NEW ORLEANS (Legal Newsline) - A federal appeals court has decided that a railroad's fraud case against two Mississippi asbestos attorneys was filed in time.
The U.S. Court of Appeals for the Fifth Circuit ruled Tuesday against lawyers William Guy and Thomas Brock, both accused of not disclosing their clients' previous involvements in another asbestos lawsuit while they were suing Illinois Central Railroad.
Two judges on a three-judge panel voted to affirm the verdict. The two lawyers argued a Mississippi federal court lacked jurisdiction over the case and that Illinois Central missed the statute of limitations.
The two clients - Willie Harried and Warren Turner - sued the company in 2001 despite their previous involvements in an asbestos mass action titled Cosey in the mid-1990s.
"Guy and Brock point out that even if Illinois Central should not have suspected them of fraud, it certainly had reason to suspect Harried and Turner," Judge Thomas Morrow Reavley wrote.
"We note that Illinois Central need not demonstrate due diligence with respect to its claims against Turner and Harried; its suits against them were timely... (W)e do not fault Illinois Central for assuming that it was Turner and Harried, rather than Guy and Brock, whom Illinois Central should sue for the settlement fraud."
Illinois Central paid $210,000 in settlements to the Harried and Turner. A federal jury awarded the company $420,000.
Guy and Brock say the company found out about the previous lawsuit no later than Feb. 13, 2004. The company sued the clients within the three-year statute of limitations, but did not add Guy and Brock as defendants until early 2008.
Harried filed suit in Mississippi state court, arguing the company knew its claims were time-barred and should not have pursued its case. Illinois Central said the suit attempts to relitigate the federal court case.
Judge Catharina Haynes joined Reavley in the majority. Judge Jennifer Walker Elrod dissented and filed an opinion.
"I would reverse because doing nothing is not due diligence," Elrod wrote. "The majority opinion applies the fraudulent concealment statute to excuse the tardiness of the claims but, in doing so, gives short shrift to Mississippi's due diligence requirement."
The company was given only a partial award of attorneys fees by U.S. District Judge David Bramlette. It lost money pursuing the fraud claim.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.