NJ Attorney Dodges Serious Sanctions In Improper Fee-Splitting Deal w/ Foreclosure Surplus "Snatcher"; Lawyer "Not Venal" - Just Clueless, Says DRB

In Trenton, New Jersey, the New Jersey Law Journal reports:

• The New Jersey Supreme Court has censured a Point Pleasant, N.J., solo for splitting fees with a company that helped him find clients entitled to surplus funds from sheriff's foreclosure sales.(1) The court adopted the Disciplinary Review Board's finding that Garrett Lardiere's business relationship with Vermont-based Equinox Research and Recovery Co. constituted impermissible sharing of legal fees with non-lawyers.

• According to the DRB, Lardiere's relationship with Equinox dates to 2003. The company researches foreclosure records to find surplus funds from sheriff's sales on deposit in New Jersey Superior Court. Equinox sent letters printed on Lardiere's letterhead to individuals it believed were entitled to such funds. The letters were signed by an Equinox employee and listed the company's toll-free phone number.

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• The DRB, in a July 23 opinion, said the record included letters from Equinox to Lardiere that "call into question respondents' professional independence" in the matters in question. In one, Lardiere was urged to refer inquiries from would-be clients to Equinox, because "we know what is going on in the case and stand a better chance in getting them to sign at a higher rate," a company representative wrote.(2)

• Lardiere "relinquished control of his cases to an organization of non-lawyers who were acting under color of his name in dealing with his clients," the DRB found. In addition, he failed to ensure that his clients' interests would be protected.(3)

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• The DRB said either a censure or a three-month suspension could be supported for the fee-sharing offense, combined with the record-keeping and failure to cooperate offenses. It imposed censure based on Lardiere's 35-year unblemished record. "Respondent is not venal. Rather, he has a distinct lack of knowledge or a lack of understanding about his responsibilities as a member of the bar," the DRB said.

For more, see Attorney Censured for Splitting Fees With Foreclosure-Research Company.

For information on how foreclosed New Jersey homeowners can claim any surplus funds on their own, see:

• this state Attorney General press release,
• this state Consumer Affairs office circular, and
• this Surplus Money Application.

Go here for other stories on "foreclosure surplus" scams.

(1) When the sales price of a home sold at a foreclosure or sheriff's sale exceeds what is owed to the mortgage holder, the excess is generally referred to as the "foreclosure surplus," "surplus funds," or "the overage."

(2) Reportedly, people who responded to the solicitations were asked to sign a contingency agreement with Lardiere, which came attached to the letter. But the letters contained none of the language required in attorney-solicitation letters under New Jersey Rule of Professional Conduct 7.3, such as a prominent heading with the word "Advertisement" or a notice that the recipient may contact the Committee on Attorney Advertising if the content is misleading or inaccurate, the DRB said.

With respect to the compensation scheme. Equinox received a percentage of the funds recovered, and Lardiere received a cut of Equinox's share, along with a flat fee of $750 per case. When Lardiere received a recovery, he deposited it in his trust account and disbursed the proceeds to the client, to Equinox and to himself.

(3) The DRB also found Lardiere's violated record-keeping strictures by keeping unreconciled trust accounts, and further that he was reluctant to give ethics investigators unfettered access to his files, constituting a failure to cooperate with disciplinary authorities. lawyer renting UnauthPractOfLawTheta