Imprisoned WV Landlord Previously Convicted Of Seeking Sexual Favors From Female Tenants, & Who Settled Lawsuit Brought By State Human Rights Commission For $175K Now Gets Belted By Civil Rights Feds w/ Fair Housing Suit In Connection w/ Same Conduct

In Clarksburg, West Virginia, The Exponent Telegram reports:

• The federal government has filed a Fair Housing Act complaint against an imprisoned Monongalia County landlord, his dead wife’s estate and their companies.
  
  The lawsuit contends that landlord Gary Carl Walden subjected female tenants “to discrimination on the basis of sex, including severe, pervasive and unwelcome sexual harassment.”
  
  That included the following, according to the lawsuit: Unwelcome sex acts; unwanted groping; offering housing benefits in exchange for sex acts on him or his workers; entering female tenants’ apartments without notice to sexually harass them; and threatening to “take adverse action” against female tenants who refused or objected to his actions.
  
  Walden’s wife, Tina, who died Dec. 24, 2014, received complaints from tenants about sexual harassment but failed to act to stop it, the lawsuit contends. She also took “adverse housing actions,” or threatened to do so, “in retaliation for discrimination complaints,” the lawsuit asserts.
  
  ***
  Walden’s wrongdoing occurred “since at least 2006 through July 2015,” when he was incarcerated, the lawsuit contends.
  
  Walden was convicted last May in Monongalia County of two counts of first-degree sexual abuse, two counts of conspiracy and one count of burglary. He is serving 2-10 years in state prison, to be followed by home detention and probation.

For the story, see Feds hit imprisoned Morgantown landlord with Fair Housing Act lawsuit.

See also:

• Federal lawsuit accuses Morgantown landlord of sexual harassment: Gary Walden was sentenced last July in Monongalia County Circuit Court to up to 10 years in prison for burglary, first-degree sexual abuse and conspiracy involving apartment tenants. In 2008, he settled another sexual harassment lawsuit involving tenants for $175,000. That lawsuit was filed by the West Virginia Human Rights Commission.
  .
• Recently-filed federal lawsuit: USA v. Walden, et al.
  .
• U.S. Department of Justice press release: Justice Department Files Sexual Harassment Lawsuit Against Owners and Property Managers of West Virginia Homes and Apartments: Individuals who believe that they may have been victims of sexual harassment and housing discrimination at rental dwellings owned and/or operated by Gary and/or Tina Walden, or elsewhere, can contact the Housing Discrimination Tip Line at 1-800-896-7743 or e-mail the Justice Department at fairhousing@usdoj.gov.

City Of Fort Worth Settles Fair Housing Disability Discrimination Lawsuit w/ Feds; Use Of 4-Bedroom Residence As Group Home For Up To 7 Drug/Alcohol Addiction-Recovering Residents Gets Green Light After Initial Denial Of Zoning Variance Request; City To Cough Up $135K In Damages To Operator, $10K To Feds; Waives All Code Enforecment Citation/Fines, Agrees To Other Non-Monetary Concessions

From the U.S. Department of Justice (Washington, D.C.):

• The Justice Department announced [] that the city of Fort Worth, Texas, has agreed to settle a lawsuit alleging that Fort Worth discriminated against persons with disabilities when it refused to allow a group home for individuals recovering from drug and alcohol addiction to operate in a single family residential zone in the city.
  
  The lawsuit, filed in April 2015, alleged that the city violated the Fair Housing Act when it issued multiple citations and fines against a four bedroom group home, known as Ebby’s place, in which residents who have successfully completed at least a 30-day drug or alcohol treatment program live together to reinforce and encourage their mutual commitment to recovery. After receiving the citations, Ebby’s Place requested a zoning variance that would allow it to operate, which the city council unanimously denied.
  
  Under the terms of the agreement, which must still be approved by the U.S. District Court for the Northern District of Texas, Fort Worth will allow Ebby’s Place to operate with up to seven residents and will rescind all the citations it had previously issued against the home.
  
  Fort Worth will also pay $135,000 to Ebby’s Place in monetary damages and $10,000 to the United States as a civil penalty. As a part of the settlement, Fort Worth also adopted an ordinance establishing a process whereby persons may seek reasonable accommodations from the city’s zoning or land use laws and practices, where such accommodations may be necessary to afford persons with disabilities an equal opportunity to use and enjoy their housing.
  
  The lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Development (HUD) by Ben Patterson, who through Ebby’s Place LLC, owns and operates the group home. After conducting an investigation, HUD referred the matter to the Department of Justice. Ebby’s Place later intervened in the Justice Department’s lawsuit. Today’s agreement would also settle the lawsuit filed by Ebby’s Place.

Source: Justice Department and City of Fort Worth, Texas, Settle Lawsuit Alleging Disability Discrimination.

Long Island Landlord, Managing Agent To Cough Up $230K, Agree To Other Non-Monetary Concessions To Settle Fair Housing Groups' Allegations Of Discrimination Against Blacks; Results Of Probe Using Undercover 'Testers' Key To Filing Suit

In New York City, the Fair Housing Justice Center recently announced:

• On Thursday, February 25, 2016, Federal Judge Naomi R. Buchwald approved the settlement of a rental discrimination case filed by the Fair Housing Justice Center (FHJC), ERASE Racism, and seven African American testers in April 2015. The lawsuit alleged that the Manhattan-based Empire Management America Corp., Square Realty Group LLC. and a resident manager at the Mayfair Gardens Apartments in Commack in the Town of Smithtown were discriminating against African American renters.
  
  This case resulted from a six-month testing investigation conducted by the FHJC in 2014. Teams of African American and white testers, posing as comparably qualified prospective renters, inquired about apartments at the 107-unit suburban apartment complex located in the predominantly white Town of Smithtown in Suffolk County.
  
  The complaint alleged that African American testers, unlike their white counterparts, were lied to about available apartments or when apartments would be available, shown fewer apartments, informed about fictional waiting lists, quoted higher rents, and/or were not provided with rental applications. The investigation was jointly funded and sponsored by the FHJC and ERASE Racism, a non-profit organization dedicated to exposing and eliminating racial disparities on Long Island.
  
  The defendants agreed to comply with fair housing laws, adopt a non-discrimination policy and distribute it to employees and agents, display the HUD equal housing opportunity poster, publicly advertise available apartments, provide fair housing training to its employees, maintain rental records, and permit ERASE Racism to inspect records for a period of four years.
  
  Finally, the defendants agreed to pay $230,000 to the plaintiffs in damages, costs, and attorneys’ fees. The plaintiffs were represented by Diane L. Houk and Theodor O. Oxholm with the law firm of Emery Celli Brinckerhoff & Abady LLP.

Source: Race Discrimination Lawsuit Involving Suffolk County Apartment Complex Resolved (Landlord to Pay $230,000 and Take Steps to Comply with Fair Housing Laws).

For the lawsuit, see Erase Racism, Inc. et al v. Empire Management America, et al.

SW Florida Mobile-Home Park Operator Denies Discriminating Against Blacks, But Says Settling Undercover Sting-Triggered Fair Housing Suit w/ Feds For $40K Cheaper Than Coughing Up Over $100K To Fight Charges

In North Fort Myers, Florida, WZVN-TV Channel 7 reports:

• Thomas Mere, the owner and operator of Mere’s Mobile Home and Recreational Vehicle Park in North Fort Myers, agreed to pay $40,000 to resolve allegations that he discriminated against African Americans in violation of the Fair Housing Act.
  
  The settlement, in the form of a consent order, must still be approved by the U.S. District Court for the Middle District of Florida.
  
  The government’s complaint alleges Mere falsely told African Americans that no mobile homes, recreational vehicles or recreational vehicle lots were immediately available for rent, but told similarly-situated white persons that they were, in fact, available. According to the complaint, the defendant encouraged prospective white renters to consider residing and discouraged African Americans by, for example, referring them to another park, making discouraging comments about available units and failing to provide complete, accurate information about available units and lots.
  
  The lawsuit is based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as renters to gather information about possible discriminatory practices.
  
  ***
  Under the settlement, the defendant will establish a fund of $30,000 to compensate victims of his discriminatory practices and pay a civil penalty of $10,000 to the United States. The agreement also requires the defendant implement non-discriminatory application and rental procedures at the park, undergo fair-housing training and provide periodic reports to the department.
  
  ***
  We got in contact with Thomas Mere, the man in question.
  
  "I am not racist at all," he said. "I have people of all different nationalities in my park, even I have a black gentleman over at my park on Ixoria Drive."
  
  He told us the African-American man who said he was denied a rental from Mere had lied on his application and that's why he was not offered a unit.
  
  "He lied where he used to live so I checked with the landlord there, and he said, 'No, a woman lived there with her children. He never did live there,'" Mere said. "I think it's wrong for any type of discrimination. He's been fair to me, I'd like to be fair to everybody else. Everyone has the right to a decent home, not just whites."
  
  Mere wants to fight the allegations but said settling was cheaper than spending more than $100,000 in court fees. He said that the fine was so hefty that he may be forced to close his park.
  
  Mere’s Mobile Home and Recreational Vehicle Park is the second of its kind in North Fort Myers that's been fined for breaking the Fair Housing Act in less than six months.

Source: RV park owner settles discrimination case for $40,000.

For the U.S. Department of Justice press release, see Justice Department Settles Housing Discrimination Lawsuit Against Owner of North Fort Myers, Florida, Mobile Home and Recreational Vehicle Park.

Go here for the Lawsuit and Consent Order.

HUD, Fair Housing Groups Squeeze Missouri Bank For $2.8 Million In Lending Concessions To Resolve Allegations It Discriminated Against Blacks When Making Home Loans

The U.S. Department of Housing & Urban Development recently announced:

• The U.S. Department of Housing and Urban Development (HUD) announced [] an agreement with First Federal Bank of Kansas City to resolve allegations of ‘redlining’ against African American mortgage applicants. Two fair housing organizations claimed the lender’s designated service area effectively excluded African American neighborhoods, limiting residential mortgage lending to persons based upon their race. Read the HUD-mediated agreement.
  
  ***
  The agreement stems from two complaints filed on October 5, 2015, by the nonprofit organizations Metropolitan St. Louis Equal Housing and Opportunity Council (EHOC) and Legal Aid of Western Missouri.
  
  The groups alleged the bank’s lack of market penetration in African-American communities in the urban core (East Side) of Kansas City, Missouri made residential real estate products less available to people based on race. The groups also alleged that the bank designated its service area, or assessment area, in a way that excluded areas of high African American concentration, which resulted in making residential real estate products less available to persons based on race, a practice commonly known as redlining.
  
  As part of the HUD-mediated conciliation agreement, First Federal Bank of Kansas City agreed to provide $75,000 in discounts or subsidies on home purchase loans on owner-occupied properties in majority African American census tracts in the Kansas City metropolitan area over a three year period. In addition, the bank agreed to originate $2.5 million in mortgage loans in majority African American neighborhoods over a three year period.
  
  The bank also agreed to a series of important fair lending directed financial commitments:

• $105,000 to support a loan pool that finances the rehabilitation of vacant, blighted homes in distressed areas of Kansas City;

• $50,000 at the rate of at least $15,000 per year for three consecutive years for affirmative marketing and outreach to African American communities in the Kansas City metropolitan area;

• $30,000 to support financial education specifically targeting majority African American communities;

• $50,000 directly to the named complainants to support their fair lending and community reinvestment work.

Source: HUD and First Federal Bank of Kansas City Reach $2.8 Million Settlement (Agreement resolves claims of race-based lending practices).

State Regulator Issues Cease & Desist Orders, Subpoena For Accounting Books & Records Against Austin-Area Real Estate Operators Accused Of Targeting Dozens Of Unsophisticated Latino Homebuyers w/ Contract For Deed/Rent-To-Own Deals Loaded w/ Onerous Terms, Unaffordable Balloon Payments

In Austin, Texas, the Austin American-Statesman reports:

• A state agency has issued cease and desist orders to an Austin real estate group that several dozen Dove Springs residents blame for deals costing neighbors their homes.
  
  The Texas Department of Savings and Mortgage Lending issued the orders to HomeTex Enterprises and Jeff Evans, who is listed as its property director, and who residents say lured them into unfavorable housing contracts. The department also ordered another mortgage firm flagged by residents, the Lending Group LLC, to turn over records.
  
  About 40 to 45 homes in the Dove Springs area are believed to be involved in the deals. According to the complaint in a 2014 foreclosure lawsuit involving a Round Rock couple, the real estate group manages a portfolio of more than 300 houses and duplexes in Central Texas.
  
  An attorney for Evans could not be immediately reached for comment.
  
  Austin civil rights attorney Brian McGiverin said he and other lawyers representing the residents are pleased to see progress in the inquiry. The dredging up of documents could help uncover wrongdoing, he said.
  
  “I think the department has gathered as much as it could from speaking to residents,” he said. “The subpoena (against the Lending Group) will get at their books and record keeping, and it is the next full step to flesh out a full picture about how they have been operating.”
  
  Lawyers with Texas RioGrande Legal Aid have said a rotating cast of four firms, all owned and controlled by the same people, targeted Latino and Spanish-speaking buyers in the Southeast Austin neighborhood, many of whom didn’t qualify for traditional loans.
  
  Legal aid attorneys allege the group took advantage of an informal sales process — buyers were often unrepresented by a real estate agent, title company or attorney — and signed people up for financing packages that included large balloon payments.
  
  Some buyers told lawyers they did not realize a payment for the remaining balance on the home would come due within a few years, while others believed the balloon payment would be far lower than it turned out to be. In some cases, according to attorneys, homeowners were promised a chance to refinance balloon payments but were then denied at the critical moment, resulting in default.
  
  Residents began organizing against the firms in October, and the home deals have attracted the attention of several state and local officials including state Sens. Kirk Watson, D-Austin, and Judith Zaffirini, D-Laredo, and Austin City Council Member Delia Garza, who represents Dove Springs.

Source: State ramps up inquiry into Dove Springs mortgage complaints. land contract

Use Of Land Contract By Nationwide Real Estate Investor To Unload Dilapidated Money Pit At Center Of Controversy Involving Collapsed Retaining Wall; Title Holder Denies Responsibility For Repairs, Says Obligation Has Been Shifted Onto Savvy-Lacking Homebuyer; Hazard Leaves Innocent Next-Door Neighbor In Danger w/ Forced Move Possible

In Council Bluffs, Iowa, WOWT-TV Channel 6 reports:

• A collapsed retaining wall in Council Bluffs has put next door neighbors in danger. One family has been ordered to move while another is teetering on leaving home to be safe.
  
  The ties between them tumbled last fall but Kelley Hillyer says getting the neighboring property owner to fix the hazard has hit a wall.
  
  "Awful, what do you do when you are on the brink of losing your home? I can't afford an attorney," said Hillyer.
  
  The city ordered the renter next door to move out and issued a civil citation to the property owner Stonecrest Acquisitions of San Jose California for failure to abate a dangerous building.
  
  Stonecrest told the inspector the renter is buying on land contract and she's responsible for making the wall safe. The assessor, however, lists the company address for the owner so Stonecrest faces an $800 city fine.
  
  The collapsed wall is just a little over two feet from Hillyer’s foundation and the drop off. She and her two teenagers can stay as long as the gas line remains stable.
  
  Council Bluffs City Code Inspector Chuck Legg said told Hillyer that if something shifts and the earth gives way, there’s a possibility she’ll have to leave.
  
  "The wall sitting in the position its in could collapse further,” said Legg. “To fence the area off, to make it safe from the neighborhood would be a concern of mine."
  
  Hillyer told WOWT 6 News she’s got nowhere to go.
  
  Cracks inside are a warning Hillyer’s 12 year old home is slipping away and her claims to various insurance companies came back saying “Property Not Covered" or "No Legal” responsibility.
  
  "The mortgage company needs to step up to the plate and get this wall put back together, fix the yard, and fix the interior of my house," said Hillyer.
  
  She’s worried that Stonecrest is stonewalling her.
  
  Six On Your Side has reached out to Stonecrest Financial and Acquisitions of California but hasn't received a response. The company will have to answer for the citation at a court hearing March 30.

Source: Mortgage company cited for fallen wall. contract for deed

Arizona AG Racketeering Lawsuit: Real Estate Operators Targeted Unsophisticated Homebuyers w/ Dubious Contracts, Misrepresenting Leases As Purchases, Fleecing Victims Out Of Hundred$ Of Thousand$

From the Office of the Arizona Attorney General:

• Attorney General Mark Brnovich announced [] his office filed an Arizona Consumer Fraud and Civil Racketeering Lawsuit against ProSolutions, LLC, a Phoenix-based real estate consulting company. The lawsuit alleges ProSolutions and its owners, Ruben Diaz and Rodrigo Diaz preyed on Spanish-speaking families who wanted to buy a home, acting as a home loan financing officer, and taking thousands of dollars in down payments from them. Families thought they purchased a home and later discovered they never owned the home.
  
  “Arizonans trusted this business to help them turn their dream of homeownership into a reality,” said Attorney General Mark Brnovich. “Dozens of families lost their hard-earned savings and we want to help them get their money back.”
  
  The Consumer Fraud Lawsuit alleges ProSolutions misrepresented the nature and terms of various home financing transactions for their own financial gain. In several instances, ProSolutions allegedly mischaracterized lease agreements as purchase agreements and accepted hundreds of thousands of dollars’ worth of home payments from consumers before consumers learned that they did not hold the title to their homes.
  
  ProSolutions allegedly used an assortment of other deceptive practices to take the title to their clients’ properties and forced their clients to lose thousands of dollars in real estate down payments. The complaint also alleges that ProSolutions mishandled deposits paid by consumers and failed or refused to refund deposits to consumers as agreed.
  
  In addition to filing the lawsuit, the State is also asking the court to issue a temporary order that would freeze the Defendants’ assets, ban them from engaging in the business practices alleged in the complaint, stop collection and eviction actions against consumers, and require the production of business records.

Source: Consumer Fraud Lawsuit Filed Against Fraudulent Phoenix Real Estate Operators Accused of Scamming Dozens of Families.

For the lawsuit, see State of Arizona v. Diaz, et al. land contract for deed rent to own

Florida Bar's Client Security Fund Coughs Up Over $1 Million To 14 Victims Of Real Estate Closing Attorney Who Went AWOL w/ Over $6 Million From Trust Account, But $tiffs Over Two Dozen Others; Lack Of Lawyer-Client Relationship Suspected As Being Fatal To Their Eligibility For Reimbursement

In West Palm Beach, Florida, The Palm Beach Post reports:

• When Elaine Bredehoft and Keenan Frank plunked down $65,000 in earnest money for a sprawling house in Ibis Golf and Country Club, all the Virginia couple wanted was a second home.
  
  Instead, their simple quest turned into a three-year odyssey of litigation and recriminations because they handed their check to Lake Worth real estate attorney Timothy McCabe, who promptly disappeared with it, along with $6.1 million in his firm’s escrow account.
  
  Still reeling from that loss, they were hit by another financial blow. Barry and Margaret Hollander, who agreed to sell their Ibis house for $650,000, sued Bredehoft and Frank, claiming they had to cough up the full amount, never mind that McCabe had made off with their deposit.
  
  While an appeals court this month ruled that Bredehoft and Frank couldn’t be forced to pay the deposit twice, the victory, according to their lawyers, was a hollow one.
  
  “It was a tough pill to swallow when the escrow agent stole their $65,000 and then the sellers sued them,” said attorney Ryan Lehrer, who represented the couple in the litigation that began in 2013, shortly after McCabe emptied his firm’s escrow account and went on the lam for two months. “As you can imagine, it left a bad taste in their mouths.”
  
  More importantly, it left a gaping hole in their wallets.
  
  While the appeals court ordered the Hollanders to pay the nearly $50,000 Bredehoft and Frank racked up in legal bills, they are still out the $65,000.
  
  And they aren’t alone.
  
  Although the Florida Bar has a special fund to reimburse those who have been ripped off by attorneys, few of McCabe’s victims qualified for it. Of the 42 people who sought reimbursement from the Clients’ Security Fund after McCabe made off with their cash, only 14 requests were approved, said Lori Holcomb, director of special projects for the Bar.
  
  With one request still pending, she said $1.17 million has been paid to those who lost money to McCabe, who is scheduled to be released from federal prison in October after serving roughly 3 1/2 years of a five-year sentence. After riding around the country on a bus for months, the Boca Raton resident ultimately turned himself in and pleaded guilty to five fraud charges.
  
  Holcomb declined to detail the reasons 27 requests for reimbursement were denied. The records aren’t public. But in the case of Bredehoft and Frank, the reason was simple: He wasn’t their lawyer.
  
  “The Florida Bar Clients’ Security Fund(1) was created to provide compensation to clients when an attorney has misappropriated or embezzled client funds pursuant to an attorney and client relationship,” the Bar wrote, rejecting the couple’s request. “Such a loss must have occurred while the attorney was providing legal services, or other services customary to the practice of law on behalf of the client.”
  
  Because McCabe was merely holding their money and wasn’t representing them in the real estate transaction, they were not eligible for reimbursement. “Our file in this matter is closed,” the letter concluded.
  
  Lehrer said the Bar was splitting hairs. “I fail to see the distinction,” he said. “At the end of the day, he was acting as an escrow agent and had a fiduciary duty to both sides.”
  
  Vickie Meyer, a real estate agent who represented Bredehoft and Frank in the purchase, said she had another client who lost $50,000 for similar reasons. Three others were lucky. Two received $15,000 and $1,000 respectively from the fund because they had hired McCabe to review their sales contracts. A third got a partial reimbursement from a title company’s insurer because it had begun its research.
  
  Meyer, who estimated she lost $30,000 in commissions when sales fell through in the wake of McCabe’s theft, said she used him as an escrow agent for her clients for years without any problems. “Who would have thought he would do what he did?” she said. “It’s like something snapped in him. This was not a guy that I would have thought had all of these issues going on.”
  
  That is the argument Lehrer and attorney John Mullin raised to persuade Palm Beach County Circuit Judge Jack Cox, and later the 4th District Court of Appeal, to dismiss the Hollanders’ lawsuit against Bredehoft and Frank. McCabe’s actions, which stunned the community, couldn’t have been anticipated, they successfully argued. It was like an act of God for which mere mortals can’t be held responsible.
  
  Like others, Meyer said, the Bar’s refusal to reimburse McCabe’s victims doesn’t make sense. “But my years in real estate have taught me one thing about the law: When you think something is logical and makes sense, you’re wrong,” she said.
  
  Other attorneys, who initially said they planned to sue to recover money for McCabe’s victims, said they, too, ran into roadblocks. Not only were some people ineligible because they didn’t have an official attorney-client relationship with him, but his insurer also refused to pay up, said attorney Jeffrey Sonn, who explored and abandoned a half-dozen lawsuits. Insurers don’t cover intentional theft under traditional policies.
  
  That means, Holcomb acknowledged, that the Bar’s fund, which is generated by membership fees paid by lawyers, is a person’s only resort.
  
  Given that one of the leading causes of attorney discipline involves misuse of money that is entrusted to them, Sonn said the Bar should require attorneys to carry theft insurance. He said he pays $3,500 annually for a $2 million policy. “It’s really sad,” he said of the plight of McCabe’s victims. “It shows that anytime you have a person holding money in a position of trust, they should be required to have theft insurance.”
  
  But Bredehoft and Frank aren’t pushing for reforms. The couple has moved on, Mullin said. They did finally buy their Florida dream home. In Naples.

Source: Runaway lawyer to be released soon; some victims can’t get money back.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

--------------------------------

(1) For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

See generally:

• N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;
  
  When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),
  
  Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

California Bar OKs $2 Million Boost To Its Client Security Fund, Making Amount Available This Year For Reimbursements To Clients Victimized By Thieving Lawyers To $8 Million

From a recent press release from The State Bar of California:

• The State Bar Board of Trustees has approved the transfer of $2 million in reserves to the Client Security Fund, boosting the amount available for payouts this year to $8 million.(1)
  
  “The board is committed to ensuring the Client Security Fund has enough money to reimburse every person who lost money or property due to theft by their attorney,” State Bar President David Pasternak said. “This program is vital to achieving the State Bar’s public protection mission. By reallocating these funds, the State Bar is trying to avoid or minimize the need to raise further funds from the California attorneys who finance this important restitution program.”
  
  The fund, established by State Bar-sponsored legislation in 1972, is primarily financed by an annual assessment paid by California lawyers which is currently $40 per active lawyer and $10 per inactive lawyer.
  
  Applications to the fund have increased in recent years as a result of the loan modification crisis, during which attorneys were prohibited from collecting advanced fees for loan modification work. In 2013, the fund paid out a record $11 million to more than 2,000 applicants. Alleged loan modification fraud still accounts for about half of the new applications being made to the fund.
  
  “I am delighted that careful budgeting has identified the savings needed for this transfer of funds to a critically important activity,” Executive Director Elizabeth Rindskopf Parker said. “The State Bar’s new Chief Operating Officer Leah T. Wilson deserves special credit for this important achievement – an example of excellent stewardship of mandated member fees.”
  
  The one-time infusion of $2 million translates to as many as 475 additional applicants being paid this year. In order to seek reimbursement from the fund, victims must first file a complaint against the attorney with the bar’s Attorney Discipline System.

Source: Client Security Fund receives $2 million fund transfer.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

• This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.
  
  There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.
  
  This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.

----------------------------

(1) The Client Security Fund is a public service of the California legal profession. The State Bar sponsored the creation of this fund to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

See generally:

• N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;
  
  When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),
  
  Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

Ohio High Court's Client Protection Fund Pays Out $236K To 33 Victims Who Were Fleeced By Their Lawyers

In Columbus, Ohio, WKYC-TV Channel 3 reports:

• The Board of Commissioners of the Lawyers’ Fund for Client Protection has awarded $236,558 to 33 victims of attorney theft. Ten former or suspended Ohio attorneys were found to have misappropriated client funds, and additional claims were made involving five deceased attorneys.
  
  Cuyahoga County
  The maximum award amount of $75,000 was approved to a former client of now-deceased Westlake attorney James L. Burns for failure to account for the client’s funds.
  
  A former client of deceased attorney Bruce M. Cichocki was reimbursed $440 as a result of the attorney’s failure to complete the services requested prior to his death in 2013.
  
  Two former clients of former attorney James W. Westfall Jr. were reimbursed a total of $2,305 because he failed to provide the services requested before resigning from the practice of law in Ohio in August 2013 with discipline pending.
  
  Delaware County
  A former client of former Delaware County attorney Aaron R. Scheeler was reimbursed $850 as a result of Scheeler failing to provide the services requested. He resigned from the practice of law in Ohio, with discipline pending, in October 2014.
  
  Erie County
  Former clients of deceased attorney John F. Kirwan were reimbursed $2,300 as a result of Kirwan’s failure to complete the services requested prior to his death in September 2013.
  
  Franklin County
  The board awarded reimbursement to former clients of two Franklin County attorneys. Fifteen former clients of suspended attorney Mohammed Noure Alo were reimbursed a total of $54,540 as a result of Alo’s failure to provide the services requested.
  
  A former client of deceased attorney Ester D. Harber was reimbursed $600 because legal services were not completed before Harber’s death in June 2014.
  
  Hamilton County
  A former client of former Hamilton County attorney Geoffrey P. Damon was reimbursed $1,000 as a result of Damon’s failure to return funds belonging to his client. He was permanently disbarred from the practice of law in Ohio in September 2014.
  
  Lake County
  Two former clients of former Lake County attorney David H. Davies were reimbursed a total of $66,000 as a result of Davies’ failure to account for funds belonging to his clients. Davies was permanently disbarred from the practice of law in Ohio in December 2015.
  
  Montgomery County
  Two former clients of suspended attorney Thomas P. Liptock were reimbursed a total of $1,650 as a result of Liptock’s failure to complete the services requested. His license to practice law in Ohio was suspended indefinitely in November 2015.
  
  A former client of Raymond W. O’Neal was reimbursed $4,800 paid to the attorney but not earned. O’Neal’s law license was suspended in December 2012.
  
  Morrow County
  A former client of former Morrow County attorney William M. Adams was reimbursed $21,317.50 paid to Adams but not properly accounted for. Adams resigned from the practice of law in Ohio in April 2014 with discipline pending.
  
  Stark County
  Two former clients of Stark County attorney Celeste M. DeHoff, whose law license was suspended indefinitely in March 2015, were reimbursed a total of $1,650 as a result of DeHoff’s failure to provide the services requested.
  
  Summit County
  A former client of former Summit County attorney Peter F. Fletcher was reimbursed $1,106 for fees paid to Fletcher for services that he failed to provide. Fletcher was permanently disbarred from the practice of law in Ohio in April 2013.
  
  Wayne County
  A former client of deceased Wayne County attorney David T. Eager was reimbursed $3,000 paid to Eager for services that he failed to provide prior to his death in May 2015.
  
  The Lawyers’ Fund for Client Protection, formerly known as the Clients’ Security Fund, was created in 1985 by the Ohio Supreme Court and is supported from the Attorney Registration Fund. More than $18 million has been awarded to consumers. Ohio has more than 44,000 attorneys engaged in the active practice of law, and less than 1 percent of those attorneys have been involved in reimbursement claims.(1)
  
  Law clients who believe they have sustained financial losses resulting from attorney theft, embezzlement, or misappropriation should call 614.387.9390 or 800.231.1680.

Source: Victims of attorney theft awarded money from state fund.

-----------------------------------

(1) For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.

See generally:

• N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;
  
  When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),
  
  Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

Court Administrator: Bogus Paperwork Simulating Official Legal Documents Used In Squatting Scams By So-Called Sovereign Citizens To Make Bogus Ownership Claims To Vacant Homes Creates Undue Burden For Judicial System

In Mecklenberg County, North Carolina, WBTV-Channel 3 reports:

• The house on Kelly Woods Lane in Piper Glen is back on the market and under contract a week after an accused squatter was convicted in court of several charges.
  
  The price is nearly $300,000 less than the property tax value, which is likely a reflection of its foreclosure status and the legal battle over ownership.
  
  A woman named Ninti El-Bey claimed to own the house through documents she said gave her authority under her status as a member of the Moorish Nation.
  
  El Bey came to court with a stack of papers and a plan to prove ownership during her trial last week at the Mecklenburg County Courthouse. She faced several charges, including trespassing and breaking and entering.
  
  Her documents may have been legally meaningless, but the court process was real.
  
  “I am following the laws, just because they don't know the laws in which I stand, they will soon find out,” said El-Bey, talking about court officials at a previous hearing.
  
  Instead, her defense failed after a six-month court battle and a six-hour trial.
  
  “It's definitely a burden on a system that is already over burdened,” said Court Administrator Charles Keller.
  
  Keller says court officials receive state training on how to handle what some call “paper terrorism” by defendants who claim to be a sovereign citizen, often members of the Moorish Nation.
  
  He says cases come up at least once a week. Often they involve petty charges and huge amount of paperwork. One person even wrote a letter demanding a fee of $10,000 a day for jury duty.
  
  “They all pretty much share the same ideology that they do not recognize state, federal, or local government as having any type of authority over them,” says Keller.

For more, see Piper Glen squatter case shows court concerns.

Contractor Gets 9 Months To 4 Years For Clipping Homeowner Out Of $5K Advance Payment To Construct Deck, Then Failed To Start Job Or Purchase Building Materials

In Clearfield County, Pennsylvania, Gant Daily reports:

• A DuBois man accused of not completing a construction job pleaded guilty to theft [] in Clearfield County Court.
  
  Joshua D. Cribbs, 33, [...], currently an inmate of state prison, pleaded guilty to theft by deception and theft by failure to make required disposition of funds before President Judge Fredric J. Ammerman, who sentenced him to nine months to four years in state prison.
  
  ***
  According to the affidavit of probable cause, police were contacted by the victim who reported a theft. He stated that he had given $5,000 to Cribbs as an advance payment for a home improvement project in May of 2014.
  
  Cribbs had signed a contract with the victim to build a deck at his residence in DuBois. The $5,000 advance was to cover building materials and an additional $5,000 would be paid upon completion of the project.
  
  Cribbs did not do the work or even purchase the building materials, as the victim learned when he contacted several local businesses.
  
  The victim sent Cribbs several letters and left several phone messages but did not get a response. Eventually he pursued civil action. Cribbs was ordered by District Judge Patrick Ford to pay the victim $5,000 as well as court fees.
  
  The victim made another agreement with Cribbs allowing him to make payments or do various work at his residence. However Cribbs did neither and discontinued all contact with the victim.
  
  An officer was able to make contact with Cribbs at his residence and advised him he was pursuing criminal charges. Cribbs stated he was in the process of compensating the victim and planned to complete several projects at his residence. He also claimed he had paid $1,000 to the victim but was unable to provide the officer with a receipt.
  
  Cribbs became agitated and used several expletives regarding the victim. Cribbs claimed he was told because of the civil judgment that no criminal charges could be filed against him.

For the story, see Cribbs Pleads Guilty for Not Completing Construction Job.

Ex-Code Enforcement Agent To Spend 30 Days In Halfway House, Then Gets Six Months House Arrest After Pleading Guilty To Squeezing Bribes Out Of At Least Five Connecticut Homeowners Under Threat Of Official Action Against Them

From the Office of the U.S. Attorney (Bridgeport, Connecticut):

• [F]RANK BIANCUR, JR., 41, of West Haven, was sentenced [] by U.S. District Judge Victor A. Bolden in Bridgeport to 30 days of incarceration in a halfway house, followed by two years of supervised release, for seeking and receiving illegal payments while employed as a Zoning Enforcement Officer for the Town of East Haven. During his term of supervised release, BIANCUR must spend six months in home confinement with electronic monitoring and perform 200 hours of community service.
  
  According to court documents and statements made in court, BIANCUR was employed as the Town of East Haven’s Planning and Zoning Administrator/Zoning Enforcement Officer. In pleading guilty, BIANCUR admitted that he sought and received payments from at least five individuals in exchange for official acts he rendered as the Zoning Enforcement Officer.
  
  In May 2015, a resident of East Haven contacted the East Haven Police Department and the FBI with information that he/she had been extorted by BIANCUR since approximately October 2012 and, as a result, had made cash payments to BIANCUR.
  
  On May 19, 2015, BIANCUR called the victim and informed the victim that BIANCUR had to inspect an addition to the victim’s residence. Although BIANCUR stated that he was “fighting” for the victim, he also required a payment of $200 or he would make the victim tear down the addition. On May 21, 2015, the victim engaged in a consensually-recorded meeting with BIANCUR at BIANCUR’s office in East Haven Town Hall. During the meeting, the victim gave BIANCUR $200 in cash, which BIANCUR put in his pocket.
  
  BIANCUR also has admitted that he sought and received $500 cash payments from two additional East Haven residents in order to resolve zoning violations.
  
  BIANCUR was ordered to pay $6,265 in restitution.

Source: Former East Haven Zoning Official Who Solicited and Received Payments from Residents is Sentenced.

Foreclosure Of Reverse Mortgage Triggered By Death Of Married Sole Borrower Kiboshed Where Surviving Spouse, While Not Having Co-Signed Promissory Note, Was Identified As A Borrower On Mortgage Document

The following excerpts come from a recent court ruling by Florida appeals court:

• The defendant, Johnnie Mae Edwards, appeals the entry of a final judgment of foreclosure entered in favor of appellee, Reverse Mortgage Solutions, Inc., in this reverse residential mortgage foreclosure case. Following this Court's recent opinion in Smith v. Reverse Mortgage Solutions, Inc., etc., 2015 WL 4257632 (motions for rehearing and rehearing en banc pending), we reverse because Reverse Mortgage failed to establish a condition precedent to its right to foreclose.
  
  On November 21, 2006, Willie A. Edwards obtained a reverse mortgage from Reverse Mortgage using the equity in his marital home (a home equity conversion mortgage). Mr. Edwards signed and executed a promissory note for the debt. The note defines "borrower" as the person who signs at the end of the note. Mr. Edwards, joined by his wife, Johnnie Mae Edwards, secured the debt by signing and executing a mortgage. Mrs. Edwards appears as a borrower on the mortgage's signature block. However, she was not mentioned in the note, and her signature was not on the note.
  
  On April 10, 2008, Mr. Edwards passed away. As per the terms of the mortgage's acceleration provision in paragraph 9(a)(i):
  
  Grounds for Acceleration of Debt. Due and Payable. Lender may require immediate payment in full of all sums secured by this Security Instrument if: A borrower dies and the Property is not the principal residence of at least one surviving Borrower; . . .
  
  Accordingly, Reverse Mortgage Solutions, Inc. accelerated the debt. Mrs. Edwards failed to pay the alleged sum due under the note and defaulted. On November 8, 2013, Reverse Mortgage filed a one-count foreclosure action. Initially, Mrs. Edwards was defaulted for her failure to appear and for failing to file any responsive pleadings. However, she eventually appeared pro se. A non-jury trial was held, at which point she had obtained counsel to represent her.
  
  At trial, due to having been defaulted, Mrs. Edwards was barred from testifying and from entering affirmative defenses. Her counsel stated that she no longer had title of the home, having quitclaimed it to her husband prior to his application for the reverse mortgage. This assertion was not objected to. Mrs. Edwards contended that despite the default, Reverse Mortgage was still required to prove its case. She maintained that Reverse Mortgage needed to prove she defaulted under the note and mortgage by failing to pay the payment due on April 10, 2008 and all subsequent payments.
  
  The trial court held that Reverse Mortgage was entitled to foreclosure because Mr. Edwards was the only borrower under the note, and therefore, the only borrower for the purposes of the mortgage's acceleration provision. Accordingly, as Mr. Edwards was now deceased, the trial court entered final judgement in favor of Reverse Mortgage. Mrs. Edwards then filed this appeal.
  
  We believe the issue before us today is the exact same issue that was recently addressed by this Court in Smith v. Reverse Mortgage, Solutions, Inc., etc., 2015 WL 4257632.
  
  In Smith, we found that "based on the plain and unambiguous language of the mortgage," both the deceased husband and his wife were treated as "borrowers" under the mortgage, and each borrower was "protected from the foreclosure of the mortgage until both borrowers died." Id. at *3 (emphasis added). Thus, we held in Smith that the wife who survived her spouse was a co-borrower and that her death was a condition precedent to Reverse Mortgage Solutions' ability to foreclose. Id. In Smith, as in the case before us, the surviving spouse was a borrower under the mortgage, but was not designated a borrower under the note.
  
  As in Smith, we hold that the trial court's final judgment in the case before us should be reversed because Reverse Mortgage has not met the condition precedent required before it is able to foreclose on Mrs. Edward's property. Here, Mrs. Edwards is a co-borrower, and her death is a condition precedent to Reverse Mortgage's ability to foreclose on the property. Smith at *5.
  
  We agree with the reasoning in Smith that this holding is consistent with Florida's Homestead provisions, Article X, § 4(c), Florida Constitution, as well as the purpose of federal laws related to reverse mortgages enacted to prevent the displacement of elderly homeowners. See Smith at *4; 12 U.S.C. § 1715z-20(j). This provision provides, and as we stated in Smith, "For purposes of this subsection, the term `homeowner' includes the spouse of a homeowner." See Smith at *11; 12 U.S.C. § 1715z-20(j).
  
  We adhere to Smith and agree that "it would be difficult, if not impossible, for us to construe [Mrs. Edwards] as anything other than a `Borrower'". Accordingly, Mrs. Edwards is a "borrower" for purposes of Paragraph 9 of the mortgage's acceleration provision. Smith at *5. It then follows that pursuant to the acceleration clause, Reverse Mortgage had to establish that either Mrs. Edwards died or that as of the date of the trial in the lower court, the property was no longer Mrs. Edward's residence.
  
  The record reflects that Mrs. Edwards is still alive, and the property is still her residence. Accordingly, Reverse Mortgage may not foreclose the mortgage, pursuant to the 9(a)(i) acceleration provision, against Mrs. Edwards, who is a surviving borrower under the mortgage, but not a borrower under the note.
  
  We reverse the trial court's Final Judgment of Foreclosure and remand the case to the trial court to enter final judgment in favor of Mrs. Edwards.

For the ruling, see Edwards v. Reverse Mortgage Solutions, Inc., Case No. 3D14-2631 (Fla. App. 3d DCA, March 2, 2016).

Representing the widowed homeowner was the non-profit law firm, Legal Services of Greater Miami, Inc., a provider of broad-based civil legal services for the poor in Miami-Dade and Monroe Counties, Florida, and Jacqueline C. Ledón.

Florida Appeals Court Vacates Foreclosure Sale Where Borrowers' Timely Motion For Rehearing Of Judgment Was Pending

The following court ruling was recently handed down by a Florida appeals court in a case involving a foreclosure sale a trial judge refused to vacate, despite the fact that the homeowner had filed a timely motion for rehearing of the foreclosure judgment before the sale, and the motion remained pending when the property was sold:

• In this foreclosure case, the borrowers appeal the post-judgment order denying their motion to vacate the foreclosure sale. The property was sold to the lender while the borrowers' timely motion for rehearing of the judgment was pending.
  
  Based on the lender's commendable confession of error, we agree that the foreclosure sale must be set aside. See Wollman v. Levy, 489 So. 2d 1239 (Fla. 3d DCA 1986) ("Once a timely motion for rehearing is made, the operation of the judgment is suspended until the motion is disposed of. [The borrowers] timely moved for a rehearing; therefore, the sale of the property should not have been carried out until the motion had been acted upon.") (internal citations omitted); Hoffman v. Bank United, N.A., 137 So. 3d 1039 (Fla. 2d DCA 2014) ("[W]e agree that the foreclosure sale of the property must be set aside because the sale was conducted while [the borrower's] timely motion for rehearing was pending.").
  
  Reversed and remanded.

For the ruling, see Prieto v. FNMA, No. 3D15-1518 (Fla. App. 3d DCA, March 2, 2016).

Bankruptcy Appeals Court: Massachusetts Homestead Exemption Insulates Three Vacant Lots Against Creditor's Forced Sale Where Parcels Are Contiguous & Used In Connection With Homeowner's Primary Residence As Of Declaration Filing Date

From a client alert from the law firm Nutter McClennen & Fish LLP:

• [T]he chapter 7 bankruptcy case of In re: Nealon involved a bankruptcy filing by an individual who worked as a contractor (the "Debtor"). Prior to the bankruptcy case, a former customer of the Debtor succeeded in obtaining an arbitration award against the Debtor arising out of an extensive residential real estate remodeling project that ended poorly.
  
  In 2014, the Debtor filed for bankruptcy protection, listing among his assets real estate with a value of $420,000 secured by a mortgage in the amount of $307,192. In his filing, the Debtor claimed an exemption in the property pursuant to the Massachusetts homestead law. The Debtor also listed the former customer as an unsecured creditor with a claim based on the arbitration award of nearly $300,000.
  
  The former customer objected to the claimed homestead exemption. The bankruptcy court sustained the objection after concluding that the exemption extended only to the one specific parcel on which the Debtor's residence was situated, and not to three adjacent parcels that the Debtor had sought to subdivide in the past.
  
  As a result of the bankruptcy court decision, the adjacent parcels were not protected by the homestead exemption and, without protection, the parcels were at risk of being sold to satisfy creditor claims.
  
  Before any sale occurred, however, the Debtor appealed, arguing that the bankruptcy court applied the wrong standard by erroneously focusing on the Debtor's original intent to subdivide the property rather than his family's actual use of all of the property at the time of the declaration of homestead.
  
  The BAP [ie. Bankruptcy Appellate Panel] sided with the Debtor, concluding that the critical issue was the Debtor's usage and not any intent to retain or convey away the property.(1)
  
  Although the Debtor won before the BAP, the fight may not be over. The customer has the right to seek further appellate review before the United States Court of Appeal for the First Circuit. As of this writing, no such appeal has been filed, but the time to do so has not yet expired.

For more, see The Lesson Of In Re: Nealon – Homestead Is A Protection Worth Maximizing.

For the court ruling, see In re Nealon, BAP No. MW 15-035, Bankruptcy Case No. 14-40719-HJB (B.A.P. 1st Cir. January 20, 2016).

--------------------------

(1) From the court ruling:

• The Nealons testified about the various uses that the family made of the vacant lots surrounding their home both before and after the filing of the Declaration of Homestead, including sledding, snowshoeing, cross country skiing, hiking, snowboarding, riding off-road vehicles, storing boats during the winter, and gathering lumber, firewood, and holiday greens.
  
  He also introduced photographs depicting his family's use of the vacant lots for such activities. Ms. Matthews did not produce any evidence to counter the Nealons' testimony and documentary evidence regarding their use of the vacant lots and, therefore, it is unrefuted.
  
  The bankruptcy court acknowledged the Nealons' various activities, but found that "there is no reason why those activities should not have happened regardless of what the party's intention was ultimately with respect to the property. The property had not yet been sold and these various activities are neither consistent nor inconsistent with any intention to retain the property."
  
  Based on cases such as Edwards, Fiffy, and Kology, however, these are precisely the kinds of activities that establish a debtor's use and occupancy of surrounding land in connection with a principal residence for purposes of the Massachusetts homestead statute.
  
  Whatever his intentions were through late 2011, Mr. Nealon produced evidence that, as of the date of the declaration in December 2013, he used and occupied the entire Property in connection with his principal residence. As such, the bankruptcy court erred in disregarding evidence of the Nealons' use of the Property, and in determining that Mr. Nealon's homestead exemption did not include Lots 2A, 2C and 2D.

Three Years After Real Estate Closing, Title Insurer Steps In, Pays Tab For Lien Search Screw-Up That Failed To Pick Up Existing Unpaid Mortgage; Unwitting Couple Was On Verge Of Losing Their Home When Error Discovered

In Tampa, Florida, WFLA-TV Channel 8 reports:

• South Tampa homeowners who turned to 8 On Your Side on the verge of losing their house, are now keeping it – free and clear. Kris and Rebecca Kraft faced losing their home of three years, even though they’ve never missed a mortgage payment and never even did business with the bank trying to take the house.
  
  Now, the Krafts title insurance company, Old Republic, is stepping in to help. The insurance policy will cover a title mixup that was missed when the Krafts bought their home.
  
  The Krafts were getting nowhere in their quest for answers, until 8 On Your Side stepped in. “I think the news article got out there and maybe people started paying attention a little bit more,” Kris Kraft said. “We’re really thankful for Channel 8.”
  
  ***
  Here’s a rundown of how thing unraveled: The house first sold in 2004. That buyer took out two mortgages, from different banks, and then lost the home in foreclosure in 2013. This is when things got weird.
  
  The second mortgage holder beat the main mortgage holder in a race to foreclose. That bank sold the home to an investor who then flipped it to the Krafts.
  
  No one caught the big title mistake. The home should have never been sold because of the clouded title. Then, in December 2015, the first mortgage holder, now Nationstar Bank, decided to foreclose on its lien and take the title. The mistake left both Nationstar and the Krafts claiming to own the title to the house.
  
  Tampa title agent Galyn Lecher says this happens more than buyers realize and that this should be a lesson. Everything worked out well, Lecher said, because the Krafts have what’s called an owner’s title insurance policy.

For the story, see 8 On Your Side helps couple keep home after title mistake.

Polygamous Cities On Losing End Of $2M Jury Verdict For Religious Discrimination Against Non-Members Of FLDS Church In Violation Of Fair Housing Act

From the U.S. Department of Justice (Washington, D.C.):

• A federal jury in Phoenix returned a verdict [] finding that the towns of Colorado City, Arizona, and Hildale, Utah, and their joint water company systematically discriminated against individuals who are not members of the Fundamentalist Church of Jesus Christ of Latter-day Saints (FLDS) in the provision of housing, utility and policing services in violation of the Fair Housing Act. Prior to the jury verdict, the parties reached an agreement that the defendants will pay $1.6 million to resolve the monetary claim under the Fair Housing Act.
  
  ***
  “Today’s verdict reaffirms that America guarantees all people equal protection and fair treatment, regardless of their religious beliefs,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When communities deny their residents critical services simply because of where they worship, they violate our laws and threaten the defining values of religious freedom and tolerance that are the foundation of our country.”
  
  This was the department’s first lawsuit to include claims under both the Fair Housing Act and Section 14141, the federal statute that allows the Attorney General to address patterns or practices of police misconduct.

For more, see Justice Department Wins Religious Discrimination Lawsuit Against Colorado City, Arizona, and Hildale, Utah.

See also, KPNX-TV Channel 12: FLDS polygamous cities violated constitution.

Bay State Homeowner Files Fair Housing Lawsuit Against City, Sheriff's Department, Others For Allegedly Engaging In Residential Racial Segregation By Continuing To Dump Unwanted Land Use Projects In Poorest Black, Latino Neighborhoods; Latest Endeavor Involves Relocation Of Addiction Center For Jailed, Minimal Security Inmates

In Springfield, Massachusetts, Western Mass News reports:

• There’s another lawsuit fighting the relocation of Hampden County Sheriff Michael Ashe's correctional addiction center.
  
  The plaintiffs in this suit are next door neighbors to the future site of the facility on Mill street in Springfield. The lawsuit claims their fair housing rights were violated and they're now asking a judge for a temporary restraining order.
  
  The plaintiff, Patricia Taste-Ray did not wish to speak on camera [], but the lawsuit alleges that Sheriff Ashe and other defendants are violating fair housing rights by "knowingly and intentionally siting the Western Mass Correctional Addiction Center in predominantly African-American, Latino and other non-white communities."
  
  The lawsuit goes on to say that Deputy Sheriff Michael Goldberg "submitted rigged bids with the assistance and aide of defendant Ashe twice."
  
  It comes after a failed attempt last summer to relocate the facility to Wason Avenue in the North End of Springfield. Nearby neighbors there also filed suit late last year.
  
  Other defendants in the suit include the city of Springfield, the Division of Capital and Asset Management which approved the Mill Street site, Carol Gladstone who is the commissioner of Capital Asset and Maintenance, MGM Springfield and Deputy Sheriff Michael Goldberg.
  
  ***
  The lawsuit is seeking a restraining order,(1) requesting work be stopped at the Mill Street site for the next 100 days while the Department of Housing and Urban Development, Massachusetts Commission Against Discrimination and the Department of Justice investigate.

For the story, see Lawsuit against Hampden County Sheriff, Springfield and others opposes correctional facility.

For the lawsuit, see Taste-Ray v. Ashe, et al.

See also, Lawsuit: Bid rigging allegations in Addiction Center relocation:

• It's alleged under the Fair Housing Act that the Sheriff along with the city of Springfield and MGM Springfield engaged in Residential Racial Segregation by continuing to dump unwanted land use projects in poorest most diverse neighborhoods in Springfield.

For a follow-up story, see Judge denies temporary restraining order request, Mill Street construction to move forward:

• Calling the facts of the case "a mess," a federal judge on Thursday denied a temporary restraining order requested by Mill Street resident Patricia Taste-Ray to stop construction on the new location for the Western Massachusetts Correctional Addiction Center. [...] "This is an awkward fit because the Fair Housing Act deals with Realtors, landlords, and property owners who refuse to make a project available to people based on race or ethnicity," he said. "Using it to attempt to block the building of the facility is not appropriate."

--------------------------------

(1) See Federal judge schedules hearing on restraining order seeking to prevent work on proposed Springfield addiction center site.

Low-Income Renters In Section 8 Complex Use Fair Housing Discrimination Claim As Part Of Lawsuit Alleging That Daily Disruptions Caused By Gentrifying Landlord's Ongoing Renovations, Routine Utilities Shut-Offs Have Disparate Effect On Health & Well-Being Of Disabled Residents

In Austin, Texas, The Austin Chronicle reports:

• Eight tenants of Fairway Village Apart­ments are suing property owners Sage Apart­ment Communities Inc. and their subsidiary Fairway Village Apartments LLC for unlawful mistreatment and negligence.
  
  The complex is a project-based Section 8 property, meaning it receives money from the U.S. Department of Housing and Urban Development to offer reduced rental rates to low-income families. Tina Greene, one of the plaintiffs, said that with no affordable housing alternatives nearby, the tenants had no other choice but to seek justice from the courts. "I think this lawsuit will show them that we are going to fight for our rights," she said.
  
  The owners began major construction on the property in March 2015 to improve the complex's outdated plumbing system. Residents say they were offered two options to compensate them for the inconvenience: a $2,400 stipend or a temporary stay at a nearby hotel. Some, however, claim that they never received the stipend after requesting it.
  
  Southwest Housing Com­pli­ance Corporation – the nonprofit subsidiary of the city's Housing Authority which serves as contract administrator for Section 8 projects – investigated the complaint, along with 10 other complaints made against Fairway Village last year, but determined the property management to be in compliance in every case. Greene feels that she and the others who complained have since faced retaliation from property management. "They've singled out those of us who put up a fight," she said.
  
  Unable to relocate, some families found themselves stuck in a construction zone. Tenants, some elderly or disabled, say they have had to deal with constant noise and random holes surrounding their residence. Greene's mother, Rosemary Martinez, who uses a walker to get around, fell into one of the holes last year. "My leg was bruised and swollen," she said.
  
  In coordination with the ongoing construction, residents say, the property managers have routinely shut off water and electricity to residents, often without warning.
  
  These withholdings, said the plaintiffs' attorney Brian McGiverin, constitute illegal discrimination against renters who are disabled, because it has a disproportionate effect on their health and well-being. In addition, the plaintiffs allege that property owners have deferred important repairs, including plumbing and heating maintenance. Some tenants have also spotted rats and cockroaches since construction started. "There's no reason why we should be living like this," Martinez said. "This isn't some poor country, this is the United States! This is the capital of Texas!"

For more, see Section 8 Renters File Suit (Allege illegal discrimination at Fairway Apt. Complex).

State AG 'Bigfoots' Gentrifying NYC Landlord Into Backing Down From Sleazy Attempt To Arm-Twist Tenants Into Signng Lease Renewal Riders Preventing Them From Suing For Future Damage From Planned Renovation Project; One Provision Blocked Residents From Suing Over Lead Paint Dust

In New York City, the New York Daily News reports:

• The owner of a Manhattan building where the real estate market is white hot told rent-regulated tenants they couldn’t sue if a planned construction project damaged their property.
  
  Starting in July, Atlas Capital Group LLC sent out the no-sue rider on renewal leases — a move the state attorney general says is blatantly illegal.
  
  Eric Schneiderman ordered Atlas to cease and desist, charging that the rider “runs afoul of numerous state and local tenant-protection laws,” according to a letter sent to Atlas Feb. 16.
  
  “Landlords should be on notice: The attorney general will take action against anyone using illegal tactics — including thinly veiled threats — to force New Yorkers out of their homes,” said Schneiderman spokesman Matt Mittenthal.
  
  After the warning from Schneiderman and an inquiry from the Daily News, the company backed down.
  
  “We look forward to making significant upgrades and improvements to the lobbies and common areas for our tenants. The residents who rent our apartments are important to us, so we chose to be fully transparent about the impending work,” said Jackie Renton, an Atlas executive. “We listened carefully to our tenants, and after meeting with them, decided to withdraw the rider going forward.”
  
  Atlas bought the 246 apartments in two aging prewar buildings on W. 23rd and W. 24th Sts. in Chelsea, one of the hottest real estate locations in New York. Tenants started noticing last summer construction riders that came with their lease renewal papers.
  
  Laura Shapiro, a rent-stabilized tenant who has lived at the W. 23rd St. address for decades, was shocked when she saw the language barring legal recourse due to construction damage. She noted the rider even included a provision barring tenants from suing over lead paint dust.
  
  “I was horrified. It was like somebody was choking me,” she said. “It was written in a way that they wouldn’t renew the lease if you didn’t sign it.”

For the story, see New York AG Eric Schneiderman nixes Manhattan landlord’s illegal ploy to keep tenants from suing.

Another Landlord Wastes No Time Implementing Renovation Plans, Begins Giving Low-Income Tenants In Recently-Purchased 118-Unit Building The Boot

In Bremerton, Washington, the Kitsap Sun reports:

• Tenants are being evicted from the Admiral Manor apartments in Bremerton as a new owner prepares to renovate the buildings.
  
  One group of residents was given 20-day notice and has until Monday to move out, according to tenants who spoke with the Kitsap Sun [] and provided copies of their eviction notices. The tenants said they were told the apartments will be upgraded and rents will be raised substantially. The 118-unit Bloomington Avenue complex offers some of the lowest rents in the area, with one-bedroom units costing about $650 a month.
  
  ***
  The new owner is The Stratford Co., a Seattle real estate firm that operates at least 10 other apartment complexes in the Puget Sound region, according to its website. County documents show Stratford bought the apartments in late January. A sale price was not yet listed.
  
  Emails and phone calls left for Stratford representatives were not returned []. A property manager at the complex declined to comment on the changes.
  
  Bremerton Housing Authority Housing Director Sarah VanCleve said the agency has heard from tenants being evicted from the property. Nine people who live there receive Section 8 rental assistance, she said. Housing authority inspectors had received reports of bedbugs and other problems at the apartments.
  
  Laurleen Smith was moving boxes out of her Admiral Manor apartment []. She'd been given another unit in the complex to move to temporarily.
  
  The new owners want to attract a higher-end demographic, Smith said. She paid $635 a month for her apartment and heard rents would be going up to $1,100 after the remodel. "We're not the right monetary demographic, or any other demographic," said Smith, who commutes to a call-center job in Tacoma.
  
  Smith said the Admiral wasn't a great place to live — she was nervous when she moved in last year. The alley in back was "sketchy," she said. But she found most of her neighbors were nice and quiet. "We're too poor to rob each other," Smith said.
  
  Displaced Admiral Manor residents are wading into a tight rental market. The vacancy rate at large apartment complexes in Bremerton was about 2.6 percent at the end of 2015, according to Tom Cain of Apartment Insights Washington.
  
  A representative of Madrona Estates, an Auto Center Way apartment complex that offers similar rents to Admiral Manor, said he had 40 names on a waiting list for units.

Source: New owners evicting tenants at Bremerton apartment building.