, 380, 516).

Carr stated that he did not receive Loyd's May 16 letter until after he sent out the notice of the Hess' attorney's lien. (Tr. 318, 515).

On May 15, 2008, Carr sent a notice of Hess' attorney's lien to the defendant in the case of Loyd v. Billiter. A copy was sent to Ron Kanoski. (Adm. Ex. 13). On May 21, 2008, Carr sent the notice of attorney's lien to the Clerk of the Circuit Court in Montgomery County, and to all parties of record in the Loyd v. Billiter case, including Ronald and Cathy Loyd. (Adm. Ex. 12; Tr. 319-21, 486). Carr said that he believed Hess had a valid attorney's lien based upon the work Hess did on behalf of the Loyds in their medical malpractice case. (Tr. 328-30, 353-54, 384-86, 480-81).

Carr said that the Loyds were not harmed by the notice of Hess' attorney's lien. He believed that the delay in the Loyds receiving their share of the settlement funds was due to

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Kanoski and Blan. Carr contended that, during the lien dispute, he agreed in open court and in chambers that the Loyds should receive their money, with only the attorney fees being withheld until Hess' lien was adjudicated. (Tr. 331-32, 354, 358; Carr Ex. 25 at 4).

On June 10, 2008, Kanoski and Blan filed a petition to intervene in regard to Hess' attorney's lien. A hearing was held on June 23, 2008, at which Carr objected to the petition. (Tr. 322, 505). Carr said that the transcript of the proceeding (Carr Ex. 22) showed that the judge indicated that Kanoski and Blan caused a delay by filing the petition to intervene. The judge stated that he "would've anticipated that the [Loyds], frankly, would have filed a petition for adjudication of . . . liens outstanding. That's the way I would normally see the matter come before the court . . . You didn't do that, yet it seems like your settlement is being held up because of that." (Tr. 507-09; Carr Ex. 22 at 7).

On June 24, 2008, Kanoski and Blan filed, a Petition to Strike or Adjudicate Lien on behalf of the Loyds. (Adm. Ex. 39). The petition alleged that Ronald Loyd told Hess that he wanted nothing further to do with him and that he did not want Hess to call him again. The petition alleged that this conversation took place within six weeks of Hess being discharged by Kanoski & Associates. The Loyds attested that the facts alleged in the petition were true and correct. (Adm. Ex. 39 at 2-3, 7; Tr. 323-27, 510). Carr filed a Response to the Loyds' Petition on July 17, 2008 (Adm. Ex. 40; Tr. 327-31), and a hearing regarding the lien was held on August 5, 2008. (Tr. 507, 509; Carr Ex. 25).

On July 17, 2008, Carr filed a lawsuit on behalf of Hess against Ronald and Cathy Loyd. (Adm. Ex. 8). Carr discussed the lawsuit with Hess. (Tr. 338). Carr said the lawsuit was in response "to their lies that they had discharged Mr. Hess knowing that they had not discharged Mr. Hess" and "they were helping Mr. Kanoski in their attempt to defeat Mr. Hess' lawsuit

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against Mr. Kanoski & Associates." (Tr. 335, 357). Carr further testified that the Loyds "owed Mr. Hess money" and the lawsuit was "a meritorious action." (Tr. 336, 345-46, 352-54, 358-59, 493). On December 5, 2008, Hess' lawsuit against the Loyds was dismissed with prejudice. (Adm. Exs. 8, 26 at 3). The judge ruled that the Loyds retained Kanoski & Associates as their attorney, not Hess, in their medical malpractice case, and that Hess did not have any contract with the Loyds. The judge also stated that Hess "has failed to allege facts supporting a cause of action against [the Loyds]."(Tr. 359-61). Hess appealed the circuit court judgment (Adm. Exs. 26, 38), and the Appellate Court, Fifth Judicial District, affirmed the judgment (Adm. Ex. 31;Tr. 377-79).

Carr acknowledged that on February 23, 2009, he filed on behalf of Hess and Hess' wife a complaint against Kanoski & Associates, Kanoski, and Blan, in the United States District Court, Eastern District of Missouri. (Adm. Ex. 23). Carr said he believed Hess had a meritorious lawsuit. Carr noted that Kanoski had admitted that he had breached the employment contract with Hess. Carr consulted with Hess about the complaint before it was filed. (Tr. 366-67, 372-73).

The federal judge in Missouri dismissed the complaint without prejudice, finding that there was no jurisdiction in Missouri. (Adm. Ex. 24). Carr noted that the judge did not rule that the complaint was frivolous and did not impose sanctions. (Tr. 367). The complaint was then refiled in the United States District Court, Central District of Illinois on December 23, 2009. (Adm. Ex. 25). The defendants filed a motion to dismiss, which was denied by the federal judge in Illinois. The case is currently pending. (Tr. 367, 374).

Carr stated that he believed he had a "reasonable basis" for filing the above lawsuit in the federal court in Missouri. He pointed out that, although Hess worked for the Kanoski law firm in

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Springfield, Illinois, Hess and his wife are residents of Missouri, Hess was paid by way of direct deposits into a bank in Missouri, and the funds received were used for living and other expenses in Missouri. Additionally, in March 2007, Kanoski & Associates had withdrawn $5,000 from Hess' account in the Missouri bank. Carr further explained that he researched the jurisdiction issue and believed that case law, including the decision in Calder v. Jones, 465 U.S. 783 (1984), supported the filing in Missouri. (Tr. 490-92; Carr Exs. 23, 24).

The Administrator's counsel asked Carr about the allegations in certain paragraphs of the federal complaint (Adm. Ex. 25, par. 32, 51, 68), and Carr provided explanations. (Tr. 368-74).

Respondent Lawrence Hess

Respondent Hess is 60 years of age and has been married for 35 years. He was licensed to practice law in Missouri in 1975 and then licensed in Illinois in 2001. (Hess Ex. 1, 2). He has practiced in the area of medical malpractice since about 1980. For about 20 years, he represented defendants in such cases, and thereafter has represented plaintiffs. (Tr. 383-84, 527-28).

He served in the United States Air Force for about 4 and one-half years, and was discharged in 1980. He was an attorney with Judge Advocate General (Hess Ex. 12). He was awarded a certificate of Competence and the Meritorious Service Medal. (Hess Exs. 13, 14). He said he currently has an "AV" rating from Martindale- Hubbell. (Tr. 528-33).

Hess was an employee of the Kanoski & Associates law firm from May 2001 until he was discharged in February 2007. (Tr. 383; Adm. Ex. 1). He subsequently worked at a law firm in Chicago. From January 2008 to October 2008, Hess did not have a license to practice law in Illinois. He explained that he did not pay the Illinois attorney registration fee in 2008 because he was trying to cut expenses, and thought he had a better chance of finding employment in

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Missouri, where he was still licensed. (Tr. 398-99). He noted that he has not been disciplined in either state. (Tr. 537-38).

Hess was asked about and discussed various provisions in his employment contract with Kanoski & Associates. He acknowledged that he was an employee of Kanoski & Associates and that cases were assigned by Ron Kanoski. (Tr. 390, 540). He also acknowledged that in the contingent fee agreement for the cases on which he was assigned, such as those set out in Administrator's Exhibit 29, the clients hired Kanoski & Associates, and that all of the agreements are the same. He said he typically met with the clients after they had signed the agreement. (Tr. 391-93, 564). Hess said he believes Kanoski owes him a "great deal of money." (Tr. 533).

In regard to his representation of Ronald and Cathy Loyd in their medical malpractice case (Adm. Ex. 3), Hess said his first communication with them was when he received a telephone call from Ronald, in which Ronald said he understood that Hess was his attorney. (Tr. 391). Hess did not provide a date of that phone call. Hess believed that he had an attorney-client relationship with the Loyds from 2002 until more than a year after Hess was fired by Kanoski & Associates, which was in February 2007, but did not provide any specific facts regarding such belief beyond the phone call referenced above. (Tr. 534). Hess said he did all the work on the Loyds' case, which he described as "complicated," until he was fired by Kanoski & Associates. (Tr. 38, 541-44). Hess did not do anything on the Loyds' case after he was fired. (Tr. 394).

Hess testified that in March 2007, after he had been fired by Kanoski & Associates, he had three telephone conversations with Ronald Loyd. During those conversations, Ronald said he and wife had been looking for Hess, and asked Hess to "take my cases again." (Tr. 545, 548, 550). Hess said he told Ronald "I can't do it" (Tr. 550), and explained that he was unemployed,

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didn't have money to front the costs of experts and other expenses, and didn't have any insurance. (Tr. 549). Hess offered to refer Ronald to another attorney. (Tr. 550). On the following day, Ronald told Hess that he (Ronald) was "leaning toward Mr. Kanoski." (Tr. 550-51). Hess emphasized that during their conversations in March 2007 Ronald did not fire Hess or tell Hess that Ronald did not want him as his attorney. (Tr. 418, 551, 590-91). Hess never spoke with Ronald after March 2007. (Tr. 545).

Hess believed he had a meritorious breach of contract action against Kanoski and, in April 2008, hired Carr to represent him. (Tr. 399)

On May 15, 2008, Carr sent a letter (Adm. Ex. 6) to Ronald and Cathy Loyd, informing them that Hess had retained Carr, and that Hess was still responsible for the lawsuit they entrusted to him. (Tr. 551). Hess said that, at the time of the letter, he believed he still had an attorney-client relationship with the Loyds. (Tr. 551-52). He also believed he had a valid attorney's lien in their case (Tr. 410, 418-19, 569-70), and gave Carr permission to pursue the lien. (Tr. 421). Hess explained that he was still an attorney and licensed to practice law in Missouri. He said he was also an attorney in Illinois, but did not have an active license. (Tr. 427-28, 431). He further opined that the Appellate Court, Fourth District, and the Appellate Court, Fifth District, have ruled that he had an attorney-client relationship with the Loyds and other clients he represented while employed at Kanoski & Associates (Adm. Exs. 27, 31). Both courts concluded that his attorney's liens were not perfected because notice was sent out after the attorney-client relationship had ended, that is after Hess had been discharged by Kanoski & Associates. (Tr. 428-29, 434-35).

Hess and Carr discussed filing a lawsuit against the Loyds. On two occasions, Hess declined to take such action. However, "after the Loyds signed an attestation claiming they had

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in essence fired me in February or March of 2007, [Carr] asked me again," and Hess told Carr to do what he felt appropriate. (Tr. 401). Hess acknowledged that he gave Carr permission to file a lawsuit against the Loyds. (Tr. 407, 409). Hess provided information about the Loyds' case to Carr, and Carr indicated that he had checked the court file. (Tr. 403). Hess said he did not review the complaint filed against the Loyds (Adm. Ex. 8) before it was filed, but read it after it was filed. (Tr. 407, 413). Hess did not ask Carr to change anything in the complaint against the Loyds. (Tr. 407-14).

Hess further testified that he believes his federal lawsuit against Kanoski and Blan to be meritorious. He voiced the opinion that Kanoski breached the employment contract and that Blan engaged in deceptive practices and tortious interference with an attorney- client relationship. Hess thought that he read the federal complaints before they were filed. (Tr. 421-23, 564-66). The first federal complaint was filed in the United States District Court for the Eastern District of Missouri. (Adm. Ex. 23). The judge concluded that there was a lack of personal jurisdiction in Missouri, and dismissed the complaint without prejudice. (Adm. Ex. 24). The same substantive complaint was then filed in the United States District Court for the Central District of Illinois (Adm. Ex. 25), and the case is still pending. (Tr. 420, 424-25). Hess noted that his federal lawsuit does not contain, and never did contain, a claim for recovery on a statutory lien. (Tr. 581-82).

Hess said that he disagrees with the decision of the federal judge in Missouri. He explained that he thinks the federal judge's "opinion ignores the importance of the Calder opinion [Calder v. Jones, 465 U.S. 783 (1984)]." He pointed out that he and his wife reside in Missouri, and Kanoski & Associates paid him by way of direct deposit into an account in his bank in Missouri. On one occasion, after Hess was fired, Kanoski & Associates directly

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deposited $5,000 for unused vacation days into that account. Later, Kanoski & Associates took the money out of the account in the Missouri. Thus, Hess believed he and his wife were harmed in Missouri, and that their case is similar to that of Calder v. Jones. In Calder v. Jones, actress Shirley Jones was allowed to sue in California because she was harmed in California, where she resided, by a publication initiated in Florida. (Tr. 425, 571-72).

Finally, Mr. Hess said that he did not do anything wrong in the above matters. (Tr. 436). He also explained that Rule 3.1 does not apply to him because he was not acting in the capacity as an attorney in the above matters, but was only the client. (Tr. 432, 573-74).

FINDINGS OF FACT AND CONCLUSIONS OF LAW

In attorney disciplinary proceedings, the Administrator has the burden of proving the charges of misconduct by clear and convincing evidence. In re Timpone, 208 Ill. 2d 371, 380, 804 N.E.2d 560, 566 (2004). This standard of proof requires a high level of certainty, which is greater than a preponderance of the evidence (i.e. more probably true than not true) but not as great as proof beyond a reasonable doubt. Bazydlo v. Volant, 164 Ill. 2d 207, 213, 647 N.E.2d 273, 276 (1995); In re Hinterlong, 09 SH 46, M.R.23811 (May 18, 2010) (Hearing Bd. at 9).

In determining whether the burden of proof has been satisfied, the Hearing Panel has the responsibility of assessing the credibility and believability of the witnesses, weighing conflicting testimony, drawing reasonable inferences from the evidence, and making factual findings based upon all the evidence. In re Howard, 188 Ill. 2d 423, 435, 721 N.E.2d 1126, 1133 (1999); In re Ring, 141 Ill. 2d 128, 138-39, 565 N.E.2d 983, 987 (1991). The Hearing Panel is in a position to judge credibility and weigh conflicting testimony because it is able to "observe the witnesses' demeanor." In re Cutright, 233 Ill. 2d 474, 488, 910 N.E.2d 581, 585 (2009). In assessing the evidence the Hearing Panel is not required to be "naďve or impractical" or to believe testimony

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that is "beyond human experience," "an unreasonable story," or "an inherent improbability." In re Discipio, 163 Ill. 2d 515, 523-24, 645 N.E.2d 906, 910 (1994); In re Holz, 125 Ill. 2d 546, 555, 533 N.E.2d 818, 821 (1989).

Count I

Count I of the Complaint alleges that Respondent Carr, while representing and with the knowledge and consent of Respondent Hess, filed an unwarranted and baseless lawsuit against Ronald and Cathy Loyd for no purpose other than to harass and intimidate the Loyds and to pressure attorney Ron Kanoski to settle a claim Hess had against the Kanoski & Associates law firm.

In Hess' 2008 lawsuit against the Loyds, the complaint alleges that the Loyds breached a contract with Hess regarding compensation for his legal services; breached their promise as to attorney fees; interfered with Hess' statutory, contractual, and equitable liens; and received unjust enrichment by benefiting from Hess' legal services without paying for such services. (Adm. Exs. 8 at 1, 10-11).

The factual findings set out below are pertinent in determining whether the misconduct charged in Count I was proved by clear and convincing evidence.

Hess became licensed to practice law in Illinois in 2001, after having been previously licensed in Missouri. In 2001, he became an employee of Kanoski & Associates, an Illinois professional corporation. An "Employment Agreement" was entered into and signed by Hess and Ron Kanoski, the president of Kanoski & Associates, on May 9, 2001. The Employment Agreement (Adm. Ex. 1) contained the following provisions:

Employee [Hess] acknowledges that while licensed employees must perform all the legal services, the clients contracting for said services are clients of the Corporation [Kanoski & Associates] and not of any individual employee;

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All proceeds received by him [employee] for professional services rendered for Corporation clients shall be the property of Corporation;

Employee acknowledges that the service nature of the business of the Corporation requires close client contact, and that he [employee] has no proprietary right of 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 of the Employee; and

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

The Employment Agreement also set out the starting salary for Hess and any bonus he was to be paid based upon fees generated. The salary and bonus for Hess were modified by a letter dated June 21, 2002.

In August 2002, Ronald Loyd entered into a contingent fee contract, hiring Kanoski & Associates to represent him in a medical malpractice action. (Adm. Ex. 29 at 1). It is clear from the evidence, including Ronald Loyd's testimony, that Loyd hired the Kanoski & Associates law firm and did not hire any individual employee or associate thereof. Ron Kanoski then assigned Hess to handle the matter for Ronald and Cathy Loyd. Hess handled most, if not all, of the legal work on behalf of the Loyds. Hess filed a complaint on their behalf in February 2004 in the case entitled Ronald and Cathy Loyd v. Dennis Billiter, M.D., et. al., Montgomery County, No. 04-L-10. The first sentence of the complaint stated that "now comes the Plaintiff, Ronald O. Loyd, by and through his attorneys Kanoski & Associates." Hess continued to work on the Loyds' case until he was discharged from his employment at Kanoski & Associates on February 14, 2007.

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Hess did not do any work on behalf of the Loyds after he was discharged from Kanoski & Associates.

On March 12, 2007, attorney Kenneth Blan entered his appearance as additional counsel in the Loyds' medical malpractice case. On March 13, 2007, Ronald Loyd entered into and signed a contingent fee agreement with the Blan Law Offices, in regard to that case.

After being discharged from Kanoski & Associates, Hess had three telephone conversations with Ronald Loyd in March 2007. (Tr. 201-02, 545, 550; Adm. Ex. 39 at 2, 7). What was said during those conversations is in sharp dispute. Ronald testified he told Hess that Hess "wasn't my attorney and that I didn't want nothing to do with the guy" (Tr. 157, 200); that Ronald "was not interested for [Hess] being my attorney;" and that "I had already got an attorney and signed with Ken [Blan] and Ron [Kanoski]." (Tr. 158, 162). Ronald also denied that he asked Hess to take over his case again. (Tr. 201). Hess, on the other hand, testified that, during those telephone conversations, Ronald said he and wife had been looking for Hess, and then asked Hess to "take my cases again." (Tr. 545, 548, 550). Hess also testified that Ronald did not fire Hess or say that he did not want Hess as his attorney. (Tr. 418, 551, 590-91). Hess did not speak with Ronald after March 2007.

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

Hess believed he had a breach of contract action against Kanoski & Associates, and was owed compensation, based upon his discharge from that firm. In April 2008, Hess hired Carr to represent him. (Tr. 314, 399, 471).

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On May 15, 2008, Carr sent a letter to Ronald and Cathy Loyd, informing them that Hess had retained Carr as his attorney and stating that "Hess remains responsible for the lawsuit you entrusted to him." (Adm. Ex. 6). Also on May 15, 2008, Carr sent notice of Hess' attorney's lien to Dr. Billiter, the defendant in the Loyds' medical malpractice lawsuit. (Adm. Ex. 13). A copy of the Notice of Lien was sent to Ron Kanoski. (Tr. 328-30).

Ronald Loyd responded to Carr on May 16, 2008. In his letter to Carr, Ronald said "Mr. Hess is not responsible for my lawsuit. I have a very competent attorney. Do not contact me again regarding this matter." (Adm. Ex. 7). Hess said that he received Loyd's letter on Monday, May 19, 2008, and that, 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. (Tr. 589-90).

On May 21, 2008, Carr filed Hess' Notice of Attorney's Lien with the Clerk of the Circuit Court of Montgomery County in the case captioned Ronald and Cathy Loyd v. Dennis Billiter, M.D. et, al., No. 04-L-10. (Adm. Ex. 12). A copy thereof was sent to the Loyds. The Loyds, through their attorneys, the Blan Law Office and Kanoski & Associates, filed a Petition to Strike or Adjudicate Lien on June 24, 2008. (Carr Ex. 12). The Petition asserted, among other things, that Ronald Loyd told Hess during their telephone conversations 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." Both Ronald and Cathy Loyd signed an attestation certifying that the statements in the Petition were true. (Resp. Carr Ex. 12 at 2-3, 7).

Hess testified that he gave Carr permission to file a lawsuit against the Loyds "after the Loyds signed the attestation which was inaccurate claiming that they had in essence fired me in February or March 2007." (Tr. 400, 407, 409). Carr also testified that the lawsuit against the Loyds was "in response to their lies that they had discharged Mr. Hess knowing that they had not

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discharged Mr. Hess at that time, I knew that they were helping Mr. Kanoski in their attempt to defeat Mr. Hess' lawsuit against Mr. Kanoski & Associates. They became conspirators with Mr. Blan and Mr. Kanoski." (Tr. 335, 355-57). While Hess discussed with Carr the claims against the Loyds, he said he did not read the complaint until after it was filed. (Tr. 403-04, 407, 413).

Hess' complaint against the Loyds, described above, was filed in the Circuit Court in Montgomery County on July 17, 2008. (Adm. Ex. 8). On September 23, 2008, Carr sent a letter to the Loyds' attorney, Todd Bresney, stating "we could probably settle Mr. Hess' claim against the Loyds in exchange for Kanoski & Blan's payment to Mr. Hess of Mr. Hess' portion of the Loyd fee." (Adm. Ex. 9). 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 "I will recommend that Mr. Hess dismiss his claim against the Loyds in exchange for half of the money now on deposit - $165,312." (Adm. Ex. 10).

The Circuit Court dismissed with prejudice Hess' complaint against the Loyds. The court found that Hess' claims were "legally deficient," and that Hess "does not have a valid legal basis for his claims against these defendants." The court also found that the Loyds were entitled to sanctions. (Adm. Ex. 26 at 3-4). Ultimately, the court awarded the Loyds "$9,275 in attorney fees and $114.82 in expenses from plaintiff [Hess] or his attorney, Bruce Carr." (Adm. Ex. 26 at 16).

Based upon the evidence, including our findings regarding credibility, it was clearly and convincingly established that the Respondents filed the lawsuit against Ronald and Cathy Loyd while knowing it was frivolous and without any legal merit, and for the purpose of harassing and burdening the Loyds because of an employment dispute with Kanoski. The complaint asserted

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that the Loyds breached their contract with Hess and their promises to Hess regarding compensation for Hess' legal services to them. It is clear, however, that the Loyds did not enter into any contract or agreement, or make any promise, to pay any attorney's fee to Hess. Rather, the Loyds entered into a contingent fee contract with Kanoski & Associates, and thereby agreed to pay a contingent fee to Kanoski & Associates. The contract makes no mention of the Loyds paying any amount to Hess or anyone else. The Loyds, or any reasonable person in the circumstances, would not have understood or expected that they could be held responsible for paying any compensation to any employee of Kanoski & Associates who may have worked on their case. The Loyds did not at any time fail to comply with the terms of their contract with Kanoski & Associates. Hess was an employee of and had an employment agreement with Kanoski & Associates. Under the plain terms of that employment agreement, Hess was to be paid by Kanoski & Associates, not by clients who entered into representation agreements with Kanoski & Associates.

Hess' complaint against the Loyds also asserted that the Loyds received an unjust enrichment from Hess' legal services because they "refused to pay Lawrence J. Hess just and reasonable compensation for his services." It is clear that "an attorney who enters into a contingent-fee contract with a client and is discharged without just cause is entitled to be paid on a quantum meruit basis a reasonable fee for the services rendered up to the date of the discharge." Alleman v. Fannell, 362 Ill. App. 3d 944, 947, 841 N.E.2d 1034, 1036 (2005). However, Hess did not enter into a contingent fee agreement, or any other fee agreement, with the Loyds. As discussed above, the Loyds had an agreement to pay attorney's fees only to Kanoski & Associates, and Hess had agreed to be paid only by Kanoski & Associates for the legal services he provided as an employee thereof. In other words, if Hess was not reasonably

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compensated for the work he performed on the Loyds' medical malpractice case, his contractual dispute was with Kanoski & Associates, not with the Loyds. There are no credible facts which justify a finding that there was a contract or agreement between Hess and the Loyds.

Hess' complaint against the Loyds also asserted that the Loyds tortiously interfered with Hess' attorney's lien. As discussed in Count II, below, Hess did not serve notice of his attorney's lien timely, that is, while he had an attorney-client relationship with the Loyds. As a result, Hess' attorney's lien was not perfected, and the alleged tortious conduct of the Loyds, which occurred long after the time for perfecting Hess' attorney's lien had expired, had no affect on Hess' attorney's lien.

Additionally, the basis for the tortious interference allegation was that the Loyds falsely attested in June 2008 that Ronald Loyd had discharged Hess in March 2007. However, according to Hess' own testimony he knew that he did not represent the Loyds after March 2007. Hess testified that he had three telephone conversations with Ronald Loyd in March 2007. During those telephone conversations, according to Hess' testimony, Ronald asked Hess to "take my cases again." Hess further testified that, in reply to Loyd, Hess said "I would love to, but I have been unemployed and I don't have any money to front the costs of experts and expenses and depos and so forth;" "Ron, I don't have any place to take you. I can't do it;" "I'm not in a position to do it," and "I can't take your case." (Tr. 549-50). The Supreme Court has made it clear that an attorney-client relationship "is voluntary and requires the consent of the attorney and the client" and "[b]ecause this relationship is consensual, the client must authorize the attorney to act on his behalf, and the attorney must accept this power." People v. Graham, 206 Ill. 2d 465, 473, 795 N.E.2d 231, 237 (2003). See also People v. Simms, 192 Ill. 2d 348, 382, 736 N.E.2d 1092, 1117 (2000). Hess' own testimony showed that he declined to represent the

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Loyds in March 2007, and that there was no authorization by the client and acceptance by Hess in the Loyd matter. Thus, Hess knew he did not represent or have an attorney-client relationship with the Loyds after his telephone conversations with Ronald Loyd in March 2007. Consequently, the conduct or statements of the Loyds in June 2008, whatever they were, had no affect on and could not have interfered with Hess' purported attorney's lien.

We also find that, based upon the totality of the circumstances shown by the evidence, the Respondents' purpose for filing the lawsuit against the Loyds was to harass, intimidate and burden the Loyds in order to pressure or influence Kanoski and Blan to settle Hess' claim against them. This was made clear by the letters Carr sent to the Loyds' attorney in September and October 2008. In both letters, Carr indicated that the Hess lawsuit against the Loyds would be dismissed if Ron Kanoski and Kennith Blan paid Hess a portion of the fee obtained in the Loyds' medical malpractice case. Neither Kanoski nor Blan was a party to Hess' lawsuit against the Loyds. The Respondents were aware, as shown by the above letters, that Kanoski and Blan would be concerned about the adverse effects Hess' baseless lawsuit would have on the Loyds, and may be inclined to settle the separate contract dispute in to order protect the Loyds from further distress.

We further find that both Respondent Carr and Respondent Hess knowingly and deliberately participated in the filing of the meritless lawsuit against the Loyds.

Respondent Hess contended that he did not violate Rule 3.1 of the Illinois Rules of Professional Conduct, as charged in the Disciplinary Complaint because he was not acting as an attorney representing a client, but rather was only the client. (Tr. 432, 573-74). Rule 3.1 does not state that it applies only to an attorney representing a client. We believe it would be inappropriate for us read such additional language into Rule 3.1 when the Supreme Court did not

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include it. In other rules, the Supreme Court did include the language "in representing a client," or substantially similar language, such as in Rules 1.2(f), 2.1, 4.1, and 4.4. Additionally, Rule 3.3 states that in "appearing in a professional capacity before a tribunal a lawyer shall not . . . ." Thus, if the Supreme Court intended Rule 3.1 to apply only when an attorney is representing a client, the Court would have included such language in the rule itself, but did not do so.

Respondent Hess also contended that if he did not violate Rule 3.1, he could not be found to have engaged in conduct prejudicial to the administration of justice or which tends to defeat the administration of justice or to bring the court or legal profession into disrepute. (Tr. 574). We disagree. In In re Rinella, 175 Ill. 2d 504, 514, 677 N.E.2d 909, 914 (1997), the court specifically rejected the "contention that attorney misconduct is sanctionable only when it is specifically proscribed by a disciplinary rule." Thus, in Rinella, the Court concluded that the attorney's conduct of engaging in sexual relations with his clients was conduct that tended to defeat the administration of justice or to bring the courts or the legal profession into disrepute, under Supreme Court Rule 771(now Rule770), even though no specific rule of professional conduct had been violated. Rinella, 175 Ill. 2d at 514-17. In In re Solber, 96 CH 186, M.R. 13985 (Sept. 24, 1997), the attorney was found to have engaged in conduct that tended to bring the courts of legal profession into disrepute, in violation of Rule 771, by failing to pay a court judgment against him and failing to respond to a citation to discover assets (Count IV), even though no specific rule of professional conduct was violated. Solber, 96 CH 186 (Hearing Bd. at 12, 29). In In re Turner, 92 CH 126, M.R. 10368 (Sept. 23, 1994), the attorney did not violate any substantive ethical rule, but was found to have engaged in conduct prejudicial to the administration of justice and conduct which tends to defeat the administration of justice or to bring the legal profession in disrepute. Turner, 92 CH 126, (Hearing Bd. at 13-14, Review Bd. at

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3-4, 6). See also In re Lemna, 02 SH 16, M.R. 18913 (Nov. 14, 2003) (Hearing Bd. at 22-25); In re Keeton, 04 SH 117, M.R. 22345 (May 9, 2008) (Hearing Bd. at 14-16: Review Bd. at 1, 8).

Therefore, even if we had not found that Hess violated Rule 3.1, we still find
that he violated Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990) and Supreme Court Rule 770. We additionally note that the seriousness of the misconduct or the severity of the sanction is not increased based merely upon the number of rules violated by the same conduct. See In re Gerard, 132 Ill. 2d 507, 532, 548 N.E.2d 1051, 1061 (1989).

Therefore, we find that the Administrator proved by clear and convincing evidence that Hess committed the following misconduct charged in Count I: (a) brought a proceeding, or asserted or controverted an issue therein without a basis for doing so that is not frivolous and which includes a good-faith argument for an extension, modification or reversal of existing law, in violation of Rule 3.1 of the Illinois Rules of Professional Conduct (1990); (b) engaged in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990); and (c) engaged in conduct which tends to defeat the administration of justice or to bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770.

We also find that the Administrator proved by clear and convincing evidence that Carr committed the following misconduct charged in Count I: (a) filed a suit or asserted a position, or took other action on behalf of a client when he knew or reasonably should have known that such action would serve merely to harass or maliciously injure another, in violation of Rule 1.2(f)(1) of the Illinois

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Rules of Professional Conduct (1990); (b) advanced a claim on behalf of a client that he knew is unwarranted under existing law and not supported by a good-faith argument for extension, modification, or reversal of existing law, in violation of Rule 1.2(f)(2) of the Illinois Rules of Professional Conduct (1990); (c) brought a proceeding, or asserted or controverted an issue therein without a basis for doing so that is not frivolous and which includes a good-faith argument for an extension, modification or reversal of existing law, in violation of Rule 3.1 of the Illinois Rules of Professional Conduct (1990); (d) in representing a client, used means that have no substantial purpose other than to embarrass, delay, or burden a third person, in violation of Rule 4.4 of the Illinois Rules of Professional Conduct (1990); (e) engaged in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990); and (f) engaged in conduct which tends to defeat the administration of justice or to bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770.

Count II

Count II of the Complaint alleges that Respondent Carr served notices of meritless attorney's liens on behalf and with the knowledge of Respondent Hess in the cases of Loyd v. Billiter, Montgomery County, No. 04-L-10, Eller v. Villegas, Macoupin County, No. 05-L-24, and Thompson v. Skeffington, Macon County, No. 02-L-51.

In each of the above cases, the plaintiffs entered into a contract hiring the law firm of Kanoski & Associates to represent them and agreed to pay Kanoski & Associates a contingent fee. (Adm. Ex. 29 at 1, 2, 7). Hess, an employee of Kanoski & Associates was assigned to handle the plaintiffs' cases. Hess worked on these cases until he was discharged by Kanoski & Associates on February 14, 2007. In April 2008, Hess hired Carr to represent him. In May 2008, Carr, with Hess' knowledge and consent, served notice of Hess' attorney's liens pursuant to statute, 770 ILCS 5/1, in the three cases. (Adm. Exs. 12, 13, 15, 16, 22 at 18).

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On January 26, 2009, the Circuit Court in Montgomery County struck Hess' attorney's lien in the Loyd v. Billiter case. (Adm. Ex. 14). On October 15, 2010, the Appellate Court, Fifth District, issued an order affirming the Court Court's striking of the attorney's lien. (Adm. Ex. 31). On April 16, 2009, the Circuit Court in Macoupin County struck Hess' attorney's lien in the Eller v. Villegas case. (Adm. Ex. 21 at 6). On May 5, 2009, the Circuit Court in Macon County struck Hess' attorney's lien in the Thompson v. Skeffington case. (Adm. Ex. 22 at 23-24). On May 26, 2010, the Appellate Court, Fourth District affirmed in an order the Circuit Court's striking of the attorney's lien. (Adm. Ex. 27). On September 29, 2010, the Supreme Court denied Hess' petition for leave to appeal. (Adm. Ex. 30).

We think it appropriate to mention that the Respondents objected to the admission into evidence of unpublished orders of the Appellate Court (Adm. Exs. 27, 31), and of a federal court in Missouri, which pertained to Count III of the Complaint (Adm. Ex. 24). They contended that such orders have no precedential value and may not be considered pursuant to Supreme Court Rule 23. (Tr. 9-10, 14-17, 306-07, 628, 641). Their objections were overruled and the orders were received into evidence.

We agree that unpublished orders may not be considered for precedential value. See People v. Pinkonsly, 207 Ill. 2d 555, 560, 802 N.E.2d 236, 240 (2003); Burnette v. Stroger, 389 Ill. App. 3d 321, 329, 905 N.E.2d 939, 947 (2009). However, unpublished orders may be considered to support contentions of "double jeopardy, res judicata, collateral estoppel or law of the case." Pinkonsly, 207 Ill. 2d at 560; In re Donald R., 343 Ill. App. 3d 237, 244, 796 N.E.2d 670, 676 (2003). The Appellate Court has stated that "the fact that a disposition is rendered pursuant to Rule 23 does not, however, lessen its effect upon the relationship of the parties. It is as conclusive on the issues raised as would be a published opinion and most assuredly becomes

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the ‘law of the case'." Bradley v. Hembrough, 89 Ill. App. 3d 121, 124, 411 N.E.2d 535, 537 (1980). See also Norris v. Estate of Norris, 143 Ill. App. 3d 741, 746, 493 N.E. 121, 125 (1986). In Adames v. Sheahan, 233 Ill. 2d 276, 909 N.E. 742 (2009), a person named "Billy" had been adjudicated delinquent in a previous case, and the finding in the previous case was affirmed by the Appellate Court in a Rule 23 order. The Supreme Court stated:

There is no merit to plaintiffs' claim that this court cannot look to Billy's juvenile adjudication as set forth in the appellate court's Rule 23 order . . . this court may take judicial notice of the Rule 23 order addressing Billy's appeal of his juvenile adjudication. See In re Donald A. G., 221 Ill. 2d 234, 242, 850 N.E.2d 172 (2006) (this court took judicial notice of Rule 23 order in underlying criminal case); People v. Ortiz, 196 Ill. 2d 236, 265, 752 N.E.2d 410 (2001) (this court took judicial notice of Rule 23 order in codefendant's case).

Donald A. G., 233 Ill. 2d at 309-310.

In this case, the Administrator did not offer (Tr. 15) and we did not rely on the unpublished orders for their precedential value. Rather, the unpublished orders constitute the law of the particular case and are simply part of the historical facts of the cases at issue. We did not base our factual findings or legal conclusions in this disciplinary case on the reasoning or rulings in the unpublished orders.

We also note that the Supreme Court has considered various types of orders and court rulings when considering disciplinary charges of filing groundless or frivolous pleadings. See In re Sarelas, 50 Ill. 2d 87, 89, 93, 277 N.E.2d 313, 314, 316 (1971); In re Jafree, 93 Ill. 2d 450, 453, 458-59, 444 N.E.2d 143, 145, 148 (1983); In re Bercos, 97 CH 97, M.R. 14713 (May 27, 1998) (Petition to Impose Discipline on Consent at par. 8, 9, 17, 24, 33, 39, 47). Recently, the Review Board addressed this issue in In re Dore, 2007PR0122 (Feb. 25, 2011), and stated:

With respect to Count I, Respondent asserts that it was improper for the Hearing Board to consider ‘submissions, filings, and judicial opinions and orders' that were filed in the proceedings that gave rise to the charges of misconduct . . .

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[T]he respondent's argument lacks merit. The respondent was charged with asserting frivolous positions in the Greviskes matter in order to obstruct the district court's efforts to ascertain who was involved in sending the forged faxes. The documents to which the Respondent now objects form the basis of the charges in Count I. The Hearing Board routinely admits and considers such evidence when a respondent is charged with violating Rule 1.2(f), 3.1 or 4.4 . . .

The Hearing Board properly relied on the documents filed in the Greviskes matter and those documents amply support the Hearing Board's findings as to Count I.

Dore, 2007PR0122, (Review Bd. at 8-9).

The evidence clearly and convincingly established that the Respondents served notices of an attorney's liens in the cases of the Loyds, Eller, and Thompson even though they knew there was no legal basis for doing so, and for the purpose of harassing, intimidating, and burdening those individuals. As in Count I, the Respondents sought to use the liens to pressure or influence Ron Kanoski and Kennith Blan to settle Hess' claims against them in a separate dispute.

It is well established that notice of a statutory attorney's lien must, in order to be perfected, be served while there is still an attorney-client relationship. See Rhodes v. Norfolk & Western, 78 Ill. 2d 217, 227, 399 N.E.2d 969, 973-74 (1979). The Loyds, Penny Eller, who was the special administrator of the Estate of Terry Eller, and Robert Thompson entered into contingent fee agreements with Kanoski & Associates to represent them. Kanoski & Associates then assigned Hess, an employee of Kanoski & Associates, to handle those cases. Hess worked on those cases until he was discharged by Kanoski & Associates on February 14, 2007. Hess' attorney-client relationship with the Loyds, Eller, and Thompson was clearly on behalf of and through his employment contract with Kanoski & Associates. None of the clients entered into a representation agreement with Hess, and none of them agreed to pay any compensation to Hess. Clearly, Hess was to receive compensation only from Kanoski & Associates as set forth in the employment agreement, discussed in Count I, and not from those who entered into contingent fee agreements with Kanoski & Associates. Thus, when Hess was discharged by Kanoski &

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Associates on February 14, 2007, his attorney-client relationship with the Loyds, Eller, and Thompson ended. As a result, the service of the notices of Hess' attorney's liens in May 2008 was long after the attorney-client relationship had ended. Thus, the liens were not properly perfected and were invalid.

Another condition for an effective attorney's lien is that "the attorney must have been hired by the client to assert a claim." Rhodes, 78 Ill. 2d at 227. As stated above, it is clear to us that the Loyds, Eller, and Thompson hired and agreed to pay Kanoski & Associates to assert their claims, and did not hire Hess or agree to pay any compensation to Hess. Thus, Hess had no valid attorney's lien in the above cases.

The Respondents cite the principle that a client who hires a law firm also hires all the members of the law firm. (Tr. 621). While this is a valid principle, it has no application in this matter. In Corti v. Fleisher, 93 Ill. App. 3d 517, 521, 417 N.E.2d 764, 768 (1981), the Appellate Court explained:

It is fundamental that the employment of one member of a law firm is the employment of all whether specifically consulted or not, except where there is a special understanding to the contrary. This principle, however, typically finds its application in situations concerning the authority of a member of a law firm to represent a client or to contract with the client on the firm's behalf. Plaintiff cites no cases where the concept has been extended to circumstances such as these, where an employee of a firm, instead of asserting his authority to act for the clients as a representative of the firm, attempts to create an attorney-client relationship between the clients and him alone, and to depart from the firm with the clients' files without their consent to the newly created relationship. We believe no such authority exists.

We also note the decision in Crabb v. Anderson, 117 Ill. App. 2d 271, 254 N.E.2d 551 (1969). Crabb employed the law firm of Ozman & Blowitz to represent him in a personal injury claim against Anderson. When the law firm dissolved, Crabb's file remained with Blowitz. An attorney named Heilgeist had an agreement with Blowitz, whereby Heilgeist was to be paid $200 per week and one-third of the fee in any case he tried. Heilgeist tried Crabb's case, which

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resulted in a verdict of $50,000 for Crabb. Heilgeist served an attorney's lien against the recovery of Crabb, which money was on deposit with the circuit clerk. The issue before the Appellate Court was "whether Heilgeist has a statutory lien on the funds presently in the hands of the Circuit Court." The Appellate Court held that Heilgeist did not have a valid attorney's lien. In reaching its decision, the Appellate Court stated:

We hold that the evidence fails to show that Crabb placed any claim or cause of action in the hands of Heilgeist, and absent this element, essential to the creation of a valid statutory lien, no lien can be awarded.

We next consider Heilgeist's contention that the facts show an attorney-client relationship with Blowitz. The record does not support the contention, but assuming, arguendo, the relationship exists, the lien fails for the reason that the notice purporting to create the lien apparently asserts a lien against the recovery of Crabb, not that of Blowitz.

Calder, 117 Ill. App. 2d at 276-77.

In the case before us, it is clear that the Loyds, Eller and Thompson hired and placed their claims in the hands of Kanoski & Associates, not Hess, and that Hess' involvement in their cases was as an employee and representative of Kanoski & Associates. Thus, Hess had no statutory attorney's lien and no reason to believe he had.

The Loyds, Eller, and Thompson could have hired Hess to represent them after Hess was discharged by Kanoski & Associates. However, there is no evidence that they did so. Likewise, there is no evidence that Hess represented them or agreed to represent them after he was discharged by Kanoski & Associates. The evidence showed that Hess did not do any work on any of their cases after February 2007. Also, as mentioned in Count I, Hess' testimony regarding his telephone conversations with Ronald Loyd in March 2007 showed that he declined to represent the Loyds. Hess testified that Ronald asked Hess to "take my case again" (Tr. 549), but that Hess replied: "I can't take your case." (Tr. 550). Hess also testified that he explained to Ronald that "I have been unemployed and I don't have any money to front the costs of experts

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and expenses and depos and so forth. And I don't have any insurance." (Tr. 549). Thus, Hess' own testimony showed that after February 2007 he was no in a position and did not want to represent the Loyds. As noted in Count I, to have an attorney-client relationship the client must have authorized the attorney to act on his or her behalf and the attorney must have accepted this power. See Graham, 206 Ill. 2d at 473; Simms, 192 Ill. 2d at 382.

In addition to the above, Hess chose not to pay his Illinois attorney registration fee for the year 2008, and he was not authorized to practice law in Illinois from January 2008 to October 2008. He explained that he did not pay the registration fee because he was trying to cut expenses, and thought he had a better chance of finding employment in Missouri, where he was still licensed. (Tr. 398-99). By choosing not to pay the Illinois attorney registration fee, Hess clearly demonstrated that he did not want and did not have any clients in Illinois. Consequently, Hess made a conscious decision not to represent the Loyds, Eller, Thompson or anyone else in Illinois during 2008.

Accordingly, we further find that both Carr and Hess actively participated in the serving of the notices of attorney's lien and filing the notices with the Circuit Courts while knowing that the attorney's liens were without merit and invalid.

Therefore, we find that the Administrator proved by clear and convincing evidence that Hess committed the following misconduct charged in Count II: (a) brought a proceeding, or asserted or controverted an issue therein without a basis for doing so that is not frivolous and which includes a good-faith argument for an extension, modification or reversal of existing law, in violation of Rule 3.1 of the Illinois Rules of Professional Conduct (1990); (b) engaged in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990); and (c) engaged in conduct which tends to defeat

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the administration of justice or to bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770.

We also find that the Administrator proved by clear and convincing evidence that Carr committed the following misconduct charged in Count II: (a) filed a suit or asserted a position, or took other action on behalf of the client when he knew or reasonably should have known that such action would serve merely to harass or maliciously injure another, in violation of Rule 1.2(f)(1) of the Illinois Rules of Professional Conduct (1990); (b) advanced a claim on behalf of the client that he knew is unwarranted under existing law and not supported by a good-faith argument for extension , modification, or reversal of existing law, in violation of Rule 1.2(f)(2) of the Illinois Rules of Professional Conduct (1990); (c) brought a proceeding, or asserted or controverted an issue therein without a basis for doing so that is not frivolous and which includes a good-faith argument for an extension, modification or reversal of existing law, in violation of Rule 3.1 of the Illinois Rules of Professional Conduct (1990); (d) in representing a client, used means that have no substantial purpose other than to embarrass, delay, or burden a third person, in violation of Rule 4.4 of the Illinois Rules of Professional Conduct (1990); (e) engaged in conduct that is prejudicial to the administration of justice, in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990); and (f) engaged in conduct which tends to defeat the administration of justice or to bring the courts or legal profession into disrepute, in violation of Supreme Court Rule 770.

Count III

Count III of the Complaint charges that Respondent Hess, while being represented by Respondent Carr, filed a baseless lawsuit against Kanoski & Associates, Ronald Kanoski, and Kennith Blan in the United States District Court for the Eastern District of Missouri (Adm. Ex.

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23), and then filed a similar baseless lawsuit in the United States District Court for the Central District of Illinois (Adm. Ex. 25). Hess' wife, Vickie Warren, was also a plaintiff in the lawsuits. The federal complaints alleged that Kanoski & Associates, among other things, breached its employment contract with Hess; failed to pay wages and bonuses to Hess; wrongfully discharged Hess; and engaged in deceptive practices. The federal complaints also alleged that Ronald Kanoski and Kennith Blan, among other things, engaged in deceptive practices; tortiously interfered with Hess' contracts, business expectancies, and prospective economic advantages; unjustly enriched themselves; and illegally conspired against the plaintiffs. (Adm. Exs. 23 at 1-2, 11-15; 25 at 1-2, 14-18).

The lawsuit filed by Hess and his wife in the federal court in Missouri was dismissed without prejudice based upon "lack of personal jurisdiction." The federal judge determined that the plaintiffs failed to demonstrate "minimum contacts sufficient to satisfy both application of Missouri's long-arm statute and due process standards for the exercise of personal jurisdiction." (Adm. Ex. 24 at19). The Disciplinary Complaint charges that the Respondents had no good-faith basis for filing the lawsuit in the federal court in Missouri. (Tr. 610-11). Both Respondents asserted that they reasonably and in good-faith believed the lawsuit was properly filed in Missouri. The evidence showed that Hess was employed by Kanoski & Associates, worked in Illinois, and the cases upon which he worked were also in Illinois. However, the Respondents pointed out that Hess and his wife resided in Missouri at the time he was employed by Kanoski & Associates, and all compensation Hess received from Kanoski & Associates was directly deposited into an account in Missouri. On one occasion, after Hess was fired, Kanoski & Associates directly deposited $5,000 for unused vacation days into that account, but later

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Kanoski & Associates took the money out of the account in the Missouri Bank. Hess said he believed he and his wife were harmed in Missouri.

Hess and Carr relied, in part, on the decision of the Supreme Court of the United States in Calder v. Jones, 465 U.S. 783 (1984) for filing the lawsuit in Missouri. In Calder actress Shirley Jones filed a lawsuit in California against the author (South) and editor (Calder) of an article that was prepared in Florida and published in the National Enquirer Magazine. The Supreme Court held that California had jurisdiction because the "intentional conduct in Florida [was] calculated to cause injury to [Jones] in California." The Court also stated that because "California is the focal point both of the story and of the harm suffered jurisdiction over [South and Calder] is therefore proper in California based on the ‘effects' of their Florida conduct in California." Calder, 465 U.S at 788-89, 791.

Hess' federal lawsuit was not filed in a venue where neither the plaintiffs nor defendants had a connection. There was some connection to Missouri, but the federal judge determined that the contacts were insufficient for personal jurisdiction in Missouri. Based upon the evidence before us, we are unable to find, clearly and convincingly, that the Respondents knowingly, or even recklessly, filed the lawsuit in the federal court in Missouri with no reasonable or good-faith basis for doing so.

In regard to the federal lawsuit filed in Illinois, the Disciplinary Complaint first asserted that there was no reasonable basis for Hess to allege that the Loyds, Eller, Thompson and others "placed their claims in [Hess'] hands for suit" or that "Hess obtained an express, oral, or implied contract to render legal services from [them]." (Adm. Ex. 25, par.29, 31; Disciplinary Complaint, par 75). While it would have been more accurate, in our view, for Hess to have alleged that the named clients, each of whom had contingent fee agreements with Kanoski &

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Associates, consented or agreed to have Hess handle their cases on behalf of Kanoski & Associates, we fail to see how the language used by Hess and Carr could enhance the claims against the named defendants in the federal lawsuit or otherwise mislead the court. The lawsuit does not name the Loyds, Eller, or Thompson as defendants and does not seek fees or other damages from them. Moreover, the federal complaint made it clear, and Hess testified before us, that he was an employee of Kanoski & Associates, the foregoing clients had signed contingent fee agreements with Kanoski & Associates, and that Hess was assigned the cases by Ronald Kanoski. (Tr. 390-93, 540).

The Disciplinary Complaint also asserted that the allegations by Carr and Hess in the federal complaint against Kanoski and Blan, generally described above, are without legal or factual basis. The federal judge has denied the defendants' motion to dismiss the complaint, and we do not know what evidence will be presented in support of the allegations in the complaint at the anticipated federal trial. Also, the evidence presented in this disciplinary matter simply was not sufficient for us to determine whether or not the Respondents had a reasonable basis for the allegations in the federal complaint.

Consequently, while we make no finding on the actual merits of the dispute, as such is outside the scope of this proceeding, we do not believe that sufficient evidence exists to find that either federal claim was filed in violation of Rules 1.2(f)(1), 1.2(f)(2), 3.1, or 8.4(a)(5) of the Illinois Rules of Professional Conduct (1990) or Supreme Court Rule 770. Thus, we conclude that the Administrator did not prove by clear and convincing evidence the misconduct charged in Count III of the Complaint.

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RECOMMENDATION

The purpose of the attorney disciplinary system is not to punish the attorney for his or her misconduct, but "to protect the public, maintain the integrity of the legal profession, and protect the administration of justice from reproach." In re Winthrop, 219 Ill. 2d 526, 559, 848 N.E.2d 961, 981 (2006). In determining the appropriate sanction, we must consider the nature of the misconduct charged and proved, and any aggravating and mitigating circumstances shown by the evidence. In re Gorecki, 208 Ill. 2d 350, 360-61, 802 N.E.2d 1194, 1200 (2003). In addition, we may consider the deterrent value of the sanction, the "need to impress upon others the seriousness of the misconduct at issue," and whether the sanction will "help preserve public confidence in the legal profession." In re Twohey, 191 Ill. 2d 75, 85, 727 N.E.2d 1028, 1034 (2000); Gorecki, 208 Ill. 2d at 361.

Although each disciplinary case "is unique and must be resolved in light of its own facts and circumstances," the sanction imposed should be "consistent with those imposed in other cases involving comparable misconduct." In re Howard, 188 Ill. 2d 423, 440, 721 N.E.2d 1126, 1135 (1999); In re Chandler, 161 Ill. 2d 459, 472, 641 N.E.2d 473, 479 (1994).

The Administrator requested a sanction of a one year suspension for Carr and a suspension for a "period of months" for Hess." (Tr. 615).

The misconduct committed by the Respondents was egregious. They filed a lawsuit that was frivolous and totally without merit against Ronald and Cathy Loyd. The lawsuit against the Loyds was filed for the purpose of harassing the Loyds and to obtain a settlement in a separate matter- a fee dispute with Ron Kanoski and Kennith Blan. In other words, the Respondents intentionally used a meritless lawsuit against the Loyds, who were innocent third parties, as a negotiating ploy to get Kanoski and Blan to settle Hess' fee dispute with them. Additionally, the

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Respondents sent notices of attorney's liens for which Hess had no legal basis in cases involving the Loyds, Penny Eller and Robert Thompson. The liens were also intentionally used to harass and intimidate the foregoing individuals and to obtain a settlement in Hess' separate dispute with Kanoski & Associates, Ron Kanoski and attorney Kennith Blan. As stated by Ronald Loyd, the Respondents "have done nothing but try to extort money out of me just because [Hess] and the law firm he worked for has a beef and they've taken it out personally on me and my wife." (Tr. 170-71). Clearly, the Respondents' conduct demonstrated a complete lack of concern and respect for Ronald and Cathy Loyd, Penny Eller, Robert Thompson, and served to present the legal profession in a highly negative light.

We found that Respondent Carr's misconduct was more serious than that of Respondent Hess. It is apparent from the evidence that Carr initiated the plan to file the lawsuit against the Loyds, and Hess ultimately gave Carr permission to proceed. Additionally, Hess' judgment appeared to have been affected, to some degree, by his personal involvement in the underlying matters, including his discharge from and fee dispute with the Kanoski firm.

In aggravation, the Respondents acted with self-serving motives against individuals with whom Hess had no valid legal dispute, and their misconduct did not consist of an isolated incident or momentary lapse of judgment. Rather, the evidence showed that the Respondents engaged in their misconduct after they had thoroughly discussed and deliberated the course of actions they took. Their misconduct clearly harmed the individuals who Hess had represented on behalf of Kanoski & Associates.

For example, the Respondents' misconduct caused the Loyds considerable stress; Ronald Loyd "about had a nervous breakdown" and "ended up having to go see a psychologist over this;" and Cathy Loyd "lost many days of work over this." (Tr. 168-70, 212-13, 219-20). It is

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also apparent that the Respondents' misconduct caused judicial resources and attorneys' time to be needlessly wasted on dealing with frivolous matters.

We also find that the serving of the notice of attorney's lien in the Loyd matter caused delay of about three months in the Loyds' receiving the settlement funds to which they were entitled. Carr asserted that the lien did not cause the delay, but that the actions of Kanoski and Blan by their pleadings, particularly in filing a motion to intervene before filing a motion to strike or adjudicate the lien, was the cause of delay. Carr also pointed out that he told the judge at the lien proceedings that, in effect, he wanted the Loyds to receive their funds quickly.

We first note that no responsive pleadings would have been filed and no court proceedings would have been held but for the fact that the Respondents served the notice of the Hess' meritless attorney's lien, a full year after Hess had done any work on the Loyd matter. The Respondents must have anticipated that the serving of the notice of the attorney's lien, which was untimely, without merit and invalid, would result in responsive pleadings and court proceedings. The Respondent's misconduct triggered and certainly contributed to the delay. Additionally, we agree that Carr told the judge that, in effect, he wanted the Loyds to get their funds quickly. (Tr. 291; Carr Ex. 24 at 4). However, attorney Blan testified that he confronted Carr in the hallway of the courthouse about the foregoing statement, and said something like "all right, let's do that." In response, Carr indicated "it was like no, we want our money." (Tr. 291-92). We found Blan's testimony in this regard to be credible. Thus, while Carr voiced concern about the Loyds receiving their funds, his actions did not conform to his words. Furthermore, as mentioned previously, the overall circumstances shown by the evidence demonstrated that the Respondents had a lack of concern for the Loyds, Eller, and Thompson. They were motivated by

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an employment dispute, which they attempted to turn into a third-party fee dispute for their advantage and without regard to the consequences to the Loyds.

Additionally, the Respondents' testimony indicated that they do not understand the seriousness or wrongfulness of their misconduct and have no remorse. The lack of remorse and lack of understanding of the seriousness of their misconduct is an aggravating factor. See In re Barry, 00 SH 54, M.R. 18782 (Sept. 19, 2003) (Review Bd. at 16). In In re Mason, 122 Ill. 2d 163, 173-74, 522 N.E.2d 1233, 1238 (1988), the Court stated:

An attorney's failure to recognize the wrongfulness of his conduct often necessitates a greater degree of discipline than is otherwise necessary, in order that the attorney will come to appreciate the wrongfulness of his conduct and not again victimize members of the public with such misconduct.

See also In re Samuels, 126 Ill. 2d 509, 531, 535 N.E.2d 808, 817 (1989).

In mitigation, neither Respondent has been previously disciplined. We also consider their admirable backgrounds as set out in their testimony and exhibits. We note that they did not present any character witnesses on their behalf.

While recognizing that each disciplinary case is unique, we find the following cases instructive as to an appropriate sanction in this matter.

In In re Denzel, 92 CH 114, M.R. 10694 (Mar. 27, 1995), the attorney filed six suits against ex-clients for unwarranted legal fees, filed a motion alleging a conflict of interest by the lawyer for an ex-client, filed a motion alleging misconduct by another lawyer, and filed two change of venue motions alleging he was unable to obtain a fair hearing because all of the judges in the county were "bias[ed] and prejudice[d] against him." All of the foregoing pleadings were found frivolous, without factual basis, and served merely to harass. (Hearing Bd. at 1-2, 7, 16-19). The attorney's testimony showed he actually believed that the judges were biased against him and the Hearing Board found that the attorney did not intentionally file false pleadings or

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intentionally seek to harass. (Hearing Bd. at 15, 19-20). Nevertheless, the Hearing Board found that the filing of the meritless pleadings, which "spanned more than one case," constituted "serious misconduct." (Hearing Bd. at 21). The Supreme Court approved the recommendation of the Hearing Board and ordered the attorney suspended for two years and until further order of the Court.

In In re Masters, 98 CH 60, M.R. 17674 (Mar. 8, 2002), the attorney filed a motion for sanctions in a civil case based, in part, on certain alleged telephone conversations between his client and a man named O'Keefe. Subsequently, the attorney obtained "overwhelming" evidence establishing that O'Keefe was not a party to the telephone conversations. However, the attorney pursued the motion and testified falsely at a hearing that he was present during one of the telephone conversations with O'Keefe. The attorney also sent a client's landlord a letter that contained false statements. (Hearing Bd. at 30-32, 36-37). Aggravation included the attorney "failing to recognize the seriousness of his misconduct and failing to exhibit any remorse for his actions." Mitigation included the attorney's "extensive volunteer work within his community" and the testimony of three witnesses regarding his "reputation for truthfulness and honesty." (Hearing Bd. at 39-41). Although the attorney was previously disciplined, that was not considered "a significant aggravating factor" because the prior misconduct was not similar to the current misconduct, and the prior discipline was imposed seven years before the subsequent misconduct occurred. (Hearing Bd. at 39). The Supreme Court ordered the attorney suspended for one year.

In In re Barry, 00 SH 54, M.R.18782 (Sept. 19, 2003), the respondent filed a breach of contract complaint against two clients, which falsely stated that the clients had refused to allow him to pursue an appeal. The Hearing Board found that the Respondent "knowingly made a false

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statement in the pleadings" and had no reasonable basis for filing the action. (Hearing Bd. at 35-38). The respondent also filed a legal malpractice complaint in the circuit court against another attorney, but "failed to make a reasonable inquiry into the representation provided by [the] attorney" and "had no reasonable basis, in fact or law, for the allegations against [the attorney]." Hearing Bd. at 44-45). The respondent sent a letter to the other attorney's insurance carrier stating that "a review of the trial court proceedings shows confirmation that [the attorney] was ill prepared' and "our expert will identify no less than 12 areas of malpractice [in the attorney's representation]." However, at the time he sent the foregoing letter, the respondent "had not reviewed any portion of the trial transcript" and "had not discussed the matter with any expert." (Hearing Bd. at 46). Finally, the Respondent filed a disclosure of an expert witness who would allegedly testify that the defendant attorney "failed to properly prepare the evidence and witnesses." However, at the time the foregoing statements were made, the Respondent had not discussed the case with the expert and had not sent any documents to him. (Hearing Bd. at 48- 51). The Respondent, who had no previous misconduct, was suspended for nine months.

In In re Starr, 00 CH 70, M.R. 20008 (May 20, 2005), the attorney, in order to delay the eviction of his client, asserted a position that was frivolous, false, and undertaken merely to harass the building owner. In mitigation, the attorney had no prior discipline; had provided pro bono services; and two lawyers and a judge gave positive character testimony on his behalf. The Review Board specifically pointed out that there were "no factors in aggravation." (Review Bd. at 9, 15). The attorney was suspended for six months.

In In re Schaaf, 99 SH 64, M.R. 17387 (Mar. 23, 2001), the respondent, after being employed as an assistant state's attorney, sent a letter to a former client in an attempt to collect legal fees owed by the client. In the letter, the respondent falsely stated that he had filed a

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criminal complaint against her for theft of services; that the sheriff was holding the warrant for a period of time; and that respondent was going to personally prosecute the case against her if payment was not received. The respondent admitted the misconduct, and two judges testified as character witnesses on his behalf. The respondent was suspended for 12 months, with the suspension stayed after 5 months by probation.

In In re Holman, 96 CH 679, M.R. 12939 (Nov. 26, 1996), the attorney filed a complaint on behalf of a fired employee, alleging retaliatory termination for having filed a workers' compensation claim. The court determined that the allegation had no basis in fact and was made without a reasonable investigation. The complaint also alleged that the client had contracted a respiratory ailment due to the environmental condition of the building where she worked, although he had a doctor's report finding otherwise, which he did not disclose during discovery. A suspension of five months was imposed.

In In re Renda, 99 SH 02, M.R. 16201 (Nov. 22, 1999), the attorney attempted to collect an unreasonable fee in a class action matter. After a court had preliminarily approved a settlement of 28 million dollars, the attorney filed objections on behalf of his father-in-law and two acquaintances. Without having made any analysis of the settlement, the attorney contacted a co-counsel for the class and offered to withdraw the objection if five million dollars were added to the settlement and if the attorney received a fee of $1,392,000. The demand was rejected, a hearing was held, the attorney presented no evidence, and his objections were denied. One of the persons the attorney included as an objector had not authorized the attorney to represent him. In mitigation, the attorney had been practicing law for only about nine months, cooperated in the disciplinary proceedings, and recognized the significance of his misconduct. A suspension of 90 days was imposed. (Petition to Impose Discipline on Consent at 1-5).

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After considering the nature and circumstances of the misconduct committed by the Respondents, the aggravation and mitigation, the purpose of the attorney disciplinary system, and the cases discussed above, we conclude that a suspension for both Respondents is appropriate and necessary in this matter. We again point out that the Respondents have not shown an understanding of the nature or seriousness of their misconduct.

Therefore, we recommend that Respondent Bruce Alan Carr be suspended from the practice of law for a period of nine (9) months, and that Respondent Lawrence Joseph Hess be suspended from the practice of law for a period of six (6) months.

Date Entered: June 24, 2011

Claire A. Manning, Chair, with George E. Marron III and Carolyn Berning, Hearing Board Members.