Legal Ethics

Small Pa. Law Firm Hit With $5.2M Overbilling Judgment

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A Pennsylvania judge has ordered a small practitioner to pay a $5.2 million judgment, including $1 million in punitive damages, for charging unlawful attorney fees while collecting delinquent municipal and school district property taxes.

Ruling in an unjust enrichment case, Judge Mark Bernstein of the Court of Common Pleas held last week that Portnoff Law Associates had intentionally overcharged homeowners being foreclosed upon, reports the Legal Intelligencer in an article reprinted in New York Lawyer (reg. req.). Attorney Michelle Portnoff is the president and sole shareholder of the Montgomery County firm.

Because of the firm’s “intentional disregard of the rule of law,” Bernstein wrote, $1 million in punitive damages was merited in the class action case, in addition to a $500,000 penalty. He also is requiring the firm to pay $2,654,972.98 to reimburse unlawful attorney fees; $510,855 for unlawfully collected administrative fees; $18,493.55 in interest; and an undetermined amount of plaintiffs attorney fees.

“This cavalier attitude toward keeping the money of citizens whose homes have been sold and are entitled by law to the proceeds of the sale cannot possibly be considered mistake, misunderstanding of appellate decision or vain hope of reversal,” Bernstein says in a written opinion. “This can only be considered a knowing and intentional decision to unlawfully retain improperly obtained funds.”

James Christie of Christie Pabarue Mortensen & Young represents the Portnoff firm. He indicates that his client plans to appeal and said the award of punitive damages, in particular, is not appropriate under Pennsylvania law.

The case is Roethlein v. Portnoff Law Associates Inc.

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