Baum: You've Been Served

I actually interviewed at the Steven Baum foreclosure mill last year. I knew they did foreclosure and collections work, but didn’t know the full nature of what they did. I answered an ad for a litigation attorney, dressed up for it, and met with two women who were dressed in sweatshirts and jeans.

They asked what I liked about being a lawyer. I replied that I enjoy representing and helping a diverse roster of clients through a difficult time.  I like using my mind, my research and writing skills, and the fact that every day is different – some days you’re in court, some you’re in depositions, and on other days you’re just pushing papers around. As far as trying cases, it’s simply a fun thing to do, to direct your half of that production for a jury.

The women explained that they don’t try cases there, “litigation attorney” ad notwithstanding. Every day consisted of a lawyer drafting identical boilerplate documents and managing a huge roster of foreclosure actions, mostly from the comfort of their own office. You don’t meet your clients – you just deal with banks and roll the cases through the system, one by one.

Having indirectly expressed the fact that I hated that sort of daily sameness, I didn’t expect a call back, nor did I receive one.

With the news yesterday that the now-embattled Baum firm is closing in the wake of scandals involving not only a tasteless and hateful Halloween party, but an allegedly predatory way of doing business, the awkward failure of that job interview was retrospectively awesome.  The Baum firm appeared to be a bad actor, and its way of doing business was coming back to haunt it. A lawyer friend of mine sent this to me:

Several years ago, I had my first case with the Baum firm. The residents in a three or four unit apartment complex had found a notice of petition and petition for a post-foreclosure eviction on the foyer stairs in their building.  None of them were served with the pleadings, nor did they receive the 10-day notice of the pending action. All of the papers were made out as against the pre-foreclosure owner/landlord, naming him as a resident of the property, along with his wife, a neighbor and any number of “John Doe” respondents.

When I called the Baum firm, the lawyer I spoke with (I forget the name) was adamant that service was proper and wanted to focus solely on how we could get my people out with a minimum of fuss. They had affidavits of service showing someone served the property owner (who had moved to South Carolina about three years ago), his wife (ditto) and the woman who lived at a next door address for (I believe) at least a decade, all as residents of the subject property.

I objected to this purported service, in our conversation, stating that none of my people had received papers and none of the named people resided in the property. The attorney I spoke with stated, basically, that he had affidavits of service so the action was going forward.

It wasn’t, per se, improper. He did have the proof of his case and it was on me to make the objection. If we had gone to court, I would have, and I wonder how it might have worked out. Instead, all of my people ended up leaving for new housing as the landlord was letting utility service lapse prior to the scheduled court date.

As a lawyer, though, I feel that I can’t just plow ahead. My clients sometimes lie and sometimes they don’t know the truth. If someone brings up a major issue in the case I’m working on, I feel it’s my professional and ethical duty to react appropriately. That might include being noncommittal to opposing counsel but researching behind the scenes. But it shouldn’t mean disregarding what I’m told and turning a blind eye to alleged abuse of process service or improperly commenced proceedings. The willingness of this Baum attorney to base a case on clearly fraudulent affidavits of service gave me an initial impression of this firm that I feel is only proven by all the news stories I keep seeing about their ongoing conduct.

If you take a look at the images that accompany the linked-to stories about the now-infamous Halloween party, you’ll note that the Baum employees were specifically mocking foreclosure defendants who claimed not to have received service of process – a key issue in any such case.

However, I’m torn on this one. I’d rather have seen Baum enter into a deal with Attorney General Schneiderman to pay a fine and reform the way it does business – to work to modify notes to keep people in their homes, with the understanding that abandoned homes, bank-owned foreclosures, and homelessness are to be avoided if possible. Because ninety people are losing reasonably well-paying white-collar jobs here in western New York, I’m not cheering the demise of this firm – yes, there’s a poetic justice with respect to the heartless and unfunny people who mocked the homeless and the victims of the foreclosure crisis, but that wasn’t representative of all the Baum employees who work there now.

I guess I wish those individuals the best, and hope they learned something from the experience.

Ostrowski's Anti-Pork Lawsuit Dismissed

Libertarian activist and attorney Jim Ostrowski had been spearheading a lawsuit brought against several corporations, Empire State Development, and the state of New York, alleging that state business development incentives were violative of the state constitution. The New York State Court of Appeals put an end to that suit in a decision released today.

§8. 1. The money of the state shall not be given or loaned to or in aid of any private corporation or association, or private undertaking; nor shall the credit of the state be given or loaned to or in aid of any individual, or public or private corporation or association, or private undertaking, but the foregoing provisions shall not apply to any fund or property now held or which may hereafter be held by the state for educational, mental health or mental retardation purposes.

Ostrowski filed suit, and the defendants won a motion to dismiss, which was then reversed on appeal to the Appellate Division. At issue in the fight was whether state would continue to have a right to grant money and incentives to various private entities in order to help businesses and create jobs – it goes to the very heart of contemporary state business development strategies.

The Court explains how constitutionality is not only presumed, but that a violation must be found “beyond reasonable doubt”, because the Court had found as far back as 1976 that it will uphold “public funding programs essential to addressing the problems of modern life, unless such programs are ‘patently illegal'” The current prohibition was devised throughout the 19th century to prevent the state from being required to bail out and insure businesses who have received public monies, and to “insulate the state from the burden of long-term debt”. This is why the state created public benefit corporations and authorities. Case law has repeatedly found that public benefit corporations operate independently from the state, and that the state can grant money to them for lawful public purposes.

Because public benefit corporations are independent from the state, the Court finds that Article VII Section 8(1) does not apply to them gifting or loaning money the state has provided to them.

The Court also affirmed grants of public money to benefit things like stadiums, which may provide a private entity with a monetary benefit but also serves a public purpose. As such, county subsidies to the Bills and Rich Stadium may continue unimpeded by constitutional uncertainty. Justices Pigott and Smith offer dissenting opinions, arguing that longstanding practice does not magically render the unconstitutional, constitutional, and that the system merely rewards the well-connected at society’s expense.

It’s quite an interesting read (if you’re used to reading legal opinions) and, absent a constitutional convention, the end of the road for this particular argument.

Bordeleau v. State

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