Cunningham, Mills, and Gallion to Repay Clients $42MM

11/17/2008

On Wednesday, Judge William Wehr ordered Shirley Cunningham, Jr., Melbourne Mills, Jr., and William Gallion to repay their clients $42 Million for breaching fiduciary duties owed to their clients by taking more money from the settlements than they were entitled to. You can read about the allegations here. This is different than a legal malpractice case, because they clients don't have to prove the lawyers were negligent. Instead, the clients have to prove the lawyers breached their fiduciary duties. Lawyers owe their clients the highest duty of trust. This means a lawyer cannot place his own interest (or anyone else's for that matter) above the interests of his client. Even if a lawyer achieves a good result for his client, if he violates his fiduciary duties, he may be held liable. That is exactly what happened in some breast implant litigation in Texas, and it is exactly what happened here in Kentucky. There is no argument that this was a substantial settlement achieved on behalf of the Fen-Phen plaintiffs against a major drug company; however, the lawyers took more money than they were entitled to. Now a judge has said they have to give it all back, plus interest and possibly punitive damages. Another interesting development is that Judge Wehr has also ordered Cincinnati lawyer Stan Chesley to be prepared to attend trial and defend himself against the same allegations. This is an interesting development becuase Chesley has denied he was involved in the misappropriation of client funds and was simply involved in negotiating the settlement with Wyeth Pharmacutical. Chesley is an extremely successful lawyer who has been involved in major cases in Kentucky and across the country. Judge Wehr has previously stayed the proceedings against Chesley but is expected to rule next week on whether to lift the stay. Lexington attorney Angela Ford represents the Fen-Phen clients against the lawyers and has dowloaded the pleadings and orders to her website. 

Hans Poppe