Complaints preceded attorney Brian Dailey’s bankruptcies

“To avoid the consequences of its malfeasance, the debtor initiated this bankruptcy case,” receiver John Polderman said in his objection to first-day motions. “Brian Dailey and The Dailey Law Firm have shown that they cannot be trusted to act in a fiduciary capacity with client funds.”

Dailey, who also filed a petition for Chapter 13 personal bankruptcy protection July 25, is facing a 12-count complaint by the Attorney Grievance Commission accusing the personal injury attorney of dishonesty, fraud and deceit. It is scheduled for a hearing Aug. 8. Dailey could be subject to discipline as severe as disbarment.

Some of the allegations against Dailey in the 2022 Attorney Grievance Commission filing to the Attorney Discipline Board date back more than a decade. As part of their defense, Dailey and his firm have filed complaints and countersuits against those going against his practice. In court documents, Dailey alleges that a former employee embezzled $600,000 from his firm, which contributed to its financial insolvency. The former employee denies the allegation.

Dailey declined to speak to Crain’s on the record for this report.

“Brian and I are looking forward to a full and fair hearing before the hearing panel at which time we will be able to prove that he did not engage in the conduct of which he is accused,” said Philip Thomas, the Grosse Pointe Farms-based attorney representing Dailey in the Attorney Grievance Commission case and who ran the AGC about 30 years ago.

Dailey, a resident of Grosse Pointe Shores whose practice is based in downtown Grosse Pointe Farms, has achieved some name recognition in the community. At one point, he hosted a legal-themed radio show on WJR-AM 760, and in 2015, he made headlines for a campaign to help a homeless man in Detroit named Willie Payne. In legal circles, though, some lawyers who have worked with Dailey have a less-than-flattering opinion of him.

Dalen Hanna, a Southfield-based collections attorney, sued Dailey in 2018 over bounced checks. Hanna filed his lawsuit after several attempts to get Dailey to make good on checks he sent to a client, according to the complaint. Dailey filed unsuccessfully to have the motion dismissed. A judgment was entered against him for $2,805 in 2019, but it has gone unpaid.

“I don’t want to deal with this guy. He’s bad luck,” Hanna said. “He’s never gonna pay it.”

That isn’t the only instance of that situation playing out, according to the AGC complaints. In 2010, Dailey was ordered to pay $5,495 to Gursten, Christensen and Raitt PC, which he has not, according to the Attorney Grievance Commission complaint.

The counts compiled by the commission allege a pattern of Dailey failing to pay funds owed in a timely manner, often going several years before paying judgments. In one case, Southfield-based Lemon Law attorney Steven Lehto partnered with Dailey on seven cases, but when Lehto sought his share, Dailey said he was having trouble with funds and never paid him, according to the complaint.

Bob Smith, a former partner of Dailey, said the only thing that surprises him is that Dailey has gotten away with those business practices for so long.

Smith said Dailey would put off paying money he owed in hopes he’d get away without paying, or paying less.

“Nobody’s turned him in until I started telling clients to call the Attorney Grievance Commission,” Smith said.

Smith first met Dailey around 30 years ago at Amerisure Insurance, where both worked as attorneys. Dailey left after a year or two to start his own personal injury practice. Smith said Dailey asked him to refer car crash victims, so one day he referred a co-worker.

As Smith recalled, Dailey took the case and settled it for the policy limit, and then asked Smith if he wanted the referral fee or to invest in his law firm. Smith said he asked for the former but never got a check.

“That’s when we became estranged,” he said.

After 39 years at Amerisure, the company cut its staff counsel and Smith was out of a job just a couple of years short of retirement. Scouring the classifieds, he happened upon an opening at Dailey’s law firm. He called up his former colleague and began working for him and helping on cases in 2018.

Things went well, Smith said, though he was a little suspicious of Dailey’s practices. Then four or five months in, after Dailey settled a big case, the attorney was nowhere to be found, Smith said.

“This was the rule: Anytime a check came in on any case, the receptionist would stamp it with the deposit stamp and at lunch run all the checks that came in the mail to the bank,” he said. “They didn’t note them on the file or anything.”

Smith said he quit working for Dailey after a year and three months.

“Nobody knew where he was or what he was doing,” Smith said of Dailey. “The clients that I was representing for him were calling me wanting their money. I just said, ‘I can’t do this anymore. This is unethical, it’s probably illegal what he’s doing, and I’m getting out of here.'”

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