Arizona Firm Wins Right to File Suit in New York Court

January 16, 2001

A lower court decision that an Arizona insurance company could not sue its former attorney for malpractice, negligence and fraud was reversed last week by the Appellate Division of Arizona’s Supreme Court.

Senate Insurance Co., a Mesa, Az.-based subsidiary of the Lawrence Group, brought suit against Randall Ezick according to Knight Ridder/Tribune Business News. The report said Ezick had acted as Senate’s attorney in the 1996 purchase of property. in Schenectady from Barbara Lawrence, wife of former insurance magnate Albert Lawrence, who owned Lawrence Group.

Senate reportedly claimed that, in exchange for $2.6 million, it was to receive a full warranty deed for the property—the former Carl Co. retail store in downtown Schenectady—free and clear of all liens. Instead, the company received a quitclaim according to the report, which is given without guarantee or warranty, that included several million dollars in liens. In addition, no deed was filed with the Schenectady County clerk to show that Senate had purchased the building, according to the suit.

The building subsequently was listed in Barbara Lawrence’s bankruptcy case as part of her estate. The Lawrences and Lawrence Group’s network of insurance brokerages and agencies filed for bankruptcy court protection in 1997 according to the report. Many of the companies have since been liquidated.

In 1999, according to the news service, a settlement in bankruptcy court relieved Barbara Lawrence of her $2.6 million debt against Senate, while the $1.8 million proceeds of the court-supervised sale of the building were to be divided among several parties. Senate ended up with about $100,000. Senate’s difficulty in filing its suit against Ezick stemmed from a “mutual agreement” clause that released all parties from future claims.

In reversing the lower court ruling, Appellate Justice Thomas Mercure wrote “Although defendant (Ezick) may have also served as general counsel to LGI (Lawrence Group Inc.), the record provides no competent basis for a finding that LGI was a party to the [Schenectady] transaction, the inescapable conclusion being that the defendant represented plaintiff (Senate) and not LGI in connection with the subject real estate transaction.”

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