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The Florida Bar vs. David J. Stern

The Florida Bar filed a complaint Friday against foreclosure attorney David J. Stern, whose now-defunct Plantation based firm was once the largest foreclosure mill in the state. 

Filed in the Florida Supreme Court, Stern is alleged to have violated bar rules by failing to produce documents as ordered by the Fifth District Court of Appeal in February.

The complaint requests an investigation to determine why Stern ignored the court order to file documents and is asking for disciplinary action.  The complaint does not suggest what action should be taken if Stern is found culpable. 

Florida Bar sanctions range from public admonishment to disbarment.

One of the rules Stern allegedly broke: “A lawyer shall not knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists,” the complaint states.

According to the complaint, the Law Offices of David J. Stern represented SunTrust Bank in a lawsuit against Mortgage Electronic Registration Systems.  

In February, the district court of appeal issued Stern’s firm an “order to show cause” which asked him to prove why sanctions should not be entered after he neglected to file certain documents “in a timely manner.”  Stern allegedly ignored this order.

“Respondent failed to produce the documents and has otherwise failed to respond,” the complaint said.

On March 14th, the matter was referred to the Florida Bar to determine why Stern did not obey the court order.  As investigations into the robo-signing controversy were well underway, the Law Offices of David J. Stern and Stern himself amassed a number of complaints and lawsuits against them.

The law firm and a number of its former employees are rumored to be under criminal investigation by state and federal authorities.

Once the largest foreclosure firm in Florida and one of the largest in the nation, the Law Offices of David J. Stern lost Freddie Mac’s business last November over foreclosure documentation issues, and Fannie Mae’s shortly thereafter.  

On February 25th, the Florida Attorney General launched a civil investigation into several foreclosure mills across the state, including Stern’s.  In March, the firm stopped trading on the Nasdaq stock exchange.

Stern closed the Law Offices of David J. Stern on March 31st.

Stern’s attorney – Jeff Tew, of the Miami-based Tew Cardenas LLP – told The Palm Beach Post that his client was fired from SunTrust in mid-December, prior to the issuance of the February 16th order.  

Tew said it was possible that Stern missed the court order among the 10,000 pieces of incoming mail received daily.

“David is not guilty of any violation of the Bar rules and we will vigorously defend this complaint,” Tew said.

From the complaint:

On or about February 16, 2011, the Court entered an Order to Show Cause requiring respondent to show cause why sanctions should not be entered against him for his failure to timely file certain documents in accordance with a prior Order of the Court. A true and correct copy of the February 16, 2011 Order is attached hereto and incorporated herein by reference as The Florida Bar’s Exhibit A.

Respondent failed to produce the documents and has otherwise failed to respond.

On or about March 14, 2011, the Court referred this matter to The Florida Bar for “investigation and consideration of appropriate disciplinary action for failing to comply with the February 16, 2011 Order.” A true and correct copy of the March 14, 2011 Order is attached hereto and incorporated herein by reference as The Florida Bar’s Exhibit B.

By the conduct set forth above, respondent violated the following R. Regulating Fla. Bar:

A. Rule 3-4.2 [Violation of the Rules of Professional Conduct as adopted by the rules governing The Florida Bar is a cause for discipline.];
B. Rule 4-3.4(c) [A lawyer shall not knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists.]; and C. Rule 4-8.4(a) [A lawyer shall not violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another.].

WHEREFORE, The Florida Bar respectfully requests this Court enter an Order appropriately disciplining the respondent in accordance with the applicable provisions of the Rules Regulating The Florida Bar as amended.

Read the full complaint here courtesy of The Palm Beach Post.

“The complaint against Stern seems insignificant in light of the various investigations pending against him,” says Carlos J. Reyes, a foreclosure defense attorney with the Reyes Law Group in Fort Lauderdale.  “I believe this is the tip of the iceberg.”

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