Pay no attention to the man behind the curtain.
As the title indicates, this will be a more than usually confused post.
The stimulus was the now famous grief over elementary fairness which errupted when “[Judge] Scott Fairgrieve of Nassau County District Court, wrote that ‘swearing to false statements reflects poorly on the profession [of law] as a whole” and fined lawyer Steven J Baum $20,000 for false statements in support of a foreclosure. Baum also suffered a Schack attack when Judge Arthur M. Schack referred to one filing as “incredible, outrageous, ludicrous and disingenuous.”
Baum wrote “Pay no attention to the man behind the curtain.”
In Toto not a good time to be a sleazy lawyer in New York (when was the last time that was true?).
The part which stunned me was
Anne Reynolds Copps, the chairwoman of the real property law section of the New York State bar, said, “We had a lot of concerns, because it seemed to paint attorneys as being the problem.” Lawyers feared they would be responsible for a bank’s mistakes. “They are relying on a client, or the client’s employees, to provide the information on which they are basing the documents,” she said.
So her view is that lawyers do not have the responsibility to check the claims of fact they make to judges, to look at the evidence. So what exactly do they do? Is the claim that their job is to look good in a suit and speak proper English with a confident tone?
Lawyers have discovered that they can make a whole lot more money by not doing their jobs and claiming they have done their jobs. Big surprise. Now the idea that they might have to give up that income, because they don’t have time to do what they have been claiming they have been doing is shocking.
I think that this is a very general phenomenon.
I don’t know how much money Baum made, but it is clear that one lawyer with a huge income must have been mainly taking money for doing what he didn’t bother to do
“David J. Stern, a lawyer whose Florida firm has been part of an estimated 20 percent of the foreclosure actions in the state, has been accused of filing sloppy and even fraudulent mortgage paperwork.” One firm [working on] 20% of the foreclosures, how many partners? How many associates with law degrees? How many robo signers?
Bankers and lawyers used to earn good money for, among other things, due diligence, keeping records, keeping proof if the records were contested, and complying with burdensome laws and regulations.
Relatively recently, they have earned immense incomes claiming they had done those things without bothering to do them. I guess that the fee charged by the lawyers who didn’t glance at the evidence is the same as the fees charged by lawyers who check if something is true before telling it to a judge. Clearly, one can make a lot of money claiming to have done something difficult and time consuming without bothering to do it.
Banks charge fees for handling transactions, but clearly stopped bothering to, say, handle transfer of a mortgage in a way that the entity which paid them could foreclose when the time came.
Banks charge to exchange currencies. If they are trading pieces of paper for pieces of paper, then they have to hold money to do that and they have to keep people from stealing it. If I am taking money out of an ATM in a country with a different currency from my bank account, I am forcing some computer somewhere to multiply two numbers. Ouch. But they charge as if they were doing it with pen and paper (or maybe an abacus).
I’d guess that most of the huge profits of the financial services sector are based on separating gamblers from their money, but a large part come from charging for services not rendered and another large part come from charging a lot for services which cost very little to provide now that they have computers.
The terror at the idea that judges won’t accept “because I say so” as proof shows how much the system depends on no one checking what was actually done in exchange for the huge flow of fees.
Your quote “The terror at the idea that judges won’t accept “because I say so” as proof shows how much the system depends on no one checking what was actually done in exchange for the huge flow of fees.”
Welcome to capitalism on roids.
I think you’re being a little naive here – “I guess that the fee charged by the lawyers who didn’t glance at the evidence is the same as the fees charged by lawyers who check if something is true before telling it to a judge.” I would guess that the lawyers who didn’t check anything get substantially higher fees, first because they can charge for work they didn’t do but more importantly because a plaintiff or defendent who wants to be able to make false claims and have them presented as verified will pay pretty well for that service.
I think you’re being a little naive here – “I guess that the fee charged by the lawyers who didn’t glance at the evidence is the same as the fees charged by lawyers who check if something is true before telling it to a judge.” I would guess that the lawyers who didn’t check anything get substantially higher fees, first because they can charge for work they didn’t do but more importantly because a plaintiff or defendent who wants to be able to make false claims and have them presented as verified will pay pretty well for that service.
I think you’re being a little naive here – “I guess that the fee charged by the lawyers who didn’t glance at the evidence is the same as the fees charged by lawyers who check if something is true before telling it to a judge.” I would guess that the lawyers who didn’t check anything get substantially higher fees, first because they can charge for work they didn’t do but more importantly because a plaintiff or defendent who wants to be able to make false claims and have them presented as verified will pay pretty well for that service.
Another nail in the coffen here. Indeed, the “Empire” is in decline.
At a very real level, Mr. Stern was charging legal sized fees for doing secretarial work. It seems to me that either he should be actually doing due dilligence, or charging less.
The Devil’s Advocate says
you may have got this wrong. the lawyers job is to represent his client. he can’t lie, but he has no obligation to check the client’s lies. that’s the other lawyer’s job, and the judge and jury’s.
you will note that when reports of cases come before other courts or even the press, it is always “the principle” who say.. not the lawyer. and there is a reason they call mob lawyers the “mouthpiece.”
the only time i don’t like this is when it’s a prosecutor in a criminal case who is lying, or failing to check the honesty of his witnesses.
well, not the only time i don’t like it. but at other times i can see why the lawyer is supposed to represent his clients case and not pre judge it himself.
Due diligence is a commercial standard. There is a theory called ‘honest services fraud’. It occurs when you hire someone expecting professional performance including due diligence and the standards of performance or care in the case of a medical person are not delivered.
It is a felony in wire fraud and is used in RICO. It is very evident but not pursued in managing certain contracts, where the managers are not looking out for the customers’ interests, and also in racketeering.
And it requires telling the client about something called fraud, which is misrepresentation of fact to induce a response………….
Fraud avoidance and telling the client about purjury penalties is part of due diligence.
So, yeah the lawyer don’t need to check but……………… The have to delvier hionest services and a set of standard due diligence.
Re: Mr. Stern
I see it as a race to the bottom. Those lawyers who did do due diligence charged higher fees than Mr. Stern and therefore were forced out of the business. It is the old story of bad money/practices driving out good money/practices.
ilsm
i think you are right in the present case. it seems the lawyer lied about what they did. and did not do what they should have done. the danger i see is generalizing from this to the concept that a lawyer must in general “testify” to the good faith of his client’s argument. we have an adversarial system exactly because no one can reliably be a judge in his own case. with an adversary there is at least a chance that our opponent will discover the ways in which we are fooling ourselves. it is by no means a perfect system, but i think maybe a little better than a monolithic belief that the truth is knowable and that we know it.
kharris
reasonable interpretation. but you may be sure that a lawyer in a criminal case, for example, is pretty sure his client is lying: “i didn’t do it, and he deserved it.” nevertheless it is the lawyers job to make the other side prove, or at least convince the jury, that his client is lying. it is not the lawyers job to go to the judge and say, my client is lying. i don’t know what the lawyer does when the client says… “i am lying, but i want you to make them believe me.” i suspect lawyers get really good at saying, “i didn’t hear that.”
i suspect the lawyer is in a position to advise his client to plead guilty “because no one is going to believe your story.”
You have to look at the steps in a judicial state foreclosure. The first step is to show “standing to foreclose”. This is analogous to presenting a dead body in a murder trial. If there isn’t one the judge says no tiki …. no laundry. If there is one, with all the necessary documentation, then the case proceeds and the plaintiff’s and defendant’s cases are presented.
In Foreclosure Gate, they haven’t properly shown “standing to foreclose”. This is supposed to be clear cut with no arguments, but the mortgage industry mucked up everything with securitization of mortgages then screwed up the legal paper trail.
At this point the judge can dismiss the case with or without “prejudice”. Without prejudice is like a Mulligan. The bank gets to go back and fix up their paperwork, then get a new court date. With prejudice means the bank lost the case and it’s all over. Most cases so far have been bank friendly and proceeded even with questionable documentation.
After “‘standing to foreclose” has been accepted by the judge, then case details can be argued. There can be things like bank error, illegal billing practices, or the annoying little detail that banks were telling mortgagees to not pay their mortgage in order to qualify for a HAMP restructuring, then proceeding with foreclosure in parallel
Actually, in the criminal case if the client has said I did it, but I want you to get me off, the defense lawyer has no problem as long as she trys the case by pointing out the burden of proof –beyond a reasonable doubt and contents herself with poking holes in the prosecution case and not putting the defendant on the stand. Where the rubber hits the road is when the client insists on taking the stand and lying. The lawyer is forced into the situation of not asking the client questions and convincing the court to allow the client to testify in narrative form. Everybody knows the client is lying, but withdrawal is not an option because the court is not going to let the lawyer off the hook and start over with another lawyer who will find themselves in the same position.
The civil case is different–until the lawyer suspects the client is lying she can rely on what the client says the truth is. There is a certain amount of due diligence that is done, but to vet every fact in a mortgage foreclosure would make it prohibitively expensive–maybe not in a 100 million dollar commercial building foreclosure, but in a $300K residential foreclosure, you accept what the bank tells tells you–until the homeowner produces somethimng that calls into question what the bank is saying–something more than, I executed the mortgage, I have not paid it and I should not have to pay it because the value of my house is less than I agreed to pay.
If I am a foreclosure lawyer worried about my reputation and I think there is a problem with foreclosure procedures I would certainly be sure that the information I am presenting is true and valid. This is also known as cya. On the other hand if I am simply concerned with getting paid I will do the minimum amount of work required and hope I find a court willing to continue the rubber stamp that I have already applied.
So are there any foreclosure lawyers out there who think there is not a problem with foreclosure procedures? I cannot imagine cover your ass is no longer operable.
This guy got lazy. If he says the statements are true and they’re not, he risks being disbarred. If he says that he has a sworn deposition from the bank and it turns out that the BANK lied, he loses his case. This must be covered in Ethics for Law 101.
coberly: “the danger i see is generalizing from this to the concept that a lawyer must in general “testify” to the good faith of his client’s argument.”
My impression was that the lawyer lied to the judge. That’s different from strenuous advocacy. I do not see any danger of generalization. 🙂