Saturday, March 05, 2016

Six Tenants Accuse Brooklyn Landlord Of Intentionally Failing To Address Various Water Leaks Inside Their Rent-Regulated Apartments, Then Bribing Code Enforcement Agent To Use Failed Inspections As Pretext To Give Them All The Boot

In New York City, News 12 - Brooklyn reports:
  • A group of six Bushwick renters is preparing to head to court to demand that their landlord make needed repairs to their home.

    The apartment building, located at 159 Suydam St., has been described as having leaks in the bathroom, kitchen and radiator, along with tiles peeling off the floors.

    The tenants were recently met by inspectors, who told the residents they had to leave within 72 hours, but the group's attorney Ariana Marmora says the eviction was done based on a bribe by landlord Frank Campasano.

    Assemblymember Maritza Davila has since stepped in to help represent the tenants and demand repairs.

    If Campasano doesn't agree to his tenants' requests, they plan to take their issues to trial and request an independent administrator run the building.

    It was recently learned that Frank Campasano passed the building deed to his son Damian. His attorney has not returned calls made by News 12.

Section 8 Tenants Accuse Gentrifying NYC Landlord Of Stiffing Them On Repairs That Led To Failed HUD Property Inspection; Now Fear Getting The Boot If Gov't Yanks Their Housing Subsidy

In Ridgewood, Queens, the Ridgewood Times reports:
  • “Ridgewood is not for sale!”

    That was the rally cry from public officials, members of the Ridgewood Tenants Union and residents of 1708 Summerfield St. who gathered outside the building on Tuesday morning to protest their landlord, whom many claim is using unfair tactics to drive the tenants out of the rent-regulated building.

    The new owners of the 39-unit apartment building, Silvershore Management, purchased the building in November of 2015, according to Councilman Antonio Reynoso, who has been helping residents in his district fight back against corrupt landlords.

    “[We] are going to send a clear message to Silvershore, and any property owners that want to come into Ridgewood and think that they can displace the residents that have lived here for many, many years,” Reynoso said. “It’s not going to happen.”

    All of the units at 1708 Summerfield St. are rent-regulated, with some tenants receiving Section 8 vouchers, which help low-income tenants pay for their rent. The building recently failed a Section 8 inspection, due to a lack of repairs, which means Section 8 will stop paying its portion of the rent, leading to tenants being forced out of their homes because they cannot afford to live there.

    “They are known for buying undervalued properties in not-yet-established neighborhoods,” said Raquel Namuche, of the Ridgewood Tenants Union. “They try to drive out long-term tenants, like these, and they make improvements and then they increase the rents by significant amounts. Silvershore Properties is a predatory landlord, and at this building they have failed to make repairs and they put people’s tenancy at risk by not making these repairs.”

    There are currently 127 violations on the property, with 27 Class A violations which need to be repaired within 48 hours, Reynoso said. Some of the problems tenants have been facing and asking for repairs on include cracked and falling ceilings, waters leaks, mold and pests such as roaches and rats.

    “We need justice here. We need to have our apartment fixed,” said Gloria Nives, a longtime tenant of the building. “The apartments a lot of people have here the ceilings falling, there is a lot of mold inside, starting from the roof, down going through the walls to the windows coming inside the apartments. We need [Silvershore] to fix it because [they] are trying to pull our Section 8 away.”

    Reynoso is looking at opportunities to work with the Alternative Enforcement Program, which comes in and does the necessary repairs to the building through the city, and then charges the landlord for the repairs. This makes the building to passable in the Section 8 inspection, allowing residents to continue to receive their Section 8 vouchers.

    “Silvershore recently purchased 1708 Summerfield St. in November 2015 from a long-term hands-off owner and as a result there were certain upgrades that needed to be made to the property,” a Silvershore spokesperson said. “We have requested certain tenants to permit us access to their apartments to make repairs and they have repeatedly denied us access. Silvershore is making and will continue to make every effort to correct all violations and make necessary repairs at the property.”

Brooklyn Landlord Who Allegedly Created A Panic In Effort To Abruptly Drive Dozens Of Elderly Residents (Many Over 100 Years Old) Out Of Long Term Care Facility For Luxury Condo Conversion Now The Target Of Ire From Victims' Friends, Relatives In Push To Pass Protections From Predatory Developers

In Brooklyn, New York, the Brooklyn Daily Eagle reports:
  • Friends and relatives of seniors who lived at a once-flourishing long term care facility, Prospect Park Residence (PPR) in Park Slope, [] headed to Albany on March 1 to push a bill designed to protect the elderly from predatory landlords.

    The families say it’s shocking that the state allows developer seeking to turn senior residences into luxury housing to kick out elderly tenants with only 30 days’ notice.

    Only five seniors remain at PPR (and one of them is in the hospital at the moment).

    Roughly 130 elderly residents– many more than 100 years old -- were forced out in March 2015 after the facility’s owner Haysha Deitsch gave them just 90 days to find a new home. Deitsch hopes to convert the building to luxury condos, though lawsuits have slowed down his plan.

    Even three months’ notice was not enough time to find a new senior facility, says Myra Melamed, whose father passed away in December at the age of 98.

    Melamed said that within a few weeks of receiving eviction notices, services deteriorated and “solicitors were all over the residential floors” at PPR.

    “It created such a panic. There are so few options, especially in Brooklyn” for long term care, she said. “Just to get on a waiting list takes a few months, especially for people with dementia.”

    After the eviction notices went out, residents complained of harassment, closed-off rooms, water pouring through leaks in the ceiling, and rotten fruit and cheap food instead of special diets. In January 2015 the facility became infested with bedbugs, families said.

Fearing Probable Boot, Turmoil Sets In For Low-Income Seniors, Renters w/ Disabilities In Rural 26-Unit Federally-Subsidized Building After HUD Declares Landlord In Default On Section 8 Contract; Failed Inspections, Inoperative Elevator & Fire Alarm System Violate Agreement w/ Gov't

In Calais, Maine, the Bangor Daily News reports:
  • The elderly and handicapped tenants of the 26-unit St. Croix Apartments complex in Calais are uncertain whether they will be able to stay in their federally subsidized apartments.

    The U.S. Department of Housing and Urban Development has issued landlord Aaron Gleich a notice of default, effective March 1, for “failure to maintain the property in decent, safe and sanitary condition as required by the contract he has with HUD,” said agency spokeswoman Rhonda Siciliano.

    The St. Croix Apartments are subsidized through the government’s Section 8 program, which means Gleich has a contract with HUD in which the federal agency pays a portion of the tenants’ rent directly to the landlord. In 2015, Gleich received a total of $168,929 from HUD for the apartments, which in this case are reserved for low-income elderly and handicapped tenants, Siciliano said.

    Gleich was issued the default notice on Jan. 21. Because of the safety and health violations, the tenants will have to move out, Siciliano said [].

    The complex, which is three interconnected buildings, failed the last three HUD inspections, performed on Aug. 22, 2014; Feb. 18, 2015; and Aug. 12, 2015, with scores of 56, 28 and 52, on those respective dates. The scores of those inspections, which examined the condition of the walls, plumbing and heating systems, windows, appliances and even the grounds, were rated on a total of 0 to 100, with 100 being the best. Anything under 60 is considered failing by HUD standards.

    The major safety violations cited by the inspectors were a broken down elevator and a fire alarm system that still doesn’t work properly, Siciliano said.

    Inspection reports obtained from HUD also indicate other less serious deficiencies such as cracks or gaps in walls, peeling paint, a handrail missing from stairs, overgrown and penetrating vegetation, damaged door locks and inoperable appliances.

    Resident Phyllis Stevens said on Feb. 18 that the complex is in poor condition. “Every apartment, I think, has some kind of issue,” she said.

    Gleich, who lives in New York City, said his Maine attorney, Ben Cabot of Dover, is working with city officials to get the elevator and fire alarm repaired.

    Gleich said on Feb. 17 that he had the elevator repaired once, but it broke down again soon after so he didn’t pay the contractor. He said he hasn’t been able to find another contractor since then. “I’m not a slumlord or anything like that,” Gleich said.

    Cabot said many elevator contractors are not willing to “make the trip to Calais, Maine, without charging an exorbitant fee for the trip.”

    The attorney said he is working to get the elevator repaired as soon as possible but could not provide a time frame because that is subject to contractor availability. He also said he was working to get the fire alarm system fixed but was having similar issues getting someone lined up.

    Gleich said [] that he took care of the other deficiencies identified by HUD as soon as he found out about them.

    He also said he did not receive any notices from HUD about the complex’s previous failed inspections. “I thought everything was up to snuff,” he said. “Now that I know about it, we took care of it lickety split.”

    He believes HUD will reverse its decision when repairs to the elevator and fire alarm are done. “If need be, we’ll jump into court,” he said.

    Despite the issues with the building, residents are hoping to find a way to stay.

    Attorney Judson Esty-Kendall of Pine Tree Legal Services(1) filed a lawsuit on Feb. 17 in Washington County District Court on behalf of 17 of the tenants in the complex. The suit claims Gleich violated the state’s warranty of habitability which requires landlords to maintain conditions that protect the health and safety of tenants. “We’re trying to get the court to order that the landlord fix these things,” Esty-Kendall said [].

    He acknowledged that even if the repairs are made, HUD may not change its mind about reinstating Section 8 subsidies.

    Siciliano said [] that HUD does not expect to change its position.

    “The owner has been on notice for many months that the conditions of the property are putting the tenants at risk,” she said. “The owner has refused to make the necessary repairs to it.”

    Siciliano said apartment owners are supposed to come up with a plan to make repairs after receiving a failing grade in an inspection. Gleich was given notices of default after each of the failed inspections, dating back to 2014, she pointed out, and Gleich “was non responsive.”

    Siciliano said there is no deadline for when the tenants need to move out, but they can’t stay indefinitely. A HUD relocation contractor will work with them to find suitable housing. “There will be a coordinated effort to move all of the residents out as soon as possible,” she said.

    Although HUD will cease paying rent subsidies to the landlord as of March 1, Gleich is prevented from raising Section 8 tenants’ rent to cover the shortfall, according to the notice of default from HUD.

    Under the Section 8 housing program, qualified low-income tenants pay no more than 30 percent of their adjusted income for rent.

    Siciliano said HUD works hard to help landlords keep their buildings up to standards because in many rural places such as Calais, there aren’t many other subsidized housing options available for low-income Section 8 participants.

    An online listing of available Section 8 rentals shows only three units in Calais and only four more within 30 miles.

    Tenant Stevens said there is a sense of “panic” among the residents and that tempers are short because of the uncertainty about how long they will be able to remain in their homes.

    We’re like a family here,” she said. “Nobody knows where they’re going to be or how we’re going to find each other [after a move].”
For the story, see Elderly, handicapped tenants fighting to stay in Calais apartments.

Editor's Note:

With rents and property values going through the roof, one may wonder if the landlord (who, by the way, is a real estate developer) actually allowed the conditions precipitating the failed property inspections and subsequent HUD default to arise. This way, he can 'un-encumber' himself of what may now be an undesirable HUD contract, get rid of his existing low-income tenants, & pursue possible redevelopment of the 26-unit premises to either pocket more lucrative rents, or peddle the apartments as condominiums.
(1) Pine Tree Legal Services is a statewide, non-profit organization providing free civil legal assistance to low-income people throughout Maine.

New Landlord Of Recently-Purchased, Aging 24-Unit Building Kicks Off Refurbishing Plans By Kicking Out All The Tenants; Mass Eviction (Mostly Low-Income Or Mentally Ill Renters) Said To Be Fallout From Overheated Housing Market

In Portland, Maine, the Portland Press Herald reports:
  • The tenants of a 24-unit Parkside apartment complex, most of whom are low-income or mentally disabled, are being evicted by the New Jersey-based company that owns the buildings in what city officials and housing advocates say is more fallout from Portland’s overheated housing market.

    The tenants were told Dec. 23 that they had to leave by March 1 so the new owner can renovate the aging buildings. Although some occupants have found new housing in recent weeks, city officials met with social service providers Monday to figure out a plan to help 14 residents who have nowhere else to go a week before the deadline on the eviction notices. Most of the residents are receiving housing assistance.

    These are low-income and vulnerable tenants who are in a very high-priced market,” said Katie McGovern, an attorney at Pine Tree Legal, which provides free legal aid to low-income people.

    City officials said that most of the affected tenants are low-income or are struggling with mental illness, or both.

    Evictions have been happening throughout the city’s rental neighborhoods as a shortage of housing has pushed up rents and created a market for investors to buy and refurbish old or neglected apartment buildings. But the mass eviction of so many people at one time is unusual.

    McGovern said she handled over 1,200 disputed eviction cases in Portland in 2015. “It’s fair to say we’re seeing more of it,” she said.
    Advanced Energy Group, a company based in Old Tappan, New Jersey, purchased 61-69 Grant St. from a local property owner last spring. The corporation is doing business in Maine under the name AEG Holdings.

    It’s not yet clear what the new owner plans to do with the Parkside property and whether the units will be renovated as apartments or converted into condos.
For the story, see Demand for housing in Portland leads to mass eviction in Parkside (A company that plans to renovate a Grant Street apartment complex is forcing out dozens 
of tenants, many low-income or mentally disabled, into ‘a very high-priced market.’)

For story update, see Portland landlord agrees to give tenants more time on evictions (John Le says that, for now, he won't ask a court to force out the dozen or so people still at 61-69 Grant St., as Portland officials work to find them new homes.)

Code Enforcement Officials Give Residents In Languishing 5-Unit Condo Building The Boot; Serious Unattended Health & Safety Issues Make Premises Unfit For Human Occupancy, Results In Utilities Shut-Off

In Woonsocket, Rhode Island, the Providence Journal reports:
  • Residents of a five-unit apartment building converted into condominiums during the housing boom and then left to languish after the market’s collapse are facing orders to move out by [] or face eviction.

    The residents, including families with children, received letters earlier this week notifying them they would have to leave after inspectors — responding to reports earlier in the week of burst water pipes — discovered numerous violations at 736-740 Social St., according to a Feb. 16 letter to tenants from Armand E. Benette, the city’s senior housing inspector.

    One second-floor bathroom still has no water, the letter states, and a kitchen sink drain was "badly leaking." Inspectors also found "serious sanitation issues" in the building’s common areas, including bags of trash in the halls, broken door jambs, broken cellar windows and unregistered vehicles. Some violations, the letter states, dated back more than two years.

    Benette, the housing inspector, declared the property "unfit for human occupancy" and notified residents that the water, electricity and gas will be shut off []. The police will be on site, the letter said, to remove any remaining people from the premises.

Friday, March 04, 2016

NY Appeals Court Gives Green Light To State AG's Lawsuit Alleging That Real Estate Seminars Peddled By So-Called "Trump University" Were Nothing But A $40 Million Ripoff; Defendants' Attempt To Dodge Merits Of Accusations By Invoking Statute Of Limitations Gets Thumbs-Down

In New York City, The New York Times reports:
  • A New York appeals court decided on Tuesday that a lawsuit brought by the state attorney general claiming that Donald J. Trump’s defunct for-profit school defrauded consumers can go forward.

    The attorney general, Eric T. Schneiderman, filed the lawsuit in 2013 asserting that Trump University, later known as the Trump Entrepreneur Initiative, misrepresented itself and bilked students individually of thousands of dollars and collectively of $40 million.

    A panel of justices from the State Supreme Court’s Appellate Division ruled in Manhattan against dismissing the lawsuit. The justices found that Mr. Schneiderman was authorized to pursue the case and disagreed with the claim raised by Mr. Trump’s lawyers that the statute of limitations for the claim had run out.

    In a statement on Tuesday, Mr. Schneiderman, a Democrat, hailed the decision as a “clear victory in our effort to hold Donald Trump and Trump University accountable for defrauding thousands of students.”

    “We look forward to demonstrating in a court of law that Donald Trump and his sham for-profit college defrauded more than 5,000 consumers out of millions of dollars,” Mr. Schneiderman added.

Lawsuit: Woman Dupes Elderly, Stroke-Stricken Dad Into Unwittingly Signing Over 7-Unit Harlem Building Worth $2+ Million While He Lay Recovering In Hospital Bed

In New York City, the New York Post reports:
  • A Manhattan man says his daughter waited until he had a stroke and then swiped the rental building he owns out from under him.

    Richard Tucker, 72, has lived in the West 121st Street brownstone since 1985, taking it over from his mom Lilian when she died in 2013.

    The building, worth $2 million to $3 million, has seven single-room-occupancy units and brings in about $4,500 a month in rental income, but Tucker claims in court papers he hasn’t seen a penny of that cash since Angelique Jackson-Tucker had him sign over the deed a year ago.

    He didn’t know what he was signing, Tucker says in a Manhattan Supreme Court lawsuit he filed last week against his daughter.

    When he had a stroke in January 2015, Jackson-Tucker and the family’s attorney, Roland Brewster, came to his bedside at Mount Sinai Hospital, he claims.

    Tucker “had no idea of what he was signing on Jan. 13, 2015, but he recognized his daughter and the longtime family attorney,” according to court papers.

    Brewster denied wrongdoing and insisted Richard Tucker “was competent at all times that I’d seen him,” the attorney told The Post.

    Jackson-Tucker declined comment, saying she wasn’t aware of a lawsuit.

Four Bagged On Charges Of Scamming Financially Strapped Elderly Couple w/ Private 2nd Mortgage Secured By Their Home Bearing Usurious Interest In Excess Of 60%

In Milton, Ontario, the Milton Canadian Champion reports:
  • A Milton couple was allegedly the victim of a scam involving a second mortgage that included legal fees and interest in excess of 60 per cent.

    That figure is above the criminal interest rate — resulting in charges laid by Halton Regional Police Fraud Unit.

    The incident began in February 2015, when police investigated an elderly Milton couple who claimed they were victimized by an international phone-based lottery scam.

    They were allegedly defrauded of a significant amount of their finances in the past three years, leaving them in financial distress.

    Police found out that the couple received a phone call in February 2014, from a local real estate broker, who they claim was unaware of their financial hardship. The broker offered to arrange a second mortgage.

    Police say the broker arranged for the couple to work with a mortgage agent and local lawyer who were both affiliated with the lending company Ki Lending, based in Woodbridge.

    It is alleged that the private lender for the mortgage was the mother of the real estate broker. In processing the private mortgage agreement, the couple were allegedly charged supplementary borrowing costs, legal fees and interest in excess of the criminal interest rate of 60 per cent.

    Police do not think the people facing charges are affiliated with the lottery scam that originally defrauded the victims. Charged with the offence of Criminal Interest Rate are: Diljit Singh, 61, of Milton, Kirin Singh, 38, of Mississauga, Sundeep Singh Saggu, 37, of Woodbridge and Jason Bogle, 36, of Toronto.

    All four individuals are scheduled to appear in Milton Provincial Court April 4, 2016.

Another Dementia-Stricken Senior The Apparent Target Of Real Estate Ripoff, Signing For $100K Loan & Putting Property Up For Collateral

In Boardman, Ohio. The Vindicator reports:
  • Township police are investigating a theft-by-deception case [] in which an elderly man with dementia purportedly was deceived into signing a $100,000 loan for someone.

    A report alleges that a known suspect coerced the 78-year-old man into signing the loan for him, and putting up some of his property as collateral.

    A family member of the victim reported the incident to police and provided them with the victim’s most-recent medical evaluation and the loan paperwork, according to a police report.

Thursday, March 03, 2016

Spotlight Gets Brighter On Judicially-Approved Guardianship Rackets That "Isolate, Medicate, [Then] Steal The Estate" Of Vulnerable Seniors, Disabled Who Get Sucked Into Legalized Fleecings Of Money, Property; Nevada Top Judge: Prosecutors & Cops Who Dismiss Guardianship Complaints As Civil Matters Partially At Fault

In Las Vegas, Nevada, KTNV-TV Channel 13 reports:
  • Victims and their families demanded justice and sweeping change [] from the State Guardianship Commission amid tears, raised voices and harsh criticism.

    Contact 13 Chief Investigator Darcy Spears is here to share the new slogan designed to highlight alleged corruption.

    Isolate. Medicate. Steal the estate.

    That's how critics say private, for-profit guardians operate.

    The state knows it.

    And the public wants to know how and when they're going to stop it.

    "As a steward of the public it is your responsibility to stop this corruption!" admonished Julie Belshe, who fought to free her parents, Rudy and Rennie North from what the family calls a fraudulent guardianship by private for-profit guardian April Parks.

    It's been a year since Contact 13 first reported on the Norths' case as part of an ongoing series of reports on alleged corruption, abuse of power and exploitation of our most vulnerable citizens by private guardians and those in the judicial system who are supposed to oversee them.

    "I ask each of you to put yourself in the shoes of a victim or their family," said Rick Black, fighting back tears.

    His father-in-law, Del Mencarelli, died shortly after a bitter fight by his family to free him from guardianship. "Recognize Nevada laws are being violated to this day," Black demanded of commissioners.

    The Attorney General and Las Vegas Metropolitan Police Department have launched a criminal investigation into private guardian April Parks.

    Three new laws were passed to protect the vulnerable.

    A new guardianship judge was put in place in Clark County and the Supreme Court formed a commission to pursue reform, but families say nothing has really changed.

    "The issue is isolate, medicate and steal the estate. That's what's happening," said Registered Nurse Fran Grady, who came to Las Vegas from San Diego just to address the commission at Friday's hearing.

    "My idea is guardianship is ownership of a human being. It should be done away with!" Grady said.

    Supreme Court Chief Justice James Hardesty and his panel heard all kinds of suggestions to deal with Clark county's overwhelmed and essentially broken guardianship system.

    But folks are fed up with waiting and want action.

    "At least 12 cognizant people were freed from fraudulent guardianships," said Black, "but none of their money was returned or even accounted for."

    Justice Hardesty asked for case numbers on those guardianships to dig deeper into allegations of corruption as families continued to share their devastation.

    "You promised me until death do us part," a tearful Leonard Stein told commissioners his wife said to him after she was taken away and placed under guardianship. "And I don't know what to tell her."

    Stein told commissioners how his wife was isolated and he was prevented from seeing her during her time as a ward under guardianship.

    She died three weeks ago after he failed in his battle to free her.

    The lawyer involved in the guardianship was Elyse Tyrell--a controversial figure who critics say has no business being a member of the reform commission.

    "Elyse Tyrell, I don't know why she is here. She destroyed my marriage and our lives," said Stein.

    The Supreme Court's top judge blamed lack of action in part on law enforcement, saying they've been dismissing guardianship complaints as civil matters, when there appear to be clearly criminal acts in some cases.

    He promised that will change and asked for optimism from the public through what promises to be a long process.

New Florida Law To Crack Down On Judicially-Sanctioned Guardianship Rackets That Bleed Money, Property From Incapacitated Seniors Awaits Governor's Signature

In Tallahassee, Florida, The Palm Beach Post reports:
  • In the wake of numerous reports of abuse of incapacitated seniors by court-appointed professional guardians, the Florida House on Wednesday sent a bill to Gov. Rick Scott that for the first time would exert regulatory authority over a burgeoning industry that some critics dub “elder cleansing.”

    On the same day, protesters marched outside of the Palm Beach County Courthouse in Delray Beach, calling for judicial reform.

    The Legislature’s action follows media reports about professional guardians more interested in draining the savings of incapacitated seniors through fees for themselves and the cadre of elder law attorneys who represent them. The Palm Beach Post’s series Guardianship: A Broken Trust in January brought to public attention the role of the judiciary in guardianship of the elderly — many with dementia — who no longer can care for themselves.

    As a result, Palm Beach County Chief Circuit Judge Jeffrey Colbath transferred Circuit Judge Martin Colin out of the Probate & Guardianship Division. Colin’s wife, Elizabeth “Betsy” Savitt, works as a professional guardian, compiling complaints from families of taking tens of thousands of dollars in fees without court approval. The chief judge required the south county judges to recuse themselves from her cases.(1)

    Under guardianships, seniors found by the court to be incapacitated often lose all legal rights to make decisions for themselves. When a family member is not available or they can’t agree on what to do, a judge can appoint professional guardians to make decisions on finances, medical care and housing for the senior.
    The bill, which passed the Senate on Feb. 2, has received support from advocate group Americans Against Abusive Probate Guardianship, Gov. Rick Scott and the Florida State Guardianship Association. Lawmakers appropriated more than $820,000 to fund it.

    Lidya Abramovici, a co-founder of the advocate organization, hailed the bill’s sponsor, Sen. Nancy Detert, R-Venice.

    “Now Florida is leading the push for reform in order to stop elderly abuse,” Abramovici said. “So many retirees that come to Florida need to feel safe that their estates are not going to dissipate in the hands of unscrupulous guardians and their representatives. At the same time, parents will not be separated from their families.”

    But Abramovici added that real reform will happen only when people committing a crime are prosecuted for financial abuse of the elderly.

    That was the same message of nearly 20 protesters — many of them seniors — in front of the Palm Beach County Courthouse in Delray Beach on Wednesday.

    Carrying signs that said “Jail 4 Judges” and “Guardianship is Big Business,” the protest was organized by Families Against Court Travesties’ Court Watch, which plans similar protests at the other two county courthouses. They handed out a flyer headed “Corruption, collusion and cronyism in PBC Courts.”

    The group included individuals protesting Colin and his wife, Savitt, who were featured in The Post’s series. Others had scarves over their faces because they said they have cases in front of Circuit Judge David French. French is a friend of Colin’s who was also featured in The Post’s investigative series.

    “I think it is about time that it is being exposed,” protester Gloria Stein said. “I’ve sat in many a courtroom and seen the judges just sign every paper for every request for every appointed professional for fees. No questions. It’s all about the money and the families sit there and cry because everything is out of their hands.”

    Nearby protester Eliot Bernstein said senior citizens should think twice before retiring to Florida because of predatory professional guardians.

    “This is going to take federal intervention,” he said. “When there is this much money and profit in elder cleansing, in a state like this, it is going to take a lot more, like people going to go to jail.”
For the story, see Florida guardianship reform passes; seniors protest at courthouse.

In a related story, see Local 10 News viewer claims guardian not acting in best interest of father (Professional guardianship booming business in South Florida).

Go here for earlier posts on guardianship rackets around the country.
(1) See also All power over adult guardianship severed for Judge Colingranny-snatching

Use Of Arbitration Clauses In Nursing Home Contracts: Lack Of Justice Exacerbates One Horror Story

The New York Times reports:
  • Elizabeth Barrow celebrated her 100th birthday at a backyard gathering with her son and three grandchildren in the coastal Massachusetts town where she raised her family and cooked lunches in a school cafeteria.

    A month later, in September 2009, Mrs. Barrow was found dead at a local nursing home, strangled and suffocated, with a plastic shopping bag over her head. The killer, the police said, was her 97-year-old roommate.

    Workers at the nursing home, Brandon Woods in South Dartmouth, Mass., had months earlier described the roommate in patient files as being “at risk to harm herself or others.”

    After a police inquiry, the roommate — despite her age and dementia — was charged with murder. The authorities did not focus on the nursing home, though. Brandon Woods claims that, except for some minor arguments, the two women got along nicely. When the roommate was deemed unfit to stand trial and committed to a state hospital, the sensational case that shocked this corner of New England essentially disappeared.

    More than six years after the killing, Mrs. Barrow’s only son, Scott, is still trying to hold the nursing home accountable. “The woman had a history of problems,” Mr. Barrow said of the roommate in an interview this month. “She should not have been living in that room with my mother.”

    Mr. Barrow was barred from taking Brandon Woods to court in 2010 because his mother’s contract with the nursing home contained a clause that forced any dispute, even one over wrongful death, into private arbitration.

    He has been trying ever since to get back to court, and next month he will finally get that chance. A Massachusetts state court is scheduled to hear Mr. Barrow’s case against the home, which has evolved into much more than a lawsuit about one woman’s death. It has become a crucial test of a legal strategy to prevent nursing homes across the country from requiring their residents to go to arbitration, where there is no judge or jury and the proceedings are hidden from public scrutiny.

    Arbitration clauses have proliferated over the last 10 years as companies have added them to tens of millions of contracts for things as diverse as cellphone service, credit cards and student loans. Nursing homes in particular have embraced the clauses, which are often buried in complex contracts that are difficult to navigate, especially for elderly people with dwindling mental acuity or their relatives, who can be emotionally vulnerable when admitting a parent to a home.

    State regulators are concerned because the secretive nature of arbitration can obscure patterns of wrongdoing from prospective residents and their families. Recently, officials in 16 states and the District of Columbia urged the federal government to deny Medicaid and Medicare money to nursing homes that use the clauses. Between 2010 and 2014, hundreds of cases of elder abuse, neglect and wrongful death ended up in arbitration, according to an examination by The New York Times of 25,000 arbitration records and interviews with arbitrators, judges and plaintiffs.

    Judges have consistently upheld the clauses, The Times found, regardless of whether the people signing them understood what they were forfeiting. It is the most basic principle of contract law: Once a contract is signed, judges have ruled, it is legally binding.

Wednesday, March 02, 2016

Use Of Contracts For Deed/Land Contracts To Peddle Dilapidated, 'Money-Pit' Homes To Savvy-Lacking, Low-Income Buyers w/ Crappy Credit No Longer Limited To Local Neighborhood Real Estate Operators As Nationwide Deep-Pocketed Foreclosure Investors Now Hop On Scam Bandwagon

In Akron, Ohio, The New York Times reports:
  • Hundreds of broken-down houses still dot the streets of this onetime tire capital of the world, a scar from the financial crisis and housing bust.

    The wood has rotted in some; others have black mold, broken windows or failing foundations. Many lack working electrical systems or are missing water pipes and furnaces. The unpaid property taxes mount.

    Dozens of these houses were scooped up after the financial crisis by investors, who then make deals with low-income home buyers unable to get traditional mortgages. The arrangement is something like buying a home on an installment plan, with a high-interest, long-term loan called a contract for deed, or land contract.

    But for buyers lured by the dream of homeownership, these seller-financed transactions can become a money trap that ends with a quick eviction by the seller, who can flip the home again. Before the housing crisis, low-income buyers got too much of a house that they couldn’t afford. Now, they are getting too little of a house that they can’t afford to repair.

    It is a scene playing out across the Midwest and the South, where many of the derelict houses have been sold to private investors by government mortgage firms at knockdown prices.

    Nationwide, more than three million people are estimated to have bought a home through a contract for deed. After the financial crisis, as banks retreated from lending to those with poor credit, this odd corner of the housing market began to draw interest from deep-pocketed investors who sometimes sell the homes for four times the price they paid.

    “There is this whole other way that people buy homes. It is very much under the radar and hidden,” said Heather K. Way, a professor of law at the University of Texas. “Homeowners go into this without knowing that this is such a high-risk contract fraught with perils.”

    Now, complaints are piling up in cities across the country, according to dozens of court records reviewed by The New York Times, as well as interviews with housing lawyers and home buyers in Ohio, Michigan and Minnesota.

    In Akron, some investment firms aim at residentswho do not have the financial ability to comply, nor the savvy to realize that they are being taken advantage of,” said Duane Groeger, the city’s housing administrator, whose office oversees code violations.

    One of several firms Mr. Groeger’s office has fielded complaints about is Harbour Portfolio Advisors of Dallas.(1)
    Swimming in Debt

    Lacking the means to fix up the homes, those who enter into contracts with Harbour often end up swimming in debt, a review of lawsuits shows.

    Kevin Franklyn, 46, of Detroit said he struggled with making repairs on a $44,925 Harbour house in 2011. After falling behind on the payments, he recently agreed to forfeit the contract to the house. The roof, plumbing, electrical system and drywall all needed serious repairs, he said.

    His fiancée, Lisa Micou, 46, said the home was in greater disrepair than the couple had anticipated.

    “Everybody wants that part of the American dream — everyone wants a piece of that pie,” she said.

    In Battle Creek, Mich., Patricia Howard entered into a contract for deed with Harbour for $28,800 in April 2014. Soon after, she fell behind on her monthly payment of $280, excluding taxes and insurance.

    Ms. Howard, 54, said she had to spend thousands of dollars on critical house repairs.

    “I’m behind because I had to fix the plumbing, and now the gutters on the side,” said Ms. Howard, whose main source of income is her monthly disability checks. “It’s like one thing after another is falling apart.”

    In December, she reached a court settlement with Harbour that gives her until March to make up the 10 missed payments. If she cannot come up with the money, Ms. Howard will have to forfeit the contract and leave the house.

    Harbour bought the home from Fannie Mae for $7,691.
    Fewer Protections for Buyers

    Provisions in a contract for deed are enforceable as long as they do not conflict with state law. The home dweller has more limited protections than a person buying a house with a mortgage, and evictions are quicker than a foreclosure. The residents are typically responsible for repairs and paying all property taxes, but the legal title under a contract for deed does not transfer until the final payment is made — an end result that rarely happens.

    Robert Doggett, Texas RioGrande Legal Aid’s general counsel, says contracts for deeds “take advantage of people’s desperation” and can worsen neighborhood blight.

    Some municipalities seek to hold the sellers of contracts for deeds liable for correcting housing code violations, but that can be difficult. In some states, like Michigan, there is no requirement that a contract for deed be recorded, making the market hard to monitor.
For more, see Market for Fixer-Uppers Traps Low-Income Buyers.

Editor's Note: It doesn't take an excess of genius to discern that these deals are, in substance, nothing more than leases (ie. lease-purchase or rent-to-own ripoffs) that are structured as purported sales to allow the investor to pocket upfront cash, and then collect monthly payments from the occupants with none of the typical repair & maintenance obligations, nor any of the tenant protections.

Further, by conning the occupant into thinking he/she is actually in the process of buying the property, they are duped into investing additional money into make necessary (if not emergency) improvements to the premises that the purported seller is not responsible for, only to find themselves ultimately either walking away from the home, or getting the boot when the contract terms become to onerous to comply with.

See, for example:

More Land Contract Horror Stories: "People Are Often Overjoyed At The Prospects Of Owning Their Own Home, So They Go In Blind & Fall Into A Trap" Says Lawyer Representing Clients Stuck w/ Uninhabitable 'Money-Pit' Homes

In Detroit, Michigan, The Detroit News reports:
  • It seemed like a sweet ticket to the American dream for Douglas Todd.

    Put $1,400 down, make monthly payments of $400 and own a house within five years. So he told his daughter, who also agreed to buy a home in northwest Detroit last year for similar terms. Now, after seven months and $5,000 in payments and renovations, Todd isn’t any closer to owning the brick house in northwest Detroit.

    In fact, both he and his daughter could soon lose their homes. Todd is amid a protracted legal fight that’s involved four eviction hearings since January. His daughter, Jessica Todd, faces tax foreclosure next month.

    “I wanted a house to leave to my grandkids instead of renting for all these years and having nothing to show for it,” said Todd, 53, a laborer who cleans steel mills. “I wish I never would have signed it.”

    Welcome to the murky world of land contracts and similar private-party home financing such as lease to own. Largely unregulated, land contracts and similar deals have soared in Detroit since the mortgage meltdown, attorneys and housing advocates say, contributing to evictions in a city that leads the nation in them.

    Last year, there were more land contracts than home mortgages in Detroit: 2,177 to 2,023, according to records from Wayne County and RealtyTrac, a California-based real estate data company. The numbers are likely far higher, experts say, because there’s no requirement the contracts be publicly filed.

    Macomb and Oakland counties each recorded about 750 land contracts last year.

    Land contracts don’t cause as many problems there as ones in Detroit, which often involve ramshackle homes purchased from tax foreclosure auctions and contracts that are “written to fail,” contended Joon Sung, deputy chief counsel of Michigan Legal Aid and Defender Association, a nonprofit that represents the needy in court.

    People are often overjoyed at the prospects of owning their own home, so they go in blind and fall into a trap,” Sung said.
    Cylenthia LaToye Miller, one of four 36th District Court judges in Detroit assigned to handle evictions, said she’s increasingly seeing the lease-to-own land contracts go bad.

    Before noon on a recent Friday, Miller handled four eviction cases involving deals similar to the Todds.

    She handled Douglas Todd’s case and repeatedly expressed frustration over the arrangement. She said the state Legislature “might want to take a look at” lease-to-own land contracts, arguing they may violate state law by forcing renters to live in uninhabitable homes.

    “They have become popular but they are problematic to say the least,” Miller said.
    “Everyone knows what is going on. People are gaming the system,” said [attorney Joe] McGuire of the nonprofit Michigan Legal Services. “People who enter these contracts end up paying a whole lot more than they would by renting. But have nothing to show for it.”
For more, see Land contracts trip up would-be homeowners. contract for deed

Use Of Land Contract At Center Of Ownership Snafu For 84-Year Old Woman Whose Family Purchased Property Over Six Decades Ago; Title Snags For Buyers All Too Common w/ This Type Of Deal: Attorney

In Houston, Texas, KTRK-TV Channel 13 reports:
  • An 84-year-old Louisiana woman and her family have been paying taxes on a swatch of Harris County land for six decades -- and only recently realized that on paper they never officially owned the land.

    Harris County tax officials said that they believed the woman was "voluntarily" paying taxes on land she didn't own.

    The story begins decades ago, when Edward Stewart bought two lots in northeast Houston in a subdivision that was then called Liberty Manor.

    "My father-in-law bought the land in 1949," Mittie Stewart told Ted Oberg Investigates. "At first he was going to live here. But he got sick and went back to his home in Louisiana. After that he passed away."

    The deal for the land was 'contract for deed.' That means the senior Stewart paid a little money every month for the property and when it was paid off he'd get the deed from the owners, D & H Land Company.

    She and her husband continued to care for the lots year after year. "We'd come out and clean it, cut the grass," Stewart said. "And we'd have people who cut the grass and everything." And, of course, they paid their taxes to Harris County. "We've paid taxes on this land every year," she said. "This year I paid $324 and 60-some cents."

    Stewart has tax receipts showing her family paid the taxes on the lots going back to the very first year. "I've got so many papers here I can't keep up with all of them," Stewart said. She even paid fines for uncut grass twice in the last 35 years.

    But the third time? "They dropped the charges," she said. Why?

    "They said I didn't own the land," Stewart said. "They said I didn't own nothing."

    Ted Oberg Investigates found she was right: Records show she didn't own the land she and her family paid taxes on for more than 60 years. The land is worth about $13,000 and Stewart sought out public officials to do the right thing.

    Stewart went to tax assessor and asked for a refund.

    She was told no and the official she spoke with in the tax assessor's office suggested she was volunteering to pay taxes on land that wasn't hers. "She asked if I was volunteering to pay taxes," Stewart recalled. "I said, 'No. Why would I volunteer?'"

    She tried to sell the lots, but the title company gave her the same bad news. The title was still in the name of the original owner -- D & H Land Company -- and they went out of business years ago.

    But look at who their last vice-president was when the company went out of business in 1955: Carl S. Smith.

    That's a name likely familiar to old-time Houstonians. Smith was the Harris County Tax Assessor for 51 years, dying in office in 1998. And he's the very guy who sent the tax bills to the Stewarts.

    The tax rolls weren't computerized when the Stewarts entered the deal to buy the land, and there's no way to figure out how her family's name got on there if they didn't own it.

    Officials with the Harris County Appraisal District said they don't know how it happened. The current tax assessor said he doesn't know.

    So Ted Oberg Investigates called the Houston Volunteer Lawyers(1) looking for help for Stewart.

    Cassie McGarvey with the Houston-based Sanders Willyard law firm stepped up to help her. The case won't be easy, but she thinks she can provide Stewart a win in the next six to nine months. "It is rare to see someone with this much documentation," McGarvey said of her new client.

    McGarvey said she feels for Stewart.

    "The frustrating thing about all of this is that this property has been in the family for over 60 years and they just got taken advantage of because this company, the way I look at it, just forgot about it or they just sort of moved on," McGarvey said. "She should have title to it. The family has had it forever."

    McGarvey also said the problem the Stewarts are having is all too common. "Across the board this is the problem with contracts for deed," McGarvey said. "Over the past nine years I've seen cases like this once a year."

    And while the legislature recently tightened the rules to give buyers more protections in these kinds of deals, those protections aren't in place for those who purchased land this way before the new rules.

    "You might have an unscrupulous seller, where the buyer might miss one payment and the seller will try to kick them out of the property," she said, speaking generally about sellers in 'contract for deed' deals. "A lot times they will lose all of their vested interest."

    In addition, purchasing land this way is often done by those who don't have a lot of money on hand. That leads to a Catch-22 if they need legal help.

    "A lot of time the buyers fall through the legal cracks," McGarvey said. "They don't qualify for legal aid, but don't make enough to actually afford an attorney. If you're in the middle ground, you're sort of lost."

    While her new legal team works, Stewart is still paying her taxes. She knows what happens the second she stops doing that: The tax man will wait for the inevitable.

    She figures they're saying, "When it's time to put her in the ground and we will just take it then." But she promises to wait 'em out. "I am not ready to go until I get this straightened out," Stewart said.
Source: Six Decades Of Paying Taxes On Land, But She Was 'Taken Advantage Of.'
(1) Houston Volunteer Lawyers is a non-profit service of the Houston Bar Association that provides free legal aid to low-income individuals by connecting them with lawyers in the private bar who volunteer their time. Any individual can attend one of its clinics to speak briefly with a pro bono attorney and receive free legal advice. Extended representation is available based on the individual's eligibility and legal issue.

Structuring Lease As Land Contract Or Rent-To-Own Deal A Useful Way For Slick Slumlords To Pocket Upfront Cash & Monthly Payments From Unwitting Renters For Dilapidated Homes While Relieving Themselves Of Dealing With Tenant Protections, Repair & Maintenance Obligations

In Indianapolis, Indiana, WRTV-TV Channel 6 reports:
  • Renting apartments and houses in central Indiana continues to keep pace with the popularity of owning a home.

    But when you don't own the property, navigating issues can be tricky and landlords can take advantage of situations you may not know the full story behind.
For more, see 7 ways Indiana landlords can try to cheat tenants. contract for deed

Tuesday, March 01, 2016

Florida Appeals Court Invokes 'Two Strikes & You're Out!' Rule To Permanently Sink Foreclosure Action; Unanimous Panel Says Banksters Allowed Only One Refiling Per Mortgage Note (Not Per Plaintiff), Then Get The Boot After The 2nd

In West Palm Beach, Florida, the Daily Business Review reports:
  • One voluntary dismissal too many sank a foreclosure case for a lender who acquired a debt that had been sold at least twice before.

    The Fourth District Court of Appeal considered the procedural history and the number of voluntary dismissals tied to the note rather than the dismissals per plaintiff to reverse the foreclosure Wednesday and leave homeowner attorneys celebrating.

    "This has always been the rule … but it's interesting in the context of foreclosure where there's this constant shifting of plaintiffs," said foreclosure defense attorney Thomas Ice of Ice Legal in Royal Palm Beach, who was not involved in the litigation. "Often the parties are different on paper, but they're related somehow, so it really is the same lawsuit."

    The appellate court invoked the so-called two-dismissal rule under Florida Rule of Civil Procedure 1.420(a)(1), which allows one voluntarily dismissal but not two.(1)

    The appeal pitted Loxahatchee property owner Charles Nolan against MIA Real Holdings LLC, a successor lender that sought to foreclose on the same default as its predecessor, Flagstar Bank. It was the third foreclosure attempt against Nolan following two voluntary dismissals.

    The first suit came from Flagstar, which filed for foreclosure in 2011 after Nolan reportedly defaulted on the loan.

    Flagstar dismissed that case and later assigned the note and mortgage to DKR Mortgage, which started its own foreclosure before selling the debt as a trouble mortgage to MIA Real Holdings.

    MIA sought to be substituted as the real party in interest to take over the case but then voluntarily dismissed the suit before filing a third complaint alleging the same breach.

    Nolan's lawyers, Brian Korte and Scott Wortman of Korte & Wortman in West Palm Beach, argued the suit — "based on the same mortgage, same note, same default and same damages as the prior two actions" — was barred under the two-dismissal rule.

    "It's just unfair," Korte told the Daily Business Review. "The court wants some finality. You get two bites of the apple."

    MIA attorney Jerome Tepps of Sunrise did not respond to requests for comment by deadline. His client triumphed at trial when Palm Beach Circuit Judge Catherine Brunson counted MIA's voluntary dismissal as the only one applied to the current parties in the litigation.

    But Nolan successfully challenged that decision.

    "We hold that the two noteholders — the original plaintiff and the subsequent assignee of the note — were the same 'plaintiff' under the rule, so that the second voluntary dismissal triggered an 'adjudication on the merits,' " Fourth DCA Judge Robert Gross wrote in a unanimous decision with Judges Martha Warner and Spencer Levine concurring.
Source: Appeals Court: Two Strikes and You're Out on Foreclosure Dismissals (may require subscription; if no subscription, TRY HERE, then click appropriate link for the story).

For the court ruling, see Nolan v. MIA Real Holdings, LLC, No. 4D15-666 (Fla. App. 4th DCA, February 24, 2016).
(1) "[A] notice of dismissal operates as an adjudication on the merits when served by a plaintiff who has once dismissed in any court an action based on or including the same claim." Florida Rule of Civil Procedure 1.420(a)(1). (Page 124)

Void vs. Voidable: Illinois Lawsuit: Failure To Use State-Licensed Private Detective Agency To Serve Foreclosure Lawsuits Violates State Law, Leads To Slew Of Void (Not Merely Voidable) Foreclosure Judgments; Property Owner Seeks Return Of $3.5 Million In Proceeds From 22 Sales

In Chicago, Illinois, the Cook County Record reports:
  • Trying to take advantage of a “procedural windfall,” a Chicago-area investment firm is alleging West Suburban Bank owes it almost $3.5 million from the sales of foreclosed properties held as collateral for a $10 million loan the firm defaulted on, because the firm was not legally served with notice of the foreclosures, as the process servers did not work for a state-licensed private detective agency as required by law.

    Advantage Financial Partners lodged a one-count restitution complaint Feb. 16 in Cook County Circuit Court against West Suburban Bank, which is headquartered in Lombard and has 19 branches in the suburbs.

    The case originated in 2005, when Advantage took a $10 million loan from West Suburban Bank, putting up 23 mortgaged properties as collateral, 15 of which were in Cook County, with the rest in DuPage, Will and Kane counties. The bank, however, alleged Advantage defaulted in 2008, and initiated foreclosure proceedings in December that year. The bank used a private detective agency, MPSI, to serve summonses on Advantage for 22 of the cases, and used another process server in the 23rd case. Advantage purportedly never responded.

    In 2009, default judgments were ordered against Advantage. West Suburban next bought the properties at sheriff’s sales, then sold them to third parties for $3.5 million, according to Advantage.

    In April 2013, Advantage sued to have 22 of the foreclosure judgments vacated, saying MPSI was not licensed with the state at the time its agents served foreclosure notice on Advantage. Specifically, MPSI’s agency license had expired Aug. 31, 2008, and was never renewed. Given that MPSI was not licensed, Advantage argued it was never legally served with notice of the foreclosure actions.

    Advantage did not claim it never received the summonses.

    West Suburban Bank filed a motion to consolidate the cases, which was granted, with 22 of the cases combined in DuPage County Circuit Court; the 23rd case was from Cook County and remained there. The bank then moved for dismissal of the cases in DuPage County handled by MPSI, contending, although the agency was not licensed as a detective agency, the agency’s employees who served the summonses were licensed. As a consequence, the bank contended the summonses were lawfully served.

    DuPage County Judge Robert G. Gibson agreed with the bank and dismissed Advantage’s suit in September 2013. Advantage appealed to Second District Appellate Court in Elgin, which in November 2014 overturned Gibson’s ruling, voided the foreclosure judgments and reinstated Advantage’s case.(1)

    The appellate court found the detective agency was the entity authorized to serve process, not the agency’s employees, regardless of whether they were individually licensed. Justice Mary Seminara-Schostok, who authored the appellate opinion, noted the opinion was in keeping with judicial principles “embedded in Illinois law for over a century.”(2)

    However, the court reached this decision with reluctance, having concern about the unjust effect of its ruling.

    “I invite the reader to step back and set aside, for a moment, the procedural niceties in play here and consider this case with an intuitive sense of justice. I venture that few would find this result at all palatable. Advantage has received an undeserved procedural windfall,” said Justice Joseph E. Birkett, who concurred in the opinion with Justice Schostok, as well as with Justice Ann B. Jorgensen.

    The case was remanded to DuPage County Circuit Court, where more legal maneuvers were made before the case was closed in July 2015.

    Advantage lodged a new complaint Feb. 16 in Cook County Circuit Court, demanding West Suburban Bank return to Advantage the $3.5 million in proceeds from the sale of 21 of the foreclosed properties, plus pre- and post-judgment interest, as well as any damages the judge deems just.

    Advantage alleged the money the bank received by selling the properties was based upon “unlawful judicial proceedings,” as the appellate court laid out in its ruling.
Source: Foreclosed land investors exploit technicality to demand $3.5 million 'procedural windfall' from bank.
(1) West Suburban Bank v. Advantage Financial, 23 NE 3d 370 (Ill. App. 2nd Dist. 2014).

(2) From the 2014 appeals court ruling:
  • ¶ 20 WSB argues that MPSI's expired certification is a technical defect that should not result in a lack of personal jurisdiction. However, the weight of Illinois law is clearly to the contrary: defects in the service of process are neither "technical" nor insubstantial.
    Further, strict compliance with the statutes governing the service of process is required before a court will acquire personal jurisdiction over the person served. Sarkissian v. Chicago Board of Education, 201 Ill.2d 95, 109, 267 Ill.Dec. 58, 776 N.E.2d 195 (2002); C.T.A.S.S. & U. Federal Credit Union v. Johnson, 383 Ill.App.3d 909, 912, 322 Ill.Dec. 543, 891 N.E.2d 558 (2008).
    ¶ 24 WSB contends that the defect in service of process merely rendered the judgments voidable, not void, [...].
    As we have said, the proposition is well established that invalid service results in a judgment that is void for lack of personal jurisdiction. Sarkissian, 201 Ill.2d at 109, 267 Ill.Dec. 58, 776 N.E.2d 195; Thill, 113 Ill.2d at 308-09, 100 Ill.Dec. 794, 497 N.E.2d 1156; see also Pennoyer v. Neff, 95 U.S. 714, 732, 24 L.Ed. 565 (1877) ("if the court has no jurisdiction over the person * * * and, consequently, no authority to pass [judgment] upon his personal rights and obligations[,] * * * the whole proceeding * * * is coram non judice and void").

    There is no similar support for the idea that lack of personal jurisdiction merely renders a judgment voidable.

Bankruptcy Judge Belts Bankster For $54K In Punitives (Plus Debtor's Legal Fees) For Willfully Harassing Homeowner w/ 540 Collection Calls ($100 Per Pop) After Being On Notice Of Chapter 13 Filing

From a client alert from the law firm Nexsen Pruett PLLC:
  • A recent case from the Western District of North Carolina, Statesville Division, reminds us all of the consequences for violating the automatic stay.

    Nationstar Mortgage, LLC apparently continued its efforts to collect a debt from Chapter 13 Debtors after receiving actual notice on more than one occasion of the Chapter 13 filing. The offending conduct included sending representatives to the property to take photos, making telephone calls to the Debtors for a period of six months after the filing, mailing letters informing the Debtors of their default which could result in “foreclosure and the loss of your home,” and the service of a Notice of Foreclosure by the Sheriff. Each time the Debtors were contacted, they attempted to inform the representative and later the Sheriff of their Bankruptcy filing.

    The Court noted that Nationstar had received notice of the Chapter 13 by (1) the mailing of the Plan, (2) receiving the notice of the §341 Meeting from the Bankruptcy Noticing Center, (3) verbally from the Debtors, (4) the mailing of a letter from counsel for the Debtor, and finally, (5) from the Trustee who made monthly payments to Nationstar on behalf of the Debtor.

    The Court found these “egregious” acts to be willful violations of the stay and awarded actual damages of $300, punitive damages in the amount of $54,000.00 ($100 per call) and attorney’s fees in the amount of $3,297.93. All creditors should be aware of this decision and take steps to insure that systems are in place such that automatic notices are not mailed and calls made once a Bankruptcy case has been filed.
Source: Bank Hit with Sanctions for Violation of the Automatic Stay.

For the court ruling, see In re Johnson, Case No. 15-50053 (Bankr. W.D.N.C., February 17, 2016).

Monday, February 29, 2016

Add One More Lawyer To List Of Those 'Seeking Employment' At Prison Law Library; Connecticut Attorney Gets Two Years For Bilking Victim Seeking Foreclosure Help Out Of $113K; Continued To Bill Thousand$ For Services While Stealing From Same Client; Judge: "He Has Driven Respect For The Profession To Another Low!"

In Litchfield, Connecticut, the Republican-American reports:
  • A New Milford attorney who bilked clients out of $113,000 was sentenced [] in Superior Court to two years in prison.

    Donald Wharton, 54, said he needed the money to pay bills after the real estate market "tanked," and he was left with four or five mortgage closings a year instead of two or three a week. But on Friday, he seemed resigned to time behind bars; he hardly seemed eager to avoid it by actions or words.

    Senior Assistant State's Attorney David Shannon said the real estate lawyer's failure to pay any restitution, and his lack of employment or remorse made it impossible to recommend anything but a prison term. Judge John A. Danaher agreed, and admonished Wharton for sending a message about the legal profession "that cannot be tolerated" by sentencing him to 10 years, suspended after two years, and five years of probation to pay restitution.

    "I wanted to give the defendant the opportunity to earn a suspended sentence even though he should be held to a higher standard," Shannon said. "He was given every opportunity to pay restitution."

    Wharton admitted that he stole money from Domenico Spano of New Milford that was intended to pay off foreclosure costs and fees. In exchange for his guilty plea to first-degree larceny, he accepted a plea deal which gave him the right to argue for as little as no time in prison but exposed him to up to two and a half years.

    On Friday, he apologized for what he did, telling Danaher his "reaction" to getting caught was his remorse.

    ON SEPT. 3, 2014, police say Wharton attempted suicide after he met with his clients and they demanded their money back.

    A police K-9 tracked Wharton to a wooded area behind his home. He was barely breathing and unresponsive. A bag of pills and a pistol were within arm's reach, police said. He was revived and treated at New Milford Hospital before being released and arrested by warrant.

    "It was a betrayal of the oath I took in this very room," said Wharton, a short man with glasses who wore an oversized gray suit and was ready for prison with a bag of belongings. "I have dishonored my profession. I violated a code of ethics. Now I have to suffer the consequences."

    Danaher pointed to the rear of the courtroom, to two doors constructed in the late 1800s to accommodate the public through one and members of the Bar Association through another.

    "Attorneys were held in the highest regard," he said. "Courthouses aren't built like that any more. He has driven respect for the profession to another low."

    A SEARCH of Wharton's bank accounts revealed he had deposited a check for $83,341 — the exact amount of Spano's check — into a Union Savings Bank account on April 9, 2013. There also were three cash deposits, which police allege could have been drawn from a $30,000 cash payment Wharton received from Spano on April 3, 2013.

    By Sept. 3, 2014, the balance on the account was just $33.95, according to court documents

    It was particularly callous of Wharton to bill thousands of dollars for his services while he was stealing from the same client, said Danaher, who also noted that Wharton didn't seem to pursue employment to pay off even a portion of the money he owed.

    Spano, meanwhile, needed to borrow to make up for the loss, their attorney Chris McCarthy said. None of the missing funds have been paid back but McCarthy said he can now pursue civil action to get it back.

    "A message needs to be sent and it needs to be significant that this should not happen to hard working people who entrust lawyers," said McCarthy, who asked for a two-year term and restitution.
Source: New Milford lawyer to spend 2 years in prison for bilking clients.

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 fund established by the rules of the Connecticut Superior Court to provide reimbursement to individuals who have lost money or property as a result of the dishonest conduct of an attorney practicing law in the State of Connecticut, in the course of the attorney-client relationship. The fund provides a remedy for clients who are unable to obtain reimbursement for their loss from any other source.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
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.

Atlanta Feds: Law Firm/Title Insurance Agency's Ex-Managing Partner/CEO Siphoned Over $20 Million Out Of Company's Escrow & Operating Accounts; Outfit Handled Real Estate Closings, Bankster Foreclosures

From the Office of the U.S. Attorney (Atlanta, Georgia):
  • A federal indictment unsealed [] charges Nathan E. Hardwick IV and Asha R. Maurya with conspiracy, wire fraud, and related crimes in connection with Hardwick’s alleged theft of over $20 million from the attorney escrow accounts and operating accounts of Morris Hardwick Schneider and LandCastle Title, an Atlanta-based law firm and title agency in which Hardwick and Maurya once served as top executives.

    In addition to charges against Maurya for assisting with Hardwick’s theft, the indictment also charges Maurya with stealing approximately $900,000 from the firm’s accounts to pay her own personal expenses.

    “The indictment alleges an embezzlement scheme dating back years,” said U.S. Attorney John Horn. “Along the way, Mr. Hardwick is alleged to have repeatedly lied to his clients, law partners, banks and others. The allegations are especially troubling given that the actions were orchestrated by a lawyer who swore an oath to uphold the law and to represent his clients with integrity.”
    According to U.S. Attorney Horn, the indictment, and other information presented in court: Morris Hardwick Schneider and LandCastle Title (“MHS”) was a law firm and title insurance agency headquartered in Atlanta, Georgia. MHS employed approximately 80 lawyers and 800 non-lawyer employees in 16 states.

    MHS’s law practice specialized in residential real estate closings and default and foreclosure matters. MHS’s title insurance business involved selling title insurance policies in connection with residential real estate closings.
    From MHS’s formation in 2005 until Hardwick’s resignation in August 2014, Hardwick served as managing partner of the law firm and Chief Executive Officer of the title insurance agency. Hardwick was also the majority shareholder of MHS. Hardwick worked out of MHS’s Atlanta headquarters, supervised virtually all of MHS’s day-to-day operations, and had virtually unlimited access to, and control over, MHS’s financial affairs.

    Maurya was an accounting department employee of MHS from April 2009 until her termination in November 2014. Maurya was hired to be MHS’s Escrow Account Controller and was eventually promoted to the position of Chief Financial Officer of MHS’s closing division. Maurya managed MHS’s attorney escrow account operations and other accounting operations under Hardwick’s supervision. [more]

Founder Of Now-Defunct Central Florida Foreclosure Mill To Surrender Bar Ticket, Agrees To Repay Client Reimbursement Fund For Any Client Claims; Firm Collapsed After 'Drowning' In Paperwork, Leaving Hundreds Unemployed, 60,000 Cases In Limbo

In Central Florida, the Orlando Sentinel reports:
  • The founder of Orlando-based Butler & Hosch law firm, Robert Hosch Jr., will surrender his Florida law license.

    Hosch's proposed agreement with the Florida Bar comes almost a year after his firm collapsed over night, leaving hundreds of people suddenly unemployed and 60,000 foreclosure cases in limbo.

    The firm was one of the biggest foreclosure law firms in the nation when it closed suddenly on May 14, 2015. It represented banks and lenders who were foreclosing on people's homes.

    Hosch, 54, also had a large office in Texas and lived there. He has filed a petition with the Florida Supreme Court to surrender his license in a revocation agreement.

    The revocation would resolve any possible complaints against him by the Bar, which were only just being written up at a staff level, according to Florida Bar spokeswoman. Hosch also agreed to reimburse The Florida Bar for its costs in his disciplinary case.

    According to his petition, Hosch has also agreed to pay the Florida Bar for claims made regarding stalled foreclosure cases. Such claims can be filed with the Client's Security Fund of the Florida Bar. That fund is was created to help compensate people "who have suffered a loss of money or property due to misappropriation or embezzlement by an attorney."(1)

    But a spokeswoman for Hosch said in an email that Hosch and his attorneys don't believe any such claims were ever made, so no payment would be required there.

    In his petition, Hosch's attorney acknowledged that Butler & Hosch failed to properly inform the Bar that the firm's attorney's had withdrawn from the cases.

    The firm failed to "promptly file motions to withdraw in those cases or notify the courts. Instead, Petitioner, on the advice of counsel, signed an Assignment for the Benefit of Creditors, in which a non-lawyer was the assignee. Petitioner believed the assignment was in the best interest of all affected parties, including clients and creditors and believed the assignee was a lawyer."

    Clerks in several counties in Florida noted that the Butler & Hosch closure had caused delays, and fees, in cases.

    Collier County Clerk Dwight Brock had said in 2015 that, "This is a big deal because it’s going to end up clogging up the court even more."

    Brock said home foreclosure sales were halted in his office because Butler & Hosch attorneys stopped responding to phone calls or email about the cases. He noted that Florida courts had worked overtime to clear up backlogs of foreclosures since the Great Recession, with extra funding coming from the state Legislature.

    In Collier County, Butler was responsible for paying fees associated with advertising the sale and holding a foreclosure auction. For example, the sale fee alone is $70. With no one to pay the fee, sales were canceled.

    The firm had about 700 employees at one time, in major offices in Orlando, Tampa and Miami. Hosch's agreement to surrender his law license doesn't have any bearing on a proposed federal class action lawsuit filed on behalf of former employees, against him and the firm, in Fort Lauderdale. That case seeks damages because the firm allegedly violated the state's WARN Act, which requires advance notice of layoffs. It is currently in a mediation period.

    Business for foreclosure law firms had boomed during the Great Recession, but many firms struggled to adapt to new business when foreclosures slowed down. Butler & Hosch had attempted to acquire several other firms over the past year. In a memo to employees, Hosch had blamed the attempted expansion for Butler’s sudden end -- and a breakdown in talks with lenders, along with "short-term cash crunches."
Source: Butler & Hosch law firm founder to surrender law license.
(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:
Maps available courtesy of The National Client Protection Organization, Inc.

Long Time NY Lawyer Wraps Up Career w/ Felony Convictions For Pilfering Nearly $1.5 Million From Clients; Victims Include Homebuyer ($431K) & Homeowner Facing Foreclosure ($159K)

From the Office of the Westchester County, New York District Attorney:
  • Acting Westchester County District Attorney James A. McCarty announced [] that Michael Lippman (DOB 11/03/44) of 165 Falmouth Rd., Scarsdale, NY pled guilty to the following charges:

    - one count of Grand Larceny in the Second Degree, a class "C" Felony,
    - one count of Criminal Tax Fraud in the Second Degree, a class "C" Felony,
    - one count of Scheme To Defraud in the First Degree, a class "E" Felony.

    Between Jan, 1, 2010 and Sept., 15, 2015, the defendant, at the time a licensed attorney in the State of New York, engaged in a scheme in which he deliberately defrauded multiple clients of monies entrusted to him for various purposes including the transfer of real estate and estate planning.

    In one instance, the defendant is alleged to have stolen approximately $431,300 from a client intended to complete the purchase of a property.

    In another instance the defendant is alleged to have stolen approximately $159,431.95 from another client. That money was intended to pay off a mortgage to forestall a foreclosure action on that client's property.

    In all, it is alleged that the defendant, in his ongoing scheme, defrauded 13 clients out of approximately $1,487,461.61. Lippman is also accused of non-payment of taxes to New York State in excess of $50,000.

    The investigation was carried out by investigators from the District Attorney's office along with the assistance of the New York State Department of Taxation and Finance.

    The defendant remains out on a bail of $50,000. The defendant will be sentenced on June 8, 2016. He faces a maximum sentence of fifteen years in state prison.
Source: Former Scarsdale Attorney Pleads Guilty For Stealing Over One Million Dollars From His Real Estate Clients.

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.
Editor's Note: Lippman is the same lowlife who, in an unrelated earlier prosecution in The Bronx, settled felony grand larceny charges stemming from allegations that as an attorney in the Bronx Public Administrator’s Office he stole more than $1.5 million from estates he settled. See Lawyer who avoided jail time by paying restitution reportedly steals more money a year later. In that case, Lippman reportedly pleaded guilty to two counts of grand larceny, and avoided jail time by paying approximately $150,000 in restitution, according to a 2014 press release from the Bronx District Attorney’s Office. He was disbarred the same month that the plea agreement was announced.
(1) Clients found to have been victimized by a theft by a New York attorney may be able to seek some reimbursement for being screwed over by turning to the The Lawyers’ Fund For Client Protection Of the State of New York, which manages and distribute money collected from annual dues paid by members of the state bar to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
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.