Cautionary Tales
Tales of the Trade
These accounts are designed to convey the lessons that can be learned in handling various matters – without the sting of error or the “agony of defeat.” They are true, enlightening and come with a roundup of takeaways you’ll want to remember.
Victims of Social Engineering Fraud: A Trend You Do Not Want to Follow
The emergence of a worrisome trend involving email hacking is plaguing law firms that find themselves involved with wire transfers of client funds. Primarily, these schemes tend to target real estate attorneys, although we have seen sporadic application of these frauds in other practice areas. Typically, the email hacking is carried out at or about the time of a real estate closing and almost always involves the transmission of fraudulent wire transfer information to the law firm. This causes the firm to unknowingly wire transfer monies into a bank account that can be accessed by the hacker.
A Tangled Web
This litigation arose out of legal services provided by the insured law firm for various family members related to the victim of a fatal car accident. Ryan Klinton was operating a 2006 Cadillac when, temporarily blinded by the glare from the sun, he rear-ended a vehicle that was operated by Jessica Chremion. Ryan died as a result of the accident and his two passengers, Kevin and Aiden Klinton, sustained injuries. The insured firm was later retained to pursue a claim against GMC, as the manufacturer of Cadillac, for negligence based on defects in the vehicle that allegedly caused the accident, and to represent the Klintons in their claim for negligence against Chremion.
The Dual Representation Maze
This federal litigation initially arose out of legal services provided by the insured for Jackson Smith in connection with a $200,000 loan made by the claimant in April 2011 to Capital Ventures, Inc. (Capital Ventures), which at the time of the litigation was owned by Ryan and Sarah Baker and had been placed into receivership. The claimant asserted that Capital Ventures failed to make any payments owed to her pursuant to a promissory note, wherein Capital Ventures agreed to make two interest payments 10 months apart, and to repay the principal owed with the second interest payment. Further, Smith alleged that the principal objective of Capital Ventures was to monetize certain patents owned by Harry Townsend and to use those funds to repay investors and to finance several civil lawsuits instituted by Townsend that asserted violations of those patents.
He Said–He Said: Put It in Writing
This matter was initially reported as a non-litigation claim, but later evolved into arbitration with respect to legal services provided by an insured law firm for the claimant in connection with the claimant’s divorce from his wife following 25 years of marriage. The claimant initially contacted the insured and asked the firm to enter into a six-month tolling agreement for the claimant to investigate whether the insured provided him with “competent representation.” The parties later agreed to arbitrate the dispute in light of an arbitration provision in the insured’s engagement letter.
The Jones Family Trusts
This California litigation arose out of legal services provided by the insured, John Smith, for the claimants, Bob and Bill Jones, in connection with transactions involving the assets of certain trusts for the benefit of the claimants and their sister, Christy Brown. For more than 25 years, the insured was the Jones family’s attorney, having represented several members of the family in various legal matters, including trust and estate matters.