William Conour’s multi-million-dollar fraud has produced an avalanche of state and federal lawsuits naming as defendants several attorneys who used to work with the once-prominent personal-injury and wrongful-death attorney.
In state court, claims name former partners including some who helped the federal government press the wire-fraud case to which Conour pleaded guilty last month. The government accuses Conour of defrauding at least 25 clients of more than $4.5 million.
In federal court, a filing this month claims Conour and his former law firm defaulted on a line of credit, owing in total more than $600,000. Separately, Conour’s former legal malpractice carrier has sued to void coverage for his acts that it claims were intentional and therefore outside the scope of the policy.
Conour is scheduled to be sentenced Oct. 17, but the civil cases arising as a result of his criminal conduct may determine the liability of his former associates, help define the pool of money available for victims, and resolve who gets priority for restitution – Conour’s defrauded clients or his creditors.
The ripple effect
“I have never seen anything like this massive tragedy in nearly 40 years dealing with problems caused by Indiana lawyers,” Indianapolis attorney Jon Pactor said in an email. Pactor has filed suits in Marion Superior Court naming two former Conour partners in litigation brought by defrauded former Conour clients.
Pactor has named Thomas Doehrman, Conour’s former colleague at Conour Doehrman Attorneys at Law, in a case filed on behalf of Bradley Whiteman, a Brownsburg ironworker injured on the job in 1995. The suit claims Whiteman was deprived of his settlement that Conour Doehrman negotiated in 1999.
“Conour Doehrman negligently constructed the settlement in such a way that the Whitemans will not receive the full amount of their settlement,” the suit alleges.
Doehrman’s attorney, Philip Kalamaros of South Bend, said in an email that he couldn’t comment on pending litigation. But as an affirmative defense in the case, Doehrman argues in court filings that he was never in partnership with Conour.
Doehrman “admits his corporation shared office space with William Conour from approximately 1988-2003,” the response to the suit says, but “Conour Doehrman was never in business.”
The response further “denies that the ‘law firm’ settled the case … denies ‘Conour Doehrman’ did anything at all and denies that this defendant was negligent in any way.”
Indianapolis attorney James R. Fisher, however, argues in a separate suit that Doehrman is jointly and severally liable for more than $800,000 in unpaid installments from a structured settlement. In a phone interview, Fisher said, “With law firms, as a general case, if you hold yourself out to the world as a law firm and a partnership, as far as liability goes, you are, regardless of the agreement you have inside the office.”
Conour Doehrman appeared to be a partnership, presented itself as a partnership and advertised as a partnership; it did nothing to inform consumers that it wasn’t a partnership, Fisher said.
Fisher last month sued Conour and Doehrman in Marion Superior Court on behalf of Davis Beals Sr., Loretta Beals and Kristen Beals. The Bealses were injured in a deadly crash when their vehicle was hit by a tractor-trailer; Conour Doehrman negotiated settlements. The suit accuses Doehrman of legal malpractice, conversion, securities fraud and negligence.
Daughter Kristen was left permanently disabled, with her parents serving as adult guardians, the suit says, but payments from her structured settlement stopped coming in January, depriving Kristen of monthly payments of $1,677 through the year 2047. Her parents also were deprived of 82 additional monthly payments from a structured settlement, the suit claims.
Also named in the suit Fisher filed is an entity called Structured Settlement Investment Services Ltd. The suit alleges Conour Doehrman used the entity as a shell to facilitate annual fund transfers to meet obligations of structured settlements, including those of the Bealses.
The entity “is believed to be a fictitious entity which was (doing business as) the Conour-Doehrman law firm,” Fisher alleges in the suit.
Regarding Structured Settlement Investment Services, Fisher said, “The only place that name appeared … was with the Ohio bank that set up the trust that Conour was funding on an annual basis. … As far as we can tell, it was nothing but him.”
Lawsuit by association
Pactor also has filed a suit naming former Conour firm attorney Timothy Devereux, now a partner at Ladendorf & Ladendorf. The suit alleges that after he left the Conour Devereux Hammond firm in December 2011, Devereux breached his duty by failing to inform his clients, who were being represented by co-counsel Conour, that he knew Conour was dishonest. Around the time he left the firm and afterward, Devereux was talking with investigators about Conour.
The plaintiff, Jim Love, had been injured in a construction accident in 2008 and retained a Conour firm that became Conour Devereux Hammond. The suit alleges that Devereux should have informed the Loves about Conour’s dishonesty as Devereux was ceasing to be their attorney. A few months later, Conour settled Love’s case without Love’s knowledge and stole the $120,000 settlement, some of which Conour earned, according to Pactor.
“My clients have alleged that Mr. Devereux should have informed them sufficiently about Mr. Conour so that they could have made an informed decision whether to stay with him,” Pactor said.
Devereux and his attorney in the matter, David Kasper, said they couldn’t comment about the case. Court filings in response to the complaint deny Devereux had a duty to inform the Loves when he learned of an FBI investigation.
The defense also claims that any liability should be reduced by the fault of Conour and by contributory fault of the Loves. Devereux’s letter notifying them of his departure from Conour’s firm stated, “You need only send a letter to the Conour law firm advising it that you have chosen to have me continue to represent you.”
Another suit filed in Marion Superior Court names Conour and co-defendants attorneys Thomas A. Hardin, Thomas Manges and Shine & Hardin LLP. In that case, Dustin Webb alleges that attorneys received funds from a settlement Conour negotiated for Webb’s father, Charles Webb, who died as a result of an Allen County vehicle crash.
“Defendants failed to pay plaintiff his portion of the funds,” the suit charges, while acknowledging Webb was “currently unaware of any knowledge (co-defendants) had regarding the wrongful actions” of Conour.
Co-defendants in the case filed a cross-claim against Conour that states, “Any damages that (Webb) has alleged are the direct and proximate result” of Conour’s conduct.
In U.S. District Court, Southern District of Indiana, ACF 2006 Corp. v. William Conour, et al., 1:13-cv01286, was filed Aug. 13. ACF, a successor to Advocate Capital, claims that as of July 13, Conour owed $559,900 on a defaulted line of credit, plus fees and expenses exceeding $50,000 and 24 percent annual interest.
Devereux, former Conour associate Jeffrey A. Hammond, and their respective current firms, Ladendorf & Ladendorf and Cohen & Malad LLP, are named co-defendants in that case, which seeks to recover damages from fees paid to the attorneys by former Conour firm clients on cases the attorneys took with them after they departed.
A lawsuit aiming to deny coverage under Conour’s malpractice policy is also pending in the federal court in Indianapolis. Minnesota Lawyers Mutual Insurance Co. v. William Conour, et al., 1:12-cv-01671, names a host of former Conour associates as co-defendants. Judge William T. Lawrence set a trial date of Jan. 12, 2015.
Devereux said the ACF suit is welcome in a sense because it will help clarify the priority of claims against a restitution fund held by the federal court in Conour’s criminal case. “We’re sort of off the map at this point,” he said. “Somebody has got to work out what’s the proper division of those fees. … I need a court to tell me where the money goes,” Devereux said.
So far, the restitution fund includes just a few thousand dollars more than the $450,000 donation that Conour made to Indiana University Robert H. McKinney School of Law, which the university has returned to the court.
“It’s a horrible situation and nobody’s happy with anything,” Fisher said. “It bothers lawyers who are involved in it as well as those who aren’t.”
“The emotional pain of (Conour’s) former clients, his family, his former friends (including me), and his fellow attorneys runs very deep,” Pactor wrote. “He also delivered a fierce body blow to the entire legal profession.”•