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Plaintiffs in alleged kickback class-action seek second Creig Northrop deposition

Attorneys in a class-action lawsuit against one of Maryland’s largest real estate groups believe a six-word email could help prove an alleged kickback scheme.

The plaintiffs’ lawyers want Creig Northrop of The Creig Northrop Team P.C. to appear for a second deposition and answer questions about communications he made with lawyers regarding a marketing agreement with Lakeview Title Company Inc., an agreement the plaintiffs allege was merely a cover for the kickbacks. The plaintiffs claim Northrop waived any attorney-client privilege with Miles & Stockbridge P.C. in a May 2008 email that was turned over as part of discovery in the lawsuit, according to the motion filed Wednesday in U.S. District Court in Baltimore.

The class-action lawsuit claims The Creig Northrop Team had a “sham” marketing agreement with Lakeview to disguise the more than $500,000 the title company paid the real estate firm for funneling it work. The federal Real Estate Settlement Procedures Act prohibits giving or accepting fees or gifts for referrals of settlement services.

Northrop appeared for a deposition in late March and refused to answer questions related to conversations with his lawyers about the marketing agreement, according to the plaintiffs’ motion filed Wednesday. But a week after the deposition, the plaintiffs found an email exchange between Northrop and an office manager of Long & Foster Real Estate who asked whether Northrop had drawn up an “affiliated business agreement” disclosing his marketing agreement with Lakeview, a document that would become part of every listing and contract. The Northrop Team is part of Long & Foster.

“Attorneys said it was not necessary,” Northrop replied.

The plaintiffs’ lawyers argued that statement to a third party not covered by the attorney-client privilege cancels the privilege, according to the motion to compel, even if the disclosure was unintentional.

“[E]ven though there might not be an affirmative waiver of the privilege, Courts will imply waiver through conduct that fails to protect the confidential nature of the attorney-client communication,” the motion states.

Jay N. Varon, a lawyer for the Northrop defendants, said the plaintiffs’ claim was without merit.

“We regard this as just another garden-variety discovery dispute,” said Varon, a partner with Foley & Lardner LLP in Washington, D.C.

Gregory T. Lawrence of Conti Fenn & Lawrence LLC in Baltimore, a lawyer for the plaintiff class, declined to comment.

According to the motion, the defendants also argued any waiver of attorney-client privilege would be limited only to whether the marketing agreement was required to be disclosed under RESPA. But the plaintiffs’ lawyers countered Northrop disclosed the “substance” of his conversations with his lawyers to a third party, which appellate courts have held means all communications must be turned over.

“Mr. Northrop’s disclosure constitutes a clear statement… that his counsel advised him that he was not required to disclose the Marketing Agreement to his clients,” the motion states.

The underlying lawsuit alleges Lakeview and the Northrop Team entered a marketing agreement in 2008 whereby Lakeview was designated as the exclusive settlement and title company of the Northrop Team in exchange for monthly payments of $6,000, according to the lawsuit. But Lakeview instead paid the Northrop Team up to $12,000 per month despite “no actual record or measure of any real joint marketing or services,” according to the lawsuit.

The lawsuit also alleges Creig Northrop’s wife, Carla, was on Lakeview’s payroll from 2000 to 2007 in a “sham” relationship to hide kickbacks, noting Lakeview did not provide her with an office, phone number or email address.

The plaintiffs’ lawyers estimate the class, which was certified in January 2014, to be between 1,500 and 2,200 plaintiffs.

The case is Baehr et al v. The Creig Northrop Team, P.C. et al., 1:13-cv-00933-WDQ.