Attorney Escapes Legal Malpractice Claim Due to No Actual Knowledge that his Partner Stole Funds from Client

The Court of Appeals of Indiana recently affirmed a trial court’s order granting summary judgment for a defendant attorney in a legal malpractice case. The basis for the summary judgment order was that there was no question of fact of whether the attorney deviated from the standard of care.  The case was an offshoot of a progeny of cases that arose from the theft and deceit committed by former Indianapolis attorney, William Conour (“Conour”).  In this instance, one of Conour’s clients sued his former colleague, Timothy Devereux (“Devereux”), for failing to notify her that there were potentially red flags of the handling of her personal injury settlement proceeds by Conour.

In the case, Rene DiBenedetto v. Devereux, DiBenedetto was involved in a head-on collision in 2010. 2017 Ind. App. LEXIS 274 (Ind. App. 2017).  She subsequently engaged Conour to handled the claims. Early in the following year, Conour settled DiBenedetto’s claim against the tortfeasor and their insurance company for $50,000.  However, the release preserved DiBenedetto’s right to bring a claim under her insurance policy for Underinsured Motorist (UIM) coverage.

In 2011, when Conour was out of the office, DiBenedetto and her father visited the law office on an unscheduled visit and inquired about the status of the case.  Devereux had not been handling the matter; but, checked the on the status of the case with a paralegal and reviewed the entries on firm’s case management program.  He then became aware that a check was cut for $50,000 by the tortfeasor’s insurance company and that DiBenedetto’s medical liens were just shy of $35,000.  He then explained that despite the check being over the medical liens, it was typical in cases such as this one that there not be a disbursement until all of the liens were settled.  He then instructed DiBenedetto to follow-up with Conour about the status of the case.

Later in 2011, DiBenedetto’s UIM claim was settled; but, once again, she never received any of the proceeds.  Devereux resigned from the law firm during this time period due to his concerns about Conour’s actions.  In 2012, Conour was charged with stealing millions of dollars from his clients, including DiBenedetto, and ultimately plead guilty in 2013.

DiBenedetto subsequently brought a legal malpractice claim against Devereux alleging that he breached his duty to her by not providing accurate information relating to her settlement proceeds.  Devereux argued that it was common practice for personal injury attorneys to hold money in trust while settling underinsurance claims.  Therefore, he had no reason to suspect at the time that there was any misdoing by Conour. The trial court was persuaded by this explanation and granted summary judgment.

Thereafter, DiBenedetto appealed, arguing that there was a question of fact, because she introduced an affidavit from an attorney that Devereux deviated from the standard of care.  In the affidavit, the attorney stated Devereux “should have taken some actions to protect [her] by investigating further” since he knew that the funds had not been disbursed for several months.  However, a split appellate court affirmed summary judgment, holding that Devereux had a duty to provide accurate information, and he provided it in this instance.  Therefore, there was no deviation, and summary judgment was appropriate.

Alex Passo and the Patterson Law Firm, LLC handle legal malpractice actions throughout Illinois and Indiana.  If you have a legal malpractice case that you would like to discuss with Alex, you can reach him at 312-750-1820 or