Earlier this month, Civil Beat published a very good story by John Hill reviewing a precendent-setting decision by the Hawaii Supreme Court in a case involving foreclosure of a Big Island home due to a dispute over a $500 repair (“How A Reverse Mortgage Lender Took A Hawaii Man’s Home Over A $500 Repair“).

The high court found the lender, James B. Nutter & Co., and its attorney had “committed fraud against the court, assuring a judge that all the proper steps had been taken for a foreclosure when they hadn’t,” Hill reported. “Not only that, the Supreme Court said in its decision last week – basic fairness should have prevented a person being ejected from his home over a $500 repair anyway.”

Civil Beat mistakenly identified the lender as “Joseph B. Nutter & Co.”

The case underscores both the dangers of fine print used by unscrupulous lenders, but also the issue of fraudulent practices by attorneys and law firms representing lenders.

Hill identified the attorney who had represented Nutter in the foreclosure action where the fraud occurred as Robert Ehrhorn who, Hill notes, “has since voluntarily made his law license inactive, meaning he is no longer eligible to practice.”

Although not reported in Hill’s story, Ehrhorn was an associate in the law firm known at the time as Clay Chapman Iwamura Pulice & Nervell, which recently changed the firm’s name to Clay Iwamura Pulice & Nervell, dropping named partner Robert Chapman.

The Supreme Court’s allegation of fraud in this mortage foreclosure case is not the only recent fraud allegation against attorney’s with Ehrhorn’s former law firm.

The firm’s name change followed the resignation of Robert Chapman, a named partner, who “voluntarily” surrendered his law license in lieu of discipline after being accused of fraud by the state’s Office of Disciplinary Counsel.

An ODC investigation had found Chapman committed numerous “egregious violations” of the court’s Rules of Professional Conduct over a five year period by fraudulently pursuing collection $2 million in “unclaimed property” belonging to a former client without their knowledge or consent by creating and using “fraudulent Power of Attorney documents.”

In an affidavit filed with the Supreme Court when turning in his original law license, Chapman said he had not arranged to return case files to any clients because each client for whom he performed any services were clients of the firm.

“Each and every one became a client of the Firm, not of myself personally,” Chapman wrote.

The firm’s responsibility, if any, in the apparent fraud was not addressed in either case.

And, as a footnote, the U.S. Department of Justice filed suit against Nutter Home Loans, formerly known as J.B. Nutter & Co., in September 2020 for “forging certifications and using unqualified underwriters to approve Federal Housing Administration (FHA) insured Home Equity Conversion Mortgages (HECM).”

Late last year, in the wake of the DOJ lawsuit, the company closed its doors and went out of business.

See:

“Fraud allegations lead to resignation of prominent business attorney,” iLind.net, Dec 29, 2022.

“News media turn a blind eye to attorney misdeeds,” iLind.net, Jan 17, 2023.