By KIMBERLY MILLER AND CHRISTINE STAPLETON
Palm Beach Post Staff Writers
Updated: 3:43 p.m. Wednesday, March 30, 2011
Posted: 10:07 p.m. Tuesday, March 29, 2011
South Florida law firm's demise puts 9,000 foreclosures in limbo
WEST PALM BEACH — Palm Beach County courts will sort through nearly 9,000 wayward foreclosures in a cattle call of cases from the collapsed Law Offices of David J. Stern.
Chief Judge Peter Blanc ordered hearings for pending Stern foreclosures that the firm has said it no longer has the manpower to withdraw from as counsel of record.
For homeowners, a Friday letter from Blanc to Stern outlining the procedures for case management conferences could mean a dismissal if no one from the bank's side attends the hearing. The bank could re-file the foreclosure, but it would likely cause a delay of months or even a year considering the recent slowdown in new filings.
Stern told judges in a March 4 letter that he was shutting down his foreclosure business at the end of the month, leaving as many as 100,000 cases statewide in limbo.
Blanc asked Stern in his response to reconsider the "unilateral decision to cease representation" of the cases because it is not an approved or recognized way for an attorney to quit a case.
The instructions for the hearings to update judges on where Stern cases stand are the first direction some defense attorneys have seen from the courts since Stern's announcement.
"We haven't heard a word from Miami-Dade and Broward counties," said foreclosure defense attorney Tom Ice of Ice Legal in Royal Palm Beach.
The chief judges in both counties agree that Stern's letter is not a legal way to withdraw from cases.
Linda Kelly Kearson, general counsel for the Miami-Dade courts, wrote in her response to Stern that a withdrawal from an estimated 20,000 cases could not occur with the "submission of a 575-page list of case numbers to the chief judge."
Stern's attempt "does not comply with the Florida Rules of Civil Procedure and is thus, unacceptable," she wrote.
Stern lost most of his foreclosure business in the fall following allegations of mishandled and possibly fraudulent paperwork. The transfer of cases to new attorneys has been difficult, especially considering the firm has since laid off much of its staff.
James Bonfiglio, a Boynton Beach foreclosure defense attorney, called Blanc's plan for case management conferences "a reasonable response to a very bad situation caused by Mr. Stern and his clients' greed - both tried to cut corners and save money and this is the end result. Chaos in the courts."
Attorney Jeff Tew, who is representing Stern, could not be reached Tuesday for comment.
As for where and when the case management conferences will be heard, how many cases will be scheduled for each conference and what will happen if no one shows up, Blanc said he is still working on those details.
Between 100 and 150 cases could be heard at each conference. If no replacement lawyer appears, the case will likely be dismissed, Blanc said.
"We're going to test the water and see how many people show up," said Blanc, adding that he felt compelled to take action considering there are 9,000 cases in question.
Case management conference notices will be sent out shortly, but whether Stern's office will respond is unknown. Some defense attorneys say it's unlikely.
"You are dealing with a law firm that has imploded and left clients in the lurch," said Deerfield Beach attorney Peter Ticktin.
But apparently Stern also feels cheated. On March 25, a lawsuit his firm filed against Chase Home Finance was moved to federal court in Fort Lauderdale. According to the suit, Chase owes the firm $398,979.95 in attorney fees.
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