In an effort to send a resounding message of accountability, a U.S. District judge recently decided in favor of a long-time tenant of a New York apartment who sued not the landlord, nor the property management firm, but the law firm representing the property management company. The case was settled for $22,000 and $108,000 for legal expenses, leaving landlord attorneys in New York and around the country shaken.
The 82 year-old tenant Rafael Lee had been renting an apartment in Manhattan for the past 48 years and paying a partially-subsidized rent to a property management company. According to Mr. Lee, he received an eviction notice after an employee of the property management firm missed the fact that his rent was subsidized by the government and he was only responsible for a portion of the rent, and thought his rent was behind. The property management firm turned his case over to their eviction attorneys, Kucker & Bruh LLP, who filed eviction paperwork.
Despite the fact the attorneys stopped the eviction process immediately upon notification of the error, Mr. Lee filed suit against the law firm stating, “I just needed to release all of this anxiety I have against my landlord.”
The judge in the case, Judge Lorna Schofield, decided the error was that of the attorneys at Kucker & Bruh LLP who represented the property management firm, for not confirming the accuracy of the information given them by the property management company. Her decision was based on the federal Fair Debt Collection Practices Act, a law designed to stop abuses by debt collection agencies and which holds them strictly accountable for errors except those which occur despite procedures in place to avoid them.
Since the recent foreclosure crisis of 2006, there have been a number of similar cases where sensitive housing issues are being carefully scrutinized. Attorneys are being held to a higher standard to ensure their paperwork is in order so that homeowners and tenants are not displaced from their homes in error.
Mr. Lee's attorney, James Fishman, a tenant and consumer lawyer, said the case was a "paradigm shift for the landlord bar" where some law firms have routinely made "mass filings of nonpayment proceedings without having to do any kind of checking.” He added, “Hopefully there will be fewer mistakes in Housing Court eviction proceedings.”
Landlord lawyers around the country have weighed in on this issue. David Skaller, a partner at Belkin Burden Wenig & Goldman, an uninvolved firm which represents many landlords, asked “Are we supposed to be the attorneys for the landlord and the accountants?" He also stated the case “has a potential chilling effect."
Adam Leitman Bailey, who represents many landlords and isn't connected with the Lee case, said it was a "very dangerous decision for lawyers" by a federal judge "who could not possibly understand the halls of housing court and the landlord-tenant industry."
He noted that the same printouts of rent records that the judge found inadequate were routinely accepted as evidence in housing court. "We would be unable to practice law in any field, unless we rely on information from our clients," he said.
Routine or not, relying on third party information can apparently be risky business.