DALLAS (CN) - The court-appointed receiver of R. Allen Stanford's $7 billion Ponzi scheme cannot pursue legal malpractice claims against Chadbourne & Parke because they are too late, the law firm claims in court.
Receiver Ralph S. Janvey, a partner with Krage & Janvey in Dallas, and the Official Stanford Investors Committee sued the New York-based law firm, former partner Thomas V. Sjoblom and Proskauer Rose in Federal Court in January 2013.
Sjoblom, of Virginia, was a partner at Chadbourne from 2002 to 2006 and a partner at Proskauer from 2006 to 2009.
Janvey claims that Sjoblom knew Stanford Financial was "at best, committing securities fraud" and that " at worst ," knew Stanford Financial was running a Ponzi scheme as of August 2005.
The receiver claims that the defendants' obstruction of regulatory investigations was essential to the survival of the scheme and that without it, "Allen Stanford and his co-conspirators would not have been able to execute the Ponzi scheme, and billions of dollars in damages to Stanford Financial companies ... would have been avoided."
In an Oct. 3 motion to dismiss, Chadbourne & Parke asked U.S. District Judge David C. Godbey to throw out Janvey's claims against it with prejudice.
It says his claims are "based entirely" on legal services provided by Sjoblom between June 2005 and April 2006 - services that consist of two letters to the U.S. Securities and Exchange Commission in an inquiry into Stanford Financial.
The law firm says that Janvey's legal malpractice claim under Texas law is barred by the 2-year statute of limitations. The alleged malpractice took place more than 7 years before the lawsuit was filed.
"Plaintiffs' allegation that their untimeliness should be excused because the alleged malpractice was only 'recently' discovered is unavailing, as the complaint and public record demonstrate beyond doubt that plaintiffs knew or should have known of their claims no later (and likely much earlier) than October 2009," the motion states. "Further, Texas' prohibition on 'fracturing' a legal malpractice claim bars plaintiffs from evading dismissal by opportunistically repackaging their legal malpractice claim as separate, non-negligence causes of action subject to longer limitations periods."
Chadbourne also contends the claims should be tossed under the doctrine of in pari delicto under New York law, which it says is applicable under a choice-of-law provision in a retainer letter with Stanford Financial.
The doctrine "precludes Stanford Financial from pursuing claims arising out of its own fraudulent scheme against a third-party professional that is alleged to have been, at most, negligent," the motion states. "Under New York law, there is no exception to in pari delicto for receivers. Because the receiver stands in the shoes of the primary wrongdoers, their wrongdoing is imputed to him."
Janvey fails to allege any injury to Stanford Financial caused by the law firm, Chadbourne claims. It also says he fails to state a claim in any of his seven claims under New York law.
"Plaintiffs' theory of causation is too speculative to confer standing and insufficient to plead proximate cause, an indispensable element of each of plaintiffs' claims," the motion states. "Among other fatal deficiencies, the complaint does not plead the breach of any duty owed by Sjoblom or Chadbourne as lawyers for Stanford Financial, or knowing participation or substantial assistance to the Stanford Financial Ponzi scheme by Chadbourne (through Sjoblom)."
Janvey did not respond to a request for comment Monday.Follow @davejourno
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