Illinois has long allowed a client to seek Rule 137 sanctions if the allegations brought against him are frivolous or without factual basis or both. Illinois also has a rule that provides that a lawyer who is sued and represents himself cannot obtain legal fees for his own work. (He can obtain fees if he hires counsel).
In McCarthy v. Reynolds, 2018 IL App (1st) 162478, Illinois Appellate Court, First District, those two rules collided. Unfortunately for the lawyer defendant, the court held that he cannot obtain legal fees under Rule 137 because he represented himself.
The procedural history of the case was not complex. McCarthy was a beneficiary of a trust. He sued the lawyer employed by the trust (Marvin Gray) for breach of fiduciary duty and tortious interference with his beneficiary interest.
Gray moved to dismiss the complaint and was successful. He then sought and obtained an award of Rule 137 sanctions from the trial court. The case was dismissed under the doctrine of res judicata on the ground that the same lawsuit had been filed previously by McCarthy in 2013 and had been dismissed.
On appeal, McCarthy argued that Gray could not recover Rule 137 sanctions for his own work. The Appellate Court held that sanctions were appropriate. The explanation:
¶ 21 Here, in its August 4, 2016, corrected order, the circuit court held that plaintiff’s tortious interference claim was filed with no basis in law because it was barred by the doctrine of res judicata. The circuit court noted that plaintiff filed the 2013 lawsuit and litigated it to its final conclusion. The court further reasoned that plaintiff was “acutely aware of the proceedings because he verified the complaint in that case * * * and he is a lawyer himself.” Plaintiff additionally appealed the circuit court’s decision of the 2013 case and later listed himself as cocounsel on the petition for leave to appeal to the Illinois Supreme Court. Accordingly, plaintiff was “well-aware” of the allegations in the 2013 complaint and the proceedings that took place in relation thereto. The circuit court found there was “no basis in law” for plaintiff to file his tortious interference claim where, despite being aware of the final judgment in the 2013 case, he never set forth any good faith explanation regarding why he filed the subsequent claim that was a clear attempt to relitigate the findings of fact and credibility determinations made in the 2013 case.
¶ 22 We find the circuit court did not abuse its discretion in imposing Rule 137 sanctions against plaintiff for violating the Rule. As found by the circuit court, plaintiff, though represented by counsel in the 2013 case, expressly was involved and had knowledge of the allegations of that complaint and the resulting proceedings that occurred. Notwithstanding, plaintiff filed the instant action to challenge Gray’s credibility in the 2013 action, which is a claim that should have been raised in the 2013 case. We, therefore, conclude plaintiff’s tortious interference claim was not well-grounded in law because it was barred by res judicata. As a result, it was not unreasonable for the circuit court to find the tortious interference claim was filed for an improper purpose under Rule 137.
¶ 23 To the extent plaintiff argues he was sanctioned without a proper hearing, we disagree. Plaintiff alleges Gray failed to raise res judicata as a basis for the imposition of sanctions and, therefore, the circuit court erred in awarding sanctions on that basis without providing him with a hearing. Our review of the record demonstrates that the circuit court dismissed plaintiff’s tortious interference claim on February 27, 2015, based on res judicata and then granted Gray’s request for Rule 137 sanctions on March 30, 2016, where it found the tortious interference claim was frivolous. Accordingly, at the time the circuit court considered the Rule 137 sanctions, plaintiff was fully aware that his tortious interference claim had been dismissed based on res judicata. Moreover, Gray’s motion requesting Rule 137 sanctions alleged he was entitled to such sanctions “[d]ue to the plaintiff’s unfounded, fallacious and specious allegations and pleadings.” Notwithstanding, plaintiff never requested an evidentiary hearing on any basis.
Alas, the lawyer could not recover fees for his own legal time, so the sanctions award disappeared.
¶ 26 Plaintiff finally contends the circuit court abused its discretion in awarding excessive fees against him to an attorney that proceeded pro se. Plaintiff cites Hamer v. Lentz, 132 Ill. 2d 49 (1989), and its progeny to support his argument regarding the impropriety of awarding the fees to Gray.
¶ 27 We first address our standard of review. As stated, a circuit court’s decision to impose sanctions pursuant to Rule 137 is a matter of discretion and will not be overturned absent an abuse of that discretion. Nelson, 408 Ill. App. 3d at 67. However, whether a circuit court has the authority to grant attorney fees as an available remedy is a question of law that we review de novo. People ex rel. Schad, Diamond & Shedden, P.C. v. My Pillow, Inc., 2017 IL App (1st) 152668, ¶ 101. Because plaintiff challenges the circuit court’s authority to award attorney fees under Rule 137 to Gray, who appeared pro se, our review is de novo.
¶ 28 In Hamer, the supreme court held that an attorney appearing pro se in an action brought pursuant to the Freedom of Information Act (FOIA) (Ill. Rev. Stat. 1987, ch. 116, ¶ 201 et seq.) was not entitled to attorney fees. Hamer, 132 Ill. 2d at 63. The FOIA contains a standard fee-shifting provision that is silent on the issue of a pro se attorney recovering fees. The supreme court reasoned that fees were not appropriate under those circumstances because the fee-shifting provision of the FOIA was designed (1) to remove the burden of legal fees as a deterrent from litigants, which was not a barrier for a pro se attorney because a lawyer representing himself does not incur legal fees, (2) to reduce unnecessary litigation by encouraging citizens, even lawyers, to seek objective legal advice before filing suit, and (3) to avoid abusive fee generation by unscrupulous attorneys. Id. at 61-62. Subsequent appellate decisions have expanded the rule to other contexts. See, e.g., Kehoe v. Saltarelli, 337 Ill. App. 3d 669, 678 (2003) (holding an individual attorney was not entitled to recover fees for pro se representation in a malpractice action); In re Marriage of Pitulla, 202 Ill. App. 3d 103, 117-18 (1990)(finding the rule barring pro se attorneys from collecting attorney fees applied in the context of a divorce proceeding); Uptown People’s Law Center v. Department of Corrections, 2014 IL App (1st) 130161, ¶ 25 (denying fees under FOIA for work performed by in-house, salaried lawyers on behalf of its employee, an organization).
¶ 29 The parties have not cited, and our research has not uncovered, any case law applying the Hamer rule to a Rule 137 motion. We acknowledge the purpose of Rule 137 is, in relevant part, to curb the filing of frivolous pleadings. See Sanchez v. City of Chicago, 352 Ill. App. 3d 1015, 1020 (2004). We further acknowledge that plaintiff’s tortious interference claim was undoubtedly a frivolous cause of action. Rule 137, however, is silent on the recovery of attorney fees for all pro se litigants, whether an attorney or not. Without any support establishing that attorney fees are appropriate under the circumstances before us, we choose to follow the demonstrated law providing that pro se attorneys are not entitled to attorney fees, especially because Rule 137 is penal in nature and must be strictly construed. See Adler, 271 Ill. App. 3d at 476. We find the policy reasons provided in prior case law to be convincing; thus, we will not extend Rule 137 to provide attorney fees to pro se attorneys.
Mr. Gray deserves credit for his excellent legal work on his own behalf. The court, applying well-settled law, concluded that he could not recover for that work.
Update: The Illinois Supreme Court reversed the judgment of the Appellate Court.
¶ 28 We find that Hamer and its progeny are distinguishable because those cases did not involve Rule 137 sanctions to compensate a pro se attorney defending himself against frivolous claims. The essential underlying policy of Rule 137 of discouraging frivolous or harassing litigation is furthered by imposing sanctions in the form of an award of attorney fees in favor of a pro se attorney defending against meritless claims. See Sundance Homes, 195 Ill. 2d at 285-86; In re Estate of Wernick, 127 Ill. 2d at 77. Here, defendant did not initiate or otherwise invite the frivolous pleadings. Nevertheless, defendant was forced to defend against the frivolous claims filed by plaintiff, also an attorney. If the policy of Rule 137 sanctions is to deter frivolous pleading and litigation, it would be illogical to deny attorney fees to pro se attorneys defending themselves in such matters.
¶ 29 The policy considerations underlying our decisions in Hamer and My Pillowon fee-shifting provisions are not present when a court awards sanctions under Rule 137. Here, sanctions are intended as a punishment against the party who abuses the judicial process, not as a reward to a successful pro se attorney who is defending against a frivolous lawsuit. The concern articulated in Hamer and My Pillow on deterring abusive fee generation by lawyers who initiate litigation is not present when sanctions are imposed against a plaintiff who files frivolous pleadings. This case does not involve awarding attorney fees to an attorney bringing suit as a plaintiff in his own name. Rather, defendant was forced to expend his time defending a frivolous lawsuit, as well as pursuing sanctions clearly provided for by Rule 137.
…
¶ 31 We reiterate that “[t]he purpose of Rule 137 is to prevent abuse of the judicial process by penalizing claimants who bring vexatious and harassing actions.” Sundance Homes, 195 Ill. 2d at 286. To hold that an attorney cannot recover reasonable attorney fees in defending himself against frivolous litigation would clearly frustrate the purpose of Rule 137 and unfairly reward those who persist in maintaining frivolous litigation.
¶ 32 We hold that, under Rule 137, a court is authorized to impose sanctions in the form of attorney fees under Illinois Supreme Court Rule 137(a) (eff. July 1, 2013) against a plaintiff to compensate an attorney defending himself against a frivolous cause of action. Accordingly, we reverse that part of the appellate court decision holding to the contrary and remand with directions to reinstate Gray’s attorney fee award.
Comment: the Illinois Supreme Court, in my view, has made the correct ruling. Sanctions should be available even where a lawyer must defend himself pro se.
Ed Clinton, Jr.
Illinois Procedure and Sanctions Decisions 