Dentons alleges former client's lawsuit an attempt to wrongfully extract money
No issues with former partner Shane Stevenson’s legal work, law firm says
Dentons is accusing a former client of suing the law firm to try to "extract payment" for his own bad business decisions that allegedly resulted in the client losing more than $100 million of his $120-million fortune.
In a lawsuit filed in early February, Calgary businessman Laurie Venning and his Venning Group of companies sued former Dentons partner Shane Stevenson of Edmonton and the law firm for more than $25 million, alleging a years-long scheme of self dealing, conflict of interest and gross overbilling.
Venning's lawsuit further alleges Dentons failed to properly monitor Stevenson, even though the firm knew he had a serious substance abuse problem that had resulted in stays in a rehabilitation centre.
In April 2018, Edmonton police charged Stevenson with impaired driving causing death and hit and run causing death after 16-year-old Chloe Wiwchar was run down while crossing Kingsway in a marked crosswalk with flashing lights.
But in a statement of defence filed earlier this week, Dentons alleges Venning, through his own fault, suffered major business losses.
"The funds lost by Mr. Venning or the Venning Group are entirely attributable to a series of unfortunate business and personal decisions made by Mr. Venning or the Venning Group which are wholly unrelated to the services provided by Dentons," the statement of defence says.
Dentons further alleges Venning's lawsuit is an attempt to "exploit the departure of Mr. Stevenson to wrongfully extract payment" from the law firm to make up for Venning's business losses of more than $100 million since 2014. The lawsuit says Venning made $120 million from the sale of a company in which he had an interest.
The law firm's defence also claims Venning launched the lawsuit to "avoid paying significant legal fees incurred to preserve the little money Mr. Venning and the Venning Group have not squandered."
There was no problem with the quality or cost of the legal work provided by Stevenson or any of the firm's other lawyers, Dentons says, and no conflicts of interest existed in its dealings with Venning.
Unaware of any substance-abuse issues, firm says
Venning, in his lawsuit, alleges Stevenson was providing legal advice to his company while under the influence of alcohol and drugs, including cocaine. The businessman says Dentons knew about Stevenson's substance-abuse issues and the firm had sent him for multiple stays in a rehabilitation facility.
That is false, Dentons says.
The law firm adds that "at no time did Mr. Venning or the Venning Group advise Dentons of any substance abuse concerns, nor did they suggest that any legal advice provided by Mr. Stevenson was in any way impaired."
No self-dealing, Dentons says
Venning also claims Dentons and Stevenson had assured him that Stevenson would become in-house counsel for him and his companies. Because of that assurance, Venning allowed Stevenson to become directly involved as a shareholder or director in numerous of its companies, Venning claims.
Stevenson eventually became involved in 22 of Venning's companies or trusts, and the lawsuit claims Stevenson issued shares in several companies to himself, including some instances "without the knowledge or consent of the plaintiffs."
Dentons, in its defence, says Venning's demands for Stevenson to be available at all hours and to travel extensively with Venning effectively precluded him from having other clients.
The law firm further claims Venning "voluntarily gifted" shares in various companies to Stevenson.
"All share transfers and appointments of Mr. Stevenson as director or officer were done at the request and direction of Mr. Venning, and in the case of appointments, were necessary to implement the corporate transactions negotiated and sourced by Mr. Venning or his agents," Dentons defence statement says.
Dentons also rejects Venning's claim that it never recommended he get independent legal advice in relation to these transactions, and it denies Stevenson's involvement in Venning's companies created a conflict of interest that Dentons ought to have identified and disclosed.
Dentons has launched a countersuit against Venning and his companies, alleging it is owed nearly $477,000 in outstanding legal fees. Dentons' Spanish branch claims it is also owed about $656,000.
After police charged Stevenson in 2018, he was suspended by both Dentons and the Law Society of Alberta. None of the allegations in the statements of claim or defence has been proven in court.
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