Class action suit accuses law firm of swindling property owners
Breaking Legal News - POSTED: 2007/08/10 10:25
Breaking Legal News - POSTED: 2007/08/10 10:25
In the eyes of some home owners there seems to be a collection force worse than the IRS: lawyers hired by burdened cities to gather delinquent property taxes.
Representing Pete Gotcher, and all others similarly situated in the U.S., attorney Gilbert T. Adams filed a class-action lawsuit against the Linebarger, Goggan Blair & Sampson law firm, claiming the attorneys suspect collection methods violate the Texas Tax Code.
The suit was filed on Aug. 7 in the Jefferson County District Court.
For more than 30 years Linebarger Goggan has solely focused on collections.
"The early decision to concentrate our energy and resources on delinquent tax collections in Texas led to successes that have elevated Linebarger Goggan from a 'Texas firm' to the national stage," the firm's Web site said. "The firm is now a major player in the collection industry with over 2,800 clients, serving both the public and private sectors from offices in Arizona, California, Colorado, Delaware, Florida, Illinois, Maryland, Missouri, Ohio, Pennsylvania, Tennessee, Texas and Virginia."
According to the plaintiffs' original petition, Linebarger Goggan has been charging and collecting fees from delinquent Texans that are not "expressly provided for in the state's Tax Code."
"Despite the explicit provisions of the Tax Code and defendant's own contracts which define the total compensation due, these defendants wrongfully and deceitfully demand and extract payments from taxpayers in amounts exceeding those permitted by law for abstract or title search fees," the suit said.
The suit says that in some instances the firm and its lawyers benefit directly as "undisclosed principals" while in all instances the "defendants benefit by passing on their overhead expenses to the taxpayers," and in no instances are the fees a "liability of or payable by the taxing entities."
This is not the first suit of its kind. On behalf of Camella O'Brien, plaintiffs' lawyer Adams first filed a lawsuit against Linebarger Goggan back in 2005.
O'Brien's suit also alleged the firm was "deceitfully scheming" money from taxpayers in "amounts exceeding those permitted by law."
In essence, Adams and his clients argue Linebarger Goggan operate an "illegal and deceptive practice," and maximize the firm's partners' profits by extracting money, "which is in addition to statutorily authorized fees to attorneys," from Texas property owners as "fees" not permitted by the Tax Code.
On the other hand, Linebarger Goggan says the firm places honesty and integrity at the center of its professional duty, the firm's Web site stated.
"The firm has made an uncompromising commitment to the highest ethical standards in the collection industry and the practice of law, reflected in the following actions: the retention of an outside ethics advisor who is a former president of the Texas State Bar; and the establishment of an in-house general counsel who developed, implemented and oversees compliance with the firm's current code of ethics."
The four-count suit faults the firm with fraud, negligent misrepresentation, unjust enrichment and civil conspiracy.
"Linebarger Goggan has developed a scheme, plan or system for the extortion of these monies and concealed their misdeeds," the suit said.
The plaintiffs seek a return of the monies allegedly "illegally obtained," common law and statutory damages, exemplary damages, "and to achieve a formal declaration that such fees are not authorized," the suit said.
Judge Gary Sanderson, 60th Judicial District, has been assigned to the case.