Carr takes stand in legal malpractice case he's leading

Steve Gonzalez Mar. 7, 2008, 5:40am

Rex Carr

Carrie Hogan

After four weeks of testimony, Magna Bank finally finished presenting evidence in the legal malpractice lawsuit against Thompson Coburn.

The trial, which was on a three-day hiatus so presiding Judge Daniel J. Stack could attend a judicial conference in Chicago, resumed March 6. And in an odd twist Magna's lead lawyer, Rex Carr, was called to testify as a witness for the defense.

Representing Thompson Coburn, Carrie Hogan of Jones Day in Chicago asked Carr a series of questions about his role in steering clients to James Gibson -- the notorious businessman who ended up swindling structured settlements from children and widows.

According to Carr, it all started in 1985 when Gibson took up the business of structuring settlements under an agreement with a bank that Magna later acquired.

He said he would advise clients that received jury awards or settlements to enter into a structured settlement with Gibson's SBU and Magna Bank

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

Carr told jurors that Gibson and Magna would pass out pamphlets at bar association meetings in order to drum up business, and soon many lawyers including himself began to use SBU when a they would have a structured settlement.

But Carr did admit that he himself never actually saw the pamphlet Gibson was distributing.

Carr said all was good until 1993, when Gibson told Magna Bank that pursuant to contract, he would terminate the agreement and take the money to a different trust company.

Carr was scheduled to be on the stand again on March 7. His co-counsel, Troy Walton, will begin Magna's cross examination when Hogan finishes her examination of Carr.

The trial, which was originally scheduled to last four weeks, entered its fifth week on March 6.

Carr rested his case without calling two of his key witnesses, Gordon Maag and Randy Bono, but they could still make an appearance during rebuttal if Carr needs them too.

Part of the reason Maag and Bono did not make it was the length of time Carr had witnesses on the stand.

Kurt Schroeder, a former Thompson Coburn lawyer provided testimony eight separate days over three weeks totaling nearly 30 hours during the trial and another former Thompson Coburn lawyer, Thomas "Skip" Hennessy, III, was in Stack's courtroom for five days.

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