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. by the time anybody gets to such files they will probably have been totally vacuumed anyways. they're pros at this at universities. anything to protect their incomes. Still, a laudable attempt. Let's go for throat though: how about the idea of unionizing football college football players so they can get a fair shake for their work? then if one of the players is a pain in the neck cut them loose instead of protecting them. if that kills the big programs, great, what do they have to do with learning anyways? nada. just another way for universities to rake in the billions even as they skate from paying taxes with their bogus "nonprofit" status.

  2. Um the affidavit from the lawyer is admissible, competent evidence of reasonableness itself. And anybody who had done law work in small claims court would not have blinked at that modest fee. Where do judges come up with this stuff? Somebody is showing a lack of experience and it wasn't the lawyers

  3. My children were taken away a year ago due to drugs, and u struggled to get things on track, and now that I have been passing drug screens for almost 6 months now and not missing visits they have already filed to take my rights away. I need help.....I can't loose my babies. Plz feel free to call if u can help. Sarah at 765-865-7589

  4. Females now rule over every appellate court in Indiana, and from the federal southern district, as well as at the head of many judicial agencies. Give me a break, ladies! Can we men organize guy-only clubs to tell our sob stories about being too sexy for our shirts and not being picked for appellate court openings? Nope, that would be sexist! Ah modernity, such a ball of confusion. https://www.youtube.com/watch?v=QmRsWdK0PRI

  5. LOL thanks Jennifer, thanks to me for reading, but not reading closely enough! I thought about it after posting and realized such is just what was reported. My bad. NOW ... how about reporting who the attorneys were raking in the Purdue alum dollars?

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