Trial against Thompson Coburn could run as marathon

By Steve Gonzalez | Feb 22, 2008

Kurt Schroeder After providing testimony eight separate days over three weeks totaling nearly 30 hours, former Thompson Coburn attorney Kurt Schroeder exited stage left out of the Madison County Courthouse in a civil trial that appears will last a long time.

Kurt Schroeder

After providing testimony eight separate days over three weeks totaling nearly 30 hours, former Thompson Coburn attorney Kurt Schroeder exited stage left out of the Madison County Courthouse in a civil trial that appears will last a long time.

A professional negligence trial against Thompson Coburn -- which was originally scheduled to last four-to-six weeks -- is likely to take up to six-to-nine weeks, given heretofore drawn-out witness testimony, frequent objections, sidebars and jury recesses for lawyer arguments.

On Tuesday, Madison County Circuit Judge Daniel Stack gave plaintiff's attorney Rex Carr a time limit to finish his examination of Schroeder. Before lunch recess, Stack told Carr he had two hours to wrap it up so the trial could keep moving, in part because Carr was asking the same questions over and over.

Carr's client, Magna Bank (now Regions), is suing law firm Thompson Coburn for legal advice that allegedly cost the bank millions in settlements after financial havoc was wreaked by businessman James Gibson. He stole millions from children and widows by making off with their structured settlement funds.

During Schroeder's extended time on the witness stand lawyers for Thompson Coburn objected dozens of times -- "asked and answered" -- over Carr's line of questioning.

A plaintiff's witness, Schroeder was asked to answer several "hypothetical" questions posed by Carr.

On several occasions, Carr apparently was not pleased with his witness's answers.

"Your Honor, would you instruct the witness to accept the assumption that I've given to him," Carr asked Stack during one instance.

Stack responded, "He said he wasn't involved at the time to know."

"Right, and I've asked him to assume that that's the situation," Carr asked.

Growing impatient, Stack sent the jury out of the courtroom so he could talk to the parties.

"We'll do this one more time," Stack said. "You can ask him to assume what I've ruled and ask him those questions, and he can answer according to these assumptions, but he doesn't have to necessarily agree with them."

Carr said, "But he does for the purpose of the hypothetical."

"Well, but that's because you -- sometimes you ask it one way and then ask it the other way, and you are wanting me to instruct him that that's the law of this case," Stack said. "But then you re-ask the question, and you're stating it in a way that makes it sound as though he does agree, which he doesn't want to agree."

But Carr argued, "He has to, your Honor, for the purpose of this question. Every witness that's given a hypothetical set of facts and the law must assume those things to be true. He must do that, otherwise, you can't ask a hypothetical question."

Stack responded, "I'm in total agreement with you, but when you -- you get through the first part of that question and when you get to the second part, you're dropping that," Stack said.

"No, I'm not," Carr replied.

"It sounded to me like to you were," Stack said.

I'm sorry. I'll try to make it a little more clear," Carr said.

After Schroeder finished answering questions, Carr read the deposition of Robert Brownlee.

But instead of just reading the deposition, Carr had his co-counsel, Troy Walton, take the stand to act like he was Brownlee and then read from the script.

After reading the 100-plus page deposition, Carr called another live witness to the stand on Wednesday, former Thompson Coburn attorney, Thomas "Skip" Hennessey, III.

Hennessey testified for a few minutes until the court recessed for the day and set to continue on Thursday.

With the day's ice storm, Stack recessed the trial early and informed jurors and parties involved to call the courthouse before coming on Friday.

Carr still has plans to call Tom Keefe, Gordon Maag and Randall Bono to testify before the defense can present evidence.


The crux 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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