Lawyer spats, objections slowing down mega trial

Steve Gonzalez Feb. 15, 2008, 4:12am



Constant objections and fierce bickering are slowing progress in one of the most dramatic and complicated civil trials ever held in Madison County Circuit Court.

With notorious swindler James Gibson as backdrop – he stole millions from children and widows by making off with their structured settlement funds -- Magna Bank is suing law firm Thompson Coburn for legal advice that allegedly cost the bank millions in settlements.

In Circuit Judge Daniel Stack's courtroom on Wednesday, Belleville attorney Bernie Ysursa -- who had represented Gibson-cheated clients -- testified that a company called Crews and Associates also played a role in allowing Gibson to steal.

Originally scheduled to take four weeks, the trial is likely to last until the first week of March due to arguments over evidence as well as compelling spats between opposing lawyers – veteran plaintiff's attorney Rex Carr of East St. Louis and defense attorney Carrie Hogan of Chicago.

During his testimony, Ysursa said he had "heard" of lawyers who brought claims to the Illinois State Bar Association against personal injury lawyers – including Carr -- for reasons related to the structured settlements.

Hogan asked him what he heard, which caused Carr to explode with, "Hearsay!"

So, Hogan asked Ysursa a direct question.

"Did you ever hear anything about Mr. Carr, any claim being filed against Mr. Carr as a result of advising his clients to enter into the structured settlement?"

That did not go over well with Carr who interrupted with, "Are you representing there was?"

"No," Hogan said.

"Excuse me. Are you representing that there was by asking that question?" Carr repeated.

Hogan replied, "No sir," and tried to explain why she asked the question, but again Carr interrupted her saying, "Then apologize to me and apologize to the jury for suggesting such a thing."

"Judge please," Hogan got out before Carr said, "She known damn good and well no such claim has ever been made."

"Mr. Carr, she is entitled to ask," Stack said.

Hogan told Carr that she did not know the answer to the question she asked.

"Oh, baloney," Carr yelled. "I swore under oath when you took my deposition."

"You don't need to yell at me Rex, I am standing right here," Hogan said.

Stack finally stepped in to defuse the situation.

"Mr. Carr, you'll have to calm down," Stack said.

Hogan apologized to Stack for "hitting a nerve" with Carr. Then, asking the question again, yet another eruption from Carr.

"Well you did hit a nerve," Carr said.

"Obviously," Hogan responded.

"Because you knew it was a damn lie," Carr continued, which prompted Stack to play referee again.

"The jury will disregard Mr. Carr's remarks," Stack said.

"His outbursts," Hogan added.

Ysursa's testimony

Ysursa said Crews, based in Little Rock, became a brokerage house firm and when Gibson would need money, Crews would cash in bonds and send him the money. He said Gibson needed a company like Crews to liquidate the bonds to cash.

"Unfortunately, Mr. Gibson took the money and used it for his own purposes," Ysursa said.

Ysursa also testified that Magna paid his clients about 50 percent of their net losses, while Crews paid about 86 percent.

Schroeder testimony

Kurt Schroeder, a former Thompson Coburn partner, also testified this week that he did not believe the firm knew, or should have known, that Gibson was stealing money from trusts.

This was Schroeder's second time taking the witness stand. Last week, he was called to give some background information on the case.

Next week, one of Carr's expert witnesses, Belleville attorney Tom Keefe, is expected to testify.


The heart of the matter goes back to 1985 when Gibson took up the business of structuring settlements, under an agreement with a bank that Magna later acquired.

Personal injury lawyers who represented clients that received jury awards or settlements would advise their clients to enter into a structured settlement with Gibson's company, SBU.

Carr told jurors that Gibson used government bonds instead of an annuity, like most structured settlements at that time used, which made Gibson's pitch unique.

Everything was fine until 1993, when Gibson told Magna Bank that pursuant to contract, he would terminate the agreement and take the money elsewhere.

Magna Bank refused to turn the money loose, so Gibson sued the bank.

St. Clair County Circuit Judge Robert Hillebrand ruled that the agreement allowed termination. He granted summary judgment to SBU. Magna appealed to the Fifth District, when Gordon Maag was a justice, but the summary judgment was affirmed.

After several more years of litigation, Magna gave possession of the government bonds to Flag Financial, a shell corporation Gibson owned in Missouri.

And that, according to Carr, is when Thompson Coburn started to "screw up."

Carr claims that based on the advice of Thompson Coburn, Magna did not file an appeal with the Illinois Supreme Court because the law firm allegedly advised the bank that it had no grounds to resist SBU's termination of Magna's trusteeship and joined in a stipulation with SBU by appointing Flag Finance as the successor trustee which allowed Gibson to have possession of the bonds.

Gibson eventually stole the money and purchased homes, cars and yachts.

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