The Ent Credit Union location at 1499 Wynkoop St. in LoDo. (Justin Wingerter/BusinessDen)
A law firm has been ordered to pay $115,000 to Colorado’s largest credit union following a legal dispute over which was to blame for an overseas scam that shut down the firm.
The Colorado Court of Appeals ruled this month that Sayre & Harris Law, which handled business and real estate cases in Denver and Grand Junction before closing, must pay the judgment to Ent Credit Union, upholding a lower court ruling from last fall.
Sayre & Harris opened a trust account for law firms, known as a COLTAF account, at Ent in March 2021. Nine months later, the firm was contacted by a prospective client, who asked them to draft a purchase agreement with a hospital for the sale of respiratory ventilators.
“Given the national importance of respiratory ventilators during the COVID-19 pandemic, Sayre & Harris treated the transaction with great urgency,” the Court of Appeals notes.
The supposed client wrote a $154,000 cashier’s check to Sayre & Harris and instructed them to wire $116,000 to a bank account in New York that was said to belong to a ventilator inspection company. Ent added a credit of $154,000 to Sayre & Harris’ account and the law firm, believing that meant the cashier’s check had cleared, wired the $116,000 to New York.
The next day, Bob Harris, one of the firm’s partners, got in touch with Wells Fargo, the bank whose name was on the cashier’s check. Harris had reached out to Wells Fargo before wiring the money to New York but not heard back for days. When Wells Fargo finally did talk with him, it had bad news: The cashier’s check was a fake. Harris then informed Ent.
The wired money, in Nigeria by then, has never been recovered by Ent or the law firm.
“The scam left a $114,540 overdraft in the COLTAF account,” the Court of Appeals said. “Unable to pay the negative balance, the firm closed its account and was dissolved.”
Ent then sued Sayre & Harris for the $114,540, plus interest and legal fees. Judge Brian Flynn in Mesa County decided in November that because the facts in the case were undisputed, he could decide the matter without a trial. He did so in favor of the credit union.
“The risk of loss remains with the depositor when a counterfeit cashier’s check is dishonored and returned as unpaid,” he decided. “As such, the defenses raised by the defendant seeking to shift blame to Ent Credit Union for the dishonored check…are not applicable.”
Sayre & Harris appealed that decision to the Court of Appeals, which also sided with Ent.
“Sayre & Harris knew the cashier’s check was fraudulent and informed Ent of the fraud even before it was formally dishonored,” a unanimous three-judge panel wrote on Aug. 1. “Sayre & Harris fails to explain how, given this advance knowledge and that it informed Ent of the fraudulent check, its ‘loss resulted from’ Ent’s alleged delay in notifying it.”
Sayre & Harris was represented by Joseph Coleman, Isaiah Quigley and Stuart Foster with Joseph Coleman & Associates in Grand Junction. Ent’s lawyer was Neal Dunning of Brown Dunning Walker Fein Drusch in Greenwood Village. All declined comment.
The Ent Credit Union location at 1499 Wynkoop St. in LoDo. (Justin Wingerter/BusinessDen)
A law firm has been ordered to pay $115,000 to Colorado’s largest credit union following a legal dispute over which was to blame for an overseas scam that shut down the firm.
The Colorado Court of Appeals ruled this month that Sayre & Harris Law, which handled business and real estate cases in Denver and Grand Junction before closing, must pay the judgment to Ent Credit Union, upholding a lower court ruling from last fall.
Sayre & Harris opened a trust account for law firms, known as a COLTAF account, at Ent in March 2021. Nine months later, the firm was contacted by a prospective client, who asked them to draft a purchase agreement with a hospital for the sale of respiratory ventilators.
“Given the national importance of respiratory ventilators during the COVID-19 pandemic, Sayre & Harris treated the transaction with great urgency,” the Court of Appeals notes.
The supposed client wrote a $154,000 cashier’s check to Sayre & Harris and instructed them to wire $116,000 to a bank account in New York that was said to belong to a ventilator inspection company. Ent added a credit of $154,000 to Sayre & Harris’ account and the law firm, believing that meant the cashier’s check had cleared, wired the $116,000 to New York.
The next day, Bob Harris, one of the firm’s partners, got in touch with Wells Fargo, the bank whose name was on the cashier’s check. Harris had reached out to Wells Fargo before wiring the money to New York but not heard back for days. When Wells Fargo finally did talk with him, it had bad news: The cashier’s check was a fake. Harris then informed Ent.
The wired money, in Nigeria by then, has never been recovered by Ent or the law firm.
“The scam left a $114,540 overdraft in the COLTAF account,” the Court of Appeals said. “Unable to pay the negative balance, the firm closed its account and was dissolved.”
Ent then sued Sayre & Harris for the $114,540, plus interest and legal fees. Judge Brian Flynn in Mesa County decided in November that because the facts in the case were undisputed, he could decide the matter without a trial. He did so in favor of the credit union.
“The risk of loss remains with the depositor when a counterfeit cashier’s check is dishonored and returned as unpaid,” he decided. “As such, the defenses raised by the defendant seeking to shift blame to Ent Credit Union for the dishonored check…are not applicable.”
Sayre & Harris appealed that decision to the Court of Appeals, which also sided with Ent.
“Sayre & Harris knew the cashier’s check was fraudulent and informed Ent of the fraud even before it was formally dishonored,” a unanimous three-judge panel wrote on Aug. 1. “Sayre & Harris fails to explain how, given this advance knowledge and that it informed Ent of the fraudulent check, its ‘loss resulted from’ Ent’s alleged delay in notifying it.”
Sayre & Harris was represented by Joseph Coleman, Isaiah Quigley and Stuart Foster with Joseph Coleman & Associates in Grand Junction. Ent’s lawyer was Neal Dunning of Brown Dunning Walker Fein Drusch in Greenwood Village. All declined comment.
