Court Opinion

ID: 768686
Source: CourtListenerOpinion
Date Created: 2012-04-18 09:12:33+00
Date Added: 2024-06-11T12:55:25.870709
License: Public Domain

212 F.3d 353 (7th Cir. 2000)
RAY HANANIA and ALISON RESNICK,    Plaintiffs-Appellants,v.BETTY LOREN-MALTESE, individually and  in her official capacity as president  of the Town of Cicero,  TOWN OF CICERO, THE CICERO TOWN NEWS, CICERO  TOWN REPUBLICAN ORGANIZATION, THE CICERO  OBSERVER, BOARD OF TRUSTEES MICHAEL FREDERICK,  RUPERTO ALEJANDRO, MOISES ZAYAS, JOHN KOCIOLKO,  JOSEPH VIRRUSO, RICHARD SMETANA, and JANET  POROD, individually and in their official  capacities, JEROME TORSHEN, and TORSHEN,  SPREYER, GARMISA & SLOBIG, LTD.,    Defendants-Appellees.
No. 99-2862
In the  United States Court of Appeals  For the Seventh Circuit
Argued March 28, 2000Decided May 5, 2000

Appeal from the United States District Court  for the Northern District of Illinois, Eastern District.  No. 98 C 5232--James B. Moran, Judge.
Before EASTERBROOK, MANION, and EVANS, Circuit  Judges.
EVANS, Circuit Judge.

1
This case marks another  chapter in the colorful history of Cicero, a  western Chicago suburb where Al Capone once set  up shop and where more recent political  shenanigans have been keeping federal  investigators and attorneys busy.

2
Leading off this tale's cast of characters is  Betty Loren-Maltese, president since 1993 of the  Town of Cicero and the widow of Frank Maltese, a  prominent Cicero politician who confessed to  being a mob bookmaker and pleaded guilty to a  federal gambling charge. See United States v.  Maltese, 1993 WL 222350 (N.D. Ill. 1993). Loren-  Maltese is a defendant in this civil case, along  with the town itself, some affiliated officials  and organizations, and Chicago attorney Jerome H.  Torshen and his law firm, Torshen, Spreyer,  Garmisa & Slobig, Ltd. The plaintiffs are two ex-  employees of the town: Alison Resnick and her  husband, Ray Hanania. Resnick was appointed the  town collector in February 1996, replacing her  father, Gerald Resnick, who held the position for  26 years before being nabbed in the government's  "Silver Shovel" public corruption probe.  Hanania1 is a former reporter for the Chicago  Sun-Times who served as the town spokesman from  1993 to 1996.

3
Taking all facts alleged in the complaint to be  true, as we must do at this time (without, of  course, vouching for their accuracy), Loren-  Maltese fired Hanania in October 1996 when he  refused to defend her in the press against  charges of rampant corruption. Resnick also made  noise about corruption, requesting the State's  attorney to investigate and helping to organize  an opposition slate of candidates that ran  unsuccessfully against Loren-Maltese in the  February 1997 Republican primary. Loren-Maltese  is not the sort of lady you want to cross, and  Resnick paid the price. Loren-Maltese stripped  the town collector's office of authority and  employees, exiled the office to shabby quarters,  denied Resnick access to her files, and refused  to accept the monthly statements Resnick was  required to file.

4
In June 1997 Loren-Maltese took away two of  Resnick's last three employees. This, for  Resnick, was the last straw. She hired Torshen,  who helped her get a temporary restraining order  in state court that stopped Loren-Maltese from  impeding Resnick's duties. The order also  reinstated two of Resnick's employees. With the  TRO in place (it was even extended) the case  moved forward but, on Torshen's recommendation,  Resnick signed a settlement agreement in August  in which she agreed to let it drop. The attorneys  Cicero retained to work out this agreement were  Merrick Rayle and Edward "Fast Eddie" Vrdolyak,  the former aldermanic nemesis and failed  electoral opponent of the late Chicago mayor,  Harold Washington. Incredibly, the Resnick-Cicero  settlement called for Cicero to refer some of its  future legal work to Torshen--and Torshen has  since represented Rayle in a lawsuit filed  against Cicero by the town's former police chief  and his deputy.

5
There was a period of detente between Resnick  and Loren-Maltese, but in December 1997 the  Cicero board of trustees sacked Resnick with  three weeks to go in her term. Resnick called  Torshen, who by this time was happily  representing Cicero in other matters. He finagled  two weeks of vacation time for Resnick and  persuaded her to leave it at that.

6
Or so he thought. Resnick and Hanania later  filed a 42 U.S.C. sec. 1983 suit in federal court  against Torshen, his law firm, Loren-Maltese, the  Town of Cicero, and others. The lawsuit claims  that the defendants deprived Resnick and Hanania  of their constitutional right to speech by firing  them in retaliation for speaking out about  corruption. Torshen was named as a defendant on  the theory that he was in cahoots with the Cicero  officials when he convinced Resnick to sign off  on a settlement that was not in her interests.  Judge James B. Moran let Resnick and Hanania  proceed with their suit against the rest of this  crowd but dismissed the claims against Torshen  and his law firm. Resnick and Hanania now appeal  the decision that let Torshen off the hook.

7
A complaint is properly dismissed under Federal  Rule of Civil Procedure 12(b)(6) if, taking all  facts alleged by the plaintiffs to be true and  construing all inferences in favor of the  plaintiffs, the plaintiffs have failed to state  a claim upon which relief can be granted. Pleva  v. Norquist, 195 F.3d 905, 911 (7th Cir. 1999).  And this complaint is full of so many mushy  "facts" ("it was widely believed" . . . "it was  widely rumored that") that Judge Moran shrewdly  branded it "an exercise in investigative  journalism." Nevertheless, we review its  dismissal de novo. Id.

8
A cause of action under sec. 1983 requires a  plaintiff to demonstrate that he was deprived of  a right secured by the Constitution or a federal  law at the hand of someone acting under color of  law. Fries v. Helsper, 146 F.3d 452, 457 (7th  Cir.), cert. denied, 525 U.S. 930 (1998). A  private individual has acted under color of law  if there was a concerted effort between the  individual and a state actor. Id. Establishing  sec. 1983 liability through a conspiracy theory  requires a plaintiff to demonstrate that (1) the  private individual and a state official reached  an understanding to deprive the plaintiff of her  constitutional rights and (2) the private  individual was a willful participant in joint  activity with the state or its agents. Id. We  turn, then, to the question of whether the  allegations in this complaint are sufficient to  demonstrate, even at the notice pleading stage,  that a conspiracy, involving Torshen, was afoot.  See Ryan v. Mary Immaculate Queen Center, 188  F.3d 857 (7th Cir. 1999).

9
Why Resnick, who certainly is no idiot, signed  a settlement agreement that she claims achieved  nothing for her is anybody's guess, but sign it  she did. The agreement contained six provisions:

10
1.      Resnick would drop her case.

11
2.      "Plaintiff shall serve out her Term as Town  Collector through December 31, 1997. She shall  come to work and Board Meetings as appropriate  and assist in the transition of her elected  successor, whose Term commences January 1, 1998.  She shall perform all of the duties and functions  of her appointive Office."

12
3.      Resnick would not file any new suits arising  out of the claims in this case.

13
4.      The agreement would be confidential.

14
5.      Cicero would refer to Torshen's law firm the  town's defense in a pending personal injury case.

15
6.      Resnick would try to persuade her husband,  Hanania, to stop publicly slamming Cicero and its  officials.

16
Cicero's promise to hire Torshen--who at the  time was representing Resnick, Cicero's adversary  in this litigation--for future legal work strikes  us as highly unusual. Settlement agreements  sometimes provide for one side to pay the other  side's attorneys fees, but a settlement like this  in which one side essentially hires the other  side's lawyer is new to us. Whether it violates  the duty of loyalty an attorney owes to the best  interests of his client is not for us to say, but  it should make one a little queasy (see Preamble  to the Illinois Rules of Professional Conduct,  Article VIII, Illinois Supreme Court Rules, 134  Ill. 2d 470; ABA Model Rule of Professional  Conduct 1.8(f); Kling v. Landry, 686 N.E.2d 33,  39 (Ill. App. Ct. 1997) ("When in the course of  his professional dealings with a client, an  attorney places his personal interest above the  interest of the client, the attorney is in breach  of his fiduciary duty by reason of the  conflict.")).

17
The question for us, however, is not whether  Torshen acted unethically or committed legal  malpractice, but rather whether this fact-laden  complaint shows that, under color of state law,  he conspired with others to deprive Resnick of  her constitutional rights. Ironically, the fact  that Torshen's alleged conflict of interest was  so blatantly spelled out in the settlement  agreement undercuts the complaint's conspiracy claim. Whatever scheming might have gone on here  was certainly not covert.

18
Resnick's sec. 1983 claim as to Torshen is  based on the premise that this agreement gave her  nothing, gave Cicero everything, and gave at  least a little something to Torshen. The first  question is whether the agreement was as lopsided  as she claims. If not--if she actually got  something out of the settlement--then her claim  against Torshen is a nonstarter. Torshen says the  second provision of the settlement allowed  Resnick to serve out her term, thereby achieving  the litigation's purpose. Resnick says she was  entitled to serve out her term the day she was  appointed and the settlement did nothing to  shield her from Loren-Maltese's ongoing  harassment. We might be inclined to adopt  Torshen's interpretation if the agreement  explicitly allowed Resnick to finish her term  without interference, but the agreement contains  no such language. Because all inferences must be  construed in the plaintiff's favor, we treat the  settlement as a sham that provided Resnick with  no benefits.

19
The next question is whether Torshen's success  in persuading his client to sign a worthless  settlement agreement raises an inference that he  and Cicero reached an understanding to deprive  Resnick of her constitutional rights. Torshen and  Cicero's representatives clearly reached an  understanding that it would be advantageous for  Resnick to drop her state lawsuit. Sharing the  goal of having Resnick abort her state case does  not necessarily translate, however, into a mutual  goal of trampling upon Resnick's constitutional  rights. It is true that participants need not  share the same motives to share the same general  conspiratorial objective. See United States v.  Irwin, 149 F.3d 565, 573 (7th Cir.), cert.  denied, 525 U.S. 1031 (1998). So, for instance,  if Torshen's motive (allegedly ginning up some  new business) differed from Cicero's motive  (stifling Resnick), Torshen would still be liable  if he shared with the Cicero defendants the  ultimate goal of depriving Resnick of her  constitutional rights. Whether characterized as  motive or objective, however, the most that can  be said about the allegations is that Torshen's  actions do not appear to go beyond greed. Viewed  favorably to the plaintiffs, Torshen wanted what  apparently turned out to be lucrative legal  business from a town that often finds itself in  court. The settlement was the means to Torshen's  pecuniary ends. But even if this is all true, the  allegations fail to demonstrate a desire by  Torshen to snatch away Resnick's constitutional  rights.

20
Furthermore, the settlement of Resnick's state  lawsuit is not connected to the acts underlying  the sec. 1983 claim. The sec. 1983 claim is that  Loren-Maltese and the Town of Cicero retaliated  against Resnick for exercising her First  Amendment right to speech. Resnick says the  defendants were unconstitutionally squeezing her  office before she filed the state lawsuit, but  Torshen was not involved in any of this. Resnick  also says the defendants forced her out of office  after she settled the state lawsuit, but Torshen  was not involved in this, either. Resnick argues  that if Torshen had done a better job of  protecting her in August of 1997 she would not  have lost her job in December, but that, if true,  is legal malpractice, not a federal sec. 1983  claim. If the settlement agreement had foreclosed  Resnick from ever filing suit against Loren-  Maltese and Cicero in the future, then perhaps  Torshen could be tied into an alleged conspiracy  to deny Resnick her constitutional rights. The  dismissal of the state lawsuit, though, did not  prevent Resnick from bringing her sec. 1983  claim-- her federal case is going forward against  the Cicero defendants. The nastiness that gave  rise to the sec. 1983 claim took place before and  after Torshen was on the scene, but he was not  involved in the nastiness.

21
To wrap up, if these allegations against  Torshen are true, i.e., that he railroaded Resnick by getting her to sign the settlement  agreement and later negotiated vacation pay on  her behalf when by that time he was representing  the town that had just fired her, Torshen may  have acted unethically or committed legal  malpractice. This complaint, loaded as it is with  factual allegations, does not show, however, that  Torshen conspired with the Cicero defendants to  deprive Resnick of her constitutional rights. We  affirm the district court's dismissal of Torshen  and his law firm from this case.

Notes:

1
 Hanania is only a bit player in this present  dispute so we'll focus on Resnick's claims as we  move along.