http://cookcountyrecord.com/stories/511003156-insurer-says-chicago-state-s-lawyers-owe-for-mistakes-leading-to-3-million-whistleblower-verdict
Cook County Record, Sep. 1, 2016
An insurance company has sued the law
firm who defended Chicago State University against a lawsuit brought by
whistleblower fired for refusing to bottle up public documents pertaining to
the school’s former president’s pension and salary, with the insurer now
alleging the lawyers’ missteps led to a multi-million dollar judgment for the
whistleblower.
On Aug. 29, Illinois National Insurance Company, an affiliate of AIG, filed suit in Cook County Circuit Court against the law firm of Pugh Jones & Johnson P.C., of Chicago, asking the court to order the law firm to refund all fees paid to the firm and repay the insurer any amount paid to Chicago State to cover the $3.3 million judgment. The case centers on actions the insurer alleged were taken by the Pugh firm in the wake of the verdict handed down by a Cook County jury in February 2014. The jury had found in favor of the whistleblower, James Crowley, awarding him $480,000 in back pay and punitive damages of $2 million, after determining the university had wrongly fired him, allegedly in retaliation for releasing public documents over the alleged objections of former CSU President Wayne Watson. Cook County Judge James P. McCarthy, citing state law, then doubled his back pay award to $960,000, and ordered CSU to pay Crowley’s attorneys $318,000, plus $60,000 in interest.
On Aug. 29, Illinois National Insurance Company, an affiliate of AIG, filed suit in Cook County Circuit Court against the law firm of Pugh Jones & Johnson P.C., of Chicago, asking the court to order the law firm to refund all fees paid to the firm and repay the insurer any amount paid to Chicago State to cover the $3.3 million judgment. The case centers on actions the insurer alleged were taken by the Pugh firm in the wake of the verdict handed down by a Cook County jury in February 2014. The jury had found in favor of the whistleblower, James Crowley, awarding him $480,000 in back pay and punitive damages of $2 million, after determining the university had wrongly fired him, allegedly in retaliation for releasing public documents over the alleged objections of former CSU President Wayne Watson. Cook County Judge James P. McCarthy, citing state law, then doubled his back pay award to $960,000, and ordered CSU to pay Crowley’s attorneys $318,000, plus $60,000 in interest.
The judgments came as part of a years-long litigation that
began in 2010 after CSU fired Crowley, allegedly over financial irregularities
at the CSU convocation center, which Crowley supervised as part of his job
duties. However, Crowley argued that was merely a pretense to fire him for
defying the alleged threats of Watson, who had objected to Crowley’s decision
to release documents requested under the Freedom of Information Act, which
provided details on actions Watson had taken at the university as he
transitioned from his position as head of the Chicago City Colleges to his new
role as CSU president. Public statements had indicated Watson intended to
retire from the City Colleges and begin drawing a pension, in addition to
collecting a salary from Chicago State. However, under the rules of the State
University Retirement Systems (SURS), Watson needed to wait three months
between jobs in order to start collecting his City Colleges pension. But during
that three month period, allegations arose that Watson, while not yet
officially installed as president, had used university money to “renovate the
so called ‘presidential residence’” at CSU and was “making decisions at CSU.”
As Crowley prepared to release the requested FOIA documents pertaining to these
matters, Watson allegedly threatened him, if he released the documents or did
not first allow Watson to discuss the documents with a “friendly journalist for
damage control purposes.”
Crowley then released the documents, and brought the matter
to the attention of the Illinois Attorney General’s office. Following the
document release, the State Universities Retirement System denied Watson’s
request to draw his City Colleges pension at that time. Crowley was fired soon
after, and the university followed the termination with a complaint against
Crowley, who was also a lawyer, to the Illinois Attorney Registration and
Disciplinary Commission, seeking to initiate disciplinary proceedings against
Crowley. The ARDC rejected that complaint, court documents said. Following the
verdict and subsequent judgment, CSU appealed. But a state appellate panel
affirmed the lower court’s decisions, calling the university’s actions against
Crowley “thoroughly reprehensible.” In its lawsuit against the Pugh firm,
however, Illinois National Insurance asserted the judgments may not have been
as large as awarded, if the university’s lawyers had properly done their jobs.
The insurer said it believed the Pugh lawyers failed to properly challenge
elements of the decisions, or raise key questions at appropriate times. Among
these, the insurer alleged the Pugh lawyers did not properly question Crowley,
as a lawyer employed by CSU, could bring his retaliatory discharge claims, or
if he could collect the $2 million punitive damage award under the Illinois
Ethics Act. Illinois National also questioned whether the Pugh lawyers failed
to poll the jury or properly asked questions of the jury and its foreman. The
insurer also accused the Pugh lawyers of failure to “properly assess the case
and take advantage of settlement opportunities,” which the insurer said would
have amounted to “a small fraction of the ultimate verdict,” telling Illinois
National all the while “that CSU would likely prevail at trial.”
The lawsuit does not specify how much Illinois National has
paid either the Pugh firm or CSU to cover the costs of the defense against
Crowley’s lawsuit. Illinois National is represented in the action by attorneys
with the firm of Lewis Brisbois Bisgaard & Smith, of Chicago. Legal actions
surrounding the Crowley accusations and verdict, however, represent just one
such action still pending which involve CSU and date back to Watson’s tenure.
In April 2014, Glen Meeks, who had served as vice president
of administration and finance at CSU from November 2009 to March 2013, alleged
in a lawsuit also filed in Cook County Circuit Court, that he had been fired
after discovering and exposing allegedly deceitful actions taken by Watson. He
specifically alleged Watson had placed friends and a girlfriend on the
university’s payroll and used his social network to financially threaten the
university if school leadership terminated him. Meeks said he raised these
concerns with the university’s board of trustees, and was fired soon after. His
lawsuit remains pending. According to Cook County court records, the case has
gone to mediation, which is scheduled to be completed by October 21. Should the
mediation prove unsuccessful, a trial has been scheduled to begin Jan. 9, 2017.
Organizations in this Story Lewis Brisbois Bisgaard &
Smith LLP (/organizations/645057207-lewis-brisbois-bisgaard-smithllp/stories) 550
W Adams St Chicago, IL 60661; Pugh, Jones & Johnson, P.C.
(/organizations/644618550-pugh-jones-johnson-p-c/stories) 180 N LaSalle St
Chicago, IL 60602 Chicago State University
(/organizations/644441853-chicago-state-university/stories) 9501 South King
Drive Chicago, IL 60628
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