Carr wants new damages trial in Magna Bank v. Thompson Coburn

Steve Gonzalez Jul. 28, 2008, 7:27am




Rex Carr's client won a protracted legal malpractice trial four months ago in Madison County, but the veteran trial lawyer claims the jury's award was "inadequate."

He wants Madison County Circuit Judge Daniel Stack to grant a new trial on damages.

Carr argues that the jury's $3.6 millon award to Magna Bank, in a case against the law firm Thompson Coburn, was not supported by evidence presented at trial.

In its suit against Thompson Coburn, Magna alleged the firm committed legal malpractice by providing bad advise on how to transfer structured settlement trusts to another financial institution.

Stack held a hearing July 24 to consider all post-trial motions.

"The amount of damages awarded bears no relationship to the evidence introduced in this case and is inadequate to compensate plaintiff for the losses it has sustained and is not the result of a compromise on the question of liability," Carr argued.

Carr added that the amount awarded by the jury was "taken out of thin air" and was not related to anything presented in the case.

He argued Magna lost $9,707,146.63 to settle lawsuits arising from structured settlements that were stolen by businessman James Gibson and spent $2,081,906.28 to defend those cases.

After deliberating nearly eight hours over two days, a Madison County jury awarded Magna Bank (now Regions Bank) $3,654.606.40 on March 28.

The jury's award was actually more than $11 million, but was reduced on the question of "mitigation of damages" by the bank.

Thompson Coburn was represented by Carrie Hogan and Morgan Hirst of Jones Day in Chicago. Mike Nester of Belleville also represented Thompson Coburn.

In response to Carr's motion, Hogan said that it was "wishful thinking" that Magna would be granted a new trial on damages.

"This is not a case that justifies a new trial on damages," Hogan argued.

She argued that there was "clearly mitigation evidence" and said that the jury even noted mitigation on the verdict form.

"It is not our job to question what the jury was thinking," Hogan added.

Stack said he would issue his ruling on the matter within 30 days.

The crux of the case goes back to 1985 when Gibson, who is now serving time in federal prison, took up the business of structuring settlements under an agreement with a bank 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.

In 1993, Gibson told Magna Bank that pursuant to contract, he was going to 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, but the summary judgment was affirmed.

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

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.

Gibson eventually was convicted of stealing the money and purchasing homes, cars and yachts with the proceeds.

At the motion hearing, Carr also argued that a new trial should be ordered because Stack erred when he fail.

Carr argued that on multiple occasions Stack allowed witnesses to disagree with his rulings, which caused confusion in the minds of the jury as to what the law is.

Carr also argued that Stack was wrong when he denied his motion for a mistrial after allowing a witness to disagree with his ruling that Magna owed a fiduciary duty to the injured plaintiffs and on the issue of constructive trust.

He claims Stack wrongly set time limits on witness examination and limited Magna's time for making its case in chief and in rebuttal.

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