Scammed law firm sues insurer for lost money
An Arkansas law firm has sued its insurer in a bid to recover nearly $100,000 lost to a scammer.
The suit filed by Watts Donovan & Tilley against Valley Forge Insurance Co. says the loss is covered under a provision of its insurance policy covering losses from forgery, Arkansas Business reports. The suit (PDF), filed Jan. 8, was removed to federal court in Little Rock.
Watts Donovan was hired in March 2014 by someone representing himself as a London architect who wanted to collect professional fees from Arkansas clients, according to the suit. The law firm received a cashier’s check for $97,588 from the architect’s purported clients on April Fools’ Day 2014. The firm deposited the check at Regions Bank and wired the entire amount to the man in London.
The cashier’s check turned out to be a forgery, and the bank told the law firm it was on the hook for the loss, the suit says.
In its answer (PDF) to the complaint, Valley Forge says the policy provision regarding forgeries doesn’t apply to this situation. The provision covers situations in which the forged check or other instrument was made by or drawn upon the law firm, Valley Forge says.
The policy reads: “We will pay for loss resulting directly from ‘forgery’ or alteration of, on, or in any check, draft, promissory note, bill of exchange, or similar written promise, order or direction to pay a sum certain money, made by or drawn upon you, or made or drawn by one acting as an agent or claiming to have been so made or drawn.”
The policy defines forgery this way: “ ‘Forgery’ means the signing of the name of another person or organization with intent to deceive; it does not mean a signature which consists in whole or in part of one’s own name signed with or without authority, in any capacity for any purpose.”
