59 Maiden Lane in Manhattan.Flagging Insurance Law Firm D'Amato & Lynch Accused of $1M Fraud
An insurance company's lawsuit against the firm says a settlement check was taken at a time when D'Amato & Lynch was experiencing "financial difficulties."
September 30, 2019 at 04:36 PM
3 minute read
An insurance company has accused law firm D'Amato & Lynch of depositing a client's $1 million settlement check into its operating account and refusing to pay it back, the latest sign of trouble at the Manhattan law firm known for its work in the insurance industry.
D'Amato & Lynch, which was sued by its former landlord earlier this year amid a marked decline in its head count, now faces a lawsuit by an insurance company. The latter suit, filed Sept. 20 in Manhattan Supreme Court, alleges the law firm placed a $1 million check made out to its trust account into its operating account, instead of using it to fund a client's settlement. The act took place amid "financial difficulties" for the law firm, the suit alleges.
The firm's website is now offline and several phone numbers immediately went to voicemail. It lists dozens of employees on LinkedIn, however. Luke Lynch Jr., the firm's managing partner, said in an email to the New York Law Journal that he has been caring for his wife since February and said he "had no involvement in this matter." He didn't respond to questions about the status of the firm.
"I have no comment other than the allegations as to me are incorrect," he wrote about the Sept. 20 lawsuit. "The matter has been referred to our insurer and is under investigation."
The developments come after years of dwindling numbers at the law firm, which was founded in 1969 by George D'Amato and eventually grew to nearly 100 lawyers, and dozens more staff, in a nine-story office in New York and a location in London, according to an archived copy of its website.
The firm left its offices at 70 Pine St., then being sold by its client AIG, in 2010 and decamped to 225 Liberty St. Its most recent offices were at 59 Maiden Lane downtown, on the 40th floor.
The Sept. 20 lawsuit was filed by First Mercury Insurance Co., acting through its agent, Riverstone Claims Management.
According to the complaint, First Mercury, whose claims manager said it hired D'Amato & Lynch to defend First Mercury policyholders in personal injury lawsuits, cut a $1 million check Oct. 15, 2018, to "D'Amato & Lynch LLP Trust Account" to cover a settlement in a case where the firm represented the insured.
Sometime afterward, the suit continued, "D&L advised that it was no longer able to handle the [First Mercury] files" and began transferring them to other lawyers. It subsequently notified First Mercury that it deposited the check in the wrong account, but since then, "has refused, failed to and without cause not returned the $1 million trust money."
The suit includes causes of action for negligence, breach of fiduciary duty, fraud, conversion, unjust enrichment, and violations of Section 487 of the New York Judiciary Law and of Rule 1.15 of the New York Rules of Professional Conduct. Andrew Bluestone, a lawyer for First Mercury and its claims manager, declined to comment.
Several former attorneys and staff at or formerly at the firm—Arturo Boutin, Michael Haig, David Boyar and Robert Lang—were named in the suit as defendants, in addition to Lynch. Boyar declined to comment and other individual defendants couldn't be reached.
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