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Virginia Beach attorney faces lawsuit for almost $2.3M in missing escrow funds

Updated: December 6, 2013 - 5:57 pm

Posted: December 6, 2013

By Lydia Wheeler
lydia.wheeler@insidebiz.com 

A California-based title insurance company has filed suit against Virginia Beach attorney David Flynn in connection with the misappropriation of $2.3 million in escrow funds.

Attorney John Rinaldi of Walsh, Colucci, Lubeley & Walsh, PC, filed the suit Dec. 4 in Virginia Beach Circuit Court against Flynn’s law firm David R. Flynn PLLC, and his limited liability company, Assured Title of Virginia. Rinaldi filed the suit on behalf of First American Title Insurance Co.

The complaint claims Flynn, an attorney for First American, failed to properly maintain separate escrow accounts for real estate closings and pay deeds of trust from the proceeds of real estate closings.

A petition for prejudment, also filed by Rinaldi on behalf of First American on Dec. 4, asks the court to levy four of Flynn’s accounts with TowneBank and one account with Wells Fargo, as well as all books and records in his firm at 5267 Greenwich Road that relate to closings performed by Assured Title of Virginia LLC and his law office.  The petition for prejudgement states Flynn placed the title insurance premiums he collected on behalf of purchasers or lenders in various escrow accounts with TowneBank and Wells Fargo and that almost $2.3 million is missing from accounts maintained by Assured Title and Flynn’s law office.

The court filings list 11 properties for which Flynn acted as the closing agent between Sept. 17 and Nov. 26 and either failed to pay for all of the expenses of the closing or made checks to escrow accounts that were returned because of insufficient funds.

According to court documents, Flynn has not yet been served and no judgment has been made on the request involving the bank accounts.

Calls made to Rinaldi, whose offices are in Prince William, were not returned. Phone messages and emails to Flynn and others at his law office were not returned. Areas of practice within the firm include real estate and corporate law, driving offenses and criminal defense.

Flynn, who also owns Ultra Tan, is also being sued by Sun Resorts Inc. and its president, Leigh Winston, for $74,833.96 in damages, according to circuit court documents filed Oct. 15.

That suit involves an agreement in June 2011 to have Sun Resorts manage two of Flynn’s tanning salons in Virginia Beach. It says Flynn failed to pay for the management services and October rent.

Calls made to Gregory Larsen of Roy, Larsen, Carnes & Romm PC, the attorney representing Winston and Sun Resorts, were not returned. Sun Resorts Inc. is headquartered at 928 Diamond Springs Road in Virginia Beach. 

The suit says that as of Oct. 1, Flynn owed Sun Resorts $71,153.96 plus attorney fees and court costs. The Ulta Tan salons being managed by Sun Resorts are located at 4701 Shore Drive Suite 111 and 737 First Colonial Road, Suite 208.

Notice of the suit was left for Flynn on Oct. 24 and the business was served on Nov. 7. No court date has been scheduled.

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