Other Notable Cases

Attorney Liability

• Brandt v. Schal Associates, Inc., 960 F.2d 640, 649 (7th Cir. 1992).   Team success in obtaining substantial Rule 11 sanctions in favor of our client, a construction management client firm that had been frivolously sued for RICO violations for alleged fraud against a sub-contractor on three different large scale construction projects in downtown Chicago (the One Magnificent Mile Building, the Northwestern University Law School and the addition to the Chicago Board of Trade), After the federal court held that the attorney had violated Federal Rule of Civil Procedure 11 (in a written opinion that was over 100 pages long), the court held a three day evidentiary hearing to determine the sanction, at which the offending attorney presented expert evidence in mitigation that he had allegedly suffered a silent heart attack and became clinically depressed when he read the lengthy liability opinion. The federal court rejected these arguments and imposed one of the largest Rule 11 awards ever awarded by a federal court, including 100% of the fees incurred in defense of the underlying RICO case and 100% of the “fees on fees” in pursuing the Rule 11 motion.   This entire award was affirmed on appeal, and fees on appeal were awarded too.   

• Obtained a confidential six figure settlement on behalf of a client who was victimized by the alleged negligence of a prominent intellectual property law firm in its defense of an underlying action against the client for alleged copyright infringement. At the start of the copyright case, the client brought its insurance policy to the law firm to review and to obtain coverage if possible. However, the lawyers ignored this task, costing the client the insurance that would have been available. This case was especially egregious because what started as a bad mistake became an outrageous cover-up. Three lawyers from the defendant law firm smugly testified that they thought that the client himself was taking responsibility for obtaining coverage and not relying on the law firm, and they appeared confident at first that no one would believe that all three of them were lying or mistaken.   However, under cross-examination at their depositions, these lawyers badly contradicted each other and collectively admitted that they knew that the client had relied on them to try and get the insurance, but they allowed the client to continue in ignorance instead of admitting an earlier lapse in communication and taking corrective action.   

• Defended law firm accused of malpractice, breach of fiduciary duties and fraud in connection with failed offering of oil and gas investment opportunities.

• Defended law firm accused of negligence in the closing of the sale of client’s business, where the law firm accepted an unenforceable guaranty from the buyer.

Bench Trial Victory in a CERCLA Case

• Federal court victory in a bench trial in a private Superfund" action under the Federal Comprehensive Environmental Recovery Cost Liability Act (CERCLA), on behalf of a family-owned die casting business that faced potential liability under state law for the cost of remediating the presence of PCBs that had accumulated on the site over a lengthy period of time, and which threatened to contaminate the Milwaukee River.   The defendant was a subsidiary of Monsanto Corporation that had been a previous owner & operator of the site.  Although this defendant had not acquired the site until after the PCB contamination had already occurred, it had assumed liability for the previous contamination by engaging in a de facto merger with the prior operator, who had introduced the PCBs onto the premises. Because of the merger, the defendant was forced to accept a significant share of liability for the clean-up costs.

Arbitration Victory for Business Sellers

• Team success in a lengthy commercial arbitration hearing, representing the family of the founder of a noted Chicago retail sporting goods business who sold his business prior to his death. After the closing, the buyer (a larger regional chain) alleged a claim for breach of a closing warranty as to the value of the inventory that was due under the sales contract, and withheld the balance of the purchase price on that alleged basis. After more than two weeks of testimony in arbitration (in which Carmen was the 2^nd chair attorney), the arbitrator awarded our clients over $1 Million in damages (100% of the balance due under the sales contract) and 100% of the legal fees that our clients had expended in the case as the “prevailing parties.” The key to victory was to establish that inventory valuation was subjective, and that, when a disagreement on value had arisen prior to the closing, the sellers had made an accommodation in the sales price to resolve the difference of opinion. The sellers were caught trying to double dip after the sale, when they thought that they could get away with their dishonesty because the founder, with whom they had negotiated, had passed away. The sellers’ scheme unraveled when their perjured testimony (including perjured testimony by a partner in their outside law firm) was exposed in cross-examination.

Breaking the Glass Ceiling in Employment

• Bellaver v. Quanex Corporation, 200 F.3d 485 (7th Cir. 2000).   In a precedent setting Title VII victory in the United States Court of Appeals for the Seventh Circuit involving gender stereotyping, glass ceilings, and a phony reduction in force (RIF), the Court of Appeals accepted Carmen’s argument that where an alleged RIF is directed at a single employee, the employer is not entitled to the degree of deference to its business judgment that would ordinarily be due.   Although the company did not specifically replace this manager (because her job title was eliminated), she was entitled to a trial on the claim that the company discriminated against her by selecting her for the RIF, when she was performing better than other males who, in slightly different job categories, were not performing as well.  Specifically, there was substantial evidence that a male supervisor routinely criticized the female manager for allegedly abrasive relations with her co-workers while tolerating far more abusive behavior by the male managers whose performance was inferior, but who were spared termination in the alleged RIF.     

State Court Injunction Victories

• Winning a state court injunction to protect the “book of business” of a terminated insurance agency, in the field of professional design liability, from efforts by an insurance company, which the company itself had described as a “knife fight,” to transfer that business to a newly appointed agent.

• Defeating a requested state court injunction against a home owner who built his home in alleged violation of a deed restriction.

• Defeated a request for a TRO against departing managerial employees in a nurse staffing agency commenced competition while still employed by their former employer, and that these employees allegedly downloaded all of the employer’s financial data in order to facilitate their own financial planning’ and that they allegedly revealed their employer’s financial secrets to a bank where they sought financing. Despite the ominous nature of these allegations, we blocked a requested Temporary Restraining Order that would have extinguished the new business venture before it started and we eventually achieved a nuisance value settlement which enabled the clients to remain in business, and they are presently thriving.  

Other victories for employees

• Obtained a confidential six figure settlement for a female salesperson of a computer software design and consulting firm, where the male managers had attempted to transfer her book of business to male salespersons.

• Obtained confidential settlements for victims of quid pro quo and hostile workplace sexual harassment.

Other victories for employers

• Defense in litigation (as successor counsel) of a privately held design firm that faced a breach of employment contract claim by its former president, where there were questions of fact as to whether the company had good cause for the termination, and whether the company had given the president adequate notice of the “good cause” defense.   As successor counsel, Carmen was able to raise an additional issue of whether the former president and the corporate attorney for the company had acted with conflicts of interest in establishing terms of the contract that were disadvantageous to the company. The case settled on terms that were substantially improved from the former president’s previous demands and which the company enthusiastically accepted.

• Defense victories at the EECO level in refuting numerous discrimination claims against clients over the years.

• Successful criminal defense (winning acquittals at trial) in three separate assault and battery cases arising in workplace settings, where employees claimed that they were physically assaulted by their managers (in one case) and by co-workers (in two other cases).   In each of these cases, the complaining employees dropped their civil litigation plans after being defeated in the criminal case.

Fair Housing Defense Victory

• Successful defense of suburban Chicago apartment building owners against a claim of racial discrimination brought by a tenant, who claimed that she had been placed under illegal surveillance by the apartment owners, and that she was thereafter harassed by local police at the alleged behest of building management; when in fact, the apartment was frequently being visited by known members of a violent Chicago street gang. This case called into question the extent to which apartment building owners can protect themselves and their other tenants against gang infiltration without violating the civil rights of any tenants.  The plaintiffs in this case were backed by a Fair Housing legal clinic from a local law school and a noted civil rights organization. This case was won (i.e. the plaintiffs were persuaded to walk away for less than nuisance value) by the development of evidence that the tenant had made false representations to the building in her lease application as to her income level, which provided reasonable grounds for management's initial suspicions, and which led to observations of unusual traffic into and out of the apartment at unusual hours. 

• (After this case was concluded, Carmen accepted an invitation from the sponsoring civil rights organization to accept housing cases on a pro bono basis).

Public Official Defamation Case

• Defense of village trustees in a local suburb who allegedly defamed the village manager by commenting publically on alleged mismanagement by the village which resulted in the loss of federal grant money, where the mayor brought suit to silence his critics.   The village manager backed down when confronted by the fact that “truth is a defense” and that the entire lawsuit would be available for consumption by the voting public.

Litigation against the Government of Guatemala and the United States Department of Customs

• Defense of private citizens in a federal court interpleader filed by the United States Department of Customs against our clients and the Republic of Guatemala, in which the issue was who was the true owner of certain pre-Columbian artifacts that our clients had imported from Guatemala (with proper documentation etc.) but which our government had seized from the home of U.S. citizens at Guatemala’s request.   The government had sought to prosecute our clients criminally as well for alleged theft of Guatemala’s national treasure, but reconsidered that ill-advised decision after we pointed out that by filing the interpleader, the government was necessarily admitting that it had “reasonable doubt” as to ownership and that no convictions could possibly be sustained

Trustee Liability

• Obtained a recovery in excess of $1.5 million on behalf of a trust beneficiary who was victimized by two of his brothers, who were co-trustees of a trust created by their father, where the co-trustees arranged for the transfer of valuable real estate to a new trustee in which they, but not their brother, was a beneficiary. The trustee-defendants argued, without success, that this transfer was a permitted “Starker” exchange under the Internal Revenue Code. In fact, the transfer was not permitted because the trustees had taken advantage of their beneficiary, without his knowledge or consent.

Defeating exaggerated damage claims

• The owner of over technology sought nearly $200 Million in damages for alleged misappropriation of that technology.   A substantial part of the defense of the plaintiff’s claims for alleged trade secret misappropriation was to show that the economic potential of this alleged new revolutionary over was wildly overstated by the plaintiffs.

• The disappointed investor in a technology company was presenting lost profit claims that relied on unproven assumptions about the technology and the size of the relevant market. This case was settled after depositions revealed that most of the plaintiff’s assumptions could never be proven.  

• Plaintiffs alleging professional malpractice for services rendered claim that the faulty services were the cause of actual business losses and lost future profits, thus raising the issue of whether the losses were due to business factors, or allegedly defective professional services. 

Other Victories in Civil Trials

• Successful state court bench trials for breaches of commercial leases.

• Successful state court bench trial for breach of contract by a plumbing contractor.

• Successful arbitration hearing for a business opportunity investor on a breach of contract claim for failure by the promoter to fulfill its obligation to provide a suitable site.

Criminal Cases

• Successful team defense (acquittal) of a single defendant (the grandson of a Chicago Alderman) in a multi-defendant, gang-related murder trial where there was no evidence that the client was a member of the street gang or that he had been present at the scene of the homicide.

The Best Defense

• Successful defense at trial (obtaining a mistrial) of an individual who was accused of three counts of assault/battery for allegedly starting a fight with three neighbors. Recognizing that the State was relying on three eyewitnesses to one, the “best defense” required Carmen to demonstrate during trial that one of the neighbors had actually started the fight. This was accomplished by carefully escalating the questions to the State’s witness that eventually led the witness to erupt in verbal and physical anger, on the witness stand, at the cross-examining attorney, Carmen Caruso. The plan worked. All three state’s witnesses left the courtroom in handcuffs. Carmen’s client walked out a free man.