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12/17/2013

Gordon & Rees Denver Team Wins Summary Judgment in Suit Alleging Fraud and Deceptive Trade Practices

Gordon & Rees Denver partner John M. Palmeri, senior counsel Heather K. Kelly, and associate Nicole Salamander Irby successfully defended a prominent law firm in defense of a fraud and consumer protection act lawsuit in connection with a conservation easement.

The plaintiff, who had purchased a ranch in rural Colorado, was referred to a partner in the client law firm’s Denver office who specialized in conservation easements. The plaintiff alleged that the attorney’s conservation easement advice was false and deceptive.

The plaintiff’s conservation easement tax deduction was disallowed by the Internal Revenue Service and the Colorado Department of Revenue. The plaintiff sued the law firm alleging fraud and deceptive trade practices. The plaintiff also asserted fraudulent nondisclosure, claiming the law firm failed to disclose an internal investigation of the attorney during the time period the firm represented the plaintiff.

Gordon & Rees filed a motion for summary judgment, arguing that the claims were time-barred. Gordon & Rees argued that the claim accrued when the plaintiff learned that both the attorney and the appraisers were under investigation regarding the conservation easement practice, the plaintiff’s records were subpoenaed, and the plaintiff incurred legal fees related to the subpoena and interviews with state agencies investigating the attorney and appraisers. Gordon & Rees argued that the plaintiff need not discover all facts – such as the law firm’s investigation -- because under that analysis the statute of limitations would never accrue for a fraudulent omission or nondisclosure case.

The District Court agreed concluding the facts were sufficient to put a reasonable person on notice of the fraud and deceptive trade practices claims and that a plaintiff need not know all facts forming the basis of the claim for the cause of action to accrue.  The plaintiff has filed an appeal of the District Court’s summary judgment order, which is pending.

John M. Palmeri



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