The Legal Aid Society of Palm Beach County, Fla., and two homeless assistance agencies are the surprise beneficiaries of a successful lawsuit against a notorious South Florida foreclosure attorney, who was later disbarred.
As part of a rare legal procedure, Palm Beach County Circuit Judge Cymonie Rowe on Tuesday agreed that roughly $240,000 could be immediately distributed to the charities after lawyers who sued disgraced attorney David Stern reported that efforts to find all 1,150 of his victims had stalled.
Nearly 900 people who were part of a 2007 class-action lawsuit received pay-outs of between $600 and $3,500 from the roughly $1.2 million recovered from the lawsuit, said attorney Louis Silber, who filed two successful lawsuits against Stern. But, he said, about 250 of Stern's victims remain elusive despite intensive years-long efforts to find them.
"It's hard (to find people) in consumer class-action lawsuits and even harder in foreclosure class-action lawsuits like this because they got kicked out of their homes," he said.
Silber is holding onto $40,000 in case any of those who were to benefit from the lawsuit surface in the next four months. In the meantime, he and attorneys Kirk Friedland and Philip Burlington, who helped litigate the lawsuit, will send checks to the charities.
As approved by Rowe, The Lord's Place will receive $30,000 and The Miami Rescue Mission will receive $10,000. The big winner is the Legal Aid Society, which is to received $200,000 immediately and whatever money isn't claimed after four months.
The law that dictates how the leftover money can be distributed requires there be some link between the wrongdoing exposed by the lawsuit and the work of the charities, Silber said.
Both homeless assistance agencies were hard-hit during the foreclosure crisis, helping scores of families that lost their homes due to the actions of unscrupulous lenders and lawyers, he said.
Likewise, the Legal Aid Society was so inundated with requests for help from victims of foreclosure fraud that it launched the Mortgage Foreclosure Defense Project to help low-income people fight illegal fees that compounded their financial woes. The project, now named the Consumer Advocacy Unit, has recovered $23,000 for its clients and cancelled another $192,000 in debt for people who were duped by unscrupulous businesses, Silber said.
Bob Bertisch, executive director of Legal Aid, said the money from the Stern lawsuit will be a boon for the agency that has been reeling from budget cutbacks. The agency previously received $165,000 from another nearly $1 million lawsuit Silber and the other two attorneys filed against Stern, successfully challenging fees he charged homeowners.
Attorney Jack Scarola, one of the founding board members of The Lord's Place, applauded the efforts of the attorneys who sued Stern on behalf of his victims and worked to distribute money to nearly 80 percent of them. That money was leftover to help charities who dealt with the fall-out of the foreclosure crisis is a testament to their work, he said.
"It's going to be a significant contribution to The Lord's Place mission of feeding and housing the homeless," he said.
From offices in Broward County, Stern built a career as one of the most successful foreclosure lawyers in the state, filing hundreds of suits against homeowners each year. However, in 2010, he faced allegations that his climb to the top was the result of robo-signing, notary fraud and forgery. He was disbarred in 2014.
