Encore Post: Goldbeck Case.

No. 660

Goldbeck, McCafferty & McKeever PC is one of a handful of law firms in Philadelphia and Eastern Pennsylvania that has handled thousands of mortgage foreclosures throughout the State. However, the firm was delivered a severe blow in Bankruptcy Court this week. Coverage of that matter brought to light a suit recently filed in Allegheny County Common Pleas Court that is likely to have far-reaching consequences â€” to that firm, to numerous cases statewide and even to real estate previously sold in sheriff sales.

Earlier this week, the Pittsburgh Tribune Review reported that Chief Judge Agresti of the US Bankruptcy Court for the Western District of Pennsylvania sanctioned Attorney Leslie A. Puida and her firm, Goldbeck, McCafferty and McKeever (GMM), for the fabrication certain documents by Countrywide Mortgage relating to a foreclosure against Sharon D. Hill. The court determined that Puida had filed the fraudulent documents, lied about the fraud both to opposing counsel and in court and refused to take responsibility for her actions. Judge Agresti, according to press reports, gave Puida and GMM until Friday December 3 to self-report to the Pennsylvania Disciplinary Board.

While these developments constitute major trouble for GMM, the perfect storm appears to be coming up fast in the form of an equity suit filed by Pittsburgh Attorney Patrick J. Loughren against 33 non-lawyer employees of GMM and the firm itself in the Court of Common Pleas of Allegheny County at GD 10-021437.

The introduction to the Complaint states that it is an action to enjoin non-lawyers from the unauthorized practice of law, which is a crime in Pennsylvania. “These non-lawyers prepare complaints, sign lawyers’ names to those complaints, and file those complaints in county courts across this Commonwealth without an attorney ever having read the document. “[Emphasis in original].

Then, according to the Complaint, the non-lawyers prosecute the actions by filing other documents purported to be signed by lawyers, but are signed by non-lawyers, frequently before notaries who improperly state that the documents were signed by the lawyers. Attorneys fees are improperly claimed for this unsupervised work by non-lawyers, usually paid by the foreclosing lender unless the loan is reinstated.

The plaintiff, Loughren, is member of the legal profession. The Complaint asserts that a member of a profession has standing to seek an injunction against the unauthorized practice of his profession without the necessity of being personally involved in the factual matters involved. In addition to criminal prosecution, a county court of common pleas may enjoin unauthorized practice and the party obtaining the injunction may be awarded costs and expenses, including reasonable attorneys fees, against the enjoined party.

According to the Complaint, all three named partners of GMM have admitted the main allegations of the Complaint in sworn testimony. Gary McCafferty testified in a deposition taken on September 21, 2010 in the ongoing US District Court case of Kimberley A. Robinson v. Countrywide Home Loans, Inc. et al.No. 08-cv-01563 in the Western District of Pennsylvania.

“Q: Was it the practice in 2006 that Complaints could be filed without an attorney reviewing the Complaint?

A: It could be, yes.

Q: Did the firm authorize its administrative staff, which I’ll just describe as non-lawyers, so inclusive of secretaries, paralegals, legal assistants, to sign attorneys’ names and file them,knowingly that the attorney had not read the document?

A: Yes.” [Emphasis in complaint.]

Joseph Goldbeck, former shareholder and of counsel to GMM, was, according to the Complaint deposed in the same case on the same day.

“Q: Back in 2006, you were an active practicing lawyer at the firm?

A: Yes.

Q: And did you authorize individuals who were employed at the firm who were not lawyers to write up Complaints and sign your name to them and file them without you reviewing them?

A: Yes I did.” [Emphasis in Complaint.]

In another Western District bankruptcy case, DeAngelis v. Countrywide Home Loans, Inc.,the Complaint states that Michael McKeever, the third name partner at GMM, testified at a hearing on December 8, 2009 that it was a standard practice at GMM in 2007 and up to the date of his testimony for non-lawyer staff to sign lawyers’ names to pleadings without the lawyers reviewing the document.

The Complaint goes on to allege that the firm filed suits without investigation by attorneys of the underlying facts in FHA cases, violating FHA Regulations, quoting additional testimony of McCafferty.

The Complaint alleges that the non-lawyers also prepared and filed pleadings in Bankruptcy Court without attorney supervision, which the Complaint states, is also the unauthorized practice of law.

The Complaint goes on to assert at paragraph 86: “Every foreclosure action pending in every Court of Common Pleas in this Commonwealth that has been prepared by and filed by the Non-Lawyer Defendants, without attorney review, should be dismissed on the basis that the Court lacks jurisdiction over the lawsuit.”

In addition, according to the Complaint, GMM should not be permitted to collect and retain attorneys fees for work performed by paraprofessionals without attorney supervision.

The Complaint goes on to display a large number of documents, both with and without the signature and seal of a notary, purportedly signed by others.

In his prayer for relief, Loughren requests that the the Court (1) declare that the conduct of non-lawyers at GMM constitutes the unauthorized practice of law, (2) grant an injunction barring non-lawyers at GMM from engaging in practice of law in Pennsylvania, (3) enjoin continued prosecution of cases filed by non-lawyers in violation of Pennsylvania law (4) issue a rule to show cause why all pending foreclosure actions filed by GMM should not be dismissed, (5) issue a rule to show cause why attorneys fees should not be accounted for and returned to homeowners, (6) issue a rule to show cause why every judgment entered in favor of defendant clients should not be opened or vacated, (7) enjoin defendants from supporting claims with false affidavits, (8) enjoining the notaries from notarizing documents in violation of statutory requirements, (9) enjoining all non-lawyers at GMM from signing their names to affidavits, (10) costs of suit and other relief the Court deems appropriate.

It should be borne in mind that only a complaint has been filed and there have been no responsive pleadings filed. Notwithstanding the testimony quoted in the complaint, these allegations may be difficult or impossible to prove in individual cases. Exactly where or how far this matter will go cannot be determined. However, the allegations in the Complaint involve so many cases that its potential impact could be sweeping. Moreover, the activities of other firms involved in the prosecution of mortgage foreclosure actions in bulk will undoubtedly receive increased scrutiny going forward.

Here is a link to the Complaint.

Category: Encore Post, Mortgage Foreclosure, News Commentary
Tags: Goldbeck > McCafferty and McKeever

Marcellus Shell Games.

No. 659

After the Civil War the industrial revolution came to Western Pennsylvania big time. Coal, which had been previously been extracted for home heating from small “country bank” mines began to be mined in bulk and transported by rail to steel mills. Meanwhile, the oil industry sprung up in Titusville and commercial gas wells were being drilled in large numbers. The technology for producing and distributing natural gas for residential heating and cooking was quickly developed, some of it by George Westinghouse, who actually drilled a well in his back yard on Penn Avenue, much to the alarm of his neighbors.

With over 150 years of experience in gas production, you would think that our region would be pretty comfortable with the subject. But apparently not. The recent boom in Marcellus Shale gas leasing and operation has stirred a lot of controversy. South Fayette Township recently joined a growing list of municipalities that are adopting comprehensive ordinances seeking to regulate the industry within its borders. Although the State has comprehensive regulations which would seem to pre-empt local ordinances, the courts have permitted local regulation. And the City of Pittsburgh and, recently, Wilkinsburg Borough have entirely banned Marcellus drilling from their jurisdiction. This is due to environmental concerns, including fears that fracking fluids will pollute our drinking water.

Before we allow the public discourse to be driven by panic, its worth remembering a few simple facts.

1. Oil and gas drilling and production is heavily regulated in Pennsylvania. State inspectors are everywhere and they have the power to impose heavy fines when environmental laws and regulations are not observed. This includes regulations protecting the groundwater.

2. The Marcellus Shale formation contains vast amounts of gas at great depths. To economically extract it, large lease acreages are required. The cost of operation is extremely expensive. When supply exceeds demand, as it does now, many gas wells are shut in for months or may not generate sufficient pressure to flow into the pipeline.

4. This means that the Marcellus gas fields are going to be developed over time. Despite the rush for leases, the truth is that only a comparatively small number can be developed immediately. In this respect, a Marcellus field is like an underground coal field. Acquisition of a sufficient leasehold acreage must precede development to enable the vertical drilling to occur. This process is likely to still be going on a century from now.

5. In addition, gas wells must be connected to a network of pipelines. This transports the product to market. Although future lines will undoubtedly be constructed, this will take time and investment.

CLT

Category: Oil and Gas
Tags: fracking fluids > gas leasing > Marcellus Shale

Westmoreland County Suit Against Rex Energy, Inc. Settled.

No. 658

A group of landowners who executed leases with Rex Energy, Inc. have reached a settlement on their claims for bonuses on leases which the driller had obtained but never accepted. Many leases, not just those from Rex, were written in such a way that the lessee could accept or reject the lease after title work had been done. However, during the panic of 2008 (and perhaps at other times) when developers may have had trouble raising the funds to pay signing bonuses, acceptances were postponed or cancelled. This was sometimes done through side letters, not part of the formal lease. To the landowners, this acceptance process related to title issues only. Thus, in the view of landowners, if the title was satisfactory, the lessee was required to accept the lease. From the company’s perspective, the right to accept or reject a lease was unconditional. The settlement agreement, involving 137 leases in Westmoreland County, was approved by Westmoreland County Judge Gary Caruso.

The Pittsburgh Business Times reports that a class action determination would have been before the court had a settlement not been reached. Those who had not signed with other developers could, under the settlement, lease with Rex for a $2,500 per acre bonus and a production royalty of 15%. Rex issued a press release concerning the settlement in which it made projections of acreage likely to be acquired under the settlement.

On August 16, 2010, this blog reported about a similar case involving Range Resources.

CLT

Category: Civil Litigation, Oil and Gas
Tags: Judge Gary Caruso > Marcellus > Rex Energy > Westmoreland County

Its a Dog’s Life

No. 657

This Summer heat wave moment is brought to you courtesy of:

S. Charleen M. Pavlik PhD

Angelspring

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Category: News Commentary
Tags: heat wave! > heatwave!

Worthy of News of the World — Wendi Murdoch Flattens Shaving Cream Pie Wielding Comedian.

No. 656

All things considered, it turned out to be a better day for the house of Murdoch (at a day of testimony before a committee of Parliament) than could ever have been expected. Its an illustration of the adage that when things can’t be worse, they start getting better.

No, she wasn’t wielding a sword today. Lucky for the comedian. And no, his name was not Soupy Sales.

Below is a video of how it all happened. Excuse the commercial message, its the price of free. Too bad that the News of the World wasn’t there to cover it. It was their kind of story.

Category: News Commentary
Tags: News of the World > Rupert Murdoch > Soupy Sales > Wendi Murdoch

What Next?

No. 655.

Now that Daniel Radcliff has finished the Harry Potter series, he has a problem. He is type-cast as Harry Potter forever.

Not to worry. Someone should get to work writing a BBC series about a young barrister who is constantly being told what a striking resemblance he bears to, you guessed it.

Of course he will have to represent the underdog. And his cross examination will seem like slight of hand. I’ll leave the rest to your imagination.

Category: News Commentary

Ring – Ring! . . . Calling Casey!

No. 654

David Lat, in his blog, Above the Law, imagines the the supposed future legal career of Casey Anthony. You can read it if you like, but be forewarned: its not very funny.

However, I have a better suggestion. How about a radio call-in advice show? No more Dr. Laura holier-than-thou routine. Here’s a host who has experienced the seamy side of your worst nightmare. And walked away. Talk Radio for the rest of us.

Perfect!

Casey Anthony

Category: News Commentary
Tags: Above the Law > David Lat

The Anniversary of the First Great Battle of the Civil War: Manassas.

No. 653

150 Years ago this week, the first major battle of the Civil War occurred near Manassas Virginia. It was the place where Stonewall Jackson gained his fame and name. The federal troops seemed to have carried the day. But when the Confederates broke their flank, a disorderly retreat to Washington turned into a rout. The capital itself might have been taken had the victorious rebels been prepared to overrun it.

Until then, partisans of both sides had predicted a speedy end to the war. Now the entire North was in panic and shock. But clear-eyed observers on both sides began to realize that the conflict was likely to be a long and very costly one. The era of modern warfare had fully arrived, utilizing mature war technologies capable of inflicting unforeseen mass casualties. It was a lesson that would be taught over and over during the ensuing four years.

The American Civil War was the greatest Constitutional challenge that has ever been raised in our history. At its heart were fundamental legal principles that could not be resolved by words in courtrooms — only through a trial by ordeal.

In the aftermath of the first Battle of Manassas (or Bull Run, if you like), the jury would be out for a very long time.

Category: Milestones, The continuing American Revolution
Tags: Battle of Bull Run > Battle of Manassas

Faced With Record Heat This Week . . .

No. 652

. . . . a group of plush animals congregated around a fire hydrant hoping that a passing fire crew would take pity upon them.

Category: News Commentary
Tags: F A O Schwartz

The Cockle Bur Under Your Saddle Blanket.

No. 651

Interesting Law Blog, The Cockle Bur, sponsored by Cockle Law Brief Printing Company, gives a short analysis of the 2010 Supreme Court session and a few predictions for 2011. AVVO No. 251.

CLT

Category: Blawging
Tags: Cockle Bur

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CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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