Nashville at law: 6 October 2008

Election Commission laptop thefts lead to trickle-down litigation

Email | Print By E. Thomas Wood

Here are some civil legal cases of note for the week of September 26 – October 2:

Davidson County Chancery Court:

Metropolitan Government of Nashville and Davidson County v. Wackenhut Corp. Filed September 26.

She asked nicely first. Metro Legal director Sue Cain wrote to security contractor Wackenhut in May to seek reimbursement for costs associated with the Christmas Eve break-in at a Metro office building that exposed the personal data of 337,000 voters to potential compromise. Now the city has filed suit.

A thief took a pair of laptops containing the data, though they were later recovered. Subsequent investigation showed that the subcontracted guard on duty had failed to do his job as specified -- and that Wackenhut had been billing Metro for work it never did. The company has paid back some $22,000 in overbillings, but the city still wants to be made whole for the $773,000 cost of buying identity protection for every registered voter and sending out letters to advise voters about the protection program, along with the $50,000 cost of auditing Wackenhut after the incident.

The lawsuit also seeks a declaratory judgment terminating Wackenhut's contract to provide security services for Metro agencies. The contract still has more than three years to run.

James L. Charles, J. Brooks Fox and Elizabeth A. Sanders of Metro Legal brought the action.

Wackenhut Corp. v. Specialized Security Consultants Inc. and First Mercury Insurance Co. Filed 25 minutes after Metro's complaint, on September 26. Wackenhut goes after its subcontractor, Specialized Security of Mt. Juliet, for damages arising from the break-in and the discovery of "allegedly fraudulent" billing practices by Specialized Security. Insurer First Mercury, which had a $2 million errors-and-omissions policy in force on Specialized Security, has refused so far to cover the costs, according to the lawsuit.

In addition to damages from Specialized Security, Wackenhut seeks a series of declaratory judgments that would provide it with coverage from the First Mercury policy. Plaintiff's attorneys: Robert E. Boston and Mary Beth Thomas of Waller Lansden Dortch & Davis LLP.

United States Bankruptcy Court:

Robex LLC. Chapter 11 petition filed October 1. Robex manufactures erosion control blankets in Springfield. The filing shows the company with virtually equal assets and liabilities of $3.05 million. It includes a list of $177,000 in receivables that are past due by 90 days or more. Largest creditor: Baggett Straw of Springfield. Debtor's attorney: Steven L. Lefkovitz of Nashville.