It is said that money is the root of all evil. However, it is also true, that all too often it is the root of most lawsuits as well. The War of the Shysters is currently raging in Rankin County, as attorney Chuck McRae brings battle to several plaintiff's attorneys over the settlement of a class action lawsuit. McRae and his clients claim the attorneys pocketed millions of dollars for themselves, while the plaintiffs recovered little. McRae sued Freese & Goss, Dennis Sweet, III, Sheila Bossier, and several John Does in Rankin County Chancery Court in May 2014.
Crystal Springs residents claimed they suffered from a chemical leak at the Kuhlman electrical plant. The plant is owned by Borg Warner. The defendant lawyers in the current lawsuit filed several class action lawsuits in federal court and alleged they represented over 3,000 plaintiffs. The list was reduced to 348 plaintiffs. However, the lawyers allegedly submitted another list of 3,249 victims in 2010 even though those "victims" were rejected by the Borg. The victims in the second list did not actually sue the Borg, but the lawyers asked to include them in any settlement. The case went to mediation and Borg agreed to a settlement capped at a "multi-million dollar amount". The settlement included the list that had over 3,000 "clients".
The defendants claim that McRae is just churning up baseless lawsuits. They argued in a petition to the Mississippi Supreme Court:
This case is one of an ever-growing series of redundant lawsuits perpetuated by Respondent's counsel, Chuck McRae and his law firm, the McRae Law Firm (collectively, "McRae"). To date, McRae has filed nine lawsuits in Mississippi state and federal courts against the attorney Petitioners and others arising from the 20 I 0-2011 settlement of certain PCB litigation in Mississippi.....Attorneys David Kaufman and Richard Cirilli of the Brunini Law Firm represent the defendants.
Wilson, Reyes, and Taylor claim they were never provided a copy of the master settlement agreement, the individual claim amounts, any settlement agreements with Medicaid or Medicare, the total amount of the settlement expense, and other information.
The lawsuit charges the defendants required the Borg to place all settlement funds in banks outside of Mississippi to avoid any accounting of the funds. Some highlights of the complaint are:
Further, the Defendants delayed payment to these Plaintiffs and instead paid themselves without advising the Plaintiffs and others of their actions. The Defendants unjustly enriched themselves with all fees and expenses that they considered to be theirs in the latter part of 2010 and early 2011 to the detriment of the Plaintiffs and others that participated. The Defendants unjustly enriched themselves by paying off their line of credit in excess of $1,000,000.00 (one million dollars) to a bank owned and operated by one (1) of the Defendants, Richard Freese, and investing their monies and operating their numerous businesses all to the detriment to the Plaintiffs and others.
The Defendants have never explained or shown the total expenses to the Plaintiffs or any of their representatives. The Defendants have refused to produce or verify a total amount of "expenses" to the Plaintiffs and others. The acts and omissions of the Defendants, commencing in 2007 through the negotiations that commenced in January, 2010 as well as the acts and omissions of the distribution and withholding of the Plaintiffs and others' monies through the present time, has caused and continues to cause the Plaintiffs damage. The Defendants failed to secure the funds and invest the monies in an interest bearing account but allowed the Defendant Freese's bank to unjustly enrich itself and Freese. Further, the other Defendants allowed this to occur....
Unbeknown to the Plaintiffs and others, the Defendants, particularly Bossier, Freese, and Goss, agreed and negotiated with BorgWarner that the Defendants shall hold the settlement funds in trust and in escrow at Compass/SouthCity/First Partners Bank until certain specific conditions have been met for the release of funds to these Plaintiffs and others. These Defendants had to submit and determine, on or before September I , 2010, the amount each claimant was to receive, including attorney's fees and expenses. Also, the Defendants were to submit releases and settlement agreements of each claimant on or before September 21, 2010. Furthermore, the Defendants agreed to report to BorgWarner on or about January 5, 2011, the liens or alleged liens by Medicare and Medicaid, or any other governmental entity for each claimant including the plaintiffs. Also, the Defendants were to report to Medicare or Medicaid the existence of the funds available.
After the Defendants had agreed to all of the above, a written agreement as to the payment dates was signed. Upon information and belief, the Defendants caused the monies to be placed into SouthCity Bank, a state bank in Alabama, in which the Attorney Defendant, Richard Freese, was and is currently a part owner, incorporator, director, and shareholder. This bank, in the six (6) years of its existence, has changed its name three (3) times. It was originally doing business as Compass Bank, then SouthCity Bank, and is currently operating as First Partners Bank. The monies from BorgWarner were wire transferred on or about November 5, 2010 to Compass/SouthCity/First Partners Bank in Birmingham, Alabama. Five (5) days later, the Defendants disbursed $6,903,876.81 to themselves, but paid nothing to the Plaintiffs and other clients. See the Articles of Incorporation and Amendment attached as Exhibit "K." These Defendants never informed the Plaintiffs or any of the "clients" of the Defendants' interests in the bank nor did they put the monies into an interest bearing account for the benefit of the clients. These Defendants knew that it was going to take time to resolve the issues of each of the clients before full and final payment would be made. Instead, these Defendants looked only to their personal interest and secretly paid themselves within five (5) days approximately $7,000,000.00 (seven million dollars) into the operating account of Freese and Goss,PLLC in Birmingham. Simultaneously, they disbursed the following checks to themselves: Sheila M.Bossier $690,386.79; Richard A. Freese $862,441.61, Tim K. Goss $862,441.61, SouthCity Bank line of credit loans for Richard Freese $500,000.00, Tim K. Goss $500,000.00, and MedResolve, LLC $39,000 (These Defendants own this company). See Exhibit "J" attached hereto. In committing the acts complained of herein, Defendants' actions and misconduct breached their fiduciary duties for which the Defendants are liable to Plaintiffs for monetary damages....
Additionally, Defendants paid their line of credit held at Compass/SouthCity/First Partners Bank five (5) days after receiving $7,000,000.00 (seven million dollars) from the BorgWarner settlement, which was the money held in "escrow" account at Compass/SouthCity/First Partners Bank. With the placement of said monies into their account, Compass/SouthCity/First Partners Bank was able to use this money for profit and gave the Defendants collateral for their in excess of $1,000.000.00 (one million dollar) per office line of credit.
By placing the monies into his own personal bank, Richard Freese and the other Defendants in effect used the clients' monies for their own personal gain. The Defendants took their monies out immediately but allowed their bank to use the clients' money interest free. Said Defendants were in no hurry to disburse clients' money because the Defendants and Compass/SouthCity/First Partners Bank received all the benefits. The Defendants made no attempt, knowing that it would take a lengthy time to disburse, of putting monies into an account where the clients would earn interest,nor did they advise or seek client approval of the use of the monies. The clients relied on the Defendants and in their fiduciary capacity to their detriment.
From this same bank account, the Defendants had Compass/SouthCity/First Partners Bank wire transfer monies to the operating account of Freese and Goss, PLLC at Wells Fargo Bank. Freese and Goss, PLLC had maintained this operating account since their inception. Without disbursing any monies to their clients or notifying anyone, they immediately paid themselves and continued to convert over $3,300,000.00 (three million three hundred thousand dollars) to their personal use including payments to Bossier, their alter ego. .....
The Defendants took, without authority, and charged "settlement administration" fees on a percentage basis of the Plaintiffs' total settlement. However, these Defendants never charged any of the other "clients" for settlement administration and therefore violated their fiduciary duties to the Plaintiffs. Further, these Defendants had no authority under any contract to charge "settlement administration" as either cost or fees. The Defendants profited from the Plaintiffs and others and thereby breached their fiduciary duties to the Plaintiffs and others.
These Defendants had BorgWarner place all of the monies outside the state of Mississippi whereby no accounting can be obtained as to the transaction of the money, even though it has been requested. This bank has always resisted producing any documents....The lawsuit also claims the defendant attorneys never provided an itemized list of expenses. Wilson et al argued the funds should be placed in a Mississippi bank or deposited with the Chancery Court since the plaintiffs are Mississippi citizens. It also asks the court to oversee the distribution of the settlement funds and requests an injunction against the defendants.
The defendants are charged with several counts of breach of attorney client contract, breach of fiduciary duty, fraudulent inducement, tortius indifference with the original attorney contract, unjust enrichment and other torts. The plaintiffs ask the court to order an accounting of all settlement proceeds, interest, damages, punitive damages, attorney's fees, and "disgorge" any attorney fees charged to plaintiffs by the defendants "for their conduct and breach of fiduciary duties."
The case has still not gone to trial as legal skirmishing and procedural warfare broke out between the two sides in Rankin County. A second front in this war opened up at the Mississippi Supreme Court. (Click on this link to see copy of docket and filings in that court.) The Court transferred the case to circuit court in January. The case is assigned to Circuit Judge Steve Ratcliff. The plaintiffs posted a notice of a hearing scheduled for August 22 at 1:00 PM on the motion for the injunction and transfer of funds.
Hmm..... the Rojos one one side, the Baxters on the other.....
20 comments:
Anonymous comments on Chuck McRae? Pass the popcorn.
This is going to be interesting. McCrae has a great case. The defendants could get in legal trouble after all this shakes out.
I thought all class action lawsuits came out that way. Lawyers get rich and the people get a couple of $$.
3000 plaintiffs ????
Jackpot justice strikes again !!
Reminds me of that old lawyer joke about it being so cold the lawyers have their hands in their own pockets...except that times are so hard, lawyers have their hands in each other's pockets....
Interesting that a dirtbag plaintiff's whore like Chuck McRae would lay venue in Rankin Chancery. Guarantee you he wouldn't do so if he were taking the case to a jury.
But given the slimy, sleazy nature of Rankin County Chancellors of late (not including the elder Zebert), I imagine Chucky knew exactly what he was doing.
When I was in law school and he was still on the Supreme Court, I used to see him at George Street all the time. Liquored up, loud and obnoxious, denigrating the help and flipping people off across the name with a shouted "F you." The guy's a disgrace.
Exactly the reason Ole Miss an MC Law need to close. Less asshattery like this.
Usually people just get coupons.
before anybody got a check for 7 million....releases were had from all the people who were clients.
I guarantee you that not a single person who was not a client was a part of the settlement.
Chuck files some bogus shit...and this is more of the same.
SHANE LANGSTON, ATTORNEY IS CHUCK'S SON-IN-LAW AND LANGSTON IS A FORMER PARTNER OF LANGSTON FREEZE & SWEET, PLLC. LANGSTON MADE ABOUT $30 MILLION IN ONE YEAR AND MOVED TO FORT WORTH, TEXAS. THE WOLVES RUN IN PACKS. CHUCK IS A SLOB AND IS NOT VERY WELL THOUGHT OF---AS MY OLD DEAD MOM USE TO SAY---"THEY ARE NOTHING BUT WHITE TRASH".
LOOKS LIKE THE WOLVES ARE TURNING ON EACH OTHER---WOW, HOW UNUSUAL IS THAT ?????? IT'S PROVEN ONCE AGAIN---IT'S ALL ABOUT THE MONEY !!!!
I can tell that KF really enjoyed getting to write "the Borg" multiple times in this post.
What is the name of the bank they own?
In Mississippi?
"bank owned and operated by one (1) of the Defendants, Richard Freese"
3000 plaintiffs?!!! That's not that many people living in proximity to the Kuhlman Plant! This needs to be researched . Also, there IS a deep water well and elevated water tank very close to the plant. What did the dept of health ever have to say about this? I wouldn't drink the water in Crystal Springs if you held a gun to my head! This plant has poisoned the soul and it's a known fact. They need to bring the DEQ into this equation
I can tell that KF really enjoyed getting to write "the Borg" multiple times in this post.
Resistance is futile.
I just can't help recalling him on that white Harley slip-sliding around the Waterworks Curve at 88 mph.
He and Hopalong Kirksey made a swell pair up at Ratliff back in the day. Leather, boots, beer, tassles and all.
7:15, DEQ and the EPA have been involved with the Kuhlman plant and Borg-Warner since early 2000. There have been rounds of civil lawsuits and settlements in addition to the ones that are the subject of McRae's suit. This isn't a new event by any means.
Sure they cheater their clients, they are lawyers. They have a license to steal.
3:14; On your family computer - that little key that says Caps Lock - Press it once.
Federal District Court Judge Tom Lee apparently was not impressed with McRae's antics. He dismissed one of the class action lawsuits McRae filed on behalf of the lawyers' former clients and had some really revealing statements in his rulings about what the cases really are about:
As defendants have repeatedly pointed out, this was lawyer-driven litigation. Plaintiffs, in the court's view never even fully understood what the litigation was about.
No serious argument can be made that Bobby Gordon is an adequate class representative. The deposition excerpts presented by plaintiffs in support of the class certification motion demonstrate that Gordon has barely a clue what this case is about. That is, she lacks even a basic understanding of the litigation.
In fact, as the court observed in its opinion denying class certification, plaintiffs herein did not seek out counsel to file suit but rather were solicited to do so, and they do not appear to be more than vaguely aware (if at all) of how they have allegedly been wronged.
I read in some of the papers in those cases that McRae apparently was attempting to use the lawsuits he filed on behalf of the lawyers' former clients as leverage to force the lawyers to settle with his client attorney Don Mitchell. Mitchell and the lawyers McRae sued in the Rankin County lawsuit apparently jointly represented the PCB claimants and have a pending fee dispute case. Looks like that plan is not working so well.
99% of lawyers give the rest a bad name....
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