Devereux v. Love

Decision Date22 April 2015
Docket NumberNo. 49A02–1404–CT–260.,49A02–1404–CT–260.
Citation30 N.E.3d 754
PartiesTimothy DEVEREUX, Appellant/Cross–Appellee/Defendant, v. Jim and Diana LOVE, Appellees/Cross–Appellants/Plaintiffs.
CourtIndiana Appellate Court

David T. Kasper, Julia Blackwell Gelinas, Maggie L. Smith, Frost Brown Todd LLC, Indianapolis, IN, Attorneys for Appellant.

Jon R. Pactor, Indianapolis, IN, Attorney for Appellee.


Case Overview

[1] One of the blocks of the foundation of America is an individual's ability to seek to right a wrong through the courts of justice. In a civil case, a plaintiff entrusts his plight and cause to his attorney. The instant matter involves the disturbing tale of a husband and wife whose confidence and trust was betrayed by the very attorney to which they had entrusted their cause of action. The just and normal inclination in such a matter is to punish the wrongdoer and make the victims whole. While William Conour, i.e., the wrongdoer, has been punished and now occupies his appropriate place in federal prison, to date, it appears that these victims have not been made whole for the misdeeds inflicted upon them.

[2] In an attempt to redress this wrong, Appellees/Cross–Appellants/Plaintiffs Jim and Diana Love (collectively, the Loves) now seek relief from Appellant/Cross–Appellee/Defendant Timothy Devereux, a former member of Conour's law practice. However, in light of the facts of this particular case, we find that Devereux satisfied his legal duty to the Loves based on his lack of knowledge of any specific wrongdoing by Conour relating to the Loves. We therefore reverse the judgment of the trial court in this regard and remand the matter to the trial court with instructions that the trial court grant summary judgment in favor of Devereux.

Facts and Procedural History
I. William Conour, the “Wrongdoer”

[3] On April 27, 2012, William Conour “was charged by criminal complaint in the United States District Court for the Southern District of Indiana with misappropriating client funds in violation of 18 U.S.C. § 1343.” Minnesota Lawyers Mut. Ins. Co. v. Conour, No. 1:12–CV–1671–WTL, 2014 WL 5089290, at *1 (S.D.Ind. Oct. 8, 2014). “The complaint alleged, in part, that Conour ran a so [-]called ‘Ponzi scheme’ with clients' settlement funds and converted a large portion of those settlement funds to his own use and benefit.” Id. “Shortly thereafter, the Disciplinary Commission of the Supreme Court of Indiana instituted disciplinary proceedings against Conour.” Id. “Conour eventually resigned from the Indiana Bar.” Id. On June 29, 2012, the Indiana Supreme Court issued a published order accepting Conour's resignation from the Indiana Bar. In re Conour, 969 N.E.2d 1008 (Ind.2012). On August 13, 2012, the United States Supreme Court issued an order suspending Conour from practicing law before the Court. In re Discipline of Conour, –––U.S. ––––, 133 S.Ct. 88, 183 L.Ed.2d 728 (2012).

[4] On July 15, 2013, Conour pled guilty to one count of wire fraud. During his change of plea hearing, he admitted that:
Beginning as early as 1999 and continuing through April 2012, in Hamilton and Marion Counties and elsewhere in the Southern District of Indiana, [he] ... knowingly devised and participated in a scheme to defraud and to obtain money and funds from his clients and others by means of materially false and fraudulent pretenses, representations, and promises ...
It was part of the scheme that after receiving settlement funds on behalf of some clients, [he] convinced the clients to accept monthly payments over a period of years rather than to accept a lump sum payment. [He] created trust accounts for the clients through State Bank & Trust, doing business as Reliance Financial Services, and Ohio Financial Institution, to facilitate the monthly payments. Rather than depositing the entire amount of settlement funds with Reliance, [he] funded the trusts only on a yearly basis, thereby unlawfully keeping for his own use and benefit the bulk of the settlement proceeds totaling more than $3 million.
It was further part of the scheme that after receiving settlement funds on behalf of some clients, [he] failed to notify the clients that he had received settlement funds on their behalf, and in some cases falsely denied that he had received any settlement funds. Thereafter, [he] unlawfully converted the settlement funds to his own use and benefit and, in part, used the settlement funds obtained for some clients to make settlement payments to other clients.
It was further part of the scheme that [he] stole, misappropriated, and unlawfully converted to his own use more than $4,500,000 belonging to more than 25 clients. On or about October 6, 2011, in the Southern District of Indiana and elsewhere, [he], for the purpose of executing the above-described scheme, knowingly caused to be transmitted in interstate commerce, by wire communication, certain writings, signs, and signals, namely a facsimile transmission from his office in Indianapolis, Indiana to Zurich American Insurance in New Jersey, which contained [a client's] release and indemnification agreement.
Dkt. No. 155–5 at 12–14. Conour was thereafter sentenced to 120 months in prison and ordered to pay restitution to the client-victims.

Conour, No. 1:12–CV–1671–WTL, 2014 WL 5089290, at *1–2.

II. Conour's Representation of the Loves

[5] On May 13, 2008, Jim was injured at work. A few months later, in August of 2008, the Loves hired Conour Law Firm (the “Firm”) to represent them in a personal injury lawsuit against Meyer & Najem Construction, LLC. Unfortunately, the Loves subsequently became victims of Conour's above-described illegal acts when he settled their personal injury lawsuit without their knowledge in February of 2012.

III. Devereux's Representation of the Loves and the Termination of Devereux's Employment at the Firm
A. Events Occurring Prior to December of 2011

[6] In February of 2008, Devereux joined the Firm as an Associate Attorney. Devereux was subsequently assigned, by Conour, to work with Conour on the Loves' personal injury case.

[7] In early July of 2010, the Loves received a letter dated July 1, 2010, which read as follows:

We are pleased to introduce you to the new law firm of Conour Devereux Hammond [ 1 ] which is taking over the cases and business of Conour Law Firm, LLC. Of course, you already know all of us because we have been working with you on your case since its beginning. Your existing contract with the Conour Law Firm will be fully honored by the new firm and we are continuing to represent you as your attorneys.
Conour Devereux Hammond will represent you in the same professional and excellent manner as the Conour Law Firm. However, upon the formation of a new law firm, even though it may include the same lawyers as the previous law firm, we are required by the Indiana Rules of Professional Conduct for Attorneys to give you the option of selecting other counsel to represent you.
We presume you will want us to continue as your attorneys and, if that is true, then you do not have to respond to this letter; but if you do wish to find other counsel you must notify us within ninety (90) days of the date of this letter.
We look forward to continuing to work with you to the conclusion of your claim. If you have any questions or wish to discuss this matter, please call any one of us. Thanks.

Appellant's App. p. 67.2 The letter was signed by Conour, Devereux, and Jeffrey Hammond. Despite the July of 2010 change of the Firm name to include Devereux's name, Devereux subsequently averred, without contest, that he never had any ownership interest in the Firm, that he was never a signatory on any of the Firm's bank accounts, and was not provided access to any of the Firm's financial records.

B. Events Occurring During December of 2011

[8] At some point in December of 2011, Devereux decided to terminate his employment with the Firm due to concerns he had regarding Conour's failure to timely pay expenses and expert witness fees, which was hampering Devereux's ability to adequately and timely prepare cases for trial in cases other than the Loves' matter. In addition, on December 21, 2011, after deciding to leave the Firm, Devereux became aware that a Case Verification Report, which had been prepared by Conour and sent to Advocate Capital,3 contained inaccurate and misleading information. Also on December 21, 2011, Devereux became aware that Conour had not delivered the settlement proceeds from a wrongful death case to a client, the settlement for which had been approved by the trial court in early June of 2011.

[9] Devereux resigned from his position of employment with the Firm on December 22, 2011. On this date, Devereux delivered a letter to Conour which read: “I am terminating my employment with your law firm effective December 22, 201[1] In addition, please remove me from the firm's name immediately including but not limited to the firm's letter head, the firm's website, all signage at the office and all marketing materials.” Appellant's App. p. 120.

[10] Devereux averred that based upon his experience with the Firm, “whenever an attorney left their employment with the Firm, the Firm would prepare and file Withdrawals of that attorneys [sic] Appearance on all of the Firm's cases.” Appellant's App. p. 111. Devereux further averred that he “saw this practice occur firsthand after both John Daly and Jeffrey Hammond left their employment as attorneys with the [Firm].” Appellant's App. p. 111. Devereux also averred that it was his understanding that, upon his resignation, the Firm did prepare and file withdrawals of his appearance on all of the Firm's cases and that he was advised by the office staff at the Firm that the withdrawals of his appearance had, in fact, been prepared shortly after he resigned.

[11] On December 23, 2011, Conour informed the Loves, via letter, that Devereux was “no longer an employee with [Conour's] law firm.” Appellant's App. p. 101. The December 23,...

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