A Chicago brokerage and property management firm recently acquired by Transwestern is facing what could be a liability of several million dollars over alleged mishandling of evidence in a workers’ compensation lawsuit.
Martin Kraslen, the former chief building engineer for Chicago’s MB Real Estate, filed a new lawsuit last month against his former employer.
It claims the company captured, viewed and then fumbled a crucial video clip of Kraslen falling through a damaged manhole grate and into the sub-basement of the LondonHouse hotel at the northwest corner of North Michigan Avenue and Wacker Drive, before he or his attorney could see it.
The injury to Kraslen’s knee and shoulder has cost him between $500,000 to $1 million in medical bills and he still has surgery ahead, due to the impacts of the fall, which occurred while the building was being converted from an office into a hotel in 2016.
A judge in July slammed MBRE for losing the video, writing it likely knew it had a duty to preserve it ahead of a trial in a separate lawsuit that was settled by the developers on the project, Chicago-based Oxford Capital and New York-based Angelo Gordon, as well as contractor W.E. O’Neil and subcontractors. MBRE, however, was taken to trial in October by Kraslen, who is now pursuing the brokerage in a separate case.
He claims the $1.5 million he recovered in worker’s compensation is only a third of what he would have received had he been able to access the video. MBRE has also been accused of initially claiming that no such video existed during the litigation.
“Not only was the video footage in the possession of MBRE, not only did MBRE employees know of its existence, not only did they view it numerous times, not only did they know of its importance to any future litigation and the need to retain it, it was not preserved or retained,” Cook County Circuit Judge Kathy M. Flanagan wrote, according to court records. “With this knowledge, under oath, MBRE answered interrogatories which wilfully and falsely declared no such video surveillance existed.”
Transwestern, the new owner of MBRE, did not return requests for comment. Neither did attorneys who have represented MBRE in cases tied to Kraslen, including in a federal lawsuit filed last year by the firm’s workers’ compensation insurer seeking to get off the hook for paying to defend MBRE. The firm has also sued its general liability insurer, asking it to step in and cover costs of its defense in Kraslen’s case.
In court filings, MBRE had said it was never aware the manhole cover was in a hazardous condition, and there’s no evidence showing it was damaged, and that it “remains a mystery as to who, what, or when the access cover was damaged or compromised.” The firm also said it had no duty to preserve the video, never had possession or control of the complete video and rather only a link to the video. The link was subsequently corrupted and it lost access within a matter of days, through no fault of its own, the firm said.
Kraslen worked for MBRE for decades before the injury, his attorney said. He didn’t initially sue MBRE, and was rather going after the developers and contractors in the building, but those defendants brought MBRE into the case, alleging it should have given them more notice about potential problems with the manhole cover.
Another party in the litigation later discovered it did still have access to the video clip as the case moved forward, but only part of it. It showed Kraslen walking away from the manhole carrying an object, however, the clip recovered doesn’t show the actual fall, and instead cuts to when emergency personnel arrived to help.
The defendants argued Kraslen may have carried away the manhole cover. Because he wasn’t shown walking back into the video footage without the cover due to the missing portion of film, they were able to suggest he may have contributed to his own injury. The lack of the footage showing the actual fall dulled Kraslen’s attorneys’ ability to refute that claim, they said, even as the judge didn’t allow the defendants to play the partial video clip as evidence.
“Now, at the 11th hour, the partially recovered, arguably selectively preserved scant portions of the video by MBRE, is being relied upon by the defense to introduce as evidence and cast aspersions on (Kraslen’s) account of the accident,” Flanagan wrote. “There is no way that this partial video footage will ever be used as evidence in this case, especially by the party responsible for losing and/or failing to preserve it in the first instance.”
This story was corrected to note that Angelo Gordon is based in New York.