September 9, 2002 at 5:31 PM EST - Updated July 12 at 6:40 AM
CLEVELAND (AP) - A woman who thought her estranged husband's insurance business was worth up to $72 million has sued the accountants who handled the company's books.
Margaret Lucia has filed a lawsuit in Cuyahoga County Common Pleas Court against Grant Thornton LLP, a Chicago-based accounting firm, accusing Grant Thornton of filing falsely optimistic audits of two now-defunct Beachwood insurance companies owned by her husband, Robert Lucia.
The Lucias have been in a divorce fight since 1998.
Margaret Lucia, 49, turned down several settlement offers because she believed Grant Thornton's estimates that her husband's businesses were worth up to $72 million. She thought she should get half.
But the companies, Credit General Insurance Co. and Credit General Indemnity Co., were up to $50 million in debt, according to the Ohio Department of Insurance, which effectively took them over two years ago.
Robert Lucia says he is jobless and $544,000 in debt, although he is living in a $730,000 house in a gated community in Palm Beach Gardens, Fla., where his home is protected from court judgments.
Margaret Lucia now works as a tennis instructor in West Palm Beach, Fla. She has received about $2.3 million, most of it from the sale of two houses the couple owned, but legal fees cost $800,000 of it.
Her lawyer, Joshua Cohen, said the case against Grant Thornton was her best chance to collect anything more.
"If she had known there was nothing worth fighting for, she would have pursued what she had and not contested the divorce," Cohen said.
The case hinges on the argument that the accounting firm should have expected Margaret to rely on its audits in the divorce. Cohen says that under Ohio law, accountants have a duty to anyone they can reasonably expect to rely on their work.
Anthony Cillo, a lawyer for Grant Thornton, said to extend the law so that spouses of company executives could sue auditors "borders on the absurd."
"Nowadays, it's fashionable to blame anything on auditors that you can," Cillo said.
Jennifer Arlen, a law professor at New York University, said that in some states, creditors or company shareholders may be able to take an accountant to court.
(Copyright 2002 by The Associated Press. All Rights Reserved.)