SB 800: Defect Attorney Sued for Fraud

As reported by CBIA on June 25th:  “The plaintiff’s construction defect law firm of Milstein, Adelman & Kreger is being sued by eight former clients for fraud, deceit, malpractice and breach of fiduciary duty arising out of their representation in a construction defect lawsuit.  The complaint alleges that the firm obtained blank signature pages that were subsequently attached to a settlement accepted by the Milstein firm without the client’s knowledge and not reported to the firm’s clients for more than eight months after settlement.  One client initially withheld returning the blank signature page and was allegedly threatened by the firm with dismissal of the client’s case.

The complaint provides that the firm settled the case for less than 10 percent of what its own expert estimated the damages to be worth, however, the firm never told its clients of the expert’s estimate. Instead, the firm is alleged to have actively misled and deceived its clients by telling them of a “recent case” decided seven years before being retained by the clients (believed to be Aas v. Superior Court) that weakens the clients’ case.

The firm is alleged to have frightened its clients by telling them of another case in which homeowners recovered nothing after deducting fees and costs. The firm estimated that it would cost $500,000 to $700,000 in costs to proceed to trial and that the “recent case” made it very unlikely that the clients would recover more than approximately $8,000 per home.  The former Milstein clients are seeking punitive damages for intentionally deceiving them, in addition to $1.5 million in damages.”

Read the complaint

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