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Summary Judgment Ends $2.5 Million Failed Development Claim Against Law Firm

April 21, 2016

Billy Newcomb and Joe Kingma successfully defended a law firm sued after a Chatham County waterfront development failed. Claims against the law firm were brought by the title insurer and the borrower. The lender had been put into involuntary bankruptcy and its successor in interest, which had purchased the loan out of bankruptcy, was a party defendant as well.

CCS filed a motion for summary judgment against the title insurer. It argued that the insurer had no duty to defend or indemnify its insured (the purchaser of the loan that it was already defending under the policy) because the potential for a discrepancy was made known to the failed lender by the law firm and thus the title insurer had no claim against the law firm that issued the policy. In the face of a strong brief, the title insurer settled its claim against the law firm rather than file a response.

That left CCS free to tee off on the borrower. On summary judgment, CCS argued that the borrower’s claims failed because: 1) there was no attorney-client relationship; 2) the borrower could not show the law firm made a false representation on which the borrower was entitled to rely; and 3) the borrower, who had also declared bankruptcy, could not show damages proximately caused by the law firm’s alleged error.

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For informational purposes only. Past success does not indicate the likelihood of success in future cases.