Was the domain held in an account originally created in your name? If so watch out!
I myself have one sold domain held in a similar situation ... as long as the domain is held in my account, there is some, though very limited, responsibility on my part in ensure the domain remains in control of the person I sold it to; it's a calculated risk that I've assumed to facilitate business and have planned accordingly - ie. it's locked and I track it.
How was the domain "lost" ... did it expire or something else?
If it expired and you can document that they had full control, *including* receiving renewal notices, then their suit will likely go nowhere.
However, if the renewal notices were still coming to you (or alternatively to no one at all), then things get a bit dicey...
Did you update the registrant field and related information? Or did you assume they'd do that?
If you still had some control and it expired, well it's a big question as to whose responsibility it is to ensure it remained registered - likely with some documentation and an experienced attorney, you'll likely prevail.
The nightmare scenerio is if instead of expiring, the domain instead changed hands directly to a third party ... in that instance if you still had any control at all of the domain, no matter how small, you may be on the hook so to speak for some damages.
Lastly, these are some layman opinions I'm throwing out, based on experience in the domain business ... it of course is not legal advice ... $310K is a decent chunk of change ... you may do best to get an experienced attorney asap - contact one or more of the ones that visit here directly for further assistance.
Ron
Addendum:
On an aside, when transferring domains, it's best to have the buyer create an account, assuming they don't already have one, in their name and push the domain to them.
Transferring domain accounts is a something one should avoid whenever possible - updating the registrant info and pushing it to them is the safer way.
Ron
