Florida Bar v. David J. Stern – Complaint, Consent Judgement, Report of Referee, and Judgment

Circa 2002

Below are copies of a Florida Bar Complaint that was filed against David J. Stern regarding his foreclosure techniques back in 2002…

Let’s review and see if he changed his ways or violated any of the issues brought by the bar…

From the complaint…

COUNT I

A significant portion of work performed by the respondent’s law firm is not performed by attorneys, but it is performed by nonlawyer staff. The attorneys in respondent’s law firm have a duty to supervise the nonlawyer staff, as well as review the nonlawyer staff work product and sign off on it for the purposes of the foreclosure actions.

Sounds familiar…

Because the amount of attorneys’ fees respondent may charge is limited by his contract with his clients, respondent created Professional Title as a means for providing the services in a manner he controls, and as a result increasing the monies he receives for each foreclosure matter.
4closureFraud dot org
Respondent orders title searches from the Fund at prices ranging from $75.00 to $90.00

At all times material to this complaint, the respondent did not have Professional Title render an invoice. As a routine practice, only in situations where a borrower or their counsel challenged the amount of respondent’s costs did respondent generate a Professional Title invoice.

The Professional Title invoices, when they are generated, reflect respondent’s “costs” for Professional Title’s services in a range from $325.00 to over $400.00.

In many instances, the mischaracterizing as costs what should be identified as attorneys’ fees or legal assistant fees allowed respondent to avoid his agreed-to fee cap.

It may be permissible to bill for this nonlawyer time if it is properly identified in any bills and fee affidavits. It is not permissible for an attorney to represent, in bills and/or fee affidavits, that work performed by a nonattorney was performed by the attorney personally.

The affidavits filed by respondent’s law firm in the foreclosure proceedings routinely contain these misstatements of material fact…
4closureFraud dot org
By the actions set forth above, respondent violated Rule Regulating The Florida Bar 3-4.3 [Acts contrary to honesty and justice are cause for discipline.]; Rule 4-1.5(a)[An attorney shall not enter into an agreement for, charge, or collect an illegal, prohibited, or clearly excessive fee]; Rule 4-3.3 [A lawyer shall not knowingly: (1) make a false statement of material fact or law to a tribunal. . .(4) permit any witness .. . to offer testimony or other evidence that the lawyer knows to be false.]; 4-8.4(a) [A lawyer shall not violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.]; Rule 4-8.4(d) [A lawyer shall not engage in conduct prejudicial to the administration of justice.].

COUNT II

Respondent’s invoicing practices could mislead clients and others to believe that Professional Title performed services separate from those of his law firm, and that he incurred actual out-of-pocket expenses due and owing to Professional Title.

The respondent did not fully inform some clients of the manner in which these legal services were performed by his firm through Professional Title Services.
4closureFraud dot org
By the actions set forth above, respondent violated Rule Regulating The Florida Bar 3-4.3 [Acts contrary to honesty and justice are cause for discipline.]; and Rule 4-1.5(e) [When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.].

COUNT III

Certain products and services, such as an examined title insurance report, were guaranteed and eliminated the need for respondent to have his attorneys and other personnel engage in further examination of Fund searches.

The cost the Fund charged for examined title was significantly less than what respondent billed as a cost through Professional Title.

If the equivalent services could have been provided to his clients at a savings, respondent’s own interests conflicted with the best interests of his clients. Respondent did not fully explain these circumstances to clients so that they could make an informed waiver of this conflict.
4closureFraud dot org
By the actions set forth above, respondent violated Rule Regulating The Florida Bar 3-4.3 [Acts contrary to honesty and justice are cause for discipline.]; Rule 4-1.7(b) [A lawyer shall not represent a client if the lawyer’s exercise of independent professional judgment in the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person or by the lawyer’s own interest, unless: (1) the lawyer reasonably believes the representation will not be adversely affected; and (2) the client consents after consultation.].

COUNT IV

Residential borrowers have the right to attempt to reinstate defaulted mortgage loans, even after being served with a foreclosure summons and complaint.

Respondent, by substantial use of and reliance on nonlawyer personnel with no authority to negotiate a resolution, inhibits foreclosure defendants’ access to information about their reinstatement figures.

Unsuccessful attempts by foreclosure defendants to communicate with the attorneys handling their cases result in increasing attorneys fees, and consequently, increased difficulty in defendant’s ability to reinstate.

In many situations, foreclosure defendants or their counsel request verification of fees spent and costs incurred.

Respondent’s nonlawyer personnel have a duty to disclose that they are not lawyers and that they cannot engage in settlement negotiations, but these personnel do not routinely make this disclosure.
4closureFraud dot org
By the actions set forth above, respondent violated Rule Regulating The Florida Bar 3-4.3 [Acts contrary to honesty and justice are cause for discipline.]; Rule 4-3.4(a)[A lawyer shall not unlawfully obstruct another party’s access to evidence or otherwise unlawfully alter, destroy, or conceal a document or other material that the lawyer knows or reasonably should know is relevant to a pending or a reasonably foreseeable proceeding; nor counsel or assist another person to do any such act.]; Rule 4-4.4 [In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person.]; Rule 4-5.3(a) [A partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that nonlawyers’ conduct is compatible with the professional obligations of the lawyer.]; Rule 4-8.4(a) [A lawyer shall not violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.]; Rule 4-8.4(d) [A lawyer shall not engage in conduct prejudicial to the administration of justice.].

From the Report of the Referee

Summary of Proceedings: The undersigned was appointed as referee to conduct disciplinary proceedings herein according to the Rules Regulating The Florida Bar. This matter was resolved through a Consent Judgment. The record in this case, which is forwarded to The Supreme Court of Florida, consists of the following: Complaint; Answer; Joint Notice of Voluntary Dismissal of Counts II, III and IV; Consent Judgment; and this Uncontested Report of Referee Accepting Consent Judgment.

Recommendations as to Whether the Respondent Should Be Found Guiltv: As to each count of the complaint I make the following recommendations as to guilt or innocence:

Pursuant to the Consent Judgment, I find the respondent guilty of violating Rule 4-8.4(d), Rules Regulating The Florida Bar, as admitted in the Consent Judgment. I accept the Joint Notice of Voluntary Dismissal of Counts II, III and IV of the Complaint.
4closureFraud dot org
Recommendation as to Disciplinary Measures to Be Applied: Pursuant to the Conditional Guilty Plea for Consent Judgment, I make the following recommendations as to the disciplinary measures to be applied:

Public reprimand to be administered before The Florida Bar Board of Governors.

Personal History and Past Disciplinary Record: After the finding of guilty and prior to recommending discipline to be recommended pursuant to R. Regulating Fla. Bar 3-7.6(k)(l), I considered the following personal history and prior disciplinary record of the respondent, to wit:

Age: 42
Date admitted to Bar: November 27, 1991
Prior disciplinary convictions: None

Statement of costs and manner in which costs should be taxed: I find the following costs were reasonably incurred by The Florida Bar.

Administrative Costs $750.00
Court Reporter 249.00
TOTAL COSTS: $999.00

Related report: Foreclosure Fraud Exposed!!! Foreclosures Bring Wealth, Rebukes for Florida Lawyer David J. Stern

Full documents below…

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4closureFraud.org

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Comments
5 Responses to “Florida Bar v. David J. Stern – Complaint, Consent Judgement, Report of Referee, and Judgment”
  1. Jeffrey Tew was also the attorney representing Shannon Smith the notary at David J Stern’s office who ………….I don’t know………..what……………”changed her signature” on a whim so it looked exactly like another stern employee’s signature, Cheryl Samons?

    http://4closurefraud.org/2010/07/16/cheryl-samons-notary-fraud-full-deposition-of-david-j-sterns-notary-shannon-smith/

  2. Michael says:

    Don’t forget that Stern’s lawyer then and now is Jeff Tew. Funny cause Jeff’s partner is Mike Tew, one of the lead adjudicators for the Florida Bar. The third party is mega-Republican lobbyist Alberto Cardenas; lead fundraiser for Bush and McCain. Cardenas was on the Fannie Mae Board of Directors when they decided to ramp up their lending, causing the housing bubble.

    If one were paranoid they’d wonder if Cardenas’ influence might be why Fannie kept sending files to a lawyer who fleeced both homeowners and his clients. In fact, have to question if Fannie “balanced” how much taxpayer money could and would have been saved by restructuring notes against how much Stern and his ilk would have lost in foreclosure, REO, and title fees. After all, it was just taxpayer money (oh yeah; and leaving people homeless); wouldn’t want to stifle a “business” just to prevent that, would we?

    President Obama — time for a Special Prosecutor, and a Foreclosure Moratorium until all this is sorted out.

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