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Paul L. Pratt, P.c. v. Blunt

OPINION FILED JANUARY 24, 1986.

PAUL L. PRATT, P.C., PLAINTIFF-APPELLEE,

v.

DAVID L. BLUNT ET AL., DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court of Madison County; the Hon. George J. Moran, Jr., Judge, presiding.

JUSTICE JONES DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 26, 1986.

The instant interlocutory appeal was brought as a matter of right pursuant to Rule 307 (87 Ill.2d R. 307) from an order granting the plaintiff's petition for preliminary injunction. Plaintiff, Paul L. Pratt, P.C., had brought suit to enjoin the defendants, as former associates of its law firm, from solicitation of the plaintiff's clients. The trial court's order, entered June 25, 1985, prohibited the defendants from contacting past or present clients of the plaintiff without prior approval of the court during the pendency of the proceedings. On appeal the defendants contend that the trial court went beyond its jurisdiction in seeking to enjoin alleged ethical violations on their part in the practice of law and that the trial court's action resulted in the unconstitutional restriction of their rights of free speech under the first and fourteenth amendments. The defendants contend further that the record failed to support the trial court's grant of injunctive relief and that the plaintiff should be denied such relief under the equitable doctrine of unclean hands. Finally, the defendants contend that the trial court abused its discretion in failing to rule upon their motion for appointment of a judge from outside the county or to delay the proceedings in order to refer the matter to the chief judge.

Prior to March 27, 1984, the defendants, David Blunt and Randolph Schum, were salaried employees of the plaintiff law firm. On that date, defendant Blunt's employment was terminated, and defendant Schum submitted his resignation from the firm. Shortly thereafter, the defendants joined together to form a partnership for the practice of law.

On June 12, 1985, the plaintiff filed a complaint against the defendants, alleging that as a result of letters sent by the defendants in April 1984 to clients for whom they had worked while with the plaintiff law firm, the plaintiff had lost six clients who had discharged the plaintiff and hired the defendants. The complaint further alleged that the defendants had "solicited" Steven Early, a client of the plaintiff's, through their client, James Dumse, who had shown Early certain newspaper articles concerning the plaintiff. Count I of the plaintiff's complaint sought damages for loss of fees resulting from these actions by the defendants, while count II prayed that the defendants be enjoined from "any further solicitation of plaintiff's clients." Count II also sought the production of 22 categories of documents from the defendants, including contingent fee contracts executed by the defendants both before and after March 27, 1984, records from the plaintiff's office showing past, present and prospective clients, and all telephone billing records from the defendants' office and residences since March 27, 1984. The plaintiff additionally filed a motion for preliminary injunction seeking to enjoin the defendants from further "contact with" or "solicitation of" its clients and requesting that the defendants provide the documents specified in its complaint at the time of hearing on the motion.

Prior to hearing on the plaintiff's motion on June 14, 1985, defendant Schum took a statutory change of venue from Judge Wendell Durr and requested that the case be assigned to a judge from outside Madison County. The case was reassigned to Madison County judge George Moran, Jr., who, at the hearing on the motion for preliminary injunction, indicated that assignment of the case to a judge outside the county was a matter to be decided by the chief judge. The defendants declined Judge Moran's offer to recuse himself and made no further motion to have the matter ruled upon by the chief judge.

At the hearing the plaintiff presented evidence regarding the defendants' actions, as alleged in the plaintiff's complaint, of sending letters to clients of the plaintiff after leaving the plaintiff firm and of attempting to persuade its client Steven Early to discharge the plaintiff by means of newspaper articles shown him by the defendants' client Dumse. In addition, the plaintiff presented evidence of another incident in which defendant Blunt allegedly induced C.E. Draffen to sign a contingent fee contract with the defendants by representing to him that he (Blunt) was associated with the Pratt firm.

Upon being called to testify by the plaintiff, defendants Blunt and Schum acknowledged having mailed approximately 100-150 letters to clients whose cases they had handled while with the plaintiff law firm. The letters were sent on or about April 24, 1984. Before sending these letters, the defendants had consulted with a representative from the Illinois State Bar Association regarding appropriate ethical standards for such action. The letters sent by the defendants stated:

"This is to inform you that I am no longer associated with the Paul L. Pratt law firm. Attorney [David L. Blunt] [Randolph E. Schum] and I have formed the law firm of Blunt and Schum and will be practicing at the above location.

You have the right to either leave your file with the Pratt firm for further processing by another attorney, or you may request your file be turned over to me for its continued handling.

If you wish to leave your file with the Pratt firm, you need do nothing. However, if you wish your case to be transferred to me, you should write a letter to the Pratt firm and so indicate your preference.

If you have any questions concerning this situation, I suggest you contact the Pratt and/or this office for further information."

Both defendants testified that the decision to send such letters was made after they became aware that clients who called the Pratt firm asking for them were misled or misinformed as to their status or whereabouts. Defendant Schum stated that, while with the Pratt firm, he had kept addresses for clients with whom he had had a lot of contact after regular business hours on an "information sheet" at home and that he had sent letters to those clients "that I felt would miss me." Defendant Blunt testified that some of the clients in question had come to the Pratt firm originally because he (Blunt) was there, and Schum stated that he had had sole responsibility for cases assigned to him at the Pratt firm and had made all decisions concerning those cases.

On direct examination by the defendants, Paul Pratt, president and sole stockholder for the plaintiff, testified that on April 11, 1984, his office had sent letters to clients whose cases had been handled by the defendants, advising them that the defendants were no longer with the firm and that their cases had been assigned to other attorneys in the firm. While Pratt initially stated that such letters were sent "to counteract the unethical letters that [the defendants] sent out," he subsequently stated, when reminded that his letters preceded those of the defendants, that his letters were "to make sure that you [the defendants] didn't get the clients that you didn't have any right to." It was Pratt's position that neither Blunt nor Schum had originated any business while they were at his firm. Pratt testified additionally that on April 3, ...


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