Class action win against foreclosure king Stern
Class action win against foreclosure king Stern
Class action win against foreclosure king Stern

Article Courtesy of The Palm Beach Post

By Kim Miller

Published February 3, 2014


More than 1,000 Florida borrowers will share in a $831,110 class action award for being billed unlawful foreclosure-related fees by the Law Offices of David J. Stern.

The judgment, which is believed to be the first successful class action lawsuit against the former foreclosure titan, was finalized last week by Palm Beach County Circuit Judge Lucy Chernow Brown.

Loxahatchee homeowner Rory Hewitt represented the class.

“I think this has some significance for these large law firms that represent banks and who were exploiting homeowners in various ways,” said Louis Silber, whose West Palm Beach-based law firm Silber & Davis represented the homeowners. “These are people who were living paycheck to paycheck and they were being charged fees that Stern wasn’t entitled to.”

Filed in 2009, the suit challenged the costs charged by Stern’s firm to deliver additional foreclosure summonses on “John and Jane Doe” and other unknown parties who may have claims on a property.

It had been common practice for law firms to

Foreclosure paperwork piles up in Palm Beach County in 2010.

serve foreclosure paperwork on homeowners, as well as separate summonses for “unknown tenant,” or “unknown spouse,” even if the borrower is single and is not renting out the property.

A typical summons delivery charge is $45. The suit also claims that in bills issued to reinstate a mortgage, Stern’s firm charged borrowers for future loan payments and attorney fees not yet due.

Stern’s attorney Jeff Tew did not want to comment on the case. He has 30 days to appeal the ruling.

Chernow Brown said in a September 2012 ruling in the case of Rory Hewitt vs. the Law Offices of David J. Stern that there is no legal basis or justification for issuing a summons made out to an unknown party, and that attempts to collect payment on those summonses violates the Florida Consumer Collection Practices Act and the Florida Deceptive and Unfair Trade Practices Act.

“Further, the court finds that the defendants, who are a law firm and its managing partner, have knowledge of the law and have knowledge that they are attempting to collect a debt that is not legitimate,” the order says.

The 1,107 class members won’t receive a windfall from the judgment. Individual amounts range from $451.67 to $2,700 depending on the borrower’s claim.

“It’s not going to change the lives of these people, but the total result of more than $800,000 is not an insignificant amount,” said Silber, who prosecuted the case with co-counsel Kirk Friedland.

Prominent foreclosure defense attorney Matt Weidner said the judgment itself is landmark because it was won under the unfair trade practices act and is the “first sign of any real consequence against people who have done so much harm.”

Florida Attorney General Pam Bondi tried to investigate Florida’s large foreclosure mills using the Florida Deceptive and Unfair Trade Practices Act, but was ultimately told by the courts that she couldn’t pursue the firms under the act.

“Finally there is some judicial enforcement of these very heroically titled laws,” Weidner said. “It’s a powerful judgment.”

Stern was disbarred by the Florida Supreme Court earlier this month.