A former waitress and her attorney have been sued by San Pedro Municipal Judge David M. Kennick for allegedly libeling, slandering and conspiring to defame him by claiming that he offered to dismiss a drunk-driving charge against her in return for sex. The 48-year-old jurist, contending that he suffered loss of reputation, shame, mortification and hurt feelings, asked for a total of $40 million on each of the three causes of action in the Los Angeles Superior Court suit. Mary Davis, 45, and her attorney, William C. Case Jr. of Santa Ana, told reporters just before her trial last May that on the night after her arrest on Feb. 22, 1985, Kennick propositioned her in the San Pedro restaurant where she worked. She said she did not have sex with him, but believed that her case had been dismissed. A warrant was issued for her arrest and she was convicted of driving under the influence of alcohol. The district attorney's office subsequently dropped an inquiry into the alleged proposition because there had been no formal complaint from Davis.