IN THE DISTRICT COURT IN AND FOR ALFALFA COUNTY,
STATE OF OKLAHOMA
ALFALFA GUARANTY ABSTRACT COMPANY, a Corporation,
v.
MONICA LEA LUCAS, an individual,
§
§
§
§
§
§
§
§
PLAINTIFF’S ORIGINAL PETITION
COMES NOW the Plaintiff, ALFALFA GUARANTY ABSTRACT COMPANY, a Corporation, and for cause of action against the Defendant, MONICA LEA LUCAS, an individual, and alleges and states the following:
I. PARTIES
1.01. Plaintiff, ALFALFA GUARANTY ABSTRACT COMPANY ("AGAC"), is a domestic “for-profit” Corporation organized and existing under the law of the State of Oklahoma, with its principal office address located at 201 S. Grand Ave., Cherokee (Alfalfa County), OK 73728.
1.02. Defendant, MONICA LEA LUCAS ("LUCAS"), is an individual residing at 1110 S. Kansas Ave., Cherokee (Alfalfa County), OK 73728, where said Defendant may be served with process by delivering to her a Summons and a copy of this Petition.
II. JURISDICTION AND VENUE
2.01. Jurisdiction is proper in this Court in that Plaintiff seeks damages and other relief which fall within the jurisdictional limits of this Court.
2.02. Venue is proper in Alfalfa County pursuant to Okla. Stat. tit. 12, §139, in that this action is one for the recovery of money obtained by theft, fraud, embezzlement, or other wrongful conduct of and by the Defendant, and is the county where the Defendant resided at the time the Plaintiff's causes of action arose. Moreover, Alfalfa County is the county in which the Defendant currently resides and in which she maybe summoned accordingly to law.
III. BACKGROUND ON CAUSES OF ACTION
3.01. At all times relevant to this suit, AGAC operated as an abstracting firm duly licensed in accordance with the Oklahoma Abstractors Act, Okla. Stat. tit. 1, §20, et seq., and the Rules implemented thereunder. See, OAC, tit. 5, ch. 11. Moreover, AGAC was duly licensed with the Department of Insurance for the State of Oklahoma, authorized to engage in the business of selling title insurance on real estate, including the opening and maintenance of real estate escrow files and the handling funds of third parties held by AGAC in its escrow account.
3.02. Also at all times relevant to this suit--including the occurrences of which complaint is made herein, Defendant LUCAS duly licensed as an abstractor in accordance with the Oklahoma Abstractors Act and held an insurance license issued by the Department of Insurance for the State of Oklahoma. During such relevant time frame, Defendant LUCAS was employed by AGAC and charged with overseeing the care, custody, control and maintenance of AGAC’s real estate escrow files and AGAC’s escrow (bank) account, including all funds on deposit therein.
3.03. In early January of 2025, AGAC discovered that funds which were on deposit in its escrow account, were insufficient to cover an anticipated wire transfer of funds purportedly being held in escrow for the benefit of a third party payee. Upon completion of a preliminary investigation, AGAC discovered that prior to the date of the anticipated outgoing wire transfer, and apparently
ongoing for several months, Defendant LUCAS had engaged in a series of transactions by which she surreptitiously¹ utilized funds held in AGAC’s escrow account for her own personal use and benefit. Unknown to AGAC or its principal and owner, funds were used by Defendant LUCAS to, inter alia, make payments on her personal credit card account through CitiBank, or in payment of personal promotional fees enuring to her benefit only, or otherwise utilized by LUCAS for her own personal matters unrelated to the business of AGAC. Upon learning of Defendant LUCAS’ deceit and embezzlement of escrow funds from AGAC’s escrow account, Plaintiff AGAC promptly terminated Defendant LUCAS as an employee.
3.04. AGAC then set about reconciling its escrow (bank) account and auditing real estate escrow files over which Defendant LUCAS had access and for which she had been responsible and had maintained control. AGAC learned from the ensuing reconciliation and auditing efforts that Defendant LUCAS had implemented a hidden plan, agenda, scheme or design to defraud AGAC and potentially those persons or entities for whom AGAC held funds in escrow. For example, Defendant LUCAS maintained a false record of fictitious checks purportedly outstanding (i.e., “held” items) in order to “cover” for funds she improperly withdrew from the escrow (bank) account, for her own personal use and benefit. She also manufactured fictitious deposit entries to the escrow (bank) account, falsely recording deposits of non-existent cash in an attempt to “balance” the register; and she would manufacture fictitious closing statements for existing escrow files as a means of documenting false entries to cover for missing funds. In one instance, Defendant LUCAS even paid a family member (multiple times) from AGAC’s escrow (bank) account, improperly tying the
¹An adjective meaning to have “obtained, done, made, etc., by stealth; secret or unauthorized; clandestine…; acting in a stealthy way.” See, Black’s Law Dictionary, pg 753 (abg’d 5th ed. 1983) (fraudulently done or introduced).
Plaintiff’s Original Petition
transaction to a closed escrow file previously opened and maintained by AGAC independently for LUCAS when she purchased a home in Cherokee.
3.05. Defendant LUCAS would also ignore requests for outgoing wire transfers to be paid to third party payees, and document the subject escrow file with notations that funds were “sent by check”— to avail herself of the time lapse created when mailing checks (rather than wiring collected funds). In other words, LUCAS engaged in what can be loosely described as a “kite” scheme2 by sending out escrow checks payable against uncollected funds while at the same time, scheduling the mailing of such outgoing checks to coincide with funds deposited later in connection with newly opened escrow files.3
3.06. Reconciling AGAC’s escrow (bank) account revealed a shortage of tens of thousand dollars which AGAC was forced to cover by way of loans secured by AGAC’s principal and owner for and on behalf of AGAC (for which AGAC remains responsible). Not all of the money missing from AGAC’s escrow (bank) account has been fully accounted for, but the sum confirmed so far which Defendant LUCAS misappropriated to her own use and benefit, quantified as of the filing of this lawsuit, totals FORTY THREE THOUSAND, ONE HUNDRED SEVENTY-EIGHT AND35/100 DOLLARS ($43,178.35). In addition, AGAC has been required to incur out-of-pocket expenses by reason of Defendant LUCAS’ mishandling of AGAC’s escrow (bank) account including bank fees, professional fees in correcting escrow account tax filings, attorneys’ fees, and interest accrued on loans to cover escrow (bank) account shortfalls. These amounts total the sum of at least
__________________________
2See, e.g., https://www.law.cornell.edu/wex/check-kitting.
3Akin to a “Ponzi Scheme” which is a type of investment fraud that pays existing investors with funds collected from new investors. See, https://www.investor.gov/introduction-investing/investing-basics/glossary/ponzi-schemes.
Plaintiff’s Original Petition
THIRTY FIVE THOUSAND SIX HUNDRED THREE AND 82/100 ($35,603.82) as of the date of filing this lawsuit, and are continuing as well. The audit and reconciliation of AGAC’s real estate escrow files and escrow (bank) account continues to this day.
3.07. By reason of Defendant LUCAS’ unlawful activities as particularly described above, AGAC was required to relinquish its state insurance license and no longer engages in various of its business activities associated with holding that license. AGAC lost business and incurred injury and damage (and continues to suffer injury and damage) to its business, reputation and goodwill by reason of a decline in its abstracting business, and a loss of revenues generated incident to conducting real estate escrow closings, document preparation fees, and the sale of title insurance. As a direct and proximate result of Defendant LUCAS’ conduct described above or as otherwise to be proved at trial, AGAC has suffered and continues to suffer consequential losses and damages, including lost profits, in the sum of at least ONE HUNDRED SEVENTEEN THOUSAND AND NO/100 DOLLARS ($117,000.00), as well as injury to AGAC’s reputation and loss of goodwill in an amount to be proved at trial all in excess of TEN THOUSAND AND NO/100 DOLLARS ($10,000.00).
IV. CAUSES OF ACTION
4.01. Plaintiff AGAC re-alleges the factual matters set forth at paragraphs 3.01 through 3.07 and incorporates them herein by reference the same as if set forth fully verbatim.
Breach of Fiduciary Duty
4.02. Defendant LUCAS was an employee of AGAC, acting as its agent entrusted with (and owing to AGAC) duties of loyalty, trust and confidence to act in the best interest of not only AGAC
but AGAC’s customers, clients and third party payees entitled to receipt of funds held in AGAC’s escrow (bank) account.
4.03. As a proximate result of the breach of fiduciary duty described above, Plaintiff has suffered injury and damage to its business, reputation and goodwill, including economic losses (and continues to suffer injury and damage) in an amount within the jurisdictional limits of this Court, for which the Plaintiff now sues in an amount to be proved at trial. In addition or alternatively, Defendant LUCAS should be ordered to disgorge and forfeit in favor of Plaintiff all economic benefit derived by her in breach of her fiduciary duty owed to AGAC.
Actual Fraud, Theft, and Embezzlement of Funds
4.04. In addition to the above, or by way of alternative pleading if necessary, Defendant LUCAS’ actions resulted in the theft of monies and the embezzlement of funds through misrepresentation and deceit amounting to common law fraud. In such regard, Defendant LUCAS had a duty to speak the truth, and to disclose all material facts pertaining to her care, custody, control and maintenance of AGAC’s real estate escrow files as well as AGAC’s escrow (bank) account. Moreover, Defendant LUCAS held special knowledge pertaining to the AGAC escrow files and AGAC’s escrow (bank) account for which she was responsible, yet she failed to disclose to AGAC (and, affirmatively concealed) material facts within Defendant LUCAS’ special knowledge and under her control. Through dishonesty and deceit practiced upon AGAC by Defendant LUCAS, Plaintiff was and remained ignorant of the facts which LUCAS actively concealed and failed to disclose. Moreover, such conduct was intentional, malicious, purposeful, and done with the specific intent to commit fraud on AGAC. Alternatively, Defendant LUCAS’ actions in concealing and hiding the above mentioned facts, failing to speak the truth, and failing to make full disclosure of
the foregoing facts, was done with the intent that AGAC act upon the deficient state of knowledge created thereby, which in fact resulted in justifiable reliance thereon by AGAC, all of which proximately caused injury or damage to the Plaintiff.
4.05. As a proximate result of the actual fraud, theft of money and embezzlement of funds described above, Plaintiff has suffered injury and damage to its business, reputation and goodwill, including economic losses (and continues to suffer injury and damage) in an amount within the jurisdictional limits of this Court, for which the Plaintiff now sues in an amount to be proved at trial.
Constructive Fraud⁴
4.06. In addition to the above or alternatively, Plaintiff AGAC alleges that Defendant LUCAS also engaged in constructive fraud through the use of a hidden plan, agenda, scheme or design involving the use of AGAC’s real estate escrow files and escrow (bank) funds. The hidden plan, agenda, scheme or design was acquired and utilized by LUCAS by reason of her agency and/or other fiduciary relationship with AGAC, allowing for her to steal money and embezzle funds to the benefit and advantage of Defendant, but to Plaintiff’s prejudice, through LUCAS’ use of cunning, deception, or artifice to circumvent, cheat or defraud AGAC, all of which proximately caused injury or damage to the Plaintiff.
4.07. As a proximate result of the constructive fraud described above, the Plaintiff has suffered injury and damage, including economic losses (and continues to suffer injury and damage)
⁴ Constructive fraud, as defined in Okla. Stat. tit. 15, § 59, consists of (a) any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault, or any one claiming under him, by misleading another to his prejudice, or to the prejudice of any one claiming under him; or (b) any such act or omission as the law specially declares to be fraudulent, without respect to actual fraud. See also, Specialty Beverages, LLC v. Pabst Brewing Co., 537 F.3d 1165, 1180 (10th Cir. 2008) (Constructive fraud is ‘the concealment of material facts which one is bound under the circumstances, to disclose’).
in an amount within the jurisdictional limits of this Court, for which the Plaintiff now sues in an amount to be proved at trial.
Money Had And Received⁵
4.08. In addition to the above, or by way of alternative pleading if necessary, AGAC alleges that it is entitled to recover from Defendant LUCAS under the doctrine of "money had and received," the sum that said Defendant is ultimately determined by the trier of fact, to have stolen and embezzled from Plaintiff.
4.09. As a direct result of the actions by Defendant, LUCAS, above described, and pursuant to the doctrine of money had and received, Plaintiff has suffered injury and damages, including economic losses (and continues to suffer injury and damage) in an amount within the jurisdictional limits of this Court, for which it now sues.
Unjust Enrichment⁶
4.10. In addition to the above or alternatively, AGAC alleges that Defendant LUCAS has obtained a benefit from Plaintiff either by application of the principles of fraud, constructive fraud, theft or embezzlement (or otherwise) by her taking undue advantage of AGAC as herein set forth including the breach of Defendant LUCAS’ fiduciary duty owing to the Plaintiff.
4.11. Defendant LUCAS has been unjustly enriched by an amount equal to the sums stolen and embezzled from Plaintiff as ultimately determined by the trier of fact.
⁵The doctrine of money had and received is essentially the recognition of an implied or constructive contact, an action for which the essential element is, the defendant's possession of money belonging to the plaintiff which defendant refuses to pay over. See, Rogers v. Lassiter, 196 Okla. 228, 164 P.2d 632 (Okla. 1945).
⁶"Unjust enrichment" is a condition which results from the failure of a party to make restitution in circumstances where not to do so is inequitable, i.e., the party has money in its hands that, in equity and good conscience, it should not be allowed to retain. Oklahoma Dept. of Securities ex rel. Faught v. Blair, 2010 OK 16, 231 P.3d 645, 658, citing Harvell v. Goodyear Tire & Rubber Co., 2006 OK 24, 164 P.3d 1028, 1035.
4.12. Plaintiff alleges that it would be unconscionable for Defendant LUCAS to retain the monetary benefits which she has thus received. Based on fundamental principles of justice, equity and good conscience, Defendant’s conduct gives rise to an implied or quasi-contract to pay or reimburse to AGAC, or an obligation to make restitution to it for such sums equal to the benefits wrongfully secured by Defendant LUCAS as described above, all for which Plaintiff now sues in an amount within the jurisdictional limits of this Court.
Imposition of a Constructive Trust7
4.13. The Court should impress a constructive trust upon any property or assets which LUCAS obtained (either directly or indirectly) which can be shown were purchased with the monies stolen or embezzled from AGAC, and/or by which said Defendant has been unjustly enriched at AGAC’S expense and to its detriment, as aforesaid. Accordingly, the Court should so order and impress such a constructive trust for the benefit of AGAC, not only upon any such property LUCAS obtained (either directly or indirectly), but upon any asset in whosoever’s names such asset is now titled or owned.
V. EXEMPLARY DAMAGES
5.01. Plaintiff re-alleges the factual matters set forth at paragraphs 3.01 through 3.07, above, as well as the claims for relief set out in paragraphs 4.01 through 4.13, and incorporate them each herein by reference the same as if set forth fully verbatim.
7The primary reason for imposing a constructive trust is to avoid unjust enrichment. It is imposed against one who “by fraud, actual or constructive, by devices or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy.” Unlike a “resulting trust,” when the imposition of a constructive trust is sought, there must be some active wrongdoing on the part of the person against whom recovery is sought. Blair, at ¶23, 231 P.3d at 659, citing Easterling v. Ferris, 1982 OK 99, 651 P.2d 677, 680.
5.02. In addition to the above, or pleading in the alternative if necessary, Plaintiff alleges that the conduct of Defendant LUCAS as described above, was done in bad faith and in violation of the law and public policy of the State of Oklahoma; and/or was committed with conscious indifference to, or in reckless disregard for, the rights of the Plaintiff; and/or said Defendant engaged in such conduct intentionally and with malice towards Plaintiff; and/or such conduct constitutes the type which tends to expose the Plaintiff to an extreme risk of financial harm and/or ruin; all or any of which the Plaintiff expects to prove by clear and convincing evidence as the law shall require, but which nonetheless warrants the imposition of exemplary or “punitive” damages against said Defendant pursuant to Okla. Stat. tit. 23, § 9.1.
5.03. Plaintiff therefore seeks to recover punitive damages from and against Defendant, LUCAS, in an amount within the jurisdictional minimums of this Court, for which Plaintiff now sues.
VI. JURY DEMANDED
6.01. Plaintiff demands a trial by jury.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that the Defendant be summoned to answer and appear herein according to law, and that upon final hearing hereon, Plaintiff have and recover judgment against Defendant LUCAS, as follows:
1. Judgment for Plaintiff’s actual, compensatory damages in their entirety, including economic losses, in an amount that exceeds that required for diversity jurisdiction pursuant to Section 1332 of Title 28 of the United States Code;
2. Judgment decreeing the imposition of a constructive trust upon the property or assets of Defendant or others (however titled) which have been purchased (either directly or indirectly) with the monies by which Defendant has been unjustly enriched;
3. Judgment for exemplary or "punitive" damages in an amount to be determined by the trier of fact in accordance with the provisions of Okla. Stat. tit. 23, §9.1.
4. Judgment for prejudgment and post-judgment interest, as allowed by law, at the highest rate or rates permitted by law;
5. Costs of Court, including attorneys’ fees and expert witness fees; and
6. Plaintiff prays for such other and further relief to which it might be or become justly entitled to receive.
Respectfully submitted,
[signature]
Sam L. Stein / OBA No. 12498
LAW OFFICE OF SAM L. STEIN, PLLC
305 S. Grand Ave. / P.O. Box 223
Cherokee, OK 73728
Tel: (580) 596-3000
Fax: (580) 596-3004
Email:
[email protected]
ATTORNEY FOR PLAINTIFF
