State Ex Rel. Morrison v. Price

172 P.3d 561, 285 Kan. 389, 2007 Kan. LEXIS 821

• Court: Supreme Court of Kansas
• Decided: December 7, 2007
• Docket: 96,481
• Status: Published

Opinions

The opinion of- the court was delivered by

Beier, J.:

This is an original quo warranto action filed by the Attorney General’s office on behalf of the State to enjoin what is alleged to be unauthorized practice of law by Respondents David Martin Price, Janice Lynn King, Rosemary Denise Price, and Pro Se Advocates, an association in whose name they do business. None of the individual Respondents is licensed as a Kansas lawyer.

The petition was filed on April 27, 2006. It attached two digital video disc recordings of sworn statements given by Theron and Jennifer Frost, two of the individuals alleged to be victims of Respondents’ unauthorized practice of law. In the statements, the Frosts describe what they understood to be legal research and advocacy performed on their behalf by certain of the Respondents in exchange for fees. The services provided included preparation of pleadings to be filed in court and preparation of a demand letter to be sent to a former employer of Jennifer Frost. At the direction of Respondents, tire Frosts signed the documents prepared for them.

Respondents pursued dismissal of this quo warranto action, which this court denied on June 29, 2006. The same date, we appointed Senior Judge Jack Lively as Commissioner to “conduct evidentiary proceedings and to make findings of fact and conclusions of law necessary for this Court’s final determination and judgment in this case.” We also stated:

“Commissioner Lively is hereby authorized and empowered to fix the time and place for hearings; to administer oaths and affirmations; to decide motions with or without a hearing; to cause the depositions of witnesses to be taken as he deems necessary; to receive evidence and take testimony; to issue subpoenas to witnesses and to compel their attendance and testimony at any hearing; to require the production of any papers, books, documents and records, whether in written or electronic form, he deems necessary; to do any and all other things required so that a complete hearing may be had on all pertinent and relevant matters raised or which may hereafter be raised by the parties involved in this original proceeding; and to rule upon all legal questions presented in connection with any and all such matters.”

The Respondents filed a Notice of Removal to federal court on July 26, 2006. Two months later, Judge Julie A. Robinson of the United States District Court for the District of Kansas remanded the proceeding on motion of the State. She included the following language in her Memorandum Order and Opinion:

“The Notice of Removal ostensibly asserts a federal [counterclaim] against petitioner and its counsel under 42 U.S.C. §§ 1983 and 1985, alleging petitioner has brought a willful, malicious and frivolous action. The Notice also appears to base removal on [Respondents’ contention that the underlying action to enjoin the unauthorized practice of law is an infringement upon their First Amendment rights.

“The Court agrees with [the State] that removal was improper. The Petition in Quo Warranto consists of an action exclusively under the laws of the State of Kansas to enjoin respondents from engaging in the unauthorized practice of law within the State of Kansas. ‘The regulation of the practice of law is a state matter,’ and the Tenth Circuit recently held that an action to enjoin the unauthorized practice of law did not fall within the federal district court’s federal question jurisdiction. Moreover, [Respondents’] purported federal law [counterclaim] does not create federal question jurisdiction justifying removal, nor can jurisdiction be conferred by counterclaim. Likewise, it is well-established that a case may not be removed to federal court on the basis of a federal defense, including a constitutional defense based on First Amendment considerations. Finally, [Respondents failed to timely comply with 28 U.S.C. § 1446(b), which requires a notice of removal of a civil action or proceeding within thirty days of service. Respondents were served on May 1, 2006, but did not file their notice of removal until July 26, 2006, just under three months after service. . . .

“Having no jurisdiction over this case, the Court will not address any other pending matters or arguments, except the matter of attorney’s fees and costs. . . .

“For the reasons set forth in its determination that remand of the case is required, the Court concludes that [Respondents lacked an objectively reasonable basis for seeking removal. Although [Respondents proceed pro se, they are familiar with die procedures and limitations on removal jurisdiction, having previously removed actions from state court to federal court that were remanded. [The State] was required to devote time and resources responding to a facially meritless motion, as well as multiple orders to show cause filed by [Respondents. As such, the Court will require [Respondents to pay [the State’s] attorney’s fees and costs expended in defending this frivolous removal litigation. [The State] is hereby ordered to submit an accounting of its attorney’s fees and costs association with the improper removal of this action.”

After the remand, Commissioner Lively ordered Respondents to answer written discovery and to appear for depositions scheduled for October 24,2006. Respondents attempted to appeal Judge Robinson’s remand order to the United States Tenth Circuit Court of Appeals. Also, the day before the depositions ordered by Commissioner Lively were to take place, Respondent King filed a second Notice of Removal for this action. Again, the State moved to remand.

Judge Robinson had not acted on the State’s second remand motion when Commissioner Lively went forward with a December 5, 2006, hearing on the State’s “Motion for Sanctions Based Upon [Respondents’] Failure to Comply with Order of the Supreme Court Regarding Discovery” and the State’s “Motion Renewing Its Previous Stipulation to [Respondents’] Motion for Judgment o[n] the Pleading.” Respondents did not appear at the December 5 hearing.

Judge Robinson signed a second remand order 2 days later; the order reflects a filing date of December 11, 2006. It recited:

“Respondent asserts that this matter ‘became removable when the Petitioners failed to apply the 30 day mandatory stay on the proceedings of the state court actions pending the provision of the removal statutes upon the remand of an action back to state court jurisdiction.’ In all other material respects, the basis for the relief sought remains the same as in the first Notice of Removal.

“. . . [T]he Court concludes that respondent lacked an objectively reasonable basis for seeking removal. . . . Moreover, the Court stresses that this is the second attempt to remove these quo warranto proceedings, the first attempt resulting in remand as well as an award of attorney’s fees .... [The State] was once again required to devote time and resources responding to a facially meritless motion. As such, the Court will require respondent to pay [the State’s] attorney’s fees and costs expended in defending this frivolous removal litigation.”

Commissioner Lively issued his Report the same day that Judge Robinson’s second remand order was filed. The Report took judicial notice of Judge Robinson’s first remand order and made a finding that “Respondents have repeatedly enjoyed notice of the Court’s orders pertinent to discovery. With that knowledge, Respondents have willfully and knowingly refused to take part in the discovery process or appear before the Commissioner.”

The Commissioner granted the State’s motion for sanctions— adopting the State’s allegations regarding the work performed for Theron and Jennifer Frost as findings of fact, and concluding as a matter of law that each of the Respondents had engaged in the unauthorized practice of law in the State of Kansas. Commissioner Lively therefore entered orders permanently enjoining the Respondents from:

“1. Appearing in any representative capacity for another, or;

“2. Taking any action intended to assist nonmembers of the state bar of Kansas in the presentation of any legal matter, or;

“3. Preparing or aiding in the filing of any pleading or legal document, or;

“4. Counseling or advising any nonmember of the state bar on any legal matter whatsoever.”

Commissioner Lively also concluded that Respondent David Martin Price and Respondent Pro Se Advocates had committed an unconscionable act in violation of the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq., in their work for Theron Frost and had committed a deceptive act in violation of the KCPA in their work for Jennifer Frost. For these violations, Commissioner Lively ordered Respondent David Martin Price and Respondent Pro Se Advocates to pay Theron Frost and Jennifer Frost restitution. He also permanently enjoined them from taking fees for, among other things, preparing any legal document; preparing or expressing legal opinions; or preparing any claims, demands, or pleadings for filing in any court, administrative agency or other tribunal. He also ordered the two Respondents to pay $1,000 for Petitioner’s expenses and investigative fees and $5,000 in civil penalties.

Finally, Commissioner Lively ordered the Clerk of the Appellate Courts and the clerks of the state district courts to refuse to file any pleadings signed or prepared by Respondents “except when [a] Respondent is a named party and the pleading or document is submitted solely on Respondent’s own behalf’ and to instead deliver a copy of any such pleading to the chief judge of the district and to the proper state authorities charged with investigating the unauthorized practice of law.

Respondent King attempted to appeal Judge Robinson’s second remand order to the Tenth Circuit; this appeal was consolidated with the first appeal attempted by all Respondents. On August 2, 2007, the Tenth Circuit dismissed the consolidated appeals, holding it had no jurisdiction over district court remand orders such as those entered by Judge Robinson. Although Respondent David Martin Price asserted at oral argument before this court that some sort of motion was still pending before the Tenth Circuit, that is not true.

Discussion

In an original proceeding in this court, the findings and conclusions of the Commissioner are advisory only and it is this court’s duty to examine die record, find the facts, and make its own conclusions of law. State, ex rel., v. Schmitt, 174 Kan. 581, 585, 258 P.2d 228 (1953) (citing State, ex rel., v. Harvey, 148 Kan. 166,167, 80 P.2d 1095 [1938]); State, ex rel., v. Buchanan, 142 Kan. 515, Syl. ¶ 1, 51 P.2d 5 [1935],

Before we can reach the merits, we must address whether Commissioner Lively was authorized to conduct the December 5,2006, hearing before Judge Robinson’s second remand order had been filed.

28 U.S.C. § 1446 (2000), concerning the procedure for removal of a case from state to federal court, reads in pertinent part:

“(a) A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal ....

“(b) The notice of removal of a civil action or proceeding shall be filed within thirty days after tire receipt by the defendant, through service or otherwise, of a copy of tile initial pleading setting forth the claim for relief upon which such action or proceeding is based ....

“If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable ....

“(d) Promptly after the filing of such notice of removal of a civil action the defendant or defendants shall give written notice thereof to all adverse parties and shall file a copy of tire notice with the clerk of such State court, which shall effect the removal and the State court shall proceed no further unless and until the case is remanded.” (Emphasis added.)

Respondents argue that the December 5 hearing before Commissioner Lively—at which they did not appear and which led to what is, in essence, a default judgment against them—should not have proceeded because the state action was required to be stayed while their second removal was still in effect.

Respondents are correct on this point. The italicized portion of the statute set forth above is clear: “[T]he State court shall proceed no further unless and until the case is remanded.” Although the second removal notice filed by Respondent King, as described by Judge Robinson, turned out to be as “frivolous” as the first filed by all Respondents, it was permitted under the statute. With no contraiy federal order preventing it, Respondents were free to file the second notice of removal, even if their motives in doing so are open to serious question. The second notice automatically stayed this action, pending Judge Robinson’s ruling. The December 5 hearing before Commissioner Lively should not have gone forward. Any action taken by him as a result is a nullity. See 28 U.S.C. § 1446(d); Burlington Northern Railroad Co. v. Bell, 482 U.S. 919, 919-20, 96 L. Ed. 2d 684, 107 S. Ct. 3197 (1987) (White, J„ dissenting); United States v. State of Ohio, 487 F. 2d 936, 943, aff'd on other grounds Fry v. United States, 421 U.S. 542, 44 L. Ed. 2d 363, 95 S. Ct. 1792 (1975) (once notice of removal filed, clear and unambiguous language of 28 U.S.C. § 1446 prevents state court from proceeding unless, until remand); State of South Carolina v. Moore, 447 F.2d 1067, 1072-74 (4th Cir. 1971) (explicit language of the statute and its uniform construction requires proceedings in the state court after removal to be void); Mississippi Power Company v. Luter, 336 So. 2d 753, 755 (Miss. 1976) (state court had no jurisdiction to impanel jury after case removed to federal district court despite later remand; jury’s verdict a nullity); 14C Wright, Miller & Cooper, Federal Practice and Procedure, Jurisdiction and Related Matters § 3737 (3d ed. 1998). We have only unearthed two cases from one state court that have not held strictly to this rule. They represent a departure from the view of the majority of jurisdictions and from the unambiguous language of the removal statute. See Farm Credit Bank of St. Paul v. Ziebarth, 485 N.W.2d 788, 791 (N.D.), cert, denied 506 U.S. 988 (1992) (state court retains jurisdiction to act when federal court subsequently denies removal notice based on same ground as previously remanded removal); Farm Credit Bank of St. Paul v. Rub, 481 N.W.2d 451, 457 (N.D. 1992) (state court had jurisdiction to decide foreclosure action even though, on day of trial, defendant notified plaintiff, state court of notice of removal; notice was second based on same ground as first; federal court ultimately remanded second time); cf. State ex rel. Nixon v. Moore, 159 S.W.3d 488, 490-91 (Mo. App. 2005) (distinguishing two North Dakota cases).

We also note that, even if the timing of the December 5 hearing had been appropriate, Commissioner Lively’s findings and conclusions regarding violation of the KCPA are hot supported by the record before us. During oral argument in this court, the Petitioner disavowed any knowledge of their genesis. No allegation of a violation of the KCPA was pled in the Petition for Quo Warranto, and the record contains no subsequent pleading or argument from either side on the KCPA.

Because of the December 5 hearing alone, we are required to refuse to adopt Commissioner Lively’s orders and to remand for further proceedings before him on the allegations regarding Respondents Rosemary Denise Price, Janice Lynn King, and Pro Se Advocates. However, as to Respondent David Martin Price, we refuse to adopt only those orders entered by Commissioner Lively as a response to the perceived violations of the KCPA. David Martin Price engaged in the unauthorized practice of law before us in our courtroom during his oral argument on behalf of his fellow Respondents. We therefore conclude that a permanent injunction must be issued against David Martin Price. He is now and, unless duly licensed as a member of the state bar, ever after prohibited from appearing in any Kansas legal proceeding in a representative capacity for another; from taking any action intended to assist nonmembers of the state bar of Kansas in the presentation of any legal matter; from preparing or aiding in the filing of any pleading or legal document in a Kansas controversy or legal proceeding, except when doing so solely on his own behalf; and/or from counseling or advising any nonmember of the state bar on any legal matter whatsoever. We also direct the Clerk of the Appellate Courts and the clerks of our state district courts to refuse to file any pleading or document signed or prepared by Respondent David Martin Price, except when he is a named party to the action in which the pleading or document is to be filed and the pleading or document is being filed solely on his own behalf.

Only one further point bears mention at this juncture. Since oral argument before this court, the individual Respondents have filed a second Motion to Dismiss and a request for a hearing. This motion is without merit and it and the request for hearing are therefore denied.

Case remanded to Commissioner Jack Lively for further proceedings consistent with this opinion as to Respondents Janice Lynn King, Rosemary Denise Price, and Pro Se Advocates. A permanent injunction as set forth above is hereby entered against Respondent David Martin Price. The Motion to Dismiss filed by individual Respondents on October 11,2007, and request for hearing are denied.

Davis, Nuss, and Luckert, JJ., not participating. Hill, McAnany, and Buser, JJ., assigned,