Opinion ID: 1353826
Heading Depth: 2
Heading Rank: 3

Heading: Chrysler v. Carey & DanisFalse and Misleading Statements

Text: Respondents Carey and Danis notified their malpractice insurer of a potential lawsuit by Chrysler and gave the insurer copies of documents that could be relevantincluding the Grossman letter. The insurer later met with Lou Basso, the attorney Carey and Danis had chosen to represent them. [12] The insurer gave the documents respondents had compiled to Mr. Basso. Basso made copies and then returned the documents to the insurer. Carey and Danis had also given the original Grossman letter to Basso, along with some other documents, when Basso was originally retained. On March 26, 1996, Chrysler sued Carey & Danis for breach of fiduciary duty and respondents were served with process. Chrysler alleged that Carey & Danis, though not attorneys of record, assisted a group of lawyers in prosecuting ABS class action claims against Chrysler. Chrysler served interrogatories and requests for production upon both Carey and Danis, individually. Between March 26, 1996 (when respondents were served) and October 28, 1996 (when respondents submitted sworn discovery answers), there was a good deal of communication between the members of the group. Among these communications was a series of letters and faxes regarding Chrysler ABS cases from members of the group that were either sent directly or carbon copied to either Carey & Danis or respondents individually. However, both Carey and Danis testified that only a few of these documents actually made their way to their desks. Respondents had instructed their staff that Carey & Danis was not to get any Chrysler materials and that such correspondence should be given to David Danis. The instruction to cut-off any correspondence regarding Chrysler remained, even after discovery in Chrysler v. Carey & Danis had begun and Chrysler had specifically requested such documents. Despite their denials, Carey & Danis' involvement in the prosecution of the class action lawsuits against Chrysler continued. On March 28, 1996only two days after he and Danis were served with processCarey dictated a memorandum to the file regarding the potential use of a witness named Sheridan. Carey stated, Sheridan should be useful in two respects: (1) as an expert witness in the New Jersey ABS case regarding defects in Chrysler's antilock braking system; and (2) as a fact witness in Chrysler's suit against us regarding Chrysler's outrageous and abusive practices. Carey told Richard Paletta, a lawyer in the group, about the Alabama Chrysler ABS case over lunch one day. Carey explained that the case was filed in Alabama because David Danis was concerned about getting cut out of the attorneys' fees in the New Jersey case. On October 28, 1996, both Carey and Danis provided sworn answers to identical sets of interrogatories. Interrogatory No. 2 to each was as follows: State whether you have communicated with anyone (other than Dennis Beam and .. . any employee of Carey & Danis, L.L.C.) regarding the subject matter of the St. Louis, Hattiesburg, or New Jersey class actions referenced ..., or the class action suit Betty Brown, et al. v. Chrysler Corp. et al., filed in the Circuit Court of Sumter County, Alabama. For each such communication, state the following: a. the time and place at which it was made; b. the name and address of each person who was a party to such communication; c. the substance of the communication providing as much detail as possible; d. identification of any document or recording relating to such communication. Respondents each provided the following sworn answer: ANSWER:

Document Request No. 12 requested each respondent to produce any correspondence, memoranda, or notes relating to the subject matter of the cases mentioned in Interrogatory No. 2. Carey and Danis both answered: No such documents are in the possession of Defendants. The lawyers representing Chrysler did not believe Carey's and Danis' answers to their interrogatories. Chrysler subpoenaed other members of the ABS group: Mr. Phebus in Illinois, Mr. Deakle in Mississippi, and Danis, Cooper. Chrysler also obtained federal court orders pertaining to these documents. These efforts resulted in the production of forty-two pieces of correspondence that were not produced by either Carey or Danis. After the documents were ordered produced, Joseph Danis wrote a letter to members of the group asking them to not send Carey & Danis any correspondence involving Chrysler litigation, as Carey & Danis did not have any involvement in this litigation. Respondents explained their failure to identify or acknowledge the existence of the documents by saying they had never seen them or had seen them but forgotten about them, thrown them away, or given them to David Danis. Respondents did not forget about the meeting with Blumenfeld lawyers discussing the Beam case, [13] but claimed it was not subject to the interrogatory because it was presuit. Respondents also consistently defended this conduct by blaming their attorney, even though they reviewed and signed their own interrogatories. For example, when asked about his answer to Interrogatory No. 2, Carey answered, It was prepared by my attorney. I believed it to be true, honest, and correct at the time. Joseph Danis went so far in his Disciplinary Hearing testimony as to question whether or not he even saw his interrogatory answers. Danis testified: I don't have any recollection of ever seeing those requests. .... It's come to my attention that my attorney received a request for production of documents directed at my firm and myself as well as my partner. .... Again, it's come to my attention that Mr. Wuestling prepared a response. I have a vague recollection that Rick had prepared a response and wanted me to sign the response. I have no recollection reviewing any interrogatories or document requests, or executing them. .... Now I have reason to believe that I never executed my interrogatories. However, in his deposition testimony, Danis specifically said, I actually recall this being sent for my execution and that he reviewed the responses for their authenticity and genuineness. On March 13, 1997, Judge Perry of the Federal District Court for the Eastern District of Missouri entered discovery orders in the case. With respect to Document Request No. 8, Judge Perry ordered both Carey and Danis to produce all documents that pertained or referred to actual or anticipated litigation against Chrysler Corporation regarding any anti-lock brakes, heater cores or vehicle latches. Pursuant to Document Request No. 25, Judge Perry ordered production of all documents which refer or relate to fee sharing or joint representation agreements with any attorneys or law firms concerning a client represented by Carey & Danis. Again, each respondent failed to provide any such documents to Chrysler and each responded, With regard to matters in which Chrysler was a party, no such documents exist. Defendant never had a fee arrangement on the Beam case or any Chrysler matter, and defendant has never received any fee derived from any matter related to Chrysler. Chrysler v. Carey & Danis went to trial in September 1998. On the fourth day of trial, respondents' attorney, Lou Basso, sought to use the Grossman letter to impeach some evidence. Chrysler's attorneys realized that the letter had never been produced during the course of discoveryeven after the appearance of the forty-two documents and Judge Perry's prior discovery orders. Chrysler moved to strike Carey & Danis' answer. The Grossman letter states in pertinent part: Gentlemen: Both my father, David Danis, and I enjoyed meeting with you last Sunday. We look forward to working with you in this matter and the other matters we discussed in the future. We have preliminarily discussed your suggestion of consolidating our cases and pursuing the matter [in New Jersey]. Your suggestion has merit, and we are seriously entertaining the invitation.... Please provide us with a general analysis of what you anticipate our role in the litigation would be if we consolidated our case, the Mississippi case and join the other plaintiffs we have lined up in other states to your suit. It is my suggestion that we negotiate some percentage of attorney fee allocation at the outset to protect both of our interests, and leave some flexibility for the remainder so that it may be adjusted according to the amount of work and contribution provided by each party in the litigation ........ This case has good merit and there will be plenty of money for all of the participants .... .... Very truly yours, CAREY & DANIS, L.L.C. /s/ Joseph P. Danis Respondents' position regarding their failure to identify this letter is somewhat inconsistent. First, they maintain that the Grossman letter is not subject to the order because there was never any actual fee agreement. With respect to the letter, Carey testified, There is a proposal to share legal fees. There's no written agreement or arrangement that I'm aware of that ever existed. In the alternative, respondents maintain that failure to produce the letter was out of inadvertence or negligence, not dishonesty. Respondents' attorney, Lou Basso, explained that at the trial there was reference to the New Jersey litigation as a conspiracy in opening statement and that this was sort of a ... twist that happened at trial and we didn't know where they were going with it. Basso asked [Danis] and [Carey] the night before if they had any airline tickets, or anything like that, to prove that they had gone out to New Jersey, or anything. And they thought in [sic] having this. Basso asked them if they remembered the letter and they looked at [him] shocked. They didn't even remember writing the letter. Basso found the letter in a black notebook on some documents that [he] had received very early on in the lawsuit. He testified that he remembered these events specifically, because Joe [Danis] looked at me and goes, `Well, where did you get this? Where did this come from?' Joseph Danis' testimony at the disciplinary hearing was slightly different and somewhat inconsistent. First, Danis said he remembered the letter vividly. Q: (By Ms. Church) Well, do you remember it? A: Yeah, I remember it vividly. Q: That's the letter ... dated December 13, 1995 to Stanley Grossman? A: That's correct. .... Q: (By Ms. Church) Do you recall writing this letter? A: Yes, I do. However, later in his testimony, Danis testified: Q: So one of your lawyer's had it? A: That's correct. Q: You knew it existed? A: I didn't recall that it existed. In fact, I had forgot about it until sometime during the middle of trial Lou [Basso] showed us this letter. Q: Would you agree with me that it was never turned over in response to the request for production of documents for the interrogatory answer? A: It was turned over to our attorneys through our insurance carrier. And what they turned over to Chrysler I don't know. I did not review all the documents that were turned over. Danis testified that, even before he and Carey had been served in the Chrysler v. Carey & Danis lawsuit, Carey & Danis' malpractice insurer turned over the Grossman letter to Mr. Basso. Danis testified that Basso gave Carey & Danis' other attorney, Rick Wuestling, some of the documents, but did not give Wuestling the Grossman letter out of inadvertence. Danis did confirm that during trial, Basso remembered the letter and went and grabbed it for the purpose of cross-examination.... Judge Perry did not believe that failure to produce the document was out of mere inadvertence. After reviewing respondents' answers to Chrysler's interrogatories and requests for production along with the Grossman letter and the other allegedly responsive documents, Judge Perry struck respondents' answer. In discussing the appropriateness of her sanction, Judge Perry commented at length on respondents' conduct: I, as I told you, assumed that all lawyers were telling the truth, because I believe that's what our profession requires of us. .... I was shocked to see all of this communication between Mr. Carey and Danis and these lawyers, but I figured they had an explanation .... [referring to the forty-two documents found by Chrysler and not produced by Respondents] .... I know that lawyers are busy, but I don't know how a lawyer could forget a trip to New Jersey to talk about antilock brake litigation. Of course, it didn't have to be a trip to New Jersey.... It says I enjoyed a meeting with you last Sunday. Sunday afternoon meetings with attorneys in my experience are not something that people inadvertently forget. .... I don't believe that I can let this case just sit in the normal remedy of let the jury see that .. . they were lying. The problem is this. It's deeper. These are lawyers, I don't know if this jury is going to come out of here thinking that's just how lawyers are .... [T]he defense in this case, although I have not allowed all of this to be presented to the jury, has somewhat been all lawyers cheat and lie, therefore what we did wasn't so bad. I'm not saying that's really the defense you have presented, but the implication has been there, and so I'm concerned ... [that the jury] will think that's what we all do, and I have to tell you gentlemen, our profession is better than that. We don't all do that. We don't all do that. This is the most egregious abuse I have seen in my court.... .... What [the Grossman letter] tells me is that we're not following the normal rules of discovery .... [T]he problem I have is [the Grossman letter] makes me think it's the tip of the iceberg; makes me think that disclosure in this case has not been done in accordance with the rules of civil procedure, and so I no longer have faith in the process .... .... Why didn't your clients tell the truth about [the documents] when they were asked under oath? That's the problem Mr. Basso. You know, I've told you my opinion and I'm speaking very harshly, but I'm sorry, these are lawyers who lied, and that's not something I'm used to seeing. I assume every lawyer who stands in front of me is telling me the truth, and I can tell you that until this case, there is not a lawyer in this room or frankly very many in the Eastern District of Missouri who have not given me good reason to follow that assumption in every case. Most lawyers tell me the truth. Most lawyers do what they're supposed to do. As a result of their answer being struck, a default judgment was entered against Carey & Danis in the amount of $850,000. The judgment was affirmed against Carey & Danis by the Eighth Circuit Court of Appeals in Chrysler Corp. v. Carey, 186 F.3d 1016 (8th Cir.1999).