The following is the full text of my editor’s column from Minnesota Lawyer, which we are making available to our blog readers as a special blog extra.
‘Tis the season for pro bono
We are reaching that time of year again when it’s nice to throw off the coat and scarf, curl up by the fire, grab a mug of hot cocoa and settle down to a nice holiday story. We at Minnesota Lawyer try to oblige with a fe
el-good story or two from the legal community. This week’s entry was spawned by a recent ruling by Judge Patrick Schiltz.
The facts of the case — which involve a particularly loathsome example of a fraudulent equity scheme — won’t make anyone feel good. In fact, it’s a tale of deceit that would make a Dickensian villain blush.
The victim is an elderly woman targeted by the defendants — whom Schiltz pithily describes as “until recently a married couple” — when her house went into foreclosure. At that time the woman had a duplex worth about $470,000, approximately $170,000 of which was her equity.
The defendants’ company contacted the woman and offered to refinance her mortgage to help her save her house from foreclosure. In fact, the couple tricked the woman into unknowingly selling her house, and did not turn over any of the $160,000 in net proceeds that the sale generated.
However, Schiltz goes on to note in the opinion, “This, however, was apparently not enough for [the defendants].” They induced the women to pay rent on the property thinking she was making mortgage payments. The defendants also arranged for the third party who had bought the house from the woman to resell it. (One of the defendants actually had the nerve to pocket a $100,000 commission on the sale, representing 20 percent of the sale price!)
Schiltz granted the woman summary judgment on her claims of unjust enrichment and conversion. The judge also granted the woman summary judgment on her fraud claim for the $12,000 in “rent” that she paid.
Is this the holiday happy ending? Not quite. First of all, the elderly plaintiff does not get back the house that she and her late husband purchased in 1958. Secondly, any judgment is likely to prove mostly uncollectable as the defendants are believed to have little to no assets. (There was a separate settlement with some banks involved, but the terms of that are confidential.)
So far not a story that inspires a lot of cheer and goodwill toward men, is it?
But there’s one thing I haven’t mentioned yet — what this woman paid for legal fees in her nearly two-year odyssey through the federal justice system. Her legal team — drawn from one of the biggest firms in town, Faegre & Benson — has at times included up to four lawyers and support staff. They have spent hundreds of hours poring through legal documents, investigating causes of action and preparing the case for motions and trial. (The defendants pleaded the 5th Amendment, making the investigation even harder than it otherwise would have been.) What, you may ask, has the all this legal attention cost this poor woman? Not a blessed thing; Faegre is handling this case on a pro bono basis.
The two principal Faegre attorneys on the case are associate Peter Hennigan and partner Eleasalo Ale.
There are many lawyers who volunteer their time and efforts in a similar fashion. Often their contributions go by unheralded. But thanks to Schiltz, that did not happen in this case.
In a highly unusual footnote in a Dec. 1 ruling in Paulson v. Beliveau, the federal judge wrote: “Hennigan and Ale are representing [the plaintiff] pro bono. The Court commends them on their extraordinarily thorough and careful work.”
I asked Ale if he was surprised to have garnered such recognition, and he wryly responded, “I’m always surprised by what judges do.”
On a serious note, Ale expressed appreciation for Schiltz’s kind words. “It’s humbling, and reaffirms what we are doing is worthwhile.”
In the true spirit of the holiday season, Ale was also not one to hog the glory.
“This case has been a team effort, and Peter Hennigan has done most of the heavy lifting, including arguing the motion,” he told me.
Hennigan confirmed that he personally has put somewhere around 375 hours into the case, with other lawyers in the firm putting in hundreds of hours more.
Hennigan told me it was easy to identify with his client, whom he described as everybody’s grandmother. He also pointed out that the home that she lost is just two blocks away from his home in south Minneapolis.
Even if the defendants turn out to be judgment-proof, the woman may have recourse. Hennigan pointed out that there is a real estate recovery fund for those who are defrauded by licensed real-estate agents. The first step in getting reimbursement is the avenue the lawyers are currently following — getting a judgment. So even once a verdict against the defendants is entered, there will still be much work to be done in the case.
Despite all this effort, Hennigan, like Ale, said Schiltz’s singling them out for praise was “unexpected.”
“It was nice of him to do that,” Hennigan said. “We were just doing our job.”
Mark A. Cohen in the editor-in-chief of Minnesota Lawyer. He can be reached at (612) 584-1531, or by e-mail at mark.cohen@minnlawyer.com.
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You’re so right, the facts are egregrious, outrageous, and extraordinarily heinous BUT Kudos to Faegre & Benson and their attorneys Hennigan and Ale. It’s nice to hear about the good ones.
-RFW
http://scaccesstojustice.wordpress.com
[...] by Barbara L. Jones Last Christmas season, we brought you some holiday cheer in the form of a post about the pro bono efforts of attorneys who spent hundreds of hours helping an elderly woman who [...]