Man paid paralegal $5,500

The scam artists who take advantage of people losing their homes through foreclosure during the recession are scoundrols at best. Unfortunately there are some members of the legal profession that walk on the wrong side of the line that separates those who use their legal knowledge to help the disadvantaged and those who use it to take advantage. Then there are those who take advantage of the vagracies in the term “paralegal” to include themselves in the lagal profession while scamming.

What brings this on? A story in the Scaromento Bee that begins bad and end up worse:

Sacramentans struggling to keep their homes increasingly are suing their lenders for fraud, even though judges rarely rule in their favor.

Desperation has led some of these homeowners to pay thousands of dollars to people who are not lawyers to help prepare their cases. Others hire attorneys in lawsuit mills that aggressively solicit for clients.

“It’s the new scam,” said Tom Layton, an investigator for the State Bar of California.

Of most concern for purposes of this blog is the example given to as an instance of a homeowner paying thousands of dollars to people who are not lawyers:

Sacramento resident Charles Ratliff is among those going it alone. He paid a Southern California paralegal $5,500 to prepare a complaint against IndyMac and others.

He filed his complaint in January. A judge denied his request for an order to stop the foreclosure, saying he was unlikely to win his case. The bank repossessed his house in March. …

He said he was introduced to the paralegal, Camilla Williams, by Sacramento real estate agent Kathleen Petroff, who was working with him on a short sale.

Petroff said she also introduced another one of her clients, Bay Area resident Clifton Constantine, to Williams, but never vouched for the paralegal’s services. She said she took a one-time payment of $200 from Williams but turned down an offer from Williams to pay her $500 per referral. …

Even with an initial discount, Constantine said he wound up paying Williams more than $20,000 for his case in San Francisco Superior Court. The judge issued a preliminary ruling for Constantine’s lenders, but has given him a chance to amend his complaint.

Jim Towery, the State Bar’s chief trial counsel, said people without a law license should not be preparing lawsuits. “It is illegal,” he said. “It falls under the category of the unlicensed practice of law.”

In a brief phone interview, Williams declined to answer questions about her business, including how many clients she has or where she received paralegal training.

“I haven’t done anything illegal,” she said.

When informed of Towery’s comments, Williams said, “I’m not even aware of any law like that.”

OK, there seems to be no end to what is wrong with this scenario and I do not want to minimize any of it, but I do want to focus on the fact that the paper, apparently being subject to the same confusion as many in the general public, refers to this Williams as a “paralegal.” There appears to be no justification for this other than the fact that Williams calls herself a paralegal. While doing what she did appears to be UPL in any state, in most states there is nothing preventing her from calling herself a paralegal. Would the paper have referred to Williams as a lawyer if she claimed to be one but never attended law school, passed the bar, or was licensed?

There has been much discussion on listservs and blogs regarding recent proposed legislation in Florida that would restrict who could be called a paralegal with some people arguing that there is no reason for paralegals to support the legislation because it does not allow paralegals to do anything they are not already doing. This appears to be both short-sighted and to smack of way too much self-interested analysis. One purpose of such legislation is to protect the public. Another is to protect the profession from being tainted by bad apples who are not really even member of the profession’s barrell. The paralegal profession needs to act agressively to educate the public and especially the media regarding the profession to minimize the extent to which people doing bad things are grouped together with true paralegal professionals. This will be difficult to accomplish as long as just anyone can call themselves paralegals.

Two caveats:
1. I have not yet had time to read and analyze either of the proposals being consider in Florida so this post should not be taken as an endorsement of those particular proposals.
2. I realize that this happened in Califoria where there is already someregulation in place. While it has not fully accomplished its purposes, as stated here, it has helped.

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