E-Alerts & Press Releases

Court Restricts Attorney Fees in Tax Sale Foreclosure When Plaintiff and Attorney Are Related

August 22, 2008: Circuit Court Judge Evelyn Cannon continues to hold the line on attorney's fees in tax sale foreclosure proceedings. In a new decision that refines her analysis of what constitutes reasonable attorney's fees appropriate for reimbursement by defendants to plaintiffs in tax sale foreclosure cases, Judge Cannon has focused on the relationship between plaintiff and plaintiff's counsel and the extent to which a less-than-arm's-length relationship may affect whether the plaintiff actually incurs the fees and thus actually pays or is obligated to pay them. For example, where the plaintiff's lawyer or a member of his immediate family owns a 100% interest in the plaintiff, and the plaintiff has actually paid no attorney's fees for the tax sale foreclosure proceeding, the court has determined that the defendant cannot be required to "reimburse" the plaintiff for attorney's fees claimed. The court has also established detailed guidelines for future disclosures that will be required in support of such claims, in order that the court can determine whether fees have truly been paid or incurred and thus may be passed on to defendants. The issue of the relationship between plaintiffs and plaintiffs' counsel is one that the PJC's Legal Director highlighted and urged the court to scrutinize carefully in an amicus memorandum filed at Judge Cannon's request in an earlier proceeding, previously reported on in these E-Alerts.

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