The NYLJ reports:
Day Pitney Lawyers Let Off Hook in Malpractice Suit Over Arms-Dealer Loan
Mary Pat Gallagher
New Jersey Law Journal
April 4, 2007
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A company that loaned $3.5 million to a business owned by a man convicted of trying to sell military parts to Iran illegally cannot sue the lawyers it says failed to warn it of the risk.
A federal judge on March 30 dismissed malpractice claims against lawyers from Day Pitney and other firms, finding the lender should have sued the lawyers as part of its state court suit against the borrowers and that, in any event, it was the borrowers’ fraud that caused the loss.
The case, Keltic Financial Partners v. Krovatin, 05-4324, stems from Daniel Malloy’s 1997 arrest and indictment for the attempted sale of 20 Phoenix missile-battery components to Iran. The long-range air-to-air missiles were the type used on F-14A Tomcat jets, which the United States had sold to Iran before 1979, when the shah was overthrown and the country became an Islamic republic.