ILNews

Judge denies summary judgment for law firm

Jennifer Nelson
February 15, 2010
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Note: This is a corrected version of the original Feb. 15, 2010, story. 

A federal judge has denied summary judgment for an Indianapolis law firm accused of selling stock held in escrow while the firm acted as a receiver of a company.

U.S. District Judge Larry J. McKinney denied Riley Bennett Egloff's motion for summary judgment Feb. 12 in Neil Lucas, individually and on behalf of Phonebillit, Inc., as shareholder v. Riley Bennett Egloff, No. 1:07-CV-534. Neil Lucas, a shareholder of Phonebillit, filed his suit in 2007 accusing the firm of having a conflict of interest in its role as custodian and then receiver of Phonebillit Inc.

There was a dispute among Phonebillit's owners as to how much stock each owned. Lucas' suit accused the firm of unreasonably liquidating Phonebillit's assets, making unauthorized payments to another owner, Steven Sann, and selling Lucas' stock in Brightpoint that was held in escrow at Sann's suggestion. Lucas claimed the sale caused him to lose more than $75,000 because the proceeds were placed in a low-interest savings account.

A settlement was reached in September 2008 on all of the issues except the stock sale, which the court found to be personal to Lucas. RBE moved for summary judgment on that issue, arguing that Lucas asserted a claim for legal malpractice which entitled the firm to an affirmative defense based on the business judgment rule.

Lucas argued that RBE's liability stemmed from its duty as an escrow agent. Judge McKinney wrote the parties' arguments based on those theories are misplaced.

"This case presents a claim against a receiver for the alleged breach of the duties it owed to one of the receivership's creditors or one with whom the receiver was in privity," wrote the judge.

Lucas didn't assert a claim for legal malpractice, nor did he present a claim against an escrow agent. Also, the business judgment rule has no place in the litigation, the judge continued, because RBE was an arm of the court as the receiver. Judge McKinney denied Lucas' motion to strike the firm's affirmative defenses and RBE's motion for summary judgment on those defenses because there are triable issues of fact. He also denied the firm's motion for judgment as a matter of law or involuntary dismissal.

At the Feb. 26 pre-trial conference, the court will address whether RBE's motion in limine and request for a protective order is moot; and RBE's motion to exclude expert testimony, including specific testimony from Lucas. A jury trial has been set for March 8.

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  1. Good riddance to this dangerous activist judge

  2. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  3. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  4. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

  5. Dear Fan, let me help you correct the title to your post. "ACLU is [Left] most of the time" will render it accurate. Just google it if you doubt that I am, err, "right" about this: "By the mid-1930s, Roger Nash Baldwin had carved out a well-established reputation as America’s foremost civil libertarian. He was, at the same time, one of the nation’s leading figures in left-of-center circles. Founder and long time director of the American Civil Liberties Union, Baldwin was a firm Popular Fronter who believed that forces on the left side of the political spectrum should unite to ward off the threat posed by right-wing aggressors and to advance progressive causes. Baldwin’s expansive civil liberties perspective, coupled with his determined belief in the need for sweeping socioeconomic change, sometimes resulted in contradictory and controversial pronouncements. That made him something of a lightning rod for those who painted the ACLU with a red brush." http://www.harvardsquarelibrary.org/biographies/roger-baldwin-2/ "[George Soros underwrites the ACLU' which It supports open borders, has rushed to the defense of suspected terrorists and their abettors, and appointed former New Left terrorist Bernardine Dohrn to its Advisory Board." http://www.discoverthenetworks.org/viewSubCategory.asp?id=1237 "The creation of non-profit law firms ushered in an era of progressive public interest firms modeled after already established like the National Association for the Advancement of Colored People ("NAACP") and the American Civil Liberties Union ("ACLU") to advance progressive causes from the environmental protection to consumer advocacy." https://en.wikipedia.org/wiki/Cause_lawyering

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