Court Opinion

ID: 3147846
Source: CourtListenerOpinion
Date Created: 2015-10-22 18:38:04.996712+00
Date Added: 2024-06-11T11:55:20.253850
License: Public Domain

FIFTH DIVISION
                                                                                          March 18, 2011

No. 1-10-0643

SCOTT RABIN,                                                           )    Appeal from the
                                                                       )    Circuit Court of
                Plaintiff-Appellant,                                   )    Cook County
                                                                       )
        v.                                                             )    No. 08 L 12871
                                                                       )
KARLIN AND FLEISHER, LLC; RICHARD FLEISHER;                            )    Honorable
and RONALD FLEISHER;                                                   )    Allen S. Goldberg,
                                                                       )    Judge Presiding.
                Defendants-Appellees.                                  )

        JUDGE EPSTEIN delivered the judgment of the court, with opinion.

        Presiding Justice Fitzgerald Smith and Justice Howse concurred in the judgement and

opinion.

                                                OPINION

        Plaintiff, Scott Rabin, appeals the trial court’s dismissal of his second amended complaint for

retaliatory discharge (the Complaint) pursuant to section 2-615 of the Illinois Code of Civil Procedure (735

ILCS 5/2-615 (West 2008)). He maintains the trial court erroneously found the Complaint fails to state

a cause of action. For the reasons below, we affirm.

                                              BACKGROUND

        In July 1997, defendant Karlin & Fleisher, LLC (the Firm) hired plaintiff to perform several duties

acting as an investigator for its contingency fee cases. Although plaintiff was a salaried employee, the Firm

billed its clients allegedly $40 per hour for plaintiff’s work without disclosing his employment status or his

actual wages, which were less than $40 per hour. Plaintiff did not initially record his hours at the Firm.
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However, in 1998 Ronald Fleisher, one of the Firm’s attorneys, allegedly advised him to bill the Firm for his

hours on “invoices” dating back to the beginning of his employment. Plaintiff complied, initialing billing as:

        “Scott Rabin, Investigator

        Karlin & Fleisher

        111 W. Washington, Suite 1505

        Chicago, Illinois 60602”

Ronald allegedly then instructed him to remove the Firm’s name from the invoices, in order to disguise the

fact that he was an employee.

        On July 10, 2007, Ronald allegedly asked plaintiff to alter an invoice in a case by adding plaintiff’s

name and address. Plaintiff declined, for “he felt it was improper or otherwise wrong.” He then refused to

provide any more “bogus ‘investigation’ invoices” to the Firm, complaining that “creating invoices that made

it look like was not a fulltime paid employee of the Defendants *** was improper and may have been a

violation of the law and the Rules of Professional Conduct.” He also claimed defendants’ “conduct

amount[ed] to fraud on the clients and a fraud on the courts because the so-called expenses [for his

services] were deducted from settlement proceeds paid to contingent fee clients and said sums were

retained by the Defendants *** without the full knowledge and consent of the clients.”

        In February 2008 the Firm terminated plaintiff’s employment. He then filed the instant lawsuit against

Ronald, the Firm, and Richard Fleisher, a firm attorney. After the trial court dismissed plaintiff’s original

complaint with prejudice pursuant to section 2-615 and section 2-619 of the Illinois Code of Civil Procedure

(735 ILCS 5/2-619 (West 2008)), he filed a motion to reconsider that was denied. The trial court granted him

leave to amend, however, pursuant to which he filed the Complaint claiming:

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              “15. In approximately February of 2008 the Plaintiff was terminated from his job. The

      termination was in retaliation of Plaintiff complaining about the fact he was asked to create

      and alter or amend ‘invoices’ that would make it appear as if he was not an employee of the

      Defendant firm and otherwise complained about charging clients for work he performed as

      a paid employee of the Defendants.

              16. Defendants violated public policy by using ‘invoices’ that made it appear Plaintiff

      was not an employee, by not informing the clients that the Plaintiff was a fulltime employee,

      by charging the clients $40.00 per hour for the work performed without adequately informing

      the clients about th[e] fact that Defendant [sic] was an employee, by misleading clients and

      the courts about the expenses incurred and falsely characterizing overhead as expenses

      and overcharging clients for the expenses actually incurred.

              17. The conduct of the Defendants violated public policy in at least 3 respects:

                      A. The Defendants [sic] conduct violated the crime fighter exception as

              stated by the Illinois Supreme Court in Palmateer v. International Harvester Co., 85

              Ill. 2d 124, 130 (1981). The Plaintiff had a reasonable belief that the actions of the

              Defendants were in violation of criminal statutes and he reported this conduct to

              the Defendant and was fired in retaliation for reporting his reasonable belief that

              criminal activity had occurred. The Plaintiff had a reasonable belief that the actions

              of the Defendant were in violation of the Rules of Professional Conduct.

                      B. The Defendants [sic] conduct violated the Rules of Professional

              Conduct which include[ ] but [are] not limited to the Preamble, Rule 1.4(b), Rule 8.4

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                 and Rule 1.5[.]

                          C. The Defendants [sic] conduct was also in direct violation of the Illinois

                 criminal statutes which include but are not limited to 720 ILCS 5/16-1(2), 720 ILCS

                 5/17-1(b)(a) and 720 ILCS 5/8-2. The defendants [sic] action were [sic] criminal in

                 nature based on false statements made to clients which induced the client to pay

                 monies to the defendants when in fact the defendants did not incur any expenses,

                 when the defendants improperly charged clients for overhead when such was not

                 recoverable, when the defendants falsely stated to clients and courts that the

                 expenses incurred were $40.00 per hour when in fact the amounts paid to plaintiff

                 in salary was [sic] far less than $40.00 per hour and the Defendants otherwise

                 misled clients and courts and collected at least approximately $250,000 in monies

                 unlawfully and illegally and because they conspired to obtain monies under false

                 pretenses and otherwise acted in a criminal manner.

                 18. The conduct of the Defendants is against public policy and because of their

        positions in society as attorneys whose duty is to uphold the law and act with

        scrupulous honesty and fidelity their firing Plaintiff for complaining about the conduct

        is actionable.”

The trial court dismissed the Complaint with prejudice pursuant to section 2-615, finding, inter alia, that the

Complaint failed to support plaintiff’s claims of illegality and the trial court’s previous ruling barred the

professional responsibility claims. The court earlier held, in dismissing plaintiff’s original complaint:

                 “The two situations in which Illinois courts have recognized retaliatory discharge are

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        when an employee is terminated for making a worker’s compensation claim, or for reporting

        or refusing to engage in illegal conduct. [Citation.]

                                                        ***

                 *** [W]e follow the Supreme Court in Jacobson[ v. Knepper & Moga, P.C., 185

        Ill. 2d 372 (1998),] in declining to extend retaliatory discharge to apply to attorneys, who

        are already subject to the Rules of Professional Conduct. Even if we found that retaliatory

        discharge could be so extended, however, Plaintiff does not have a claim. As neither party

        alleges that Plaintiff filed a worker’s compensation claim, Plaintiff must establish that he

        objected to illegal activity on the part of the Defendants in order to be considered a

        whistle blower. However, no such illegal activity existed. The ARDC1 found no violations

        of the Supreme Court Rules of Professional Conduct in Defendants’ conduct as alleged

        in Plaintiff’s complaint, thus there is no illegal activity. As Plaintiff is not a whistle blower, and

        as we will not extend the tort of retaliatory discharge, Plaintiff’s claim *** [is] dismissed for

        failure to state a claim.”

Plaintiff now appeals, contending the Complaint states a retaliatory discharge claim.

                                                   ANALYSIS

        “When reviewing the dismissal of a complaint for failure to state a cause of action, all well-pleaded

        1
            “The ARDC is an agency of [the supreme] court which, inter alia, receives, investigates

and prosecutes allegations of professional misconduct by attorneys licensed to practice in Illinois.”

Skolnick v. Altheimer & Gray, 191 Ill. 2d 214, 217 (2000).

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facts and inferences drawn therefrom are accepted as true.” Paskarnis v. Darien-Woodridge Fire Protection

District, 251 Ill. App. 3d 585, 586 (1993).

        “A reviewing court should interpret the facts alleged in the complaint in the light most

        favorable to the plaintiff. [Citation.] A complaint should not be dismissed unless it

        clearly appears that no set of facts could be proved under the pleadings which would

        entitle the pleader to relief. [Citation.] Pleadings are to be liberally construed with a

        view to doing substantial justice between the parties.” Id.

Nevertheless, “Illinois is a fact-pleading jurisdiction. [Citation.] While the plaintiff is not required to

set forth evidence in the complaint [citation], the plaintiff must allege facts sufficient to bring a claim

within a legally recognized cause of action [citation], not simply conclusions [citation.]” Marshall v.

Burger King Corp., 222 Ill. 2d 422, 429-30 (2006). Our review of a section 2-615 or section 2-619

dismissal is de novo. Solaia Technologies, LLC v. Specialty Publishing Co., 221 Ill. 2d 558, 579

(2006). We are not bound by the trial court’s reasoning and “may affirm on any basis supported by

the record, regardless of whether the trial court based its decision on the proper ground.” In re

Marriage of Gary, 384 Ill. App. 3d 979, 987 (2008).

        An Illinois employer may generally fire an at-will employee for any or no reason. Jacobson

v. Knepper & Moga, P.C., 185 Ill. 2d 372, 375-76 (1998). The tort of retaliatory discharge is a

“limited and narrow” exception to that rule. Id. at 376. “[T]he only proper defendant in a retaliatory

discharge action is the plaintiff’s former employer.” Buckner v. Atlantic Plant Maintenance Inc., 182

Ill. 2d 12, 22 (1998). It is undisputed here that plaintiff’s former employer is the Firm. Plaintiff’s

conclusory and unsupported allegation that Ronald and Richard Fleisher “are jointly and severally

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liable to” him as well is insufficient to state a claim. Misselhorn v. Doyle, 257 Ill. App. 3d 983, 985-

86 (1994) (In ruling on a motion to dismiss “the court must ignore conclusions of law and fact not

supported by allegations of the specific facts upon which such conclusions rest.”). We affirm the

dismissal of defendants Richard and Ronald Fleisher with prejudice.

        As for the Firm, “to state a valid retaliatory-discharge cause of action *** plaintiff must allege

that he was discharged in retaliation for his activities and that his discharge violates a clear mandate

of public policy.” Barr v. Kelso-Burnett Co., 106 Ill. 2d 520, 529 (1985).

                “While there is no precise definition of what constitutes clearly mandated

        public policy, a review of Illinois case law reveals that retaliatory discharge actions

        are allowed in two settings. The first situation is when an employee is discharged for

        filing, or in anticipation of the filing of, a claim under the Workers’ Compensation Act

        ( 820 ILCS 305/1 et seq. (West 1992)). [Citations.] The second situation is when an

        employee is discharged in retaliation for the reporting of illegal or improper conduct,

        otherwise known as ‘whistle blowing.’ ” Jacobson, 185 Ill. 2d at 376.

Case law also reveals that retaliatory discharge claims have been disallowed between licensed

attorneys previously employed as such and their former firms. Id. at 378. Here, plaintiff, a non-

attorney, maintains he was fired by the Firm for complaining about, and refusing to participate in,

criminal conduct that violates the Rules of Professional Conduct (Rules), namely, the Firm’s alleged

policy of

        “using ‘invoices’ that made it appear Plaintiff was not an employee, *** not informing

        the clients that Plaintiff was a fulltime employee, *** charging the clients $40.00 per

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        hour for the work performed without adequately informing the clients about the fact

        that Defendant [sic] was an employee, *** misleading clients and the courts about the

        expenses incurred and falsely characterizing overhead expenses and overcharging

        clients for the expenses actually incurred.”

We will address these in turn, beginning with the Firm’s rate for plaintiff’s services.

        While plaintiff maintains the Firm improperly charged its clients more than the actual cost of

his investigation services, he does not dispute the clients signed agreements, one of which is attached

as exhibit 1 to the Complaint, agreeing to pay investigation expenses “based on the cost and/or

prevailing rates for such services in the Chicagoland area.” (Emphasis added.) Plaintiff does not

maintain the Firm did not charge the prevailing rate for his services, that the rates were unreasonable,

or that he did not perform the work billed. He argues instead that the investigation charges were

improper because they are “overhead which an attorney cannot charge for in a contingency fee case.”

This conclusory allegation fails on its face. Johnson v. Thomas, 342 Ill. App. 3d 382 (2003), cited

by plaintiff in support of that conclusion, is inapposite. There, unlike in this case, the prevailing party

sought to recover costs under a statute that neither defined “costs” nor listed which costs were

recoverable. Id. at 401. Here, the Firm’s form contract upon which plaintiff’s claims are based plainly

states that investigation expenses shall be paid by the client in addition to the percentage fee:

                “I agree to pay my attorneys a fee, pursuant to the Illinois Statute, for their

        services only if recovery is obtained and then based upon the following schedule:

        RECOVERY

                        A. 33 1/3% of the gross amount recovered by settlement if a lawsuit

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                 is not filed.

                          B. 40% of the gross amount recoverable if a lawsuit is filed and/or a

                 demand for arbitration/mediation is filed.

        COSTS

                 In addition to the fee, client agrees to pay all expenses such as investigation,

        medical records, court costs, etc. incurred in the handling of said claim. Said expenses

        will be incurred at the discretion of KARLIN & FLEISHER, L.L.C. and will be

        charged based on the cost and/or prevailing rates for such services in the Chicagoland

        area.” (Emphasis added.)

This provision also belies plaintiff’s claim that the Firm was required to inform its clients that its

investigator was a salaried employee as opposed to a third party. Plaintiff has not cited any authority

prohibiting such an agreement and does not address the fact that the Firm’s clients agreed to much of the

conduct of which he complains. “The law and the public policy of Illinois permit and require that competent

parties be free to contract with one another.” Liccardi v. Stolt Terminals Inc., 178 Ill. 2d 540, 549 (1997).

“Parties to a contract are free to include any terms they choose, as long as those terms are not against

public policy and do not contravene some positive rule of law.” Green v. Safeco Life Insurance Co., 312 Ill.

App. 3d 577, 581 (2000). “Public policy itself strongly favors freedom to contract.” Holstein v. Grossman, 246

Ill. App. 3d 719, 726 (1993). Here, plaintiff has not alleged the Firm’s agreements with its clients violate public

policy or contravene a positive rule of law. It therefore cannot be said, under the unique facts of this case,

that it was patently improper or illegal for the Firm to bill its clients a prevailing rate for plaintiff’s

investigation services or fail to voluntarily disclose to the clients plaintiff’s employment status and/or

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the actual costs of his services. Plaintiff’s claims to the contrary are undermined by his pleading and

were properly dismissed with prejudice.

        Plaintiff also maintains defendants actively misled their clients and the court by requiring him

to create invoices for his services that disguised he was a firm employee. Such conduct, while

distasteful, is not manifestly illegal. Plaintiff may nevertheless succeed on his retaliatory discharge claim

by showing that the Firm’s termination of his employment for complaining about and refusing to participate in

the Firm’s alleged misconduct “violates a clear mandate of public policy.” Barr, 106 Ill. 2d at 529. Plaintiff

claims here that the Firm’s conduct violated public policy by violating certain Illinois criminal statutes, the

“citizen crime-fighter” exception to at-will employment, and the Rules of Professional Conduct. We agree

with the trial court, however, that plaintiff’s pleading does not support his claims of illegality. While

“a plaintiff attempting to state a cause of action for retaliatory discharge after being fired for reporting

possible illegal activity need not allege or prove conclusively the law has been violated in order to

state a cause of action,” he must have a good-faith belief that the defendant was violating the law.

Johnson v. World Color Press, Inc., 147 Ill. App. 3d 746, 751-52 (1986); accord Mackie v. Vaughan

Chapter-Paralyzed Veterans of America, Inc., 354 Ill. App. 3d 731, 740 (2004). It cannot be said

here that a reasonable person could conclude on account of plaintiff’s pleading that defendants’

conduct was criminal.

        As for the Rules, plaintiff alleges in a conclusory and unsupported fashion that defendants

violated public policy by violating “the Rules of Professional Conduct which include[ ] but [are] not

limited to the Preamble, Rule 1.4(b), Rule 8.4 and Rule 1.5.” This court has held, albeit in a different context,

that “where attorney conduct is at issue, we look to the supreme court rules for expressions of public

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policy.” Richards v. SSM Health Care, Inc., 311 Ill. App. 3d 560, 564 (2000); accord Mohanty v.

St. John Heart Clinic, S.C., 225 Ill. 2d 52, 67 (2006) (“AMA Opinion 9.02, while informative, is not

the equivalent of an Illinois statute or rule of professional conduct and, for that reason, does not

provide a clear expression of the public policy of this state.”); but see Zeigler v. Illinois Trust &

Savings Bank, 245 Ill. 180, 193 (1910), and its progeny (“The public policy of the State or of the

nation is to be found in its constitution and its statutes, and when cases arise concerning matters upon

which they are silent, then in its judicial decisions and the constant practice of the government

officials. [Citations.] Courts will not look to other sources to determine the public policy of a State.

*** ‘The public policy of a State or nation must be determined by its constitution, laws and judicial

decisions, -- not by the varying opinions of laymen, lawyers or judges as to the demands of the

interests of the public.’ ”). Nevertheless, the mere citation to the Rules will not alone state a retaliatory

discharge claim. Cf. Turner v. Memorial Medical Center, 233 Ill. 2d 494, 505 (2009) (“[T]he mere

citation of a constitutional or statutory provision in a complaint will not, by itself, be sufficient to state a cause

of action for retaliatory discharge. Rather, an employee must show that the discharge violated the public

policy that the cited provision clearly mandates.”). A plaintiff must specifically identify the clearly mandated

public policy in the Rules that his termination allegedly violated. While plaintiff here claims that, “[t]he

conduct of the Defendants is against public policy and because of their positions in society as

attorneys whose duty is to uphold the law and act with scrupulous honesty and fidelity their firing

Plaintiff for complaining about the conduct is actionable,” this allegation, if construed as a policy

statement, is insufficient. “Scrupulous honesty and fidelity” are too broad, too “general [a] statement

of policy *** to justify finding an exception to the general rule of at-will employment.” Id. at 502.

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As our supreme court has explained:

               “The tort of retaliatory discharge ‘seeks to achieve “a proper balance ***

       among the employer’s interest in operating a business efficiently and profitably, the

       employee’s interest in earning a livelihood, and society’s interest in seeing its public

       policies carried out.” ’ [Citation.] In the absence of a clearly mandated public policy,

       ‘the employer retains the right to fire workers at will.’ [Citations.] A broad, general

       statement of policy is inadequate to justify finding an exception to the general rule of

       at-will employment. Corbin v. Sinclair Marketing, Inc., 684 P.2d 265, 267 (Colo.

       App. 1984) (collecting cases). Indeed: ‘Any effort to evaluate the public policy

       exception with generalized concepts of fairness and justice will result in an elimination

       of the at-will doctrine itself.’ Fitzgerald, 613 N.W.2d at 283.

               Further, generalized expressions of public policy fail to provide essential

       notice to employers. The phrase ‘clearly mandated public policy’ implies that the

       policy will be recognizable simply because it is clear. ‘An employer should not be

       exposed to liability where a public policy standard is too general to provide any

       specific guidance or is so vague that it is subject to different interpretations.’

       [Citations.]

               Accordingly, an employee has a cause of action for wrongful discharge when

       the discharge is contrary to a clear mandate of public policy. However, unless an

       employee at will identifies a ‘specific’ expression of public policy, the employee may

       be discharged with or without cause. [Citation.] For example, insufficient allegations

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        of public policy include ‘right to marry’ a coworker (McCluskey v. Clark Oil &

        Refining Corp., 147 Ill. App. 3d 822, 825-26 (1986)); ‘product safety’ (Geary v.

        United States Steel Corp., 456 Pa. 171, 183, 319 A.2d 174, 180 (1974)); ‘promoting

        quality health care’ (Hrehorovich v. Harbor Hospital Center, Inc., 93 Md. App. 772,

        796, 614 A.2d 1021, 1033 (1992)); and ‘the Hippocratic Oath’ (Pierce, 84 N.J. at 76,

        417 A.2d at 514). Unless the employee identifies a clear mandate of public policy that

        is violated by the employee’s discharge, the complaint will not state a cause of action

        for retaliatory discharge.” Turner, 233 Ill. 2d at 502-03.

The Complaint here fails to state a cause of action. Although attorney honesty and fidelity are vital to the

legal system and a matter in the public interest, we do not believe that a former law firm employee

can be immune from the general rule of at-will employment merely by complaining to the Firm and

its attorneys prior to being fired about deceitful but seemingly legal billing practices he no longer

wishes to participate in. While we do not condone the Firm’s alleged misconduct here, we are not

persuaded that plaintiff’s allegation of “honesty and fidelity” in the legal system satisfies the supreme court’s

“narrow definition of public policy” in retaliatory discharge cases. Id. at 507-08 (holding that, “[b]ased on the

narrow scope of a retaliatory discharge action, the general concept of ‘patient safety,’ by itself, is simply

inadequate to justify finding an exception to the general rule of at-will employment”).We affirm the dismissal

of the Complaint.

                                               CONCLUSION

        The trial court properly dismissed the Complaint for failure to state a retaliatory discharge claim.

Plaintiff has not pled an exception to the general rule of at-will employment.

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      Affirmed.

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