Herzog Law Firm, others sued over alleged fraud by Lawsuit Lending Now

By Robbie Hargett | Dec 14, 2015


DALLAS (Legal Newsline) – A South Carolina legal financing company is suing a property casualty insurer, a law firm, and a national bank over an allegedly fraudulent scheme that damaged the legal financing company.

Lawsuit Lending Now filed a lawsuit Dec. 3 in the Dallas Division of the Northern District of Texas against Progressive Insurance, Kathryn Smith, The Herzog Law Firm, Michael Herzog individually, Ryan Gordon, and JP Morgan Chase Bank, alleging fraud, negligent misrepresentation, breach of contract, and negligence and/or conversion.

According to the complaint, Lawsuit Lending Now, which provides cash advances to parties seeking attorney representation in lawsuits, entered into purchase agreements with Gordon, Herzog, and the Herzog Law Firm. These defendants signed and executed the assignment of lien, security interest, and assignment of proceeds to Lawsuit Lending on May 6, 2014. Lawsuit Lending then wired funds to Gordon and JP Morgan Chase Bank.

Then, on June 24, 2014, the suit states, Herzog emailed Smith, an employee of Progressive Insurance, advising her that Herzog was not representing Gordon but that Gordon had arranged for the payment of Herzog's attorney fees. Herzog represented to Smith that "there were unpaid liens, not yet resolved," and Gordon then accepted $100,000 from Progressive Insurance, which he then deposited into the same JP Morgan Chase account into which Lawsuit Lending had previously wired advance funds, according to the suit.

The suit states Gordon and Herzog contrived a plan prior to seeking the advance from Lawsuit Lending and appropriated the funds for their own benefit without intention to honor their agreement, despite Herzog owing fiduciary responsibility to Lawsuit Lending to hold third-party funds belonging to Lawsuit Lending and not allow disbursement of any funds prior to Lawsuit Lending being paid back for its advance.

The suit claims Gordon and Herzog knew there would be no proceeds of the settlement released to Gordon and Herzog prior to Lawsuit Lending being paid, and now Gordon exercises exclusive use and control over the assigned funds for Lawsuit Lending.

Lawsuit Lending seeks an order enjoining Gordon and Herzog from withdrawing, transferring, or otherwise wasting any funds from the JP Morgan Chase account; disgorgement of funds; compensatory, actual, and punitive damages; and attorney fees and costs. The plaintiff is represented by attorney Douglas J. Brooks of The Brooks Firm in Dallas.

Dallas Division of the Northern District of Texas Case number 3:15-CV-03865-M

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Organizations in this Story

Dallas Division of the Northern District of Texas J.P. Morgan Chase Lawsuit Lending Now Progressive Insurance The Brooks Firm The Herzog Law Firm

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