LegalMortgage

New lawsuit alleges Dustin Johnson not Nat HardwickÕ only target

James Pritchard claims former LandCastle Title CEO stole $2 million

It turns out that PGA golfer Dustin Johnson wasn’t the only victim of title attorney Nathan (Nat) Hardwick, at least according to a lawsuit filed in Georgia last month.

The lawsuit, filed in Fulton County Superior Court in early October and obtained by HousingWire, alleges that Hardwick, the former managing partner of the law firm of Morris Hardwick Schneider and former CEO of the firm’s subsidiary, LandCastle Title stole $2 million from James Pritchard, of Maysville, Georgia, under the auspices of investing in Divot Holdings, a holding company controlled by Hardwick.

Pritchard’s lawsuit claims that Hardwick approached Pritchard on or about August 4 and attempted to secure a loan from Pritchard for $2 million.

What Pritchard didn’t know at time was that Hardwick allegedly needed the money to cover shortages in the escrow accounts of LandCastle Title and Morris Hardwick Schneider that were allegedly created by Hardwick himself, who stands accused by his former partners of embezzling at least $30 million from the firm.

Pritchard’s lawsuit states that Hardwick made several claims in an attempt to induce him into loaning $2 million to the company.

First, Pritchard’s lawsuit states that Hardwick promised, in the form of a signed promissory note, to repay Pritchard’s loan in 24 equal monthly payments of $96,146.94, which would total $2,307,526.56 in repayment to Pritchard.

In an attempt to convince Pritchard to loan the money, Pritchard’s lawsuit claims that Hardwick showed Pritchard purported audited financial statements and accounting records of the firm, in an attempt to convince Pritchard that the firm was financially strong, “as to further convince Mr. Pritchard that MSW’s unconditional guarantee was valuable and would be honored if Divot did not repay the loan or if Hardwick did not comply with his obligations under the (agreement).”

Pritchard’s lawsuit states that Pritchard was “satisfied” with the terms of the loan and the various forms of proof that Hardwick allegedly provided to him, and subsequently wired $2 million to one of Divot’s bank accounts.

Pritchard’s lawsuit states that the funds were then moved into the law firm’s trust account.

Under the terms of Pritchard’s agreement with Hardwick, Divot was supposed to make its first payment to Pritchard on Sept. 4. The lawsuit states that no payment was made to Pritchard that day or any day since then.

Pritchard’s suit states that Hardwick was acting as a representative of the firm of Morris Schneider Wittstadt throughout the time Hardwick was attempting to convince Pritchard to loan the money. Because of that fact, Pritchard is also suing the firm.

Pritchard’s suit targets Divot Holdings, the law firm of Morris Hardwick Schneider, now known as Morris Schneider Wittstadt and Hardwick, seeking the repayment of his $2 million plus accrued interest, late charges and attorney’s fees due to breach of contract by Divot and the firm and fraud.

“Upon information and belief, at the time that Mr. Pritchard was induced to make the loan, defendants knew or should have known that (the firm’s) audited financial statements contained false information,” Pritchard’s suit states.

“Upon information and belief, (the firm) had already discovered certain financial irregularities in its trust accounts, and (the firm’s) principals were then engaged in discussions amongst themselves regarding repayment of misappropriated funds from (the firm’s) trust accounts. Upon information and belief, said misappropriated funds may total millions of dollars. Upon information and belief, at the time Mr. Pritchard was induced to make the Loan, (the firm) continued to list Hardwick as a principal named member and defendants’ managing member.”

Pritchard’s lawsuit states that the Hardwick and the firm “knowingly, willfully, and intentionally defrauded and/or conspired to defraud Mr. Pritchard of $2 million.”

The circumstances of the supposed “loan” Hardwick sought from Pritchard are strikingly similar to the details laid out by Dustin Johnson in his lawsuit, filed two weeks ago in United States District Court for the Northern District of Georgia.

Johnson’s lawsuit states that Hardwick, who “played a particularly unique and significant role of trust and confidence” in Johnson’s life and acted as one of his primary advisors, stole $3 million from Johnson to cover shortages in the firm’s accounts.

Johnson’s lawsuit alleges that before the allegations of Hardwick’s supposed $30 million theft were made public, Hardwick approached Johnson about a “really good investment.”

Hardwick allegedly advised Johnson that if he loaned the firm $3 million, the firm would pay him back $4 million in equal monthly installments over a 30-month term.

Citing Johnson’s trust in his “close friend,” Johnson allegedly wired the money to the firm, but also did not receive his first or second monthly installments.

The firm of Morris Schneider Wittstadt and the firm’s current managing partner, Mark Wittstadt, denies Johnson’s claims, stating that the firm was not aware of any of Hardwick’s alleged actions in regards to Johnson’s loan.

“In sum, while long on hyperbole and inflammatory accusation, the Complaint is bereft of any facts showing the Wittstadt Defendants to be any more than victims of Hardwick’s alleged misconduct,” the firm and Wittstadt stated in a motion to dismiss.

“While Dustin Johnson’s complaint against the Wittstadt Defendants may be a tribute to creative fiction, it is a travesty to legal pleading,” the motion continues.

“Purposely abusing the Federal Court system to falsely accuse good, ethical lawyers of crimes and lies should be severely punished, but today is not the day for that. Instead, the Wittstadt Defendants show the Court that shotgun pleading to paint a patently false picture is not condoned. Throwing libelous accusations against the wall to see if they stick does not meet any acceptable pleading standard. And, spitting out terms like ‘racketeering’ and ‘wire fraud’ with no legal or factual foundation cannot save a meritless suit.”

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