Medical gowns are the topic of a recent lawsuit against a Houston attorney. Photo: sturti/iStockphoto.com

A Houston attorney was hit with a federal lawsuit alleging he mishandled more than $1 million in escrow funds in a botched deal for personal protective equipment.

During the personal protective equipment shortage caused by the COVID-19 pandemic, Gericare Medical Supply Inc. was helping its customers by trying to get personal protective equipment from various sources, according to its complaint.

It alleged Houston solo practitioner J.L. Sadick was representing a company that was supposed to sell 1 million medical gowns to Gericare. In that role, Sadick accepted half of a $2.8 million payment and was supposed to place the funds in escrow. The company claimed Sadick didn't refund the money when the deal turned south.

But the attorney denies this.

"There's no merit to it. I can't comment about it until the other parties are notified," Sadick said.

The medical gowns were supposed to be of a certain quality level and come from the United States, the plaintiff stated. But when they were delivered, it was only 3% of the order, and the gowns were made of a cheap plastic material and manufactured in China, alleged the petition in Gericare Medical Supply Inc. v. Sadick, filed Thursday in the U.S. District Court for the Southern District of Texas in Houston.

Gericare rejected the delivery, and the seller, Imitari Corp., promised a full refund of the escrow funds, according to the complaint.

But according to the lawsuit, there was trouble when Gericare sought its money back from the attorney.

Over multiple days between June 2 and June 15, Sadick stated in phone calls with Gericare's attorney that the funds would be wired to Gericare, but the funds did not come, the complaint stated. Over those multiple calls, Sadick didn't say the funds had already been removed from the escrow trust account, the petition alleged.

Finally on June 15, Sadick told Gericare's attorney that the funds were not available because one of Imitari's officers had "pledged" the escrow deposit and the funds were "tied" to that person's credit line.

The lawsuit claimed that Sadick did not get authorization to release Gericare's escrow deposit.

In later communications, the petition alleged that Sadick didn't respond to a request for documentation of what funds were in the escrow account. Sadick cut off communications after June 15, the petition said.

Gericare alleged that Sadick transferred the funds out of the escrow trust account, and although Gericare has demanded its funds back, Sadick has not returned the money.

The company also claimed that Sadick made misrepresentations about the reputability of a person and a company that Imitari was supposedly associated with. Gericare relied on those misrepresentations when it first decided to do the deal, said the petition.

Plaintiffs attorney Joshua Threadcraft, partner in Burr & Forman in Birmingham, Alabama, didn't immediately return a call or email seeking comment.

Read the lawsuit: