Wednesday, January 6, 2010

Judge sanctions lawyers: fraud in DaimlerChrysler defective product case

by Adolfo Pesquera
(originally published May 19, 2000 in the San Antonio Express-News; reprinted summer of 2000 in Reader's Digest)

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District Judge David Peeples slammed three attorneys fighting for their professional lives with devastating sanctions Thursday at the close of an inquiry into evidence tampering in a $2 billion product liability suit.


The 224th district judge ordered attorneys Robert Kugle, Andrew Toscano and Trey Wilson to pay more than $865,000 in legal fees incurred by law firms hired by DaimlerChrysler.

Kugle is senior partner of the Kugle Law Firm that was representing Juan Fabila and his wife. Fabila's two children and two sisters were killed in a 1996 car rollover in Mexico.

The civil court judge also said he would report his findings to the State Bar of Texas and to the Bexar County district attorney for possible action.

DaimlerChrysler's allegations of evidence tampering and witness bribing were the basis of Thursday's punishment and could lead to disbarment and criminal indictments.

A federal investigation is under way. Roy Spezia of the Austin firm Clark, Thomas & Winters, one of several firms representing DaimlerChrysler, went to the U.S. attorney's office in late April after he concluded Kugle's attorneys knew as early as July 1998 that their lawsuit had no merit.

Spezia, in concert with the Brin & Brin firm of San Antonio, sought the sanctions. They also requested, and Peeples agreed, to dismiss the suit with no option to reinstate it.

In response to a question about the Fabilas' culpability, Peeples' parting shot at the end of the weeklong evidentiary hearing was: "Obviously, I find there is complicity in a number of ways."

George Brin, the automaker's lead counsel, constructed a conspiracy theory through many pieces of evidence, including:

  • Before-and-after photographs taken in summer 1998 that show the steering column intact, then broken. Whether a steering column decoupler was defective was at the heart of the Fabilas' allegations.
  • A Kugle investigator's report stating the steering mechanisms were "unremarkable," and an affidavit from the same investigator denying authorship of the report after DaimlerChrysler was anonymously sent a copy.
  • A deposition from a Mexican federal officer claiming that Bridgett Fabila told him her husband fell asleep while driving and that she contributed to the accident by jerking the steering wheel too hard. That officer and his partner claimed they were offered a bribe to change their testimony.
  • Testimony from the investigator who took the first set of photographs claiming Wilson told him in March that the suit was dismissed because his firm was "running a bluff, but we had our hand called."

    The Kugle Law Firm did not file to dismiss the suit until the photographs showing the steering column intact came to DaimlerChrysler's attention. Brin called Kugle's attempt to dismiss the suit tantamount to a confession.

    "I know Mr. Wilson is a young lawyer. I know Mr. Toscano is a relatively young lawyer. There is no triumph here for anyone," Brin said. "This has held our entire profession up to shame, and they need to be punished for it."

    Toscano never appeared in court, and Wilson and Stephen Garza, the investigator who denied writing the report, both asserted their Fifth Amendment right not to testify. Kugle waived his right to keep silent and in testimony Tuesday claimed DaimlerChrysler bribed witnesses and tampered with evidence.

    Toscano's attorney, John Pinckney, argued that blame might be pointed at Bridgett Fabila because an insurance investigator took her statement about the accident two years before DaimlerChrysler was involved. Pinckney proposed, however, that Kugle withheld that information, as well as the photographs and Garza's report, from the attorneys in his employ.

    But Brin argued that as lead counsel up until the last five months of the suit, Toscano must have known about the tampering.

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