A Pulaski County jury awarded a Knoxville woman $143,784 in damages against a Little Rock attorney she accused of negligence for allowing a rogue member of his law firm to handle litigation for her.
The award was $150,190 less than Tracy Standridge asked for, and the eight men and four women of the jury also rejected her second claim of $649,137 in damages against Josh Sanford and his Sanford Law Firm, which was based on the same negligence accusations but as they applied to her now-defunct convenience store, Standridge Country Store Inc.
Jurors deliberated for about 3½ hours Friday before delivering the verdicts to conclude the three-day legal-malpractice trial before Circuit Judge Chris Piazza.
Standridge's attorney, Harry McDermott of Fayetteville, told jurors in closing arguments Friday that Sanford had violated one of the most sacred tenets of the practice of law: that attorneys must put their clients' needs above their own.
"All lawyers know they have to obey these rules," McDermott told jurors. "He knows he can't lie to a client. He knows you can't hide things from a client."
A former Sanford firm client, Standridge accused Josh Sanford of negligence for allowing a former member of his firm, Benjamin Thomas Donathan of Lamar, to continue to represent her and her Knoxville store in a legal dispute with her gasoline supplier in 2011, Frost Oil Co. of Van Buren.
Defense attorney Don Bacon told jurors that Sanford, faced with a member of the firm accused of forgery, did the best he could to handle the situation by following the advice of one of the state's most experienced lawyers. And before jurors could find Sanford and the firm liable, they would have to find that Standridge would have won the Frost Oil litigation, Bacon said.
"Would she have won the Frost lawsuit if she had a different lawyer?" Bacon said in his closing. "In order for Ms. Standridge and the Standridge Country Store to win ... she has to prove to you ... she would have defeated the claim and she would have won damages [from Frost]. If she can't convince you she was going to win the lawsuit, none of the rest matters."
Standridge testified that her store had missed a payment to the supplier because an employee had stolen $12,300 worth of state lottery tickets in December 2010, money she was required to immediately reimburse the state. Frost sued for the payment.
Standridge said Donathan failed to file a countersuit against the company like he had promised her, and not only lied to her that he had filed it, but also told her the gas supplier was eager to settle the dispute, which was about gas-storage tanks and credit card billing, out of court.
She said Donathan deceived her into missing a crucial court date, which resulted in a $24,190 judgment against her. Standridge said that judgment sent her and her store into a downward financial spiral that resulted in her losing her home and the store on U.S. 64 in Knoxville.
The amount Standridge sought represented reimbursement for the Frost Oil Co. judgment and the money she believed she would have won in her countersuit against Frost.
But the damages awarded to her Friday represent only reimbursement she sought for the loss of her store and do not include the Frost judgment and the money she believed her countersuit against the supplier would have won her. The damages she had sought on behalf of her store as a separate entity included 18 years of future profits, about $38,000 annually, that she had expected to earn so she could retire at age 65.
Standridge complained that she had to learn from Donathan, not the Sanford firm, that he was in trouble with the law and on the verge of losing his law license. She said she contacted the Sanford firm, asking for it to continue representing her, but was refused.
Josh Sanford testified that he learned Donathan, who had worked for the firm almost three years, was being investigated in May 2011 for forging judges' signatures on divorce papers. Sanford told jurors he immediately made arrangements for Donathan, a 2.5 percent shareholder in the law firm, to leave the firm, agreeing that Donathan could take 70 of the cases assigned to him as Donathan started his own practice.
"I didn't want to have anything to do with someone even being investigated for that," Sanford said, describing the situation as "upsetting and confusing."
The Russellville Courier reported that Donathan was accused of forging the name of Pope County Circuit Judge Dennis Sutterfield, Yell County Circuit Judge David McCormick and Pope County Circuit Judge Gordon "Mack" McCain. Some of the documents appeared to also have fake clerk file stamps, according to the June 10, 2011, newspaper report. Donathan admitted to the accusations, telling authorities he was "trying to help his client(s) out," the Courier reported, citing official records.
Donathan, who was not a party to Standridge's suit, was arrested in June 2011 and pleaded guilty to four counts of felony forgery in January 2012 in Johnson County Circuit Court in exchange for four years on probation. Donathan, 36, also surrendered his law license in September 2011 rather than go through disbarment proceedings, Arkansas Supreme Court records show.
Sanford told jurors he did not tell anyone outside the firm about the accusations against Donathan because Donathan and his lawyer, James Dunham, denied wrongdoing so strongly and Sanford didn't know if the accusations were true.
"I didn't feel right about saying something I didn't know to be true," Sanford testified.
Donathan was supposed to write a letter to the clients whose cases he retained to give them the option of choosing him or the Sanford firm but did not fulfill that obligation, Josh Sanford acknowledged.
Everything Sanford did to separate Donathan from the firm, including allowing the man to keep cases, was guided by the advice he got from his attorney, Jeff Rosenzweig, Sanford testified, citing the attorney's experience in both criminal law and legal ethics.
"I just did what Mr. Rosenzweig told me to do," Sanford told jurors, saying he'd spent at most 12 minutes on Standridge's case when she hired the firm. "I didn't know anything about Ms. Standridge's case. [Donathan] was the one who had done the work. He was the one who had a relationship with her."
Metro on 04/19/2015