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Minnesota Lawyers Mutual Insurance Co. v. Conour

United States District Court, S.D. Indiana, Indianapolis Division

October 8, 2014

MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY, Plaintiff,
v.
WILLIAM F. CONOUR, et al., Defendants.

ENTRY ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND MOTIONS FOR DEFAULT JUDGMENT

WILLIAM T. LAWRENCE, District Judge.

This cause is before the Court on the motion for summary judgment (dkt. no. 154) and the motions for default judgment (dkt. nos. 148-153) filed by Plaintiff Minnesota Lawyers Mutual Insurance Company ("MLM"). The motions are ripe for ruling, [1] and the Court, being duly advised, GRANTS the motions for the reasons set forth below.

I. STANDARD FOR SUMMARY JUDGMENT

Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." In ruling on a motion for summary judgment, the Court accepts as true the admissible evidence presented by the non-moving party and draws all reasonable inferences in the non-movant's favor. Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009). However, "[a] party who bears the burden of proof on a particular issue may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial." Id. Finally, the non-moving party bears the burden of specifically identifying the relevant evidence of record, and "the court is not required to scour the record in search of evidence to defeat a motion for summary judgment." Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001).

II. BACKGROUND

On April 27, 2012, Defendant William Conour was charged by criminal complaint in the United States District Court for the Southern District of Indiana with misappropriating client funds in violation of 18 U.S.C. ยง 1343.[2] The complaint alleged, in part, that Conour ran a socalled "Ponzi scheme" with clients' settlement funds and converted a large portion of those settlement funds to his own use and benefit. Shortly thereafter, the Disciplinary Commission of the Supreme Court of Indiana instituted disciplinary proceedings against Conour. Conour eventually resigned from the Indiana Bar, and the disciplinary proceedings against him were dismissed on June 28, 2012.

On July 15, 2013, Conour pled guilty to one count of wire fraud. During his change of plea hearing, he admitted that:

Beginning as early as 1999 and continuing through April 2012, in Hamilton and Marion Counties and elsewhere in the Southern District of Indiana, [he]... knowingly devised and participated in a scheme to defraud and to obtain money and funds from his clients and others by means of materially false and fraudulent pretenses, representations, and promises...
It was part of the scheme that after receiving settlement funds on behalf of some clients, [he] convinced the clients to accept monthly payments over a period of years rather than to accept a lump sum payment. [He] created trust accounts for the clients through State Bank & Trust, doing business as Reliance Financial Services, and Ohio Financial Institution, to facilitate the monthly payments. Rather than depositing the entire amount of settlement funds with Reliance, [he] funded the trusts only on a yearly basis, thereby unlawfully keeping for his own use and benefit the bulk of the settlement proceeds totaling more than $3 million.
It was further part of the scheme that after receiving settlement funds on behalf of some clients, [he] failed to notify the clients that he had received settlement funds on their behalf, and in some cases falsely denied that he had received any settlement funds. Thereafter, [he] unlawfully converted the settlement funds to his own use and benefit and, in part, used the settlement funds obtained for some clients to make settlement payments to other clients.
It was further part of the scheme that [he] stole, misappropriated, and unlawfully converted to his own use more than $4, 500, 000 belonging to more than 25 clients. On or about October 6, 2011, in the Southern District of Indiana and elsewhere, [he], for the purpose of executing the above-described scheme, knowingly caused to be transmitted in interstate commerce, by wire communication, certain writings, signs, and signals, namely a facsimile transmission from his office in Indianapolis, Indiana to Zurich American Insurance in New Jersey, which contained [a client's] release and indemnification agreement.

Dkt. No. 155-5 at 12-14. Conour was thereafter sentenced to 120 months in prison and ordered to pay restitution to the client-victims.

Prior to that, MLM issued a series of claims made and reported attorney malpractice insurance policies to Conour's law firms beginning in 2007. The MLM policy number, named insured, and effective policy dates of each of the MLM policies were as follow:

The policies are collectively referred to as the "MLM Policies, " and the named insureds are collectively ...


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