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Polsinelli Must Face Legal Malpractice Suit Over Old Crypto Club

May 18, 2022, 9:20 PM

Polsinelli PC failed to convince a federal judge in Florida on Wednesday to throw out a legal malpractice suit alleging the firm didn’t do sufficient due diligence in its representation of a now-defunct cryptocurrency trading club.

The liquidating agent for Q3I LP sued Polsinelli and one of its attorneys for legal malpractice and other claims. The suit alleges the lawyers failed to catch false representations made by Michael Ackerman, who created the crypto trading algorithm used by the company, and didn’t verify the accuracy of his reported returns.

The firm moved to dismiss the complaint April 4, arguing it falls under the pari delicto doctrine, which bars legal remedies where both parties are equally wrong.

Judge Virginia M. Hernandez Covington of the US District Court for the Middle District of Florida denied the dismissal bid, saying the amended complaint alleges that Ackerman acted alone when he victimized Q3I. Because the complaint must be taken as true at this stage, the doctrine isn’t applicable on its face, the court held.

Covington further noted that the “typical practice” in the circuit is to “consider affirmative defenses at summary judgment.”

The court gave defendants 14 days from the order to file an answer to the amended complaint.

The defendants are represented by Mitrani, Rynor, Adamsky & Toland PA. The agent is represented by McIntyre Thanasides.

The case is Vyas v. Polsinelli PC, M.D. Fla., No. 8:22-cv-00071, 5/18/22.

To contact the reporter on this story: David McAfee in Los Angeles at dmcAfee@bloomberglaw.com

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