$3.7 million default judgment leveled against Tom Lakin and firm in legal malpractice case

A federal judge in Oklahoma has entered a default judgment of $3,752,601.80 against Thomas Lakin and the Lakin Law Firm of Wood River in an injured Oklahoma railroad worker's legal malpractice claim.

Stephen Williams of Chouteau, Okla. filed suit against the Lakins in federal court on Sept. 26, 2006, after his $3 million-plus, tax-free structured settlement with Union Pacific over a 1991 injury was absconded by money manager James Gibson.

U.S. District Judge Claire V. Eagan, chief judge of the Northern District of Oklahoma, entered the judgment on April 18 after the Lakins did not appear in the case, even after being granted extra time to answer. The case was transferred to the U.S. District Court of the Southern District of Illinois on May 24.

"Neither L. Thomas Lakin nor The Lakin Law Firm, P.C. has appeared or filed anything in the present case, either by themselves or by retained counsel...," Williams' motion for default judgment stated.

Represented by David W. Herrold of Herrol Herrold & Co. in Tulsa, Okla., and W. Greg Wright and Charles T. Schimmel of Hill, Beam-Ward, Kruse & Wilson of Overland Park, Kan., Williams has asked the court to expedite the judgment.

"Due to the fact that The Lakin Law Firm, P.C., its former principal and co-judgment debtor herein, L. Thomas Lakin, and its current president, Bradley Lakin, are now involved in civil and criminal matters, at least two of which are pending in this Court, that could significantly impact or impair the assets of The Lakin Law Firm, P.C., or L. Thomas Lakin, that may be used to satisfy the judgment registered herein," Williams' pleading stated.

Lakin was indicted April 23 on charges of cocaine use and distribution as well as transporting a minor male to Malibu, Calif. with the intent to engage in sexual activity. He is free on a $250,000 unsecured bond and his trial is set to begin Jan. 10, 2008, in Benton.

Williams, a Union Pacific worker who in 1991 became permanently disabled, hired Lakin to pursue a claim.

According to Williams' complaint, Lakin traveled to his Oklahoma home "immediately" after he was injured on Feb. 9, 1991.

Williams' structured settlement with Union Pacific provided for a payout over 20 years wherein the railroad made monthly $11,165.13 payments, compounding annually at 3 percent, beginning Nov. 20, 1995, and ending on Oct. 20, 2015. Additionally, Union Pacific was obligated to pay Williams $3 million on Nov. 20, 2015.

He stopped receiving payments in June 2000 and learned two months later that Gibson had "converted and absconded with the assets of SBU and the assets held in trust for Plaintiff."

Williams alleges that the Lakin firm agreed to represent him and other clients in prosecuting claims against SBU by filing suit in Madison County in October 2001. But in October 2004, "Plaintiff unexpectedly received notice from an unknown attorney that was not a member of Defendant Lakin Firm that the Lakin Firm had given full authority to the attorney to handle, prosecute and/or settle Plaintiff's claims in the SBU lawsuit," Williams' complaint states.

He claims that the Lakin firm never discussed with him that it was going to hand over responsibility of his claim to another attorney, nor had he authorized it. Williams' suit claims the new attorney mishandled his case and settled portions of his claims without his consent.

In April, the Record reported that Lakin's malpractice insurer, the Illinois State Bar Association Mutual Insurance Co., has not paid the firm's clients over the loss of funds.

Clients of Lakin and other firms lost about $50 million eight years ago when Gibson, the manager of their settlement funds, stole the money.

Gibson was arrested in South America and went to prison in America.

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.

Steve Korris contributed to this report