SPRINGFIELD – Lakin Law Firm founder Tom Lakin has sworn in a civil suit that he saw no liability on his part for the disappearance of money from structured settlements of his clients.
Clients of Lakin and other firms lost about $50 million eight years ago when the manager of their settlement funds, James Gibson, stole the funds.
Gibson was arrested in South America and went to prison in America.
Attorneys who had advised clients to trust him faced possible malpractice charges. Their insurers reimbursed the clients.
Lakin's malpractice insurers, however, have not paid.
Since 2002 the Illinois State Bar Association Mutual Insurance Company has sought a Sangamon County circuit court order rescinding a malpractice policy it issued to the Lakin firm in 2001.
ISBA Mutual argues that it would not have issued the policy if the firm had not misrepresented facts in its policy application.
According to ISBA Mutual, the firm stated it did not know of claims or potential claims against it when the firm knew about such claims.
The firm switched its malpractice to ISBA Mutual from American National Insurance, later known as Great American Insurance.
In 2002 ISBA Mutual filed suit in Sangamon County for declaratory judgment against the firm.
Robert Chemers of Chicago wrote that before ISBA Mutual issued the policy, the firm advised clients of potential claims from Gibson's theft.
In addition to Gibson, the complaint covered a malpractice claim from a former Lakin client in a Greene County crash involving cars and a cow.
For the firm, Thomas Wilson of Springfield filed a counterclaim for an order requiring ISBA Mutual to defend and indemnify the firm.
To complicate the case, the record included a July 26, 2002, letter from Tom Lakin to Great American.
It stated that when Lakin learned of Gibson's theft he called Great American and asked what he should do about potential claims.
It stated that he was told to wait until a claim was filed.
To ISBA Mutual, the letter proved Lakin knew about potential claims before he switched insurers.
ISBA Mutual argued that the court should order Great American to defend and indemnify the firm.
In 2004, Andrew Witik, representing Great American, deposed Lakin Law Firm managing attorney Brad Lakin, son of Tom Lakin.
Witik asked how long his father continued his involvement with the firm after 1997, when he became managing attorney.
Lakin said, "Still does."
Witik asked if he had any involvement in the structured settlements.
Lakin said he did not.
Witik asked if he had any involvement in the interpleader action.
Lakin said, "I don't even know what you're talking about."
Witik said, "What about the Mertens Stone action?"
Lakin said, "Not a clue."
Lakin said his dad told him a crook ran off with money.
Witik asked if he and his father discussed that as a problem for the firm.
Lakin said, "No, I didn't see how some criminal could run off with our clients' money and us be liable for it."
On March 30, 2005, Chemers deposed Tom Lakin at the firm.
Chemers showed Lakin an exhibit and asked if it was a correct copy of a letter he signed.
Lakin said, "Signed by someone on my behalf, yes."
Chemers said, "That is not your signature?" Lakin said no.
Chemers said, "Are you the author of exhibit one?"
Lakin said, "I signed the letter. I didn't dictate it."
Chemers said it referred to a phone call. He said, "When was that phone call?"
Lakin said, "They were unable to find it but it was – I'm going to go through the bill, through the phone bills myself again. But it was a call made from my home where I worked. I mean it would just be a shot in the dark."
Chemers said, "You made the phone call?"
Lakin said, "I made a call to Springfield, to ISB. I talked to somebody and they referred me to a woman with a law firm in Chicago."
Chemers asked if he made the call in 2000. Lakin said he did.
Chemers said, "ISBA wasn't your insurer in 2000."
Lakin said, "I was calling to find out who the insurer was."
Chemers said, "The call, Mr. Lakin, was to Great American. Your letter is to Great American."
Lakin said, "Look, somebody else got the name of the Great American, and the letter was dictated by Gail."
Chemers had deposed Gail Renshaw of the Lakin firm, and she had not identified herself as author. He asked Lakin why Renshaw wrote it.
Lakin said, "In matters of this nature, I mean she just would be involved. I wasn't very much involved in the firm at that time."
Chemers said he assumed Renshaw would not have written it if they had not discussed it.
Lakin said, "I did or Sandy did."
Chemers said, "Who is Sandy?"
Lakin said, "My paralegal at the time."
Chemers asked if he memorialized in writing a call putting his insurer on notice of potential claims.
Lakin said, "I really wasn't doing that. I was just saying here is what happened."
He said, "I didn't and don't think, you know, today, that there is any liability here."
Chemers said, "Liability is different than whether there is a claim?"
Lakin said, "A claim? Well, I wasn't thinking that way at all at that time."
Last year Sangamon County Circuit Judge Patrick Kelley declared the letter inadmissible hearsay.
He granted summary judgment to Great American.
ISBA Mutual appealed the decision to the Fourth District appellate court in Springfield.