Posted on October 15, 2013 by Neil GarfieldI have been receiving an increasing amount of mail and comments about whether foreclosure mills or foreclosure firms should be subject to bar discipline and whether they could be sued. The issue is complex. Here is my take—-
If the lawyer is party to fabrication of documents, forgery, and subordination of perjury (knowingly proffering a witness whose testimony is known to be false), then the answer is yes. Bar discipline and civil liability would most probably apply, assuming you could prove your case. The Bar grievance must be viewed separate from the civil liability case. It is possible that if the bar finds that a violation of the ethical and disciplinary rules apply, there might be restitution but not likely. It is generally the client that would be entitled to restitution.
You must also realize that it is a violation of the Bar rules and in Florida it is a crime to threaten criminal action or quasi criminal action (bar violation) in order to gain a civil advantage. Thus the making of a threat will put you in a worse position than your adversary even if you are right, so don’t do it. Check with a licensed attorney before you even consider action against a lawyer. And no, there is no such thing as a malpractice action by a non client. And malpractice actions are extremely difficult to prove and win.
In a malpractice action you must of course prove that the lawyer clearly made an error that goes beyond a reasonable judgment call that simply turned out wrong. The hard part is actually proving your damages. In order to do that you must prove that you suffered damages as a result of the lawyers’ malpractice and not as a result of simply a negative ruling and financial damages from the result from that ruling — AND you must prove that the ruling would have been otherwise if the lawyer had not committed the error. This has proved to be a nearly impossible threshold for malpractice.
But before I leave that subject, let me say that if a homeowner actually wins their case, the situation might be different. Any attorney in bankruptcy, general litigation or otherwise who gave advice to the homeowner that there was nothing that could be done for them where it is now known that the wrongful foreclosure has been proven, then that attorney might have significant exposure which is why my firm does risk analysis for domestic law, bankruptcy law and other cases.
Lawyers who have not researched securitization should neither be giving advice nor representing homeowners. It might seem counter intuitive. But if the homeowner vacated their home or entered into an oppressive modification or settlement agreement as a result of bad advice from an attorney ignorant of the current state of the law on wrongful foreclosure, there are significant damages.
For the most part, it is unlikely that most attorneys who represent the banks would be subject to discipline or liability. This comes down to the age old question of tainting the lawyer with the crimes of his client. Everyone is entitled and indeed required to hire a lawyer if they are a corporate entity. The fact that some lawyers are willing to represent the interests of the banks to the best of their ability does not mean they agree that their clients are good guys. I personally have represented parties I didn’t like. It just goes with the territory.