Court Opinion

ID: 9712437
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:53:53.379401+00
Date Added: 2024-06-11T18:23:12.172209
License: Public Domain

JUSTICE MORAN delivered the opinion of the court: The Administrator of the Attorney Registration and Disciplinary Commission filed a three-count complaint charging respondent, Morton Allan Segall, with professional misconduct. Count I of the complaint charged that respondent’s attempts to settle a lawsuit brought against him by the Carte Blanche Corporation violated Rules 1— 102(a)(4), 1 — 102(a)(5) and 7-104(a)(l) of the Code of Professional Responsibility (87 Ill. 2d Rules 1 — 102(a)(4), 1 — 102(a)(5), 7 — 104(a)(1)). Count II charged the same violations with regard to respondent’s attempts to settle a lawsuit brought against him by the Amoco Oil Company. Count III charged that respondent’s repeated refusal to allow Amoco to take his deposition violated Rule 1— 102(a)(5) (87 Ill. 2d R. l-102(a)(5)). The Hearing Board found no ethical violation with regard to count III, but found against respondent on counts I and II. The Hearing Board recommended that he be censured. The Review Board agreed with the Hearing Board’s findings but recommended that a two-year suspension be imposed. Respondent filed exceptions in this court pursuant to Rule 753(e)(5) (103 Ill. 2d R. 753(e)(5)). The issue before this court is what, if any, sanctions should be imposed. ■ The complaint in the Carte Blanche suit alleged that respondent incurred numerous credit card charges, beginning on May 18, 1979. As of the date of the complaint, November 24, 1981, the unpaid balance on the account was alleged to be $12,837.42. On February 8, 1982, a default judgment was entered in favor of Carte Blanche for $12,837.42, plus costs. Respondent moved to vacate the default judgment, claiming lack of notice. On October 4, 1982, while this motion was pending, respondent, who was in Florida at the time, directed his secretary to send a check for $95.60 directly to Carte Blanche. He knew at the time that Carte Blanche was represented by counsel, but he nonetheless bypassed that counsel. Typed on the reverse of the check was an attempted limitation, stating that “acceptance, negotiation or endorsement of this draft shall constitute a full and final release in settlement of all claims and causes of action for Acct. No. 944 — 148— 645 — 4 in the name of Mort A. Segall.” Allegedly accompanying the check was a letter which referenced the pending lawsuit, and read as follows: “Gentlemen: In order to settle all pending claims and disputes in connection with the above entitled litigation for the above account, and to avoid the expense and effort of further litigation, I am enclosing herewith and tendering my check in the sum of $95.60 in full settlement and payment of any and all claims, causes of action and matters in dispute as referenced above and now pending so that all claims between your company and the undersigned can be resolved amicably and finally. If you agree with this offer of settlement to resolve all pending disputes and all claims with reference to the above, then your acceptance, negotiation or endorsement of the enclosed check shall constitute a full and final release, settlement and satisfaction of all claims and disputed actions with reference to all pending disputes, claims and accounts as referenced above, and you need not acknowledge this letter-as the cancelled check will be sufficient for my records to show that you have agreed to accept the enclosed payment in full satisfaction and settlement and release of all pending matters and claims and accounts disputed as referenced above.” On November 22, 1982, respondent’s first motion to vacate the judgment was denied. On December 10, 1982, respondent filed another motion to vacate the judgment. Attached to the motion were copies of the above letter and the negotiated check. In support of the motion respondent claimed that the negotiated check evidenced a settlement of Carte Blanche’s claims. The trial court, however, found that there had been no accord and satisfaction, and dismissed the motion. Respondent appealed, but the appellate court affirmed the trial court’s judgment in an unpublished order (Carte Blanche Corp. v. Segall (1983), 115 Ill. App. 3d 1158). (A copy of this order is attached to this opinion as an appendix.) On May 24, 1984, more than 10 months after the appellate court order was issued, respondent paid the judgment in full. The facts in the Amoco case were very similar. Amoco’s amended complaint alleged that respondent, as of August 26, 1980, owed a balance of $11,238.16 for credit purchases between January 1, 1979, and June 1, 1980. On October 4, 1982, the same date as his letter and check to Carte Blanche, respondent directed his secretary to send Amoco a letter and a check for $48.76. Except for the account number and the lawsuit referenced, the letter and the endorsement restriction on the check were identical to those in the Carte Blanche case. As in the Carte Blanche case, respondent knowingly bypassed Amoco’s lawyers, sending the check directly to Amoco. On November 10, 1982, respondent filed a motion to dismiss Amoco’s suit, claiming that the negotiated check evidenced a settlement. Respondent also filed a motion to “quash” his own deposition, for which he had failed to appear despite two court orders specifically requiring him to do so. On December 16, 1982, respondent’s motions were denied, and a judgment for $11,238.16, plus costs, was entered against him as a sanction for his repeated refusal to be deposed. This judgment was upheld by the appellate court. (For further details, see Amoco Oil Co. v. Segall (1983), 118 Ill. App. 3d 1002.) Approximately three months later respondent paid the judgment in full. Disciplinary Rule 7 — 104 states, in part: “(a) During the course of his representation of a client a lawyer shall not (1) communicate or cause another to communicate on the subject of the representation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.” (87 Ill. 2d R. 7 — 104(a)(1).) Respondent admits that in each of the lawsuits he knowingly contacted a party represented by counsel without obtaining counsel’s consent. He argues, however, that these contacts were made on his own behalf as a litigant and thus were not “[djuring the course of his representation of a client.” We disagree. An attorney who is himself a party to the litigation represents himself when he contacts an opposing party. Rule 7 — 104(a)(1) is designed to protect litigants represented by counsel from direct contacts by opposing counsel. A party, having employed counsel to act as an intermediary between himself and opposing counsel, does not lose the protection of the rule merely because opposing counsel is also a party to the litigation. Consequently, an attorney who is himself a litigant may be disciplined under Rule 7 — 104(a)(1) when, as in the case at bar, he directly contacts an opposing party without permission from that party’s counsel. The Administrator also alleges that respondent’s conduct violated Disciplinary Rules 1 — 102(a)(4) and (5). Rule 1 — 102 reads in pertinent part: “(a) A lawyer shall not * * * (4) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation; or (5) engage in conduct that is prejudicial to the administration of justice.” 87 Ill. 2d R. 1 — 102. The Administrator argues that respondent’s conduct was deceptive and was an attempt to defraud Carte Blanche and Amoco, in violation of Rule 1 — 102(a)(4). The Administrator also argues that, by representing to the court in. each case that the suit had been settled, respondent attempted a fraud on the court, in violation of Rule 1 — 102(a)(5). In both circuit court cases the court found that the plaintiff’s negotiation of respondent’s check did not establish an accord and satisfaction because respondent did not sufficiently prove that the letter explaining the conditional settlement was actually sent along with the checks. In the Amoco case, for example, the appellate court pointed out that respondent claimed that his secretary, Barbara Butts, sent the letter at his direction while he was in Florida. However, Butts neither testified nor supplied an affidavit, so there was no evidence as to when and where the letter was sent, or if it was sent at all. (Amoco Oil Co. v. Segall (1983), 118 Ill. App. 3d 1002, 1012.) If the Administrator had been able to prove that respondent knew that the letters had never been sent, then it would have been obvious that respondent had committed fraud. The Administrator, however, specifically alleged that respondent did send the letters to Amoco and Carte Blanche. Since this allegation was admitted by respondent we must assume that the letters were in fact sent. The Administrator nonetheless argues that the letters, together with the circumstances under which they were sent, amounted to an attempted fraud. This court has applied a broad definition of fraud, finding fraud whenever there is conduct “calculated to deceive.” (In re Armentrout (1983), 99 Ill. 2d 242, 251; accord, People ex rel. Chicago Bar Association v. Gilmore (1931), 345 Ill. 28, 46.) We agree with the Hearing Board and the Review Board that respondent’s conduct, taken as a whole, was calculated to deceive Carte Blanche and Amoco by obtaining settlements of large claims for de minimis amounts. Respondent bypassed each plaintiff’s attorney in these cases and sent each plaintiff a letter which was designed to make the plaintiffs’ agents believe that the minimal amount tendered was the amount actually due. The letters did not state the actual amount due, and, in the Carte Blanche case, did not even mention that the dispute had been reduced to a judgment. We agree with the Review Board that there is “no rational basis upon which we can believe that Respondent thought that he could actually settle claims of $12,837.42 and $11,238.16 for $95.60 and $48.76, respectively.” We therefore agree that his conduct violated Rule 1 — 102(a)(4). Also, by filing motions to dismiss the suits due to the purported settlements, respondent attempted to involve the courts in his fraudulent scheme. Involving the courts in such a scheme must be considered “prejudicial to the administration of justice,” and thus respondent’s conduct also violated Rule 1 — 102(aX5). While respondent’s attempted fraud was not successful, an attempted deception is as serious an ethical violation as a successful one. Together with the violation of Rule 7 — 104(a)(1) we feel that respondent’s attempted fraud was serious enough to warrant a substantial suspension. We therefore order that respondent be suspended from the practice of law for a period of two years from the date of this opinion. Respondent suspended.