Chris Pettit’s former clients aren’t the only ones to claim they were duped by him

SAN ANTONIO — Christopher “Chris” Pettit’s ex-clients aren’t the only ones to say they were tricked by the disgraced former San Antonio attorney.

An insurance company that is part of billionaire Warren Buffett’s Berkshire Hathaway conglomerate alleges in a lawsuit filed this week that Pettit’s misrepresentations led it to issue a $2 million malpractice insurance policy. dollars to his law firm last October.

The insurance was intended to protect Pettit and others in his practice against losses resulting from their professional conduct.

Nebraska-based National Liability & Fire Insurance Co. is suing the bankruptcy trustee administering Pettit’s assets in an effort to void the policy.

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Administrator Eric Terry, however, refused. According to a Sept. 12 letter a lawyer for Terry sent to the insurer’s attorney, the trustee will not agree to void the policy and “will continue to seek coverage for covered claims for legal services.” .

National Liability’s allegations “do not support termination of Pettit’s malpractice insurance policy,” Terry said in an email Thursday. “The policy and its proceeds are assets of the assets of the bankruptcy (and) should be available to indemnify creditors of the assets harmed by Pettit’s malpractice.”

The National Liability filed its lawsuit in U.S. Bankruptcy Court in San Antonio, where Pettit and his company sought refuge with creditors in massive cases filed June 1. The filings, which have been consolidated, came after his clients filed a dozen lawsuits alleging he collectively misappropriated tens of millions of dollars that belonged to them.

Pettit’s company reported $13.8 million in assets and $112.8 million in liabilities in its latest bankruptcy schedules. He specialized in estate planning and personal injury cases, but also provided financial advice and investment management services. Pettit gave up his law license in lieu of discipline and closed his law firms.

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He has been in jail for contempt of court since September 9, when a judge found he had not told the truth during his bankruptcy proceedings. On Thursday morning, several of Pettit’s creditors and their representatives dialed into a conference call to question him again. But he didn’t call from the Karnes County Detention Center.

A lawyer for the U.S. Administrator’s Office declined a request to schedule another meeting given that Pettit has already undergone more than seven hours of questioning. Additionally, Pettit is due to be interviewed by representatives of some creditors next week.

In its lawsuit, National Liability seeks a court order declaring the insurance policy void and that it has the right to void the policy.

When Pettit induced the insurer to issue the policy, according to the lawsuit, he stated in the request that no claims had been made in the past five years against him or his business. He also claimed that he was “not aware of any act, error, omission or incident which could reasonably be expected to give rise to a claim or lawsuit” against him or his company.

These representations were false, National Responsibility alleges.

On ExpressNews.com:

Part of the real estate transferred by Chris Pettit before the bankruptcy will be returned as part of an agreement

Indeed, eight days before Pettit filed a form as part of his policy application in September 2021, the insurer alleges he acknowledged in writing that he had received a copy of a lawsuit that later filed against him and his firm by Dr. Salvador Ortiz.

Ortiz had retained Pettit’s services for estate planning, including creating a will and forming two trusts. The doctor alleged that Pettit embezzled around $10.9 million but repaid $8 million before payments were stopped, prompting the doctor to sue for fraud and breach of fiduciary duty .

Ortiz’s complaint and other lawsuits against Pettit and his firm indicate that their “wrongful conduct … began long before debtors sought professional liability insurance” from National Liability in 2021, it says.

The insurer adds that it would never have issued the policy if Pettit had revealed that he and his company had “embezzled millions of dollars from their clients’ assets and money”.

National accountability says it informed the trustee on August 15 that it was canceling the policy due to “material misrepresentations and false warranties”. He offered to return the full amount of the premium paid for the policy to the trustee, but the trustee’s lawyer rejected the offer, the insurer adds.

A national liability attorney did not immediately respond to a request for comment.

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