The Clinton Herald, Clinton, Iowa

October 16, 2013

Iowa Bar president: Walker not negligent

By Katie Dahlstrom Herald Assistant Editor
The Clinton Herald

---- — DAVENPORT — Attorney Michael Walker was not negligent while he represented the city of Clinton in a 2010 False Claims Act case, a Des Moines lawyer who is president of the Iowa Bar Association testified Tuesday.

Guy Cook told members of the jury hearing the city’s legal malpractice suit against Walker and his law firm Hopkins and Huebner that the defendants made the right moves in the underlying False Claims Act suit, including the move to settle for $4.5 million.

The city retained Walker and his firm in 2009 after a lawsuit from former Clinton firefighter and whistleblower Timothy Schultheis was unsealed. Schultheis alleged the city had submitted false claims to Medicare and Medicaid in order to receive higher reimbursement rates for ambulance runs.

That case was settled in 2010 for $4.5 million to be paid without interest over the course of 10 years. The city filed suit against Walker in his firm in 2012, claiming he failed to properly analyze the case and his negligence led to the city settling.

Among the assertions that have been made in the legal malpractice case is one that Walker should not have accepted the False Claims Act case because he, by his own admission, had never heard of the False Claims Act before he was retained by the city.

Cook testified Walker and his firm were qualified and had the requisite skills to handle the Schultheis case. He would have recommended Walker hire an expert and get acquainted with the statute, but would not have advised against Walker taking the case, Cook said.

In regard to Walker’s decision not to file a motion to dismiss under either of two federal rules, Cook said such motions are strategically used and he felt Walker used his discretion not to file the motions for strategic reasons.

Further, Cook said, U.S. District Court for the Southern District of Iowa Senior Judge Charles Wolle, who the Schultheis case was assigned to, was “not a person prone to grant motions to dismiss.”

“The motion would have been futile and a waste of client’s resources,” Cook said.

Walker also acted reasonably and had ample information to represent the city, Cook said. Although Cook testified he would not have handled the Schultheis case exactly as Walker did, not taking Schultheis’ deposition is a move Walker made that Cook said he also might have made if handling the case.

Cook did not review the transcripts from closed meetings where Walker spoke to the Clinton City Council, but said reviewing those transcripts wasn’t needed to form his opinion.

“(It’s) important to me that he kept the client informed. It’s not important to me what he told them,” Cook said.

The move to pursue mediation in the Schultheis case also was reasonable and appropriate in order to avoid the risks of a trial, Cook said, calling the type of case the city faced dangerous due to the amount of damages the city could have incurred. Cook also testified the terms of the settlement, specifically the no-interest and decade for the city to pay, were “remarkable” and “favorable to the city.”

Cook would testify in his cross-examination that he had not reviewed the actual settlement when forming his opinion that Walker followed the standard of care, but had been “made aware” of the terms.

Walker’s attorney Bob Waterman’s 20-minute direct examination Tuesday afternoon was followed by a more than two-hour and counting cross examination from the city’s attorney, Mike Hannafan.

Hannafan spent an hour questioning Cook about an order this month from U.S. District Judge Linda Reade that found Cook, an attorney from Kansas City, Mo., and others had violated a federal rule that bars attorneys and anyone acting on their behalf from contacting jurors without court permission.

According to the Associated Press, Cook’s firm spoke with three jurors a month after they convicted Sholom Rubashkin, former manager of an Iowa kosher salughterhouse of financial fraud. Cook was the lead defense attorney in that 2009 case.

Hannafan brought up the hearing held Sept. 23 in Cedar Rapids where Cook explained he thought Reade had approved the contact with jurors because she had lifted an admonition that barred jurors from speaking to others about the case. Reade called this explanation “disingenuous” and “bordering on the ridiculous.”

Hannafan and Cook got into an exchange regarding Cook’s answers to questions about the ruling, prompting Judge Nancy Tabor to interject.

“Can we just ask some questions, please?” Tabor said.

She had to direct both Hannafan and Cook to stop their back and forth about court procedures later in the testimony and subsequently asked Hannafan to “get to a question” as well.

Hannafan anticipated he would ask another 30 minutes to an hour of questions as Cook returned to the stand this morning. He is the defense’s final witness.