City Council candidate Alex Schmitt's billing practices came under fire in lawsuit

EVANSVILLE — It was just friendly banter, the text messages between attorney Alex Schmitt and client Kassy Lauer.

The two were friendly, after all — but Toast owner Lauer was also Schmitt's client, and they were trying to transition her out of her restaurant's contracts with the city in advance of a sale in 2016. Their texts about the deal sometimes veered into territory seemingly outside the legal realm.

"I was woken up by firemen banging on my door at 6a bc my Corvette and garage were on fire," Schmitt offered in one text. "I need a (expletive) vacation."

In another exchange, as Lauer grew apprehensive about complications with the deal and how much Schmitt's services were going to cost her, he assured her he was "not going to charge you for every little thing."

"This text? Lol," Lauer replied.

"Nope," Schmitt wrote.

But Schmitt, now a Republican candidate for an Evansville City Council seat, did charge Lauer for those texts and others not strictly related to the case when his bill came due, according to records that Lauer's attorney said he subpoenaed from Schmitt.

The dispute settled last week after a one-day mediation with Lauer and her attorney, Scott Danks, and Schmitt and his attorney. Danks also serves as chairman of the Vanderburgh County Democratic Party.

Lauer authorized release of the legal documents. She claims they reveal to voters Schmitt's willingness to engage in questionable billing practices when he seeks a position of authority over local tax dollars.

The restaurant owner and the aspiring politician began their legal alliance on friendly terms in May 2016, weeks after Schmitt lost a Vanderburgh County commissioners race to fellow Republican Cheryl Musgrave.

But their relationship unraveled as the proposed deal went south.

Schmitt's employment agreement said bills would be sent to Lauer monthly, but she said he hit her with a $22,635 tab at once — for his role in a sale with a purchase price of $40,000. He billed her for 47 hours of text messages in all — at $150 an hour.

Months later, attorneys for Schmitt sent Lauer a "final demand" for $25,053, accounting for interest.

Lauer refused to pay, arguing that Schmitt's employment agreement said nothing about texts and that he grossly overcharged for other services. Schmitt sued for breach of contract, accusing Lauer of fraud, deception, theft and unjust enrichment. Lauer countersued in August 2017, asking for $40,000. She said in the suit she incurred damages in part because of Schmitt's failure to produce a routine legal agreement. She also said he had estimated his total fee would be $1,500.

Last week's settlement came more than two years after Schmitt ultimately offered to reduce her balance owed by 50 percent, according to a letter provided by Lauer.

The settlement agreement came with a confidentiality provision. But Lauer headlined a lengthy Facebook post about the case, "SOMETIMES JUSTICE PREVAILS." Danks posted that he had "successfully" represented Lauer against Schmitt.

"At the end of the day, (Lauer) got what she wanted," Danks said Monday.

The Courier & Press reached out to Schmitt, who replied by text message that the settlement agreement has a confidentiality agreement — one Danks said Schmitt himself requested.

In two separate text messages, Schmitt wrote that he "cannot, and will not, discuss it with you."

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The newspaper also received an email from Reed Schmitt, Alex Schmitt's father and a past president of the Evansville Bar Association. Reed Schmitt represents Alex Schmitt. 

"Please be advised that this matter is subject to a confidentiality provision in the Settlement Agreement and any comments by any party, or their attorney, on such are in breach of the Settlement Agreement," the senior Schmitt wrote.

Reed Schmitt did not return a subsequent telephone message.

But Danks said the confidentiality provision isn't a gag order. It covers the terms of the settlement, and that's it.

There is no “broader confidentiality agreement preventing either side from discussing the case in any manner and particularly a (clause prohibiting disparaging remarks)," Danks said by text.

Sitting in mediation last week as Schmitt's billings were itemized in florid detail, Lauer seethed at what she perceived as the injustice of it all. Four hours — $600 in all — for a memo barely more than a page long. Charges for flip one-liner text messages. Danks provided copies of the text messages he said had come from Schmitt.

And she remembered all over again a day in July 2016 when Schmitt dropped by Toast to help her and her father box up some of the restaurant's inventory. Toast was located in the clubhouse of city-owned Helfrich Hills Golf Course.

At that point, Lauer said, he was still a trusted ally and partner.

"He literally was helping me put glasses in boxes," she said, recalling that day. "He also took some pictures of my alcohol inventory."

When she saw Schmitt's billings back in 2016, the bile rose in her throat as she realized he had billed her $375 for that visit. "Assistance of inventory and boxing with Kassy at Toast," the invoice stated. Two-and-a-half hours, at $150 a pop.

"I'm glad some attorneys got to look at this," Lauer said.