Tuesday, April 13, 2010

Ohio Attorney Gets Off With Hand Slap For Engaging In Lawyer-Renting Racket With Alleged Upfront Fee Foreclosure Rescue Operator

In a recent ruling by the Ohio Supreme Court, attorney Christopher C. Harwood dodged a bullet and got off with a hand slap for his association with an alleged Ohio forclosure rescue racket in which he, in essence, allowed himself to be "subleased" out by the alleged racket to homeowners facing foreclosure.

The foreclosure companies, American Foreclosure Professionals, Inc. and Foreclosure Assistance USA, Inc., charged between $900 and $1,200 for the services they provided and informed customers that the fee included legal representation arranged and paid for, in part, by the companies. The foreclosure companies asked their customers to execute a request for legal services and then forwarded the executed request and the client's contact information and goals, e.g., keeping or selling the property, to attorney Harwood. He received $100 to file an answer in each case referred to him.(1)

The court agreed with a recommended six-month license suspension, with the entire period stayed upon the condition that Harwood commit no further misconduct.(2) Apparently, Harwood is not currently in private practice as the ruling noted that he now works as a staff attorney for a Kentucky court of appeals judge.

For the ruling, see Cincinnati Bar Assn. v. Harwood (Slip Opinion), 2010-Ohio-1466 (4/7/2010).

(1) In the same month that Harwood voluntarily terminated his relationship with the foreclosure companies and stopped accepting their referrals, the Ohio Attorney General filed a complaint against American Foreclosure Professionals, Inc. and Foreclosure Assistance USA, Inc. in the Hamilton County Court of Common Pleas alleging violations of, inter alia, the Ohio Consumer Sales Practices Act, R.C. 1345.01 et seq. The attorney general alleged that the foreclosure companies (1) failed to deliver services within the prescribed period of time, (2) knowingly sold services to consumers that carried no substantial benefit and resulted in detrimental reliance by the consumer, and (3) made false or misleading representations to consumers.

(2) The court made this, among other, observations on this case:

  • These associations present "the same ills as have respondent's alliances — insufficient attorney-client communication and case preparation, nonattorney promotion of the lawyer's legal services, the aiding of the unauthorized practice of law, and the sharing of legal fees. Together, these failings signal the surrender of an attorney's ability to exercise independent professional judgment on a client's behalf and manifest an overarching breach of the lawyer's duty of loyalty to the client." Patterson at ¶ 33, citing Willard.