Despite $600K Oversight Role, Law Firm Missed Dual Hats Worn by Attorney-Developer
Posted Jul 12, 2010 6:07 PM CDT
By Martha Neil
As plans progressed to build a new $200 million family court building in Philadelphia, the chief justice of the Pennsylvania Supreme Court brought in a lawyer who had formerly served as the chief of staff to the state's governor to oversee the deal.
John Estey was chosen specifically because of his state-government expertise, Chief Justice Ronald Castille said in a May interview. "He knows all the people out there. We hired him because we wanted another pair of eyes looking at this thing," reports the Philadelphia Inquirer.
But although Estey and his law firm, Ballard Spahr, charged the court system some $600,000 over 18 months to review documents and oversee the family court project, he apparently saw obtaining the $200 million for the project from the state as his primary role, according to the newspaper. Plus, because an attorney at another law firm who was involved in the project, Jeffrey Rotwitt, also was representing the courts, Estey said, he didn't scrutinize the Obermayer Rebmann Maxwell & Hippel partner's role closely.
"I think we're allowed in good faith to assume he's complying with the rules," says Estey of potential conflicts concerning the fellow lawyer.
But there was a whopper of a conflict, some now contend: the $12 million or so in fees that went to Rotwitt, a co-developer, architects and others concerning the court construction project.
Rotwitt says he did nothing wrong, disclosing his role as a developer both orally and in documents, and taking the new development job on only after he had completed his initial work as a lawyer working for the courts. However, he was reportedly fired from his firm's partnership after the deal came to light this year.
Although Rotwitt's project developer role could be ascertained from documents and public records, Estey and others at his firm apparently didn't notice it. They did object to fees being paid to the developer before a firm deal to construct the building was negotiated, but Castille overrode those objections for fear that not making the payments could delay or derail a much-needed new family court, the newspaper says.
Especially in a government project, it's important for lawyers reviewing documents to know who's who to make sure there are no improper relationships, attorney Ellen Brotman of Montgomery McCracken Walker & Rhoads tells the Inquirer. "If you're reviewing documents and a new party steps into the transaction or there's someone you don't know, you want to ask some questions."
For more details, read the full story.
ABAJournal.com: "Longtime Obermayer Partner Is Fired Over Phila. Family Court Development Deal"