More Real Estate Escrow Money Goes AWOL - Another Attorney Accused

In Northern New Jersey, Law360 reports:

• A New Jersey attorney is being sued for malpractice after he allegedly misappropriated $100,000 from an escrow account that was meant to cover environmental claims in a Newark property sale, according to a suit filed in New Jersey Superior Court.
  
  Miles Hunter, who represented the sellers of the Newark industrial property, allegedly failed to properly oversee a $100,000 escrow account that was set aside to address any environmental claims by the New Jersey Department of Environmental Protection stemming from the sale, according to the Jan. 19 complaint.
  
  The purchaser, B&B Blanchard LLP, planned to draw on the account to address remaining environmental issues with the site and would return any remaining funds to the sellers. The site was previously a chemical plant and had gone through extensive remediation, Robert J. DeGroot, the attorney for the buyer, told Law360 [].
  
  “[The site] previously had environmental issues that were the obligation of the seller,” DeGroot said. “Everything had been remediated but one issue.”
  
  The property sale closed in January 2007, and it had a clause that required $100,000 of the sellers’ funds be put in an escrow account overseen by Hunter. That account was meant to be used to resolve any remaining environmental issues raised by the state’s environmental agency, according to the complaint.
  
  B&B Blanchard hired a soil remediation professional to wrap up remaining environmental issues, and in November 2015, the company allegedly contacted Hunter to release the funds in the account. Hunter then allegedly said he closed the account and paid the funds out to the sellers and other third parties without notifying B&B Blanchard, the complaint said.
  
  This move constitutes malpractice, the suit says, as Hunter, the account’s trustee, owed a duty to the buyers and he breached that duty by failing to properly maintain the escrow account.
  
  DeGroot said this move has prevented B&B Blanchard from selling the property free and clear.
  
  The suit accuses Hunter of legal malpractice, breach of contract and failure to perform his duties as trustee of the escrow account.

Source: NJ Atty Failed To Maintain Environmental Escrow, Suit Says (may require subscription; if no subscription, try here, then click the appropriate link for the story).