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Lawyer’s Lies Merit $206,000 Punitive Award, Federal Judge Rules

June 10, 2021, 4:25 PM

A real estate business owner received a legal malpractice award against his former attorney of more than $430,000, including about $206,000 in punitives, after a federal court in Indiana cited a series of lies about the legal work he was supposed to do but didn’t.

Marco A. Molina lied about filing tax deed petitions for clients Michael Lisnek and Lisnek’s business venture, which successfully bid on 62 properties at a tax sale auction, including a property on Broadway in Gary, Ind., according to the court’s default judgment ruling.

He misled Lisnek about the necessary filings “while stringing Lisnek along, lying about the status of the Broadway Property, secretly executing legal documents without Lisnek’s authority, and transferring Plaintiff’s deeded property to the prior owner without advising Lisnek,” Judge Philip P. Simon said Wednesday for the U.S. District Court for the Northern District of Indiana.

These actions were “all done with malice and the intent to deceive,” the judge said, in explaining the rare imposition of punitive damages in a legal malpractice case. “There is no other explanation.”

“Lying to a client about the status of petitions, and transferring a client’s property without his knowledge or authorization, cannot be tolerated and should be deterred,” he said.

Lisnek and two of his business ventures alleged they bid successfully on properties with delinquent tax bills and hired Molina to follow through with the process of notifying property owners about their deadlines for “redeeming” their properties by paying certain amounts, according to the court.

Some 28 property owners redeemed soon after the auction, leaving 34 property notices and subsequent court filings for Molina to handle.

Molina allegedly included the wrong redemption deadline on the notices, which resulted in a six-month extension for those properties’ former owners. Molina contacted Lisnek for payment of attorneys’ fees, but otherwise largely responded to his clients by “ignoring Lisnek’s communications, providing excuses for his delays, or simply telling him lies,” the court said.

Molina never filed the petitions for tax deeds after the redemption period expired. As for the property on Broadway in Gary, he allegedly entered into a secret agreement, selling the property back to the former owner through a quitclaim deed without authority to do so, pocketing an additional $750 on the sale.

Lisnek established the elements of professional negligence and, in the case of the Broadway property, breach of fiduciary duty, the court said.

Compensatory damages came to $205,833, Simon calculated. The judge declined to award 150% in punitive damages, instead awarding the same amount as the compensatories. And he ordered Molina to disgorge the $20,000 in attorneys’ fees that Lisnek paid.

Gassman Legal PC represented Lisnek. Molina didn’t enter an appearance.

The case is Lisnek v. Law Office of Marco A. Molina, 2021 BL 214784, N.D. Ind., No. 2:20CV20, 6/9/21.

To contact the reporter on this story: Martina Barash in Washington at mbarash@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com

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