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Alleging at a news conference that three San Antonio lawyers devised a plan “worthy of a story line of any John Grisham novel,” on July 8 Chrysler Group sued the trio and their former firm in Bexar County’s 150th District Court. Chrysler Group alleges in its petition in DaimlerChrysler Corp., et al. v. Kugle, et al. that the defendants — Robert Kugle, the now defunct Kugle Law Firm and two of the firm’s former associates, Andrew Toscano and Robert L. “Trey” Wilson III — filed a fraudulent products liability suit against DaimlerChrysler Corp. in 1998. In addition to the cause of action for fraud, Chrysler Group lists three other causes of action in its petition: malicious prosecution; tortious interference with contract; and civil conspiracy. Steve Hantler, Chrysler Group’s assistant general counsel, said at a July 9 news conference that the company also plans to file grievances with the State Bar of Texas against Kugle, Toscano and Wilson. “If our legal system is to have any credibility with the public, these lawyers must be held accountable,” Hantler said. Wilson, an associate in the Law Office of Louis Rosenberg, did not return three calls seeking comment. Toscano, an attorney in Gene P. Toscano Inc., did not return two phone calls. John Pinckney III, Toscano’s attorney, says in an interview that there is no direct evidence connecting his client to fraud. “There has never been any evidence that Mr. Toscano knowingly participated in any fraud,” says Pinckney, a partner in the San Antonio office of Strasburger & Price. A phone number for Kugle could not be located. The petition notes that Kugle could be served at an address in Puebla, Mexico. Roy Spezia, who represented DaimlerChrysler Corp. in the underlying products liability suit, says the Kugle Law Firm dissolved. Mark Pinckard spokesman for the State Bar’s Office of Chief Disciplinary Counsel, says Kugle’s law license is suspended for failure to complete minimum continuing legal education requirements. In its petition, Chrysler states the Kugle Law Firm filed Fabila, et al. v. DaimlerChrysler, et al. in May 1998. The suit stemmed from a 1996 rollover accident in Mexico that allegedly caused the deaths of four children and injured a child and two adults. The suit ultimately was dismissed by the trial court in 2000. Chrysler alleges in its petition in DaimlerChrysler that Bridget Fabila, a passenger in the 1995 Dodge Neon involved in the accident and mother of two of the children who died, initially told a Mexican highway patrol officer and a Red Cross ambulance driver that the crash occurred after her husband fell asleep while driving and she grabbed the steering wheel. Fabila’s story changed after DaimlerChrysler issued a notice in late 1997 for the recall of the “decoupler” in the steering wheel of 1995 Neons, the petition alleges. The petition describes a decoupler as a joint in the steering column intended to separate in collisions to minimize injuries to the driver. After a July 1998 inspection arranged by the Kugle Law Firm found nothing wrong with the steering mechanism in the Fabilas’ Neon, Kugle, Wilson and Toscano decided to “embark on a scheme to manufacture false evidence of a steering decoupler failure,” Chrysler alleges in the petition. The petition alleges that Tom Persing, the firm’s expert, took pictures of the decoupler showing that it had no defect. “It was a functional unit,” Persing stated in a videotaped deposition taken by Chrysler’s attorneys, which was played at the July 9 news conference. Sometime between July 6, 1998, and Sept. 3, 1998, the intact coupler photographed by Persing was either removed and replaced with a failed unit or the original unit was altered, the petition alleges. In addition, the petition alleges that Kugle, Wilson and Toscano suborned a false affidavit from the tow truck driver who hauled the Neon away after the accident. As alleged in the petition, the English translation of the truck driver’s affidavit indicates he “noticed that the steering wheel did not work since it did not control the wheels.” Chrysler alleges that Kugle, Wilson and Toscano inundated DaimlerChrysler and its co-defendant, North Star Dodge Sales Inc., which sold the Neon to the Fabilas, with discovery requests in an attempt to force a settlement in the Fabila’s suit. DaimlerChrysler was served with at least 377 interrogatories, requests for production and requests for admission, the company alleges in the petition. “It was a scorched-earth kind of approach,” says Spezia, a shareholder in Austin’s Clark, Thomas & Winters. Kugle, Wilson and Toscano sent a written settlement demand to DaimlerChrysler for $75 million on Sept. 15, 1998, but demanded $2 billion in damages in the seventh amended petition filed in the Fabila suit, Chrysler alleges. Spezia said at the July 9 press conference that he obtained Persing’s photos showing that the coupler was intact after a report on the July 1998 inspection of the Neon was sent anonymously to his firm in January 2000. In March 2000, DaimlerChrylser and North Star Dodge filed a motion for sanctions against Kugle, Wilson and Toscano with 224th District Judge David Peeples, the trial judge in the Fabilas’ products liability suit. On March 22, 2000, the day after Peeples ordered the lawyers to produce Persing’s photos, Kugle, Wilson and Toscano filed a nonsuit notice. They withdrew the nonsuit almost a month later, the petition alleges. In June 2000, Peeples signed an order in Fabila finding that the conduct of the three attorneys in filing and pursuing the suit was “knowingly and intentionally fraudulent.” Peeples said in the order that tampering with the coupler is “clear and obvious” from a comparison of the photos taken in July 1998 and those taken in September 1998. Peeples ordered Kugle, Wilson and Toscano to jointly and severally pay $865,489 in sanctions to DaimlerChrysler and North Star Dodge and dismissed the Fabilas’ products liability suit. Spezia says the trio had paid approximately 20 percent to DaimlerChrysler and North Star. THE DECOUPLER Kugle, Wilson, Toscano and the Fabilas appealed Peeples’ order to San Antonio’s 4th Court of Appeals. Sitting en banc, the 4th Court affirmed Peeples’ order in a 4-2 decision issued on Aug. 21, 2002. “This case is an egregious example of the worst kind of abuse of the judicial system,” 4th Court Justice Karen Angelini wrote for the majority. Justice Catherine Stone said in her dissenting opinion that the “case presents a sordid set of facts.” Stone, joined in the dissent by Justice Alma Lopez, disagreed with the majority’s decision to affirm the dismissal of the suit. Stone wrote that there was no evidence that showed the Fabilas knew about the results of the July 1998 inspection. Phil Hardberger, at the time chief justice of the 4th Court, did not participate in the decision. Toscano argued in a brief filed with the 4th Court that he did not sign all the pleadings in the case or cause DaimlerChrysler and North Star Dodge to incur every defense expense. He also argued that he was not a principal in the Kugle Law Firm and contended that his involvement in the case was “severely restricted” after Oct. 14, 1999. Toscano said he resigned from the firm shortly after the nonsuit filing. “There was no finding of conspiracy, joint enterprise, or that the conduct or abuse being sanctioned was the result of the interwoven conduct of the sanctioned parties. However, the court did sanction Toscano for conduct which took place after he left the firm,” Toscano alleged in his 4th Court brief. In his brief to the 4th Court, Wilson contended that he, Toscano and the Fabilas were not “made privy” to the investigators’ opinions about the condition of the vehicle and the decoupler at the time of the July 1998 inspection. Also in the brief Wilson challenged the truthfulness of the Mexican police officials regarding Bridget Fabila’s comments to them on the day after the accident. “Bridgett Fabila was in San Antonio, Texas, on June 17, 1996, (the day after the accident) and could not have had any conversations or made any admissions or confessions to the Mexican police officials,” the brief said. Wilson also alleged in the brief that the Mexican police officers had not recorded Fabila’s comments in their accident report. In a petition for review filed with the Texas Supreme Court, Kugle argued that Peeples erroneously sanctioned him for signing pleadings in the products liability suit. “It is undisputed that Kugle never signed a single pleading in this case,” Kugle said in his petition. Kugle, the only one of the three attorneys who sought the Supreme Court’s review, further alleged in the petition that the trial court “inferred guilt against him” because two witnesses invoked the Fifth Amendment at the sanctions hearing held in May 2000. The Supreme Court denied Kugle’s petition on April 3. Charles “Chuck” Herring, who represents Chrysler in its suit against Kugle, Wilson and Toscano, says Peeples referred his findings in the underlying suit to the State Bar for disciplinary action. Chrysler is filing an independent grievance against the lawyers to ensure that the State Bar “has all the information,” says Herring, a partner in Austin’s Herring & Irwin. Pinckney, who represents Toscano, questions why Chrysler sued the three attorneys when it already has an $865,000 judgment against them. Chrysler officials seem to be upset because Wilson and Toscano are practicing attorneys, he says. Chrysler is seeking an unspecified amount of actual and punitive damages in its suit against the attorneys. If any money is recovered, it will be donated to a teenage safe driving program and Texas law schools, Hantler said at the news conference. Hantler said of the suit: “It’s not about the money; it’s about holding these lawyers accountable.”

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