An insurance company has sued the law firm who defended Chicago State University against a lawsuit brought by whistleblower fired for refusing to bottle up public documents pertaining to the school’s former president’s pension and salary, with the insurer now alleging the lawyers’ missteps led to a multi-million dollar judgment for the whistleblower.

On Aug. 29, Illinois National Insurance Company, an affiliate of AIG, filed suit in Cook County Circuit Court against the law firm of Pugh Jones & Johnson P.C., of Chicago, asking the court to order the law firm to refund all fees paid to the firm and repay the insurer any amount paid to Chicago State to cover the $3.3 million judgment.

The case centers on actions the insurer alleged were taken by the Pugh firm in the wake of the verdict handed down by a Cook County jury in February 2014.





The jury had found in favor of the whistleblower, James Crowley, awarding him $480,000 in back pay and punitive damages of $2 million, after determining the university had wrongly fired him, allegedly in retaliation for releasing public documents over the alleged objections of former CSU President Wayne Watson.

Cook County Judge James P. McCarthy, citing state law, then doubled his back pay award to $960,000, and ordered CSU to pay Crowley’s attorneys $318,000, plus $60,000 in interest.

The judgments came as part of a years-long litigation that began in 2010 after CSU fired Crowley, allegedly over financial irregularities at the CSU convocation center, which Crowley supervised as part of his job duties.

However, Crowley argued that was merely a pretense to fire him for defying the alleged threats of Watson, who had objected to Crowley’s decision to release documents requested under the Freedom of Information Act, which provided details on actions Watson had taken at the university as he transitioned from his position as head of the Chicago City Colleges to his new role as CSU president.

Public statements had indicated Watson intended to retire from the City Colleges and begin drawing a pension, in addition to collecting a salary from Chicago State.

However, under the rules of the State University Retirement Systems (SURS), Watson needed to wait three months between jobs in order to start collecting his City Colleges pension.

Weekly Newsletter Sign-up and get latest news about the courts, judges and latest complaints - right to your inbox. Sign up × By signing up you agree to receive email newsletters or alerts from Cook County Record. You can unsubscribe at any time.

But during that three month period, allegations arose that Watson, while not yet officially installed as president, had used university money to “renovate the so-called ‘presidential residence’” at CSU and was “making decisions at CSU.”

As Crowley prepared to release the requested FOIA documents pertaining to these matters, Watson allegedly threatened him, if he released the documents or did not first allow Watson to discuss the documents with a “friendly journalist for damage control purposes.”

Crowley then released the documents, and brought the matter to the attention of the Illinois Attorney General’s office.

Following the document release, the State Universities Retirement System denied Watson’s request to draw his City Colleges pension at that time.

Crowley was fired soon after, and the university followed the termination with a complaint against Crowley, who was also a lawyer, to the Illinois Attorney Registration and Disciplinary Commission, seeking to initiate disciplinary proceedings against Crowley. The ARDC rejected that complaint, court documents said.

Following the verdict and subsequent judgment, CSU appealed. But a state appellate panel affirmed the lower court’s decisions, calling the university’s actions against Crowley “thoroughly reprehensible.”

In its lawsuit against the Pugh firm, however, Illinois National Insurance asserted the judgments may not have been as large as awarded, if the university’s lawyers had properly done their jobs.

The insurer said it believed the Pugh lawyers failed to properly challenge elements of the decisions, or raise key questions at appropriate times. Among these, the insurer alleged the Pugh lawyers did not properly question Crowley, as a lawyer employed by CSU, could bring his retaliatory discharge claims, or if he could collect the $2 million punitive damage award under the Illinois Ethics Act.

Illinois National also questioned whether the Pugh lawyers failed to poll the jury or properly asked questions of the jury and its foreman.

The insurer also accused the Pugh lawyers of failure to “properly assess the case and take advantage of settlement opportunities,” which the insurer said would have amounted to “a small fraction of the ultimate verdict,” telling Illinois National all the while “that CSU would likely prevail at trial.”

The lawsuit does not specify how much Illinois National has paid either the Pugh firm or CSU to cover the costs of the defense against Crowley’s lawsuit.

Illinois National is represented in the action by attorneys with the firm of Lewis Brisbois Bisgaard & Smith, of Chicago.

Legal actions surrounding the Crowley accusations and verdict, however, represent just one such action still pending which involve CSU and date back to Watson’s tenure.

In April 2014, Glen Meeks, who had served as vice president of administration and finance at CSU from November 2009 to March 2013, alleged in a lawsuit also filed in Cook County Circuit Court, that he had been fired after discovering and exposing allegedly deceitful actions taken by Watson.

He specifically alleged Watson had placed friends and a girlfriend on the university’s payroll and used his social network to financially threaten the university if school leadership terminated him.

Meeks said he raised these concerns with the university’s board of trustees, and was fired soon after.

His lawsuit remains pending.

According to Cook County court records, the case has gone to mediation, which is scheduled to be completed by October 21. Should the mediation prove unsuccessful, a trial has been scheduled to begin Jan. 9, 2017.