Stanley Chesley’s former Guard cocounsel, the beleagured William Gallion, Shirley Cunningham, and Melbourne Mills, got some apparent good news in February 2011, when a Kentucky state court of appeals vacated the $42 million summary judgment against them for breach of fiduciary duty. Although a lower court had ruled in 2006 that the three attorneys had improperly withheld funds from the $200 million Guard settlement, the appellate court found sufficient issues of material fact to overturn the lower court’s summary judgment. At the same time, it upheld the denial of summary judgment against Chesley.
The appeals court based its decision largely on the expert testimony of Kenneth Feinberg, the special master who has overseen the distribution of settlements to victims of 9/11 and the BP plc oil spill. In an affidavit signed in January 2006, Feinberg said that the Guard case “was handled properly and ethically. I have seen nothing that credibly suggests any misconduct by the attorneys or any inappropriate action by the judge who presided over the case.”
