After the Illinois Supreme Court concluded that lawyers can be sued by clients seeking to recover punitive damages, two St. Louis attorneys and their law firm have reached a settlement with Midwest Sanitary Services in a legal malpractice suit involving a former employee’s alleged wrongful termination.
On Dec. 14, Madison County Circuit Judge Christopher Threlkeld dismissed with prejudice Midwest Sanitary Services’ suit against Sandberg Phoenix & von Gontard and attorneys John Gilbert and Narcisa Symank after the parties announced that they had reached a settlement agreement.
In its complaint, Midwest Sanitary District argued that the defendants were retained as counsel to represent the company in a trial where former employee Paul Crane Jr. alleged he was wrongfully terminated.
Crane filed his suit in March 2014 in the Madison County Circuit Court (14-L-501). He alleged he worked as a truck driver for the Wood River company. He claimed he observed Midwest employees engaging in “unauthorized and illegal dumping and/or storage of toxic waste and other substances hazardous to the health and well-being of the public.”
On Nov. 18, 2015, the Environmental Protection Agency sent Midwest a letter noting the “numerous environmental violations” after Crane reported photos of the alleged violations to state regulators. Crane was terminated the same day.
Sandberg Phoenix took the defense over from the plaintiffs’ prior defense counsel in Crane’s case.
The trial began Nov. 9, 2015.
The one-week trial in Madison County Circuit Judge Dennis Ruth’s court ended on Nov. 17, 2015, after jurors returned a verdict awarding Crane $160,000 in compensatory damages and $625,000 in punitive damages for a total of $785,000.
Then on July 15, 2016, Crane was awarded $225,000 for his attorney fees. Midwest Sanitary Services appealed to the Fifth District Appellate Court.
Midwest Sanitary Service claimed Gilbert reassured it that the appellate court would rectify “this miscarriage of justice.”
According to the Rule 23 decision by appellate justice Thomas Welch, the defendants sought a new trial following the verdict after a juror reached out to Midwest and the defendants’ counsel, suspecting juror misconduct and speculation based upon a testimony that had been excluded for improper disclosure.
According to the juror’s affidavit, the jury had concluded that a voicemail complaining of Crane’s behavior must have been fabricated because the customer never testified at trial.
Ruth denied the motion. Midwest Sanitary Service appealed.
However, the Fifth District Appellate Court affirmed the jury’s verdict and Ruth’s handling of the trial on May 26, 2017.
“Generally, a verdict may not be impeached by testimony or affidavits relating to the motive, method, and process of jury deliberations,” Welch wrote.
The appellate court concluded that the trial court did not abuse its discretion in concluding “jurors were not influenced and prejudiced by the juror misconduct to such an extent that they would not, or could not, be fair and impartial.”
In the complaint against Sandberg Phoenix, the plaintiff alleged its counsel failed to list all witnesses intended to be called at trial, resulting in six witnesses for defense being barred.
Midwest Sanitary Service alleged the defendants failed to identify a voicemail recorded message from a customer regarding a lost or destroyed document in response to a request to produce, resulting in a “missing evidence” instruction given to the jury. The plaintiff also alleged the defendants failed to object to jury instructions.
Then while the case was pending in the appellate court, the plaintiff claimed the defendants failed and refused to discuss potential settlement with opposing counsel. The defendants allegedly simply responded with “No” and failed to discuss or even inform their client.
After former Madison County Circuit Judge David Dugan denied a motion to dismiss and strike portions of the legal malpractice complaint, the defendants sought appellate review regarding a punitive damages claim. The question on appeal stated:
“Does Illinois’ policy on punitive damages and/or the statutory prohibition on punitive damages … bar recovery of incurred punitive damages in a legal malpractice case where the client alleges that, but for the negligence of the attorney in the underlying case, the jury in the underlying case would have returned a verdict awarding either no punitive damages or punitive damages in a lesser sum?”
The Fifth District Appellate Court originally denied the appeal in October 2019. In February 2020, the Illinois Supreme Court allowed a motion for supervisory order, directing the appellate court to vacate its previous order and allow the appeal.
After eight continuances, the appellate court answered the certified question in the negative and affirmed Dugan’s order denying dismissal in April 2021.
Sandberg Phoenix & von Gontard, Gilbert and Symank petitioned the Illinois Supreme Court to review the appellate court’s ruling in June 2021.
The Illinois Supreme Court affirmed the ruling in September 2022.
Madison County Circuit Court case number 18-L-811