HESS v. KANOSKI & ASSOCIATES (February 2, 2012)
The Kanoski & Associates law firm hired Lawrence Hess in 2001 pursuant to a written employment agreement. Although the arrangement apparently worked well for years, Ronald Kanoski, the firm's president, fired Hess on February 14, 2007. The firm reassigned many of the cases Hess was working on to Kennith Blan, Jr., who worked as an independent contractor at the firm. Hess believed that he was owed compensation from the settlement of some of the cases on which he had been working when he left. The firm rejected his demands. Hess filed attorney's liens in state court on two cases that had been settled. Those claims were unsuccessful, as well, since he had no current attorney-client relationships. Hess brought suit in federal court, alleging state law contract fraud and conspiracy claims, among others. Chief Judge McCuskey (C.D. Ill.) granted summary judgment to the defendants on the ground that the state law proceedings collaterally estopped Hess. Hess appeals.
In their opinion, Seventh Circuit Judges Bauer, Wood, and Tinder reversed in part, affirmed in part, and remanded. The Court first addressed the Illinois Wage Payment and Collection Act and breach of contract claims and found that the district court erred in dismissing them. First, it concluded that Hess did not admit, as the district found, that he had been paid all that he was due. Second, the Court concluded that the state court decisions did not collaterally estop Hess. The issues in those cases were different from the issues Hess raises in the federal case. Third, on the merits, the Court concluded that the employment agreement, which promised "40% of all fee revenue generated," was susceptible of more than one meaning. Fees could be "generated" under the contract either when work was done or when monies were received. The Court remanded for the district court to interpret the contract, possibly with extrinsic evidence. The Court did note that Hess had a better claim to fees that were actually received by the firm within 30 days of his termination since he had a contractual right to 30-days notice. With respect to the tortious interference and inducement claims, the Court stated that they could not lie against the firm and its president since one cannot tortiously interfere with one's own contract and could not lie against Blan since there was no evidence that he was involved in the termination. Finally, the Court quickly disposed of the "ragtag" of remaining claims.