Court to allow testimony from commissioners, ex-solicitor in crime-fraud exception

The case brought against the county by a former chief clerk is slated for trial in federal court in January 2021, and a recent memorandum issued by the presiding judge notes there is a reasonable basis to suspect county employees intended to falsify legal documents. Stoud initiated the lawsuit in November 2017 with claims against the commissioners for retaliation and creating a hostile work environment when he was employed as the chief clerk. He alleges that after he reported the inappropriate conduct to the county commissioners, “they subjected him to increasing and pervasive harassment and retaliation.” The county – and not the individual commissioners – are named as the defendants in the case.

United States District Judge Malachy E. Mannion issued an order on Oct. 13, permitting Robert S. Stoud to call former county solicitor Michael Giangrieco and the commissioners as witnesses at trial and to question them “with respect to those matters that fall within the crime-fraud exception.”

According to the order, the judge also will permit Stoud to introduce evidence related to the loss of future earnings.

In support of the order, Judge Mannion also issued a 17-page memorandum on motions made in advance of the trial.

The county sought a ruling in advance of trial that would preclude Stoud from presenting a claim for loss of future earnings because he has not presented evidence of his loss of future earnings. Stoud contends that he provided the county a breakdown of damages in an email in July.

Mannion wrote that Stoud is entitled to present that evidence at trial, and that expert testimony is not required. “As long as Stoud has some personal knowledge of his salary and his loss of income, which he presumable does, Stoud may present his own testimony in support of this argument,” wrote the judge.

Both Stoud and the county submitted motions related to attorney-client privilege and Stoud’s desire to call former solicitor Giangrieco as a witness.

Stoud countered the anticipated county’s objection by noting that Giangrieco had filed a complaint against the county in May of this year, in which the former solicitor stated he “repeatedly spoke to Commissioner (Elizabeth) Arnold about her actions that were contrary to County policy and could potentially export the County to liability.”

Stoud noted that another lawyer, Attorney Robin Reed, represented the county in EEOC actions with Stoud and former assistant chief clerk, Maggie MacNamara, and argues that the attorney-client privilege did not exist related to Giangrieco.

Stoud’s claim goes further to argue that the “crime-fraud exception applies to defeat the privilege” if the attorney-client privilege actually did exist.

In the complaint filed by Giangrieco (which was dismissed), the former solicitor stated that the documents prepared for the county’s responses to the two EEOC complaints were “false, inaccurate, and did not reflect the facts given by him and others… and that he and others were asked to lie and change their prior statements in order to protect Commissioner Arnold.”

Stoud argued that because lying and falsifying legal documents are crimes, the crime-fraud exception apples and defeats attorney-client privilege.

The county countered that evidence “beyond an accusation” is required to defeat the privilege and that Giangrieco was a “disgruntled former employee.”

In his argument, Stoud said that Commissioner Alan Hall and former Commissioner MaryAnn Warren disclosed confidential communications with Giangrieco in their depositions. He noted the Hall “recounted conversations between Attorney Giangrieco, Commissioner Arnold and himself regarding Commissioner Arnold’s treatment of Stoud.”

Judge Mannion cited an exception to attorney-client privilege where it may not be used “for the purpose of obtaining advice to promote crime or fraud.”

In the memorandum, Judge Mannion wrote that he believed Stoud should be permitted to question Giangrieco and the commissioners with respect to matters that fall within the crime-fraud exception. “For example, Stoud indicates he wishes to question Attorney Giangrieco and the Commissioners about Attorney Giangrieco’s allegations that he and other employees saw the County’s EEOC responses and knew portions of them were false, that he and other employees asked that the falsities be corrected, and that he and other employees were asked to lie and change statements to protect Commissioner Arnold,” wrote Mannion.

The judge continued by saying that such communications would “fall squarely” within the category of communications where the purpose is the furtherance of a future crime or fraud.

Mannion wrote that Stoud has demonstrated there is reasonable basis to suspect that: “County employees intended to commit a crime – to wit, falsify legal documents – despite Attorney Giangrieco’s and others’ apparent advice to the contrary and that Attorney Giangrieco’s responses, albeit falsified, were used in furtherance of that crime under the guidance of an attorney.”