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Tuesday, August 12, 2008

Jail and Fines Given to Solo Who Withheld Down Payment

Jail and Fines Given to Solo Who Withheld Down Payment
The New York Law Journal by Mark Fass - August 12, 2008

A Brooklyn attorney who refused for more than two years to return a $30,000 down payment in a failed real-estate deal, even after her client died and his estate engaged new counsel, has been sanctioned $10,000 and ordered to pay more than $40,000 in costs. Solo-practitioner Regina Felton eventually returned the $30,000, as well as more than $6,000 in interest, in April 2008, after spending 11 days of a six-month sentence on Riker's Island for civil contempt of court. Last week, Brooklyn Supreme Court Justice Arthur M. Schack (See Profile) issued a written decision adding costs and imposing the maximum sanction for Ms. Felton's "frivolous conduct." "Clearly, the pattern of defendant Felton's conduct in the instant action is subject to costs and sanctions," he held in Astrada v. Archer, 34401/05. The decision will be published Thursday.

"Ms. Felton's intransigent conduct, demonstrated by her refusal to return the down payment with the accrued and statutory interest to plaintiff, compelled plaintiff to commence the instant action and motion practice." Ms. Felton declined yesterday to discuss this specific decision, though she said she already had other appeals pending in the same matter. The present dispute dates to a failed 2005 real-estate contract between plaintiff Faith Astrada and Ms. Felton's then-client, Hulbert Archer, for Mr. Archer's Clinton Hill, Brooklyn, home.

According to Justice Schack's decision, that deal fell apart for several reasons, all attributable to Ms. Felton. Primarily, the transaction was needlessly stretched out for 18 months as Ms. Felton pursued a "certificate of no harassment" on the errant belief that the building was registered as a single-room occupancy. That delay led to the expiration of Ms. Astrada's mortgage commitment. Ms. Felton also failed to adequately address a lis pendens filed against the property, instead submitting to the court a "total and complete fabrication" on the issue, Justice Schack wrote. Namely, Ms. Felton claimed to have secured a stipulation that the debt would be paid out of the proceeds of the closing, although she attached in her papers only an unsigned, unexecuted proposal for a stipulation. Ms. Felton also filed a complaint against Ms. Astrada's original attorney for communicating directly with her client and his wife, even though the allegedly improper letter was required under the "inartfully drafted contract and rider" composed by Ms. Felton.

Ms. Felton refused to return the payment despite numerous orders. At an April 7 hearing, she finally brought a check for the $30,000 payment, though it only included the actual interest of $438, rather than the statutory interest of $6,608. When Ms. Felton said she would not produce the additional funds if given an hour to do so, Justice Schack ordered her to jail. Not wanting to miss an opportunity to collect the $30,438, Ms. Astrada's attorney, James T. Gerardi of East Northport, asked the judge during the hearing to retrieve the check before sending Ms. Felton to Rikers. "Your Honor, may I ask the Court to compel Ms. Felton to deliver the [check] she has put in her pocket?" Mr. Gerardi asked, according to the hearing transcript. "The money is here." "Ms. Felton, will you be willing to hand over the $30,438.81 check?" Justice Schack asked. "No," Ms. Felton answered, "I am not." The judge declined to forcibly compel her to remove the check from her pocket and hand it to Mr. Gerardi. On April 18, she made the full payment, including an additional 11 days' interest, and was released from jail.

Sanctions Justified

In a 32-page decision handed down last week, Justice Schack ruled that, all told, Ms. Felton's actions merited the highest sanction permitted for "frivolous conduct" under 22 NYCRR Sec. 130-1:1(c). "In the instant action, a reasonable attorney would have refunded plaintiff her down payment after the real estate contract was unable to close," Justice Schack wrote. "Further, a reasonable attorney would not make material misrepresentations to the Court, comply with Court orders that are not stayed, and not subject the reasonable attorney from being found in contempt for willful failure to comply with Court orders. It is clear that Ms. Felton's course of conduct in the instant action is not reasonable." In addition to the $10,000 sanction, Justice Schack also calculated costs of $40,600, including the approximately $24,682 in legal fees Ms. Astrada accrued attempting to recover her $30,000. The decision marks the second time this summer that Justice Schack has ordered Ms. Felton to pay an adversary five-figure costs.

In July, he ordered her to pay defendant United Equities Inc., $13,000 for refusing to discontinue a real-estate action even though it was "crystal clear" she had sued the wrong entity. (NYLJ, July 8.) "Obviously this judge has some vendetta against me," Ms. Felton said yesterday, noting that no other judge has deemed her "frivolous" in her 30-year career. "This is a judge who has an ax to grind." Justice Schack declined yesterday to discuss the matter. Ms. Astrada's attorney, Mr. Gerardi, could not be reached for comment. Mr. Archer's estate finally sold his home in December 2007 for $480,000, according to the Web site Trulia.com. Citing confidentiality, the Committee on Character and Fitness for Admission declined to state whether any complaints have been filed against Ms. Felton. A representative for the Appellate Division, Second Department, said that Ms. Felton is in good standing and has never been suspended or publicly censured. - Mark.Fass@incisivemedia.com

5 comments:

Anonymous said...

What do you expect? Lawyers (and judges) have been taught that anything goes..... And they'll (OCA big shot jerks) only go after you when someone connected id's you as a target, a non suck-up player.

So, the system sets you up to do a lot of wacky things, actions that are routinely exhibited by other lawyers and judges on a daily basis, and they do this so they have something to use against you if they ever have the need. This is our "legal system" at work in NY. Pretty bad stuff.

Anonymous said...

Attorney Felton served a purpose : a sacrificial lamb to be slaughtered, thus, giving the appearance that everyone is on top of it all.

Every so-called check and balance agency set up to allegedly protect the rights of the citizen are only created to whitewash it thru a filter and minimize the damage to the connected.

nobody really believes anything anymore.

People are shaking their heads with the presidential election. Never saw so much distress with so many folks. They are trying to figure out not who to vote for more than they want to find out who NOT to vote for.

Same thing we these criminals posing as our protectors. It is about them and only them.

Anonymous said...

sometimes one of the bad ones get it as in this case. This shows that these criminals do whatever they want and almost always get away with it, they make it up as they go along. To fight this type of thing takes alot of money and that's what they also know. There is no JUSTICE in the American IN-JUSTICE System..............

Anonymous said...

this witch was probably trolling for new business while she was in jail. Take her license, she is a disgrace.

Anonymous said...

bessides for the interest how about the years and time that it took to go after that lawyer.
If it was a simple mistake now that it was cleared up pay the people. it obviusly theft and she should be forced to pay it back and go to jail and they should take her lic.
Judges are to easy on these people.

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