Wells Fargo accused by law firm of unlawful conversion of settlement check

NEW ORLEANS – A New Orleans area law firm is suing Wells Fargo Bank NA claiming it "forced" deposit of a settlement check intended for its firm to distribute.

Glago Law Firm LLC filed the suit in the Orleans Parish Civil District Court on Jan. 30.

According to the suit, Glago was hired by Martin Tollin and Lazlo Szujo to provide legal representation against their homeowner’s insurer, Lighthouse Insurance Company, for a first party property damage claim, in January 2012.

The contract provided that Glago receive 40 percent of the settlement plus reimbursement of expended costs. Glago claims it filed a lawsuit, hired experts, conducted written discovery and several depositions over the course of two years and settled with Lighthouse for $20,000.  The suit alleges that the settlement check listed Szujo, Tollin, Glago, and Wells Fargo as payees. Szujo and Tollin endorsed the check and Glago mailed it to Wells Fargo with instructions that it endorse it and mail back so it can be put in trust account and then disbursed to the proper parties. The check was not endorsed by Glago. The plaintiffs assert that Wells Fargo deposited the entire check into its own account, despite the missing Glago endorsement. Glago claims Wells Fargo termed this a “forced deposit” and was a regular practice. Glago asserts that while Wells Fargo held the mortgage on the property, it did not assist on litigation.

Wells Fargo is accused of wrongfully converting $20,000 in settlement funds, and not paying Glago its statutorily privileged attorneys’ fees, $8,000 plus its costs expended in achieving the settlement, $2,066.36. It is further accused of failing to properly supervise employees, agents and brokers, improper negotiation of a check, unfair trade practices, breach of fiduciary duty, breach of contract, fraud and theft or unlawful conversion.

Glago is represented by attorney Rina Eisenberg.

Wells Fargo answered the suit on March 17 claiming the suit is overly vague. Additionally, it argues that Glago’s claims are barred by the doctrine of compensation or set-off, barred by the terms of the relevant mortgage and insurance policies.

Wells Fargo is represented by Laurie D. Clark of Baker Donelson Bearman Caldwell & Berkowitz.

Case is assigned to Division F Judge Christopher J. Bruno.

Case no. 2014-01072.