Pennsylvania Record

Wednesday, April 8, 2020

Court upholds one of allegedly defrauded investor's three claims in legal malpractice case

Federal Court

By David Beasley | Mar 20, 2020


PHILADELPHIA (Legal Newsline) – A federal appeals court dismissed a plaintiff's claim of breach of contract and breach of fiduciary duty against the attorneys he hired to handle a fraud case, but gave Stephen Nkansah a partial victory by ruling his claim of professional negligence is “sufficient to survive the motion to dismiss.”

The decision was released Feb. 26 and written by Judge Timothy Savage.

When Nkansah invested $107,000 in a Colombian juice company in July 2014, he thought he was buying a 60% stake and was guaranteed a refund of his money on demand. It turned out “Juices” was a sham company and would never turn a profit. 

The men who talked Nkansah into the investment – Dotun Aiyegbusi, Byron Drayton, Robert Towns and Robert Lee Williams – were shareholders in another Colombian company, Wazzoo Beverages, and were using the money for that company instead of for Juices, Nkansah claims. 

Nkansah demanded a refund from the men, but when they refused he sued them for fraud in 2016.

A judge dismissed the case, citing a “lack of diligence” by Nkansah’s lawyers in the discovery process. Next, Nkansah sued his lawyers – Edward Dunham Jr. and Eric Schreiner – claiming they “ grossly mishandled” the case. Nkansah claims that if the lawyers had "employed the usual and customary legal processes in the United States or Colombia, they would have had proof that his money had been spent for purposes other than for Juices."

Nkansah is seeking damages equivalent to the judgment he would have obtained in his original lawsuit, punitive damages, interest, costs and attorneys’ fees.

The defendants made a motion to dismiss the case. They argued that Nkansah failed to make a claim for breach of contract, negligence or breach of fiduciary duty.

Savage dismissed two of Nkansah’s thee claims against Dunham and Schriener, but ruled his claim of professional negligence can move forward.

U.S. District Court for the Eastern District of Pennsylvania case number 2:2019-cv-04472

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U.S. District Court for the Eastern District of Pennsylvania