Law Firm Loses Motion To Dismiss Statutory Claim Of Deceptive Acts & Practices
On February 20, 2019, the appellate court hearing appeals from Nassau County agreed that a jury should decide whether a law firm had engaged in a widespread fraudulent marketing campaign aimed at the Hispanic community on Long Island. The plaintiff who was a struggling homeowner with an unaffordable mortgage obligation, retained the Hempstead based Donado Law Firm which heavily advertised their ability to renegotiate and reduce mortgage payments. The plaintiff was allegedly told to stop making mortgage payments as the lender would not reduce payments if they were current. The plaintiff was required to pay up front fees of $5000 and $695 monthly to the law firm.
The plaintiff claimed the law firm negligently advised that he could not renegotiate a mortgage until he defaulted. It was also claimed the law firm sat on their matter until their lender filed forclosure proceedings six months after retention. Plaintiff alleged that the attorneys never returned phone calls and just continued to demand further payments. In essence, the plaintiff claimed, as several other financially distressed homeowners claimed, to be a victim of a foreclosure rescue scam.
The plaintiff incurred substantial penalties and costs for defaulting on the mortgage.The Court held that a violation of General Business Law Section 349 was properly pleaded because “in contrast to a private contract dispute, the practices alleged by the plaintiffs were not unique to these parties and involved an extensive marketing scheme that had a broader impact on consumers at large.” The Court held that the plaintiff had also properly pleaded claims of fraud and legal malpractice. Ramirez v Donado Law Firm, 2019 N.Y. Slip Op. 01244
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