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Supreme Court rejects foreclosure lawyer’s pleas

The California Supreme Court refused last month to consider a petition from Calabasas attorney Philip Kramer to stop the State Bar from taking over his law practice. Kramer is one of four lawyers shut down last summer by the bar and Attorney General Kamala Harris for their allegedly illegal loan modification activities.

Kramer had argued before the Court of Appeal that the bar had no authority to take over his practice because the Business & Professions Code section it used is directed at attorneys with mental or physical disabilities. The bar acted under B&P § 6190, which permits the court to assume jurisdiction over the practice of any attorney incapable of devoting time and attention to his law practice necessary to protect clients.

“Kramer’s inability to provide quality service to clients and to devote sufficient attention to his law practice warranted State Bar action,” said Acting Chief Trial Counsel Jayne Kim. “We believed that the Superior Court properly assumed jurisdiction of Kramer’s practice given the evidence presented.”

The bar took over Kramer’s law practice in August, accusing him of abdicating his professional responsibilities with false advertising and by using non-lawyers to bring in clients, set fees, provide legal advice and evaluate cases. Kramer, along with three other attorneys and marketing firms, represented hundreds of clients and collected millions of dollars in fees, according to the bar. Clients paid between $3,500 and $10,000 to join the suit but they rarely, if ever, met with an attorney and the legal advice they were given by non-lawyers was often inaccurate.

Kramer said in a petition to the Court of Appeal that the bar had no authority to take over the practice. The court denied his writ, and the Supreme Court refused to hear his petition.

Harris sued Kramer, three other lawyers, three law firms and 14 other defendants, accusing them of working together to defraud distressed homeowners through a “mass joinder” scam in which individual plaintiffs with separate but somewhat similar causes of action join in a single suit. Mass joinder differs from class action suits in that plaintiffs in a class action share a single judgment, and mass joinder plaintiffs can receive individual judgments or settlements. Harris called Kramer the “ringleader” of the scam.

Kramer’s firm and the other defendants were placed into receivership on Aug. 15 and were enjoined from continuing their operations.