Madison - St. Clair Record

Wednesday, February 26, 2020

Jury rules for plaintiff in legal malpractice case, but reduces award nearly 70%

By Steve Gonzalez | Mar 28, 2008

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

The jury's verdict was actually just over $11 million, but they reduced it on the question of "mitigation of damages" by the bank.

The jury delivered the verdict just after 4:30 p.m. on March 28.

Magna had alleged the law firm Thompson Coburn committed legal malpractice while providing legal advice to the bank on how to transfer structured settlement trusts to another financial institution.

Magna was represented by Rex Carr and Troy Walton of the Rex Carr Law Firm in East St. Louis.

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

Madison County Circuit Judge Daniel Stack presided over the eight week trial.

The crux of the case goes back to 1985 when Gibson, now in prison, 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 had 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.

In 1993 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.

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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