Bankrupt class plaintiff lacks standing, Delta Funding argues
Lakin Law Firm class action plaintiff Douglas Pichee failed to report a claim against mortgage lender Delta Funding in a bankruptcy petition he filed, according to Delta Funding attorney Robert Bassett.
Bassett asked Circuit Judge Daniel Stack for summary judgment July 26, arguing that Pichee lacked standing to sue Delta Funding.
Bassett wrote that Pichee's claim became property of the bankruptcy estate and could only be asserted by a bankruptcy trustee.
"The law is quite clear that, by failing to list his claims against defendant, Pichee did not thereby entitle himself to keep these claims as his own property to advance for his exploitation in private litigation," Bassett wrote.
Pichee sued in 2003, complaining that Delta Funding charged $10 each for two facsimile transmissions when he closed a loan.
The Lakin firm filed his suit and about 26 other proposed class actions over mortgage fees from 2002 to 2004.
The plaintiffs closed their loans through Centerre Title, a company Alton attorney Emert Wyss owned and operated next to his law practice.
Wyss invited former Centerre Title clients to his law office and told them they might claim damages over fees they paid.
Some former clients signed retainers for services of the Lakin firm and three other firms.
Wyss stood to collect a tenth of the proceeds but his name did not appear on the complaints the Lakin firm filed.
A name that did appear caught someone's eye.
Malik Diab, a Chicago attorney on the Lakin team, had formerly defended Countrywide Home Loans in suits over fees.
When the Lakin team sued Countrywide, attorneys for the lender spotted Diab's name and protested.
Countrywide moved to disqualify the entire Lakin team for improper communication, but Circuit Judge Phillip Kardis denied the motion.
No judge has certified a class action in any of the mortgage fee claims that Diab, Wyss and the Lakin firm assembled.
Pichee's claim against Delta Funding passed from Kardis to Circuit Judge Don Weber last year after Kardis retired.
The Lakin firm moved to substitute Weber, and Weber allowed it.
In Illinois any party can substitute a judge once without cause, if the judge has not made a substantial ruling.
Pichee's suit bounced to Stack in April.
In Bassett's motion for summary judgment he told Stack that faxes allowed Pichee to refinance his mortgage more quickly than if he had waited for a mailed copy of his payoff statement
He wrote that Delta Funding did not charge for mailing statements and it faxed statements only on request after disclosure of the fee.
Years after the closing Wyss reviewed Centerre Titles files at the request of another attorney with assistance from a Chicago attorney, he wrote.
Pichee stated in a deposition he was unaware that Wyss no longer represented him, he wrote.
Pichee filed a bankruptcy petition in 2002.
Pichee did not disclose any potential claims against Delta Funding, "…even though these claims, to the extent they even really exist, existed when he filed for bankruptcy," he wrote.
Weber recently granted summary judgment to National City Mortgage in a similar case, he wrote.
He quoted Weber: "Plaintiffs were apparently pleased about their new mortgage since they did not object to the fax fee for four years and until they were contacted by the class action attorneys."
Although the Lakin firm has led the mortgage fee suits from the start, a certificate of service with Bassett's motion listed Paul Weiss of Freed & Weiss, in Chicago, as first counsel for the plaintiff.
Bassett then named Diab and his partner in Chicago, Phillip Bock.
Last he named Paul Marks, L. Thomas Lakin, Bradley M. Lakin, Richard Burke and Gary Peel, identifying them with the Lakin firm.
If someone served Bassett's motion on Tom Lakin and Gary Peel, those two would not have much capacity to respond.
In March, Tom Lakin placed his law license on inactive status.
In the same month, Peel left the Lakin firm after a federal grand jury indicted him on charges of obstruction of justice, bankruptcy fraud and possession of child pornography.