Berger Law Group, P.A./The Resolution Law Group, P.C.

The Berger Law Group, P.A., and The Resolution Law Group, P.C. were sued on July 29, 2014, in federal court in Tampa by the Florida and Connecticut Attorney General Offices.  The AG Offices alleged that Berger Law Group, P.A., The Resolution Law Group, P.C., Litigation Law, LLC, The Resolution Law Center, LLC, Ian Berger, R. Geoffrey Broderick, Gary DiGirolamo and David Friedman operated as a legal “enterprise” that “generated millions of dollars in illegal upfront fees by convincing consumers to pay for the opportunity to be included as a plaintiff in . . . so-called ‘mass-joinder’ lawsuits against their mortgage lenders.”  The AG Offices alleged that the “enterprise” falsely promised that the lawsuits would induce banks to give consumers mortgage modifications or other forms of foreclosure relief.  The AG Offices further alleged that consumers were charged an upfront fee of typically $6,000, characterized as an “investigation fee,” and then a $500 monthly maintenance fee.  The AG Offices claim that the actions of the Defendants (i) constitute unfair and deceptive trade practices that violate Chapter 501, Part II, Florida Statutes and Conn Gen. Stat., Chapter 735a, and (ii) violate the Mortgage Assistance Relief Services Rule, 12 CFR Part 1015 (2012) (“Regulation O”).  As relief, the AG Offices requested the appointment of a receiver over the non-individual defendants, a preliminary and a permanent injunction enjoining the Defendants from further violations of state and federal law, and other relief designed to provide restitution to consumers.

On August 1, 2014, the district court (Judge James Moody) entered an Ex Parte Temporary Restraining Order with Asset Transfer Restrictions and Partial Asset Freeze, Appointment of Temporary Receiver, and Other Equitable Relief and Order to Show Cause why a Preliminary Injunction Should Not Issue (the “TRO”).  In the TRO, the Court enjoined the Defendants:

·                     from making representations about the likelihood of their success in obtaining mortgage loan modifications to reduce consumer’s mortgage payments or interest rates or help consumers avoid foreclosure;

·                     from making representations concerning the degree of success that any Defendant or other person has had in performing any mortgage assistance relief service;

·                     from making any representation concerning the nature of any of the Defendant’s relationship with any mortgage loan holder or servicer;

·                     from making representations concerning the amount of time it would take or is likely to take to obtain or arrange a renegotiation, settlement, modification, or other alteration of the terms of any secured or unsecured debt, including mortgage loans;

·                     from a host of specific actions specifically proscribed by Regulation O, and it also enjoined the Defendants from asking for or receiving any advance or maintenance fee for mass-joinder or related suits or proceedings;

·                     in the case of the Defendants Berger Law Group, P.A. and The Resolution Law Group, P.C. (the “Law Firm Receivership Defendants”), from transferring, spending or otherwise dissipating any of their Assets, including in particular funds in their possession, outside of the ordinary course of business;

·                     in the case of the Defendants Litigation Law, LLC and The Resolution Law Center, LLC (the “Non-Law Firm Receivership Defendants”), from transferring, spending or otherwise dissipating any of their Assets, including in particular funds in their possession. 

                In addition, in the TRO the Court appointed Mark Bernet as receiver for the Non-Law Firm Receivership Defendants and for the Law Firm Receivership Defendants (together the “Receivership Defendants”).  The Court directed the Receiver, among other things:  (i) to assume full control of the Receivership Defendants by removing, as he saw fit, any officer, director, independent contractor, employee or agent from control, management of, or participation in the affairs of the Receivership Defendants; (ii) to take exclusive custody, control and possession of all Assets and Documents (both defined terms) of the Receivership Defendants; (iii) to take all steps necessary to secure the business premises of the Receivership Defendants; (iv) to conserve, hold and manage all of the Assets of the Receivership Defendants, and (v) to perform all acts necessary or advisable to prevent loss, damage or injury to consumers or creditors of the Receivership Defendants.

                Generally, a TRO can remain in effect for only a short period of time before it must either be dissolved or converted into a preliminary injunction.  For this reason, the Court scheduled a preliminary injunction hearing for August 12, 2014; at that hearing, the Defendants would have been given an opportunity to contest the allegations made against them and try to persuade the Court to dissolve the TRO.  However, at a status conference held on August 8, 2014, all defendants (including Berger Law Group, The Resolution Law Group, Ian Berger and R. Geoffrey Broderick) announced that they would not contest the entry of a preliminary injunction.  The preliminary injunction, which is not yet entered but which is expected to be entered within the next couple of days, will continue the TRO in effect in a broader form.  It will leave the Receiver in place, but it will also effectively shut down Berger Law Group.

                The clients of the Berger Law Group will need to take action to protect their interests.  Many are involved in pending lawsuits, in New Jersey.  Attorney Jeanne Lahiff has signed the lawsuit papers on their behalf, and she therefore is their attorney for purposes of the litigation.  Clients may wish to make other arrangements, or to communicate with Ms. Lahiff about their lawsuits.  Consumers may choose to hire an attorney other than Ms. Lahiff.  Her e-mail address is rsvp2jeanne@gmail.com. 

Some frequently asked questions and their answers are set forth below.

·                     Why did the AG Offices file a lawsuit against Berger Law Group and The Resolution Law Group?

The AG Offices received numerous complaints from consumers who claimed to have paid several thousand dollars to The Resolution Law Group or the Berger Law Group for legal representation against their mortgage lenders and servicers.  Consumers claimed that despite receiving payment the law firms did not file the promised lawsuits on a timely basis or, if they did file, make satisfactory progress.  Many of the lawsuits that were filed were dismissed, or had parties severed, because of legal infirmities.  The AG Offices also were aware of complaints from the many other state attorney general offices. 

·                     What is going to happen with my lawsuit?

Berger Law Group formed an "of counsel" relationship with Jeanne Lahiff, an attorney licensed to practice law in New Jersey.  Ms. Lahiff is the attorney of record in 13 lawsuits pending in New Jersey – all of these lawsuits are "mass actions," which is to say that there are many consumers who are "Plaintiffs," or the persons initiating the lawsuits.  Ms. Lahiff remains your attorney in the litigation, and she is obligated to continue to represent you unless she obtains an order from the Court permitting her to withdraw as your counsel.  Ms. Lahiff will need to contact you prior to seeking to withdraw.  When you are contacted, you should speak with Ms. Lahiff about whether you would like her to continue as your attorney.  Her e-mail address is rsvp2jeanne@gmail.com.

·                     What was the hearing about on August 12, 2014?

          Under the federal rules of civil procedure, a Temporary Restraining Order can remain in effect only for only a limited period of time.  The parties against whom the TRO is entered are entitled to appear in Court and present evidence to demonstrate that the TRO should be dissolved, while the parties who obtained the TRO are permitted to present evidence to show that the TRO should be extended.  The proceedings are like a trial:  The Court listens to the testimony of witnesses, reviews documents presented into evidence, and considers the arguments of the attorneys.  If the Court determines that the TRO should not be extended, then it will enter an order dissolving the TRO.  In that case, the parties against whom the TRO was entered will be permitted to return to their offices and resume their actions.  On the other hand, if the Court determines that the TRO should remain in place, it will enter a Preliminary Injunction that, in all likelihood, will be similar to or identical in effect with the TRO.  In this case, the Defendants announced to the Court that they will not contest the entry of a preliminary injunction.  The August 12 hearing therefore has been cancelled, and a Preliminary Injunction will be entered within the next few days.

·                     What about all the money I paid?

One of the issues raised by the AG Offices in their lawsuit concerns the fees charged by The Resolution Law Group and the Berger Law Group.  The AG Offices assert that the two law firms were not permitted to charge "advance fees" for this type of representation.  If the lawsuit continues, and if the AG Offices ultimately are victorious, the Receiver will be charged with attempting to recover as much money as possible to return to consumers.  The Receiver cautions, however, that in prior cases in which he has served as receiver, recoveries generally are only a small fraction of the funds that were paid.

·                     Should I continue to pay my $500 or $495 monthly maintenance fee to Berger Law Group or The Resolution Law Group?

          No.

·                     What about my initial $6,000 or $5,000 fee?  I was paying it in installments and I still have some of that left to pay.  Should I pay it?

                   No.

·                     Where can I find out more information?

Updates will be posted to this website.  Already posted are the Complaint and the TRO. 

·                     How could I have fallen for this?

The case is just beginning, and the Defendants may contest the allegations set out in the Complaint.  The Court could determine that the Defendants are not engaging in any improper conduct, although it has already concluded, on a preliminary basis, to the contrary. 

Mortgage-related scams are becoming all too common.  An attorney is a key participant in a mortgage scheme, says Craig Howland, chief of the Federal Bureau of Investigation's financial institutions fraud unit. That's because being able to point to a lawyer, who is sworn to uphold the law, "adds legitimacy" to the scam and thus can help ensnare potential victims.  Howland says there are a number of pending FBI probes concerning lawyers.

A number of attorneys also have been held accountable, through attorney disciplinary cases and civil suits, for operating foreclosure-rescue businesses that reportedly obtain hefty up-front payments from owners trying to save their homes, but offer little in return.

According to the Huffington Post:

"The foreclosure epidemic that swept the U.S. after the financial crash has ebbed, but the business of preying on struggling homeowners remains a thriving concern. Since 2010, more than 40,000 homeowners have complained they were scammed by someone promising to offer foreclosure assistance or help them with a mortgage modification, according to an analysis of calls to the HOPE hotline, a resource for struggling borrowers.

"The most costly of these foreclosure rescue scams -- and now the most pervasive -- involve or are directed by attorneys, according to the analysis, which was conducted by the Lawyers’ Committee for Civil Rights Under Law, a group that helps monitor the hotline.

"Last year, nearly 60 percent of all complaint calls to the HOPE hotline involved a lawyer, the group found. That's up from 40 percent in 2010. The average loss claimed in schemes involving or directed by lawyers was $3,601 -- about $800 more than in other types of deceptions, according to the analysis.

"The schemes exploit the needs of untold thousands of people who have tried to refinance their mortgage under a government-sponsored program like the Home Affordable Refinance Program (HARP), only to be met with endless and costly frustrations -- including issues like lost paperwork and overcharges that in some cases have led to wrongful foreclosures. A recent report by the California Reinvestment Coalition found that banks continue to make foreclosure-related mistakes, despite many pledges of reform.

"In phone calls and direct mailings, lawyers claim they can help. 'We have special relationships with banks that can speed up the approval process,' reads one such ad, cited by the Federal Trade Commission in a bulletin warning against such offers.

"Recruiting clients to sue banks as a group is a variation on this scheme. Lawyers promise these "mass joinder" lawsuits will force banks to stop foreclosures and cut loan balances. Some borrowers have even been told they could walk away with the title to their home, free and clear of any debt. All of this could happen in a matter of months, the attorneys claim.

"But such claims are bogus, advocates warn. 'Run away as fast as you can' if approached to participate in such a case, said Linda Mullenbach, an attorney at the Lawyers' Committee.

"Valid mortgage fraud cases are filed only after extensive research into often messy and confusing mortgage documentation. They typically take years to reach a conclusion.

". . . The uptick in involvement by attorneys, who are being recruited to front what are essentially marketing operations, adds an extra wrinkle, making it even more difficult for prosecutors, and homeowners, to sniff out scams."