Patton & Ryan Secures Not Guilty Verdict in the Face of Fraud

August 17, 2016

A Vandenberg Case Update

On May 19, 2016, Patton & Ryan obtained a long-awaited and hard-fought victory when Judge Daniel J. Lynch, after having overturned the $25 million settlement fraudulently procured by Plaintiffs’ Counsel, entered judgment on the jury’s verdict in favor of Brunswick Corporation and Brunswick Boat Group in the case of Vandenberg v. Brunswick et al.

In June of 2015, Patton & Ryan successfully defended Brunswick Corporation and Brunswick Boat Group against product liability claims brought by Scot and Patricia Vandenberg after Plaintiff Scot Vandenberg fell from the upper deck of a boat manufactured by Brunswick. Originally built to specifications for a private owner, the boat was later sold to another Defendant in this action, a company called RQM, which modified it and char­tered it to privately booked parties, but allegedly failed to update its safety features or register it for commercial use. Scot Vandenberg suffered the fall that left him paralyzed from the chest down while aboard the boat for a daytime Lake Michigan party cruise that he had booked for his company. Plaintiffs, represented by Mark McNabola and Ruth Degnan of the McNabola Law Group, filed suit in the Circuit Court of Cook County against the boat manufacturer and RQM, who settled out before trial. Partners John W. Patton, Jr. and John A. Ouska, who has since retired, led the Patton & Ryan trial team.

On June 9, 2015, after a nearly month long trial before Judge Elizabeth M. Budzinski, the jury received the case. Just 90 minutes into delibera­tions, the jury sent out a question that read, “Can we find fault with RQM without finding fault with Brunswick?” Though Judge Budzinski instructed her clerk, Tatiana Agee, to call Counsel for both sides back to the courthouse to discuss the note, Agee called only Plaintiffs’ attorney Mark McNabola, and proceeded to read the question to him in hushed tones. McNabola then requested a delay, concealed his improperly acquired knowl­edge of the note’s contents from the Court and the Defense, and rushed to settle the case for an earlier offered $25 million by Brunswick.

Nearly half an hour after reading McNabola the note, and over ten minutes after McNabola secured the settlement, Agee finally con­tacted Patton to come to court to discuss the settlement and a note that “had just come out.”

When Counsel for both sides finally arrived, the Judge asked what had caused the delay, explaining that the jury was waiting for an answer. Plaintiffs’ Counsel Ruth Degnan gave no response, choos­ing to also remain silent about her superior knowledge of the note, the Judge’s orders to appear in court, and the delay – even after the Judge then read the note aloud. At Patton’s request, Judge Budzins­ki allowed the jury to continue deliberating after answering the jury’s question in writing. Within ten minutes of receiving the answer, the jury returned a fully signed, unanimous verdict in favor of Brunswick.

Patton & Ryan Questions Validity of Settlement

After learning that the jury had actually sent out the note nearly 30 minutes before he was contacted by Agee, Patton realized that something improper had likely occurred and rushed to the court­house, alerted Judge Budzinski, and requested an evidentiary hear­ing to determine the circumstances under which the settlement was procured. The Defense team mobilized and immediately filed a post-trial motion to vacate the settlement and enter judgment on the verdict.

After conducting her own internal investigation, the Judge filed a memorandum order detailing her findings on June 15, 2015, stating that Agee denied reading the note to Plaintiffs’ Counsel, but that the Court’s legal extern had told her that she witnessed Agee whisper­ing the content of the note on that first phone call to McNabola. Fol­lowing the filing of the order, Judge Budzinski recused herself due to her status as a potential witness.

Post-Trial Evidentiary Hearing and Motion to Vacate the Settle­ment

After months of motion practice, the evidentiary hearing finally oc­curred in October of 2015, with Judge Daniel J. Lynch presiding over the proceedings. As the trial attorneys for both sides were also witnesses, Dan K. Webb of Winston & Strawn, LLP was brought on as additional representation for Brunswick, and C. Barry Montgom­ery of Williams, Montgomery & John, Ltd. appeared on behalf of the Plaintiffs.

During the hearing, the Court heard testimony from the trial attor­neys for Plaintiffs and Defendants, administrative clerk Agee, extern Brook Reynolds, and the Vandenbergs. The Defense team, having obtained phone records under subpoena from the Circuit Court of Cook County, the McNabola Law Group, and Patton & Ryan, LLC, presented evidence that unequivocally demonstrated that McNabo­la received notice of the existence of the note almost a full half hour prior to John W. Patton, Jr., and that Agee had never attempted to contact Patton.

During his testimony, McNabola admitted that he knew the contents of the note prior to negotiating the settlement and that he made no effort to inform either John W. Patton, Jr. or the Court. While under questioning, Degnan was also forced to admit that she kept quiet about McNabola’s knowledge of the note’s contents despite having the opportunity to tell the Judge and Defense Counsel in chambers. Extern Brook Reynolds also delivered the shocking testimony that after she heard Agee whisper the contents of the note to McNabola over the phone, Agee told her “I always like to give [plaintiffs] a little more of an opportunity to kind of settle or figure this out first before the defense.”

Judge Vacates $25 Million Settlement

On January 19, 2016, Judge Lynch vacated the $25 million settle­ment on a myriad of legal grounds, including: fraud in the induce­ment, unilateral mistake, due process, equitable estoppel, public policy, and “the general notion of the obstruction of justice.” He also discussed the potential applicability of criminal statutes to this situa­tion, specifically 735 ILCS 5/32-8, Tampering with a Public Record.

In his ruling, Judge Lynch twice noted that he found Patton to be a credible witness while stating that he did not believe Plaintiffs’ contention that McNabola thought Defendants had also received meaningful notice of the note. Specifically, Judge Lynch stated that, “McNabola had clear and convincing signs that he alone had taken possession of superior knowledge. He had negotiated a unilateral delay followed by a unilateral mistake of fact through civil fraud.” He also rejected Plaintiffs’ attempts to deny the materiality of the jury’s question, which he said related “…to the central issue in this case,” and was, in fact, “highly suggestive of a favorable outcome for the defendant one hour and 20 to 30 minutes after the start of deliberations.” After discussing in detail the numerous violations of the Illinois Professional Rules of Conduct made in pursuit of secur­ing the settlement, Judge Lynch summed up his findings as follows:

“…an attorney has a legal and equitable duty to reveal in a timely and meaningful way both the mere existence of, and further, the full contents of a jury note to all parties whom the attorney reasonably should know may be unaware of either. That duty is at least equal to the Court’s same minimum duty. It is owed to the attorney’s opponent and transcends duties owed to the attorney’s own client. That particular duty is owed to due process itself.”

Judge Lynch Reconvenes Original Jury

Following extensive further motion practice, Judge Lynch deter­mined that justice required that he reconvene and poll the jury regarding their June 9, 2015 verdict. On February 22, 2016, under thorough questioning by Judge Lynch, all twelve jurors confirmed that they had arrived at their verdict for Brunswick free of any improper influence, and that had Judge Budzinksi asked them to pronounce that verdict in open court that same day, they would have done so. Judge Lynch dismissed the jury, allowed the parties time to each file a supplemental brief on any due process issues not yet examined by the Court, and set a date for final arguments and possible ruling on the one issue that remained before the Court, whether to enter judgment on the jury verdict.

Plaintiffs Continue Desperate Attempts to Salvage Settlement

Plaintiffs continued to take measures to get their hands on the funds from the overturned settlement, and brought in yet another set of at­torneys, Joseph A. Power of Power, Rogers & Smith and John Kral­ovec of Kralovec, Jambois & Schwartz to replace Mark McNabola and Barry Montgomery as their representation.

Though the Vandenbergs had attended each hearing in front of Judge Lynch that addressed McNabola’s fraudulent inducement of the settlement, Plaintiffs’ new Counsel argued, among other things, that they only learned of his indiscretions when Judge Lynch ruled to overturn the settlement. Plaintiffs’ Counsel also en­gaged well known attorneys with no involvement in this case to sign affidavits speculating on how they would have handled the events of June 9, 2015. On March 9, 2016, Plaintiffs’ Counsel contacted Brunswick’s representatives and attempted to accept Brunswick’s long dead June 9, 2015 settlement offer, after which they filed a Motion to Enforce Settlement.

Defense Secures Entry of Not Guilty Verdict

On May 19, 2016, nearly a year after the jury executed the verdict for Brunswick, Judge Lynch entered judgment on that verdict. He also ruled on two other motions before the court.

First, Judge Lynch granted Defendants’ Motion to Strike the Affi­davits of the unrelated attorneys, stating that the affidavits, “which are identical to the Vandenbergs’ present position… [are] present­ed to the Court in a way that is both time and scienter warped,” and that they completely ignored “the superseding due process and constitutional aspects of this fact pattern” that are at the heart of this case. He went on to say that the record demonstrated that, when Defendants’ allowed the settlement to be placed on the re­cord, they were “honoring the settlement that they had agreed to in good faith, all while facing the immediate appearance of bad timing or a court delay in communicating to both sides…[and] did not know during that particular time period was that the settlement had actually been procured through apparent crime, bad faith, and fraud.”

Next, the Court denied Plaintiffs’ Motion to Enforce Settlement, explaining that “[t]he suggestion that the offer remained open for acceptance on March 9th of this year, nine months after it was communicated, had been overtaken by the jury’s question, crime, bad faith, fraud, and clear abuse of due process.”

Finally, and most importantly, Judge Lynch granted Defendants’ Motion to Enter Judgment on the Jury Verdict. Judge Lynch ruled that he was convinced that in accordance with the law and rules governing trials in Cook County, the jury properly reached a unani­mous verdict in favor of Brunswick as indicated by their fully ex­ecuted Verdict Form B. Eloquently summarizing the reasoning for his conclusion, Judge Lynch stated:

“[w]hen a Court is faced with the ultimate power to put forth and find equitable and special remedies, it must do so in a way that is fair by being just…It cannot equita­bly grant a mistrial as a lesser even public policy based remedy, as that would trample the due process rights of Brunswick on the fact of this jury’s clear verdict.”