Tuesday, May 14, 2013

Missing S. Florida Lawyer's Antics Cost Client His Home; Victim Loses $72K Held In Trust, Another $40K Non-Refundable Deposit On Residence Being Bought On Rent To Own Basis

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports;

  • The day before Boca Raton attorney Timothy McCabe disappeared last month he blindsided a Broward County couple with a request to wire him $60,000 to complete their deal to buy a new home, the couple's attorney said Wednesday.

    George and Lori Miquel didn't send the money because they thought they had enough cash in McCabe's trust account — up to $72,000 — for the closing. They soon discovered the money was gone and so was McCabe, said the Miquels' attorney, H. Dohn Williams.

    The Miquels have become the first to file what is anticipated to be a series of lawsuits related to McCabe's April 2 disappearance. The Florida Bar has alleged that more than $3 million is missing from his law firm's trust account and his title company's escrow account.
  • The Miquels knew McCabe's family through North Broward Preparatory School in Coconut Creek, where the attorney's three daughters go to school, Williams said.

    The couple had been depositing money in a trust account controlled by McCabe since April 2011 with some of it to be used to buy a new home, according to the Palm Beach County Circuit Court lawsuit. The Miquels recently had moved into a house near North Broward Preparatory with an agreement to lease it before buying, Williams said.

    They put down a $40,000 nonrefundable deposit for the home, Williams said.

    With McCabe's disappearance, the deal to buy the house collapsed, they lost the deposit and they had to quickly move out, Williams said.(1)

    The April 29 lawsuit, seeking $112,000 plus punitive damages, is not only against McCabe and his law firm, but also names McCabe's wife, Donna, and his law partner, Steve Samiljan, as defendants. Williams alleges that some of the Miquels' missing trust money was used to pay off a $386,000 mortgage on the McCabes' Boca Raton home.(2)

    Samiljan said Wednesday that he had not seen the lawsuit. He said he hasn't heard from McCabe since the April 2 email and he's unaware if McCabe was trying to get clients to wire him money before he left.
For the story, see Boca Raton attorney's disappearance leads to lawsuit.

(1) The victimized client may be able to assert an equitable claim against the home seller that a lease-purchase, contract for deed, installment land sale contract, rent-to-own, or any other similar such arrangement where the victim and his family paid a substantial deposit and has already taken possession of the premises constituted an equitable mortgage, whereby the victimized client would be deemed the equitable owner.

In the event a court deems the arrangement an equitable mortgage, the home buyer will be treated as the holder of equitable title and the home seller's only recourse to recover said title and possession of the premises would be to file a full blown foreclosure action; a simple landlord tenant eviction procedure would legally not be sufficient to recover equitable title & possession..

See, generally., H & L Land Company v. Warner, 258 So. 2d 293 (Fla. App. 2d DCA 1972):
  • The doctrine of equitable conversion is established in Florida. See Arko Enterprises, Inc. v. Wood, Fla.App. 1966, 185 So.2d 734, and cases cited therein. If a land sale contract is specifically enforceable, and is free of equitable imperfections, the vendee becomes the equitable owner of the land and the vendor holds legal title as security for the vendee's performance.

    Moreover, we concur with the decision of the District Court of Appeal for the First District in Mid-State Investment Corporation v. O'Steen, Fla.App. 1961, 133 So.2d 455, holding that an installment land sale contract is in essence a mortgage, and pursuant to Fla. Stat. § 697.01, F.S.A., the safeguards for the debtor and the remedies for the creditor are the same as those between a mortgagor and mortgagee.

    Appellant urges us to disregard the Mid-State holding, on the ground that the installment seller in that case was really no more than one who financed the buyer's purchase from a third party, whereas in the case now before us the installment seller made a direct sale to the buyer. We are unwilling to declare that the Mid-State reasoning is inapplicable here.

    By way of dictum, the Supreme Court of Florida in Huguley v. Hall, Fla. 1963, 157 So.2d 417, recognized that in Florida a defaulting purchaser pursuant to a contract for deed is ordinarily entitled to an opportunity to redeem (sometimes inaccurately called an "equity of redemption"), subject to the protection of a court of equity.
See also, Henry v. Ecker, 415 So. 2d 137 (Fla. App. 5th DCA 1982):
  • [A]s between the parties, when no rights of a third party are involved, such equitable title and interest in the land should not be summarily terminated as forfeited, nor should it be adjudicated in a possessory action at law, but should be terminated only by an action in equity, in which action the purchaser, even one who has defaulted, is always judicially given one last fair equitable opportunity to redeem his right in equity to a conveyance of the legal title to the property by payment of all sums due and by himself "doing equity" as may be necessary.
Go here and go here for a non-all-inclusive survey of some Florida case law on the court-created doctrine of equitable mortgage.

(2) The Florida Bar's Clients' Security Fund was established to reimburse clients who have suffered a loss due to misappropriation or embezzle­ment by a Florida-licensed attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

No comments: