Law Firm of Peters and Freedman Requests Settlement

July 18, 2003

By AHRC News Services
Copyright AHRC News Services

In October 2002, Melissa Colburn was happily living in her condo in the Villas at Eastlake Shores homeowner association in San Diego County, California. Then out of the blue, she suddenly discovered that her condo had been sold to a Carlos Sosa 8 months earlier on February 8, 2002 at a foreclosure sale. She was bewildered. How could this have happened? She paid her mortgage on time. She paid her homeowner association dues on time. What was wrong?

Melissa, the owner of a HASMET company (one that cleans up hazardous spills), all of a sudden had a hazardous spill of a different kind to clean up.

She swung into action. Her attorney obtained a stay of any eviction. She started to investigate and what she discovered has opened a revealing glimpse into the underbelly of homeowner associations.

She found that the law firm for her association, Peters and Freedman of Encinitas, California, had sold her condo to another attorney, Carlos Sosa, who has his office in Encino, about 2 1/2 hours away, for just over $5,000. Her equity is about $75,000.

She employed the services of a private detective and then discovered that Carlos Sosa had purchased 4 other properties in foreclosure from Peters and Freedman, all in homeowner associations. The search revealed no other foreclosure purchases by Sosa. Her attorney, Walter Taylor of San Diego, charged in his complaint against Sosa, Peters and Freedman, the homeowner association and Merit property management company, that
"There is substantial evidence already gathered which demonstrates that the circumstances of these sales between Mr. Peters and Defendant Sosa are more than mere coincidences. That in fact, they are the product of atypical communications and conduct between a supposedly independent trustee and a buyer, which evidences collusion, fraud and covin."

In one of the sales, the owner, George Harder, a New York attorney, when he discovered that he was about to lose his property, filed for bankruptcy to prevent the sale. A bankruptcy judge ruled that the foreclosure had been improper.

But the bankruptcy judge, Michael J. Kaplan, in a letter to David Peters dated December 12, 1996, went a lot further. In a harshly worded letter, which one attorney described as "very unusual", Judge Kaplan stated:

"In my November 8 letter I note the 'dissembling, disingenuousness, mischaracterization and misrepresentations that characterize the earlier written record.' - - - - - - It seems that you cannot be trusted to represent yourself civilly and in good faith here. Consequently, I revoke the authority that my November 8, 1996 letter granted the law firm of Peters and Freedman or its individual members and associates, to submit evidence etc directly to me in this matter. From now on, all submissions shall be through your counsel - - - - - - -."

Melissa Colburn over strenuous objections by Peters and Freedman has been granted permission to file a RICO action against Peters and Freedman.

David Peters of Peters and Freedman pled guilty in June of 2001 to illegally connecting a sewer line from his home to a Cardiff Sanitation District sewer line. He dug a 100 foot long trench that crossed a creek. A shoddy connection caused sewage to empty into the creek that flows into San Eligo Lagoon. Encinitas public works director, Lin Wurbs, said that the illegal sewer hook-up caused about $20,000 in damages.

Peters was ordered to pay $93,000 in fines and damages, and sentenced to 3 years of probation. Deputy District Attorney, Evan Miller, said that the charges would be forwarded to the California State Bar, which will determine if it could affect his standing as an attorney.

In the Colburn case, Peters and Freedman offered to give Melissa her home back and pay $5,000. Melissa categorically refused.

In a dramatic late development Thursday, AHRC News Services has learned that after the New York Times questioned Peters and Freedman on her case, Keenan Parker of Peters and Freedman called Melissa's attorney to discuss a "confidential settlement." No further details have yet been released.