Suit alleges Kanawha judicial officers defrauded refinance company

By Lawrence Smith | May 7, 2007

CHARLESTON – Despite one lawsuit coming to a close against them, two Kanawha County judicial officers face a new legal challenge in a suit filed against them alleging fraudulent acts in the repayment of a loan on their cars.

Nicholas Loan and Mortgage of Summersville filed suit in Kanawha County Circuit Court against Theodore R. "Ted" Dues Jr. and his wife, Mona. Ted works as a mental hygiene commissioner, and Mona is a juvenile referee.

In their suit filed January 17, Nicholas alleges the Dues have failed to repay the loan they took out on October 15, 2004 for a 2001 Infiniti QX4 and a 1989 Mercedes Benz 420 SEL. According to court records, the Dues' are in arrears to Nicholas for $ 67,893.03
Furthermore, Nicholas, through its attorney J. Steven Hunter of Lewisburg, alleges the Dues defrauded Nicholas in various ways they handled their cars. Those acts of fraud, Nicholas alleges, include using an insurance check meant to pay for repairs to the Infiniti for personal gain, and losing possession of the Mercedes.

Damaging one vehicle, losing another

According to court records, Nicholas discovered damage sustained to the Infiniti after it was repossessed. Nicholas estimated the damages to be $ 4,698.41, and done while the vehicle was in the Dues' possession.

The Dues agreed to fix the damage, and were issued a check from GEICO Insurance, for $ 1,606.28 to use at Spring Hill Body Shop, records show. However, Nicholas alleges that the Dues "converted the proceeds to their own use and benefit and thus have further defrauded the Plaintiff."

Also, Nicholas alleges the Dues have "fraudulently converted any proceeds to their own use and benefit" with the Mercedes. In the complaint, Hunter says he finds it hard to believe they could lose possession of such a vehicle.

"The Defendants now allege that the 1989 Mercedes Benz is no longer in their possession," Hunter said, "but instead have claimed in a response to the West Virginia State Bar to have no idea of its whereabouts other than they illegally permitted their son to drive it and he 'lost' it."

Nicholas is asking it be awarded $85,000 plus contractual interest, and $50,000 in exemplary damages.

Dues deny fraud

In their reply dated Feb. 12, the Dues, who are each representing themselves pro se, noted that the Infiniti was "refinanced at the suggestion of the Plaintiff to address the arrearage that had arisen." The arrearage, the Dues maintain, came as a result of Ted's "progressive and chronic health condition in 2002."

The Dues did acknowledge damages to the Infiniti beyond the normal "wear and tear." However, they maintain they were unaware of the damages' extent, and were not liable for any after it was repossessed.

They deny using the insurance check for personal use. Instead, the Dues aver that they found an alternate repair shop which could perform the work "at the cost of the actual insurance payment without charging the cost of the deductible to the Defendants."
The reason for the alternate shop was that it could also perform engine work, the Dues' said. They maintain repair to the engine cost them in excess of $1,000.

"Said repairs were necessary to maintain the operability of said vehicle and superseded the minor body repair then in issue," they said.

Regarding the Mercedes, the Dues acknowledged their son, Ted III, was permitted to use it. However, they deny it operated illegally as he was on their insurance policy until 2005.

Despite being instructed to keep it in the Charleston-area because of its "dilapidated"condition, Ted III took "the vehicle to Huntington and it broke down." The Dues say the Mercedes was left "in a safe place on private property."

However, when Ted Jr. was well enough to drive, he took Ted III to look for the Mercedes were it was "believed to have been left." However, the Dues say attempts to locate the vehicle, including using the assistance of the Huntington Police Department, were "to no avail."

In their reply the Dues proffered a settlement. They are willing to stipulate judgment for the amount due and owning on the Infiniti after receiving an itemized statement of what they've already paid, the book value of the Mercedes as reflected in the refinancing and Hunter's attorney's fees.

Judges begin to recuse themselves

The case may see the intervention of the state Supreme Court in appointing a special judge to hear it. Already two Kanawha circuit judges – Irene Berger and Jennifer Bailey Walker – have recused themselves citing a "personal friendship" with the Dues.

The case is now before Judge Paul Zakaib. However, Zakaib, like Berger, Walker and all the other Kanawha circuit judges, recused themselves in the malpractice case Jeanettia Spencer filed against Dues in 2004.

Eventually, Berkeley Circuit Judge Christopher C. Wilkes was appointed to hear that case.

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