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New head of State Bar of California assails mortgage modification scammers

Los Angeles attorney Howard Miller lambastes lawyers who claimed to be offering help to homeowners facing foreclosure but did nothing but take their money.

September 14, 2009|Carol J. Williams

Crooked lawyers have long besmirched the profession's image, but the scale of their involvement in the loan modification scandals plaguing California homeowners has taken an unprecedented toll, the incoming president of the State Bar of California says.

The proliferation of complaints against lawyers who said they could help rescue clients threatened with foreclosure has hurt tens of thousands of people and confronted the bar with a mounting and costly disciplinary burden, said Howard Miller, a partner with the Los Angeles plaintiffs' firm of Girardi & Keese.

"There are at least hundreds, and perhaps more, perhaps thousands, of lawyers in California who deliberately reached out to obtain money from people at the most vulnerable point in their lives and, as near as anyone can tell, did nothing to help them," Miller said, vowing to make a priority of punishing such misdeeds during his yearlong tenure.

Miller, 72, ran uncontested for stewardship of the 222,000-member bar and inherited the reins from fellow Los Angeles lawyer Holly Fujie at the state association's annual meeting in San Diego on Saturday.

Among the problems facing the organization, a state audit report in July disclosed that the bar has been spending more and taking longer to discipline wayward lawyers while prosecuting fewer cases. It also criticized the bar for poor accounting, inefficiency and weak internal controls that failed to spot a former employee's embezzlement of nearly $676,000.

"Some of the auditors' criticism is justified. That's why high on my list of qualifications for the new chief trial counsel is management experience," Miller said in an interview.

The board of governors announced in July that it was declining to reappoint Scott Drexel to the bar's top prosecutorial post, while insisting that they weren't bowing to pressure from any interest group in making that decision.

Drexel had been accused of overzealous misconduct prosecutions by lawyers representing those brought before the bar's court. County prosecutors had also sought, unsuccessfully, to get state lawmakers to limit the bar's disciplinary powers.

David Cameron Carr, president of the Assn. of Discipline Defense Counsel, said he hoped that the bar, under Miller's watch, would spend its finite resources more wisely by settling those cases that don't warrant costly and protracted trials.

"The state bar should take appropriate action to protect the public, but that doesn't mean every single discipline case should be treated as a capital murder case," Carr said. "A certain amount of cases can be settled and should be settled, if the office of chief trial counsel would prioritize its prosecutions."

Miller was a key supporter of a new rule of professional conduct requiring attorneys to tell clients if they don't carry malpractice insurance. The California Supreme Court adopted the rule earlier this month after a long and divisive debate over whether the disclosure obligation would unduly burden solo practitioners and small firms trying to provide more affordable services.

Miller said the need the protect clients had to prevail.

The estimated tens of thousands who lost nonrefundable deposits to unscrupulous lawyers advertising their loan-modification services could have benefited from the knowledge that those attorneys were, for the most part, uninsured, Miller said.

California Atty. Gen. Jerry Brown has taken up the cause of defrauded homeowners, partnering with the bar and the California Department of Real Estate to require that mortgage foreclosure consultants register with his office and post $100,000 bond.

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carol.williams@latimes.com

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