What happened with the McCargo trust?
The latest ruling is expected soon in a 3-year-old civil lawsuit alleging a prominent Pittsburgh law firm conspired to prevent five siblings from obtaining their rightful trust fund allocations.
Members of the local legal community are awaiting Allegheny County Common Pleas Judge R. Stanton Wettick Jr.'s decision in the litigation against the Reed Smith firm and its former managing partner, G. Donald Gerlach. The lawsuit was filed in June 2000 by five great-grandchildren of the late Grant McCagro.
Currently at issue is Reed Smith's request to keep confidential documents it has produced in the case. If Wettick denies the law firm's motion for reconsideration and decides for a second time to open the files, we may all finally find out if Reed Smith's conduct harmed the trust fund beneficiaries.
The story began when grease magnate Grant McCargo created a trust to benefit his family after selling his business to the Standard Oil Co. in 1929. The fund is worth about $140 million and earns about $2.6 million a year.
Plaintiffs John H. Follansbee III and his four sisters are the children of Margo McCargo Follansbee , Grant McCargo's granddaughter. Their lawyers, Bob Federline and Alan Cech, filed the lawsuit after discovering Reed Smith represented rival beneficiary Peter Standish at the same time it acted as counsel for the trustee, PNC Bank.
As trustee, PNC owed a fiduciary duty to all beneficiaries. According to the complaint, Reed Smith gave PNC advice that favored Reed Smith's client and harmed the Follansbees.
One of the allegations is that Reed Smith failed to disclose this conflict of interest to PNC or to the Orphans Court of Allegheny County in 1992, when the court heard a dispute over terms of the trust. The plaintiffs claim this amounted to a fraud.
The plaintiffs also claim that Reed Smith conspired with Standish and another beneficiary, Grant McCargo II, and their respective lawyers, in advocating an incorrect interpretation of the trust document that ultimately was adopted by the court.
That court ruling diverts approximately $140,000 of income annually from each of the Follansbees, for a total of about $700,000 a year.
The complaint charges that Reed Smith and Gerlach should be held liable for concealment, breach of contract/malpractice, negligence/malpractice, publication of injurious falsehoods, conspiracy and breach of trust.
Since the beginning of the lawsuit, Reed Smith has been striving to keep sealed a variety of documents that may lie at the heart of the issue. Although the documents have been produced to the plaintiffs, Reed Smith claims that the documents should remain confidential and not subject to public disclosure out of concern for duties of confidentiality, attorney-client privilege, privacy rights, proprietary information and attorney "work product" principles.
In the most recent attempt to open the documents in the cases, the Follansbees' attorneys say that the defendants have marked as confidential every single sheet of paper and public transcripts of hearings.
Federline and Cech write that "even when seen in the light most favorable to defendants (which is not the test), defendants have failed and refused to provide any reasoned explanations for their claims of privilege."
In a legal filing, they further accuse the defendants of seeking confidentiality of all documents in an effort to stonewall and prevent plaintiffs from obtaining and using evidence of the defendants' bad acts.
Wettick already has ruled the documents no longer are confidential, but has given Reed Smith the opportunity to change his mind. Many in legal circles predict the defendant will fail again.
If so, we may learn some interesting things about some of the city's most prominent and powerful lawyers.
John Follansbee Jr. of Fox Chapel says he now has a visceral feeling that his family will prevail. He believes "the legal system in Allegheny County should hang its head in shame because a fraud has been committed."
FROM POTENTIAL JUROR TO ACTUAL DEFENDANT. In another example of " This Means You ," Allegheny County Common Pleas Judge David Cashman incarcerated a Sewickley woman for refusing to serve on a jury.
Jury Commissioner Jean Milko's letter to all potential jurors begins by reminding them that "the right to a jury is a fundamental one that our founding fathers provided to us and is a vital part of our basic guaranteed liberties."
But Vicki Lavelle of Sewickley didn't seem to think the missive applied to her. Upon arriving at the jury room, Lavelle informed court staff that serving the court would inconvenience her.
When it was reported to Judge Cashman that Lavelle thought she had better things to do, and there were plenty of other people who could take her place, he disagreed.
Called to Cashman's corner, she made the mistake of arguing with the man on the bench. Lavelle demanded the judge show her where the law states that she has to serve as a juror.
Rather than teach civic responsibilities, Cashman found her in contempt of court and forwarded her to the Allegheny County Jail.
Released some 10 hours later, Lavelle faced Cashman again with the assistance of Public Defender Jimmy Sheets.
By then, the Red Brick Inn on Second Avenue forced a change of heart. Lavelle now realizes that everyone called to jury duty may have something else to do, but not something better to do.
BASIC COURTHOUSE HIERARCHY 101. A judge is a person who is able to send you to jail if he or she feels like it.
A sheriff's deputy is the person who can take you to the bullpen for the day, despite any previous engagements.
An attorney is a person who can decide to prosecute you, defend you or sue you.
A police officer is a person who may arrest you if he can prove cause in court. (If not, he can have more problems than he can cause you.)
A juror is what we all can become when we are asked; he/she has the power to convict or acquit defendants in the legal system as it exists in our country.
PENCILS READY. As of Sept. 1, the state Supreme Court will allow jurors in civil trials to take written notes - but only as an experiment.
Jurors in most states are already allowed to take notes to help them through long cases and complicated issues. Pennsylvania has worried that note-taking can distract jurors from focusing on the testimony before them.
Recent research shows that jurors who take notes are generally more attentive to the trial, feel more engaged, and take accurate notes that they use and rely on for their decisions.
Pennsylvania may consider allowing notes in criminal cases before the end of the year.
