A Dallas County jury awarded former Baron & Budd lawyer Gary Cruciani $8.8 million in damages today after jurors found that firm founder Russell Budd and his firm made negligent misrepresentations to Cruciani when they hired him in 2006.
At the conclusion of the six-week trial, the jury also found that defendants Baron & Budd and Budd did not commit fraud when they hired Cruciani. The jury rejected counterclaims Baron & Budd brought in the suit.
Cruciani, now a principal in McKool Smith in Dallas, sued Budd in 2008, and Baron & Budd intervened in the suit with counterclaims, after which Cruciani named the firm as a defendant.
In his April 2 second amended petition, Cruciani, a commercial litigator, alleged the defendants made “numerous misrepresentations” to persuade him to leave McKool Smith in Dallas to join Baron & Budd on May 1, 2006. Among other things, Cruciani alleged Budd failed to tell him about “bad blood” between Budd and firm founder Fred Baron. Baron had left the firm in 2002, and in August 2006 Baron sued the firm and Budd; that suit subsequently settled. Cruciani alleged Budd failed to tell him about plans under discussion to restructure the firm by laying off lawyers and staff. Cruciani alleged Budd misrepresented the firm’s financial condition and its compensation system, which was known within the firm as “Hully Gully” and called for Budd to make all compensation decisions for shareholders and senior counsel. However, Cruciani alleged, Budd did not accurately describe the compensation system. However, 68th District Court Judge Martin Hoffman, dismissed three of Cruciani’s negligent misrepresentation claims on summary judgment, narrowing the case.
Baron & Budd denied the allegations and brought counterclaims, including the allegation that Cruciani, who joined Baron & Budd as a nonshareholder, was told he would not be promoted to shareholder at the end of that year “because of his interactions with female employees.” Cruciani denied he acted inappropriately.
Budd denied Cruciani’s allegations and alleged in an answer filed on April 6 that Cruciani’s “own lack of diligence and/or contributory negligence” contributed to or caused his damages, his claims were barred by the statute of limitations, and he could not recover punitive damages.
The jury found that Budd made a negligent misrepresentation when he described his relationship with Fred Baron “both professionally and personally” as “very good, that they remained friends,” and there were no “lingering problems or issues between the two of them.”
The jury also answered “yes” to the question of whether Baron & Budd and/or Budd negligently misrepresented to Cruciani that “2006, even without the mass tort cases, was projected to be even better than 2005.”
Cruciani is pleased with the verdict.
“I feel vindicated. It was hard to stand up to a firm the size of Baron & Budd and have everything but the kitchen sink thrown at you,” Cruciani says. “I know what happened. I figured the jury would arrive at the right result, and I’m pleased that they did.”
Budd declined comment immediately after the trial. His attorney, Rod Phelan, a partner in the Dallas office of Baker Botts, says he plans to file a motion not withstanding verdict, alleging that Cruciani’s damages were not supported by the evidence.
Bill Sims, a partner in the Dallas office of Vinson & Elkins, says he also believes the evidence does not support the judgment against his client, Baron & Budd.
“There are absolutely no facts to support negligent misrepresentation,” Sims says. “We’ll be filing the appropriate motions on that.”
“We’re very pleased with the finding that there was no fraud found,” Sims says. “There never was.”