Roughly five years after former Indianapolis personal injury attorney William Conour was charged in a federal wire fraud case, the Indiana Court of Appeals heard a legal malpractice action involving one of his ex-colleagues for alleged malpractice. One of Conour's victims claims the attorney's actions kept her in the dark about theft of her settlement money.
The appellate court heard arguments Friday in the case of Rene DiBenedetto v. Timothy Devereux, 49A05-1609-CT-02146, with attorney Timothy Devereux, formerly of the Conour Devereux Hammond law firm, representing himself against the legal malpractice claims. The case was brought by Rene DiBendetto, represented by malpractice attorney Jon Pactor, who hired Conour after she was injured in a car accident in 2010.
After DiBenedetto was awarded $50,000 in a January 2011 settlement related to the accident, the settlement money was entrusted to Conour and was held in a trust account that only he could access. After several months had gone by without receiving a payout from the settlement, DiBenedetto and her father came to the Conour Devereux Hammond law office, unannounced, in the summer of 2011 to speak with Conour about her case.
Conour was not in, so Devereux met with the DiBenedettos, accessed her case file and informed her that she would not receive payout from the settlement until an underinsurance claim had been settled. That conversation, which Devereux said in court documents lasted about 10 minutes, was the only communication he had with DiBenedetto.
When the underinsurance claim was settled for $50,000 the following September, Conour also failed to payout those funds. Devereux left Conour’s firm at the end of 2011, and Conour was ultimately charged in July 2012 with stealing $4.5 million from 25 clients, including the $100,000 from DiBenedetto. He's currently serving a 10-year sentence in West Virginia after he pleaded guilty in July 2013. Conour resigned from the bar shortly after he was charged.
The trial court granted summary judgment to Devereux in the malpractice case, but in oral arguments before the Court of Appeals Friday, Pactor argued that Devereux had committed malpractice by giving inaccurate, misleading advice to DiBenedetto when she came to the office that summer day.
According to Indiana Rule of Professional Conduct 1.15(d), when an attorney receives funds in which a client or third party has an interest, an attorney must “promptly” notify both the client and any interested parties of the receipt of the money and then “promptly” deliver the funds. Conour failed on both accounts, Pactor said, and when Devereux accessed the case file and saw that the first $50,000 had not been distributed after roughly six months, he should have advised DiBenedetto that something was amiss.
The definition of “promptly” became a central point of discussion during arguments, with Pactor saying he knew of the Indiana Supreme Court disciplining an attorney for holding funds in trust for three months. Devereux, however, said it was “common practice” for attorneys to hold money in trust while settling an underinsurance claim, an allegation he said was backed up by an expert witness’s affidavit he designated as evidence.
Further, because of that “common practice,” Devereux said the claim that he should have known the funds were being mishandled was not backed by facts. But Judge Terry Crone pointed out that DiBenedetto’s expert said it was not common practice to hold the funds, contradicting Devereux’s expert.
In a medical malpractice case, Crone said competing expert testimony would create a genuine issue of material fact, making the case inappropriate for summary judgment. Asked how his case was different, Devereux again returned to the “common practice” concept and the question of whether an attorney should be tipped off after learning that settlement funds had not been distributed for six months. Devereux admitted that such an issue had never been decided by the courts.
However, Devereux also told the court that he had instructed DiBenedetto to follow up with Conour to learn more specifics about her case. Judge Patricia Riley asked Pactor what else Devereux was expected to do, given that he could not disburse the settlement funds himself.
If he had been presented with DiBenedetto’s case file, Pactor said he would have immediately noticed that something was wrong and would have informed her of her options, such as filing a motion for contempt or filing a civil suit. Additionally, Pactor said he would have considered going to Conour himself on her behalf and demanding that he disburse the money.
Judge Robert Altice expressed concern about sending the wrong message by finding in DiBenedetto’s favor, saying lawyers could choose not to step in and help clients when lead counsel is out if the Court of Appeals rules against Devereux for taking that same action. But Pactor presented a different scenario, saying a decision in Devereux’s favor would send the message that “the less you do, the more immunity you have.”
Oral arguments in the case can be watched here. https://mycourts.in.gov/arguments/default.aspx?&id=2067&view=detail&yr=&when=&page=1&court=app&search=&direction=%20ASC&future=False&sort=&judge=&county=&admin=False&pageSize=20