To the Editor:

I represented Phelan Hallinan & Diamond and affiliated parties in having all six counts of Charles and Diane Gileses’ complaint dismissed with prejudice, including the RICO claim, which was the subject of the article titled " Law Firm, Bank Shielded From RICO Claims Over Foreclosures".

Respectfully, the article misses the import of Judge Jerome Simandle’s decision, instead confusing readers into thinking that Phelan acted improperly and got away with it because of a legal technicality. While the court did find the Gileses’ claims precluded by the Noerr-Pennington Doctrine, that is an alternative holding. The complaint was dismissed for substantive reasons as well: The Gileses could not plead facts that would allow the court to conclude that the conduct they complained of — even assuming it was true, which it was not — caused any damage to them. The court was certain enough no such facts existed that it did not see a need to have to analyze the numerous other reasons why the Gileses’ complaint also failed to establish a RICO claim.

The court heard oral argument on our motion to dismiss the RICO claim for two-and-a-half hours. We showed that the fees charged to the Gileses’ account — which they never paid anyway — were all approved by the state foreclosure court. We showed that there was no dispute as to the Gileses having failed to pay their mortgage, which was taken out many years after 9/11. We showed that the Gileses offered no defenses in the state court foreclosure, except claiming there was a mistake in naming the party who was the trustee of the trust that owned their mortgage. The Gileses never dealt with any trustee and were unaffected by this mistake, which was nothing more than a simple mistake — not designed to take advantage of anyone. The state court found it to be just that, and allowed the pleadings in the foreclosure action to be amended to reflect the correct name. Indeed, as Judge Simandle pointed out at oral argument, if the correct name had been used from the beginning, the Gileses would have been worse off, as the foreclosure would have ended earlier.

We also showed that the Gileses’ attorneys had searched cases from the date of the mistake in 2006 to 2011 and later and found no evidence of other similar mistakes. The court thus concluded that the Gileses were not entitled to discovery or a trial because the Gileses’ allegations — however sensational they may seem — did not amount to a plausible case.

Unfortunately, it is another sorry example of mortgagors’ lawyers rushing to point fingers at parties like Phelan without first verifying the facts and checking the law.

Kenneth S. Goodkind
Cherry Hill