William Conour’s multi-million-dollar fraud case has produced an avalanche of state and federal lawsuits taking aim at a cavalcade of local attorneys, including some who used to work with the once-prominent, personal-injury attorney.
In federal court, a filing in August claimed Conour and his former law firm defaulted on a line of credit, owing more than $600,000. Separately, Conour’s former legal malpractice carrier has sued to void coverage for his acts, claiming they were intentional and therefore outside the scope of the policy.
Claims in state court name former Conour partners, including at least one who helped the federal government press the wire-fraud case against Conour.
The government accused Conour of defrauding at least 25 clients of more than $4.5 million. He pleaded guilty in July.
Conour is scheduled to be sentenced Oct. 17. 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.
“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. Pactor has filed suits in Marion Superior Court naming two former Conour partners in litigation brought by 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 that he couldn’t comment on pending litigation. 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.
“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," Fisher said.
Conour Doehrman appeared to be a partnership, presented itself as a partnership and advertised as a partnership. And it did nothing to inform consumers that it wasn’t a partnership, Fisher said.
Fisher in July 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 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. 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 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.
Pactor also has filed a suit naming former Conour firm attorney Timothy Devereux, now a partner at Ladendorf & Ladendorf.
The suit alleges that after Devereux 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, 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.
Another suit filed in Marion Superior Court names as co-defendants Conour and 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 a suit filed in August in U.S. District Court, 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. names a host of former Conour associates as co-defendants with Conour. 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.
So far, the restitution fund includes the $450,000 donation that Conour made to Indiana University Robert H. McKinney School of Law, which the university has returned to the court.
This story originally appeared in The Indiana Lawyer, a sister publication to Indianapolis Business Journal.