It turns out, suing an incarcerated former attorney can be a bit tricky.
The trustee overseeing the revived LandAmerica bankruptcy case isn’t having an easy time getting his lawsuit against Bruce Matson to move along at a judicial pace.
That appears to be due mainly to Matson’s status as an inmate in the federal prison system.
Matson, a longtime former LeClairRyan partner and veteran bankruptcy lawyer, is currently six months into a nearly four-year sentence tied to his theft of millions of dollars from the LandAmerica bankruptcy estate from when he served as the collapsed company’s trustee.
Benjamin Ackerly, the substitute trustee who was brought on to replace Matson as the scandal was unfolding, is working to win at least $480,000 in damages from his imprisoned predecessor.
Ackerly claims, in a lawsuit filed in January, that Matson breached his fiduciary duty to the estate as a result of his crimes and seeks a judgment forcing Matson to pay back unspecified costs incurred by the estate to-date and in the future related to unwinding the mess left by Matson’s actions.
However, six months since Ackerly filed the complaint, Matson has yet to file a formal response to the allegations, despite episodes of both patience and insistence on Ackerly’s part. Matson has thus far represented himself in the matter by having his brother-in-law convey messages to Ackerly and others.
Matson has argued in court filings that his process of being “in transit” with the Federal Bureau of Prisons has hindered his ability to properly receive court documents in a timely manner and his efforts to mount a proper defense.
After being sentenced in November in Richmond federal court, Matson has apparently moved from federal facilities in Hanover, Petersburg, Philadelphia and Pittsburgh, before finally being settled into FCI Morgantown, a minimum-security compound in West Virginia.
“During each ‘stop’ defendant was in quarantine each time from five to fourteen days, including twice in Philadelphia,” Matson wrote in an April 14 response to Ackerly’s efforts to get the case to move along. “While in transit (which included lockdowns, including the 8-day, systemwide lockdown), defendant had very little — often no — access to phones or the BOP’s messaging system.
Even serving Matson the initial complaint was complicated, as Ackerly served the papers to both Matson’s Henrico residence and through the prison system.
“Plaintiff attempted to serve defendant while he was ‘in transit,’ however, due to the constant movement and the inability to know when transit might take place there is no certainty that a defendant could ever be served — and certainly no ‘service’ consistent with the Constitutional guarantees of due process,” Matson wrote, regarding the logistics of his situation.
Matson asked for extra time to seek advice and consider hiring a lawyer but still didn’t file a response or acquire representation. Ackerly, filings show, was patient for a time but eventually asked the court to move things along. Ackerly argued that Matson was unable to properly represent himself from prison and needed a guardian ad litem to handle the case on his behalf.
The judge ultimately agreed and named Washington, D.C. attorney Stanley Samorajczyk as Matson’s guardian ad litem on April 21.
But Matson pushed back in a May 4 filing, arguing that he’s not “incompetent” or a “person under a disability,” as defined by federal and state law in such instances.
He asked the court to vacate the appointment of the guardian in favor of letting him be heard on the case on his own. He went as far as to argue that the decision put an undue burden on him because the cost of the guardian could eventually fall to Matson to pay.
“The court potentially imposed a financial obligation on defendant without due process, a potentially unconstitutional taking,” Matson wrote.
Unmoved, the judge struck down that argument the next day.
“The defendant lacks the capacity to proceed pro se in this matter and may only proceed through a guardian ad litem or by an attorney licensed to practice in this court,” Judge Kevin Huennekens ruled, adding that Matson is no longer allowed to file any pleadings in the case on his own.
But then, on May 7, Samorajczyk threw another wrench into the process.
He asked to be removed from Matson’s case, stating that he “does not have the time to devote to properly performing the aforesaid duties and responsibilities,” after conducting due diligence of what would be required of him.
A hearing is set for May 25 to consider Samorajczyk’s removal from the case.
Ackerly is represented in the matter by attorney Tyler Brown of Hunton Andrews Kurth.
Matson was convicted on one count of obstruction of an official proceeding. The obstruction was related to lies Matson told during the ensuing investigation after the initial missing $3 million in LandAmerica funds first came to light.
Ackerly, as part of his investigation as substitute trustee, found that Matson was “out of trust” much earlier than previously disclosed and began comingling money from the estate with his own funds in 2015.
The comingling included Matson’s use of a fraudulent bank account, overpaying trustee fees to himself and paying hundreds of thousands of dollars to his former law firm LeClairRyan for his own benefit. He also used LandAmerica funds to make charitable contributions in his name to groups like the Appalachian Trail and Veritas School and to pay for a holiday party he once hosted at a golf course.
In addition to repaying unspecified costs incurred by the estate since the saga began, Ackerly wants $480,000 in fees Matson paid to himself while he was out of trust.
Matson has already paid more than $4 million back into the LandAmerica trust from the time he was caught stealing the money in 2019 through October 2021 just prior to his sentencing.