Two Columbia attorneys who allegedly mishandled their clients’ mortgage loan modification case by telling them that filing for bankruptcy was their “only viable option” to obtain a long-term permanent mortgage on their newly constructed house are facing a legal malpractice lawsuit.
As a result of the advice they received from Michael P. Coyle and Alon J. Nager of the now-dissolved firm Chaifetz & Coyle P.C., Dexter O. Tucker and Kimberly Kaye Tucker are dealing with severely damaged credit, are unable to negotiate with financial institutions for a mortgage and may lose their home to foreclosure, according to an amended complaint filed in U.S. District Court in Greenbelt.
The lawsuit, which seeks $2.5 million in punitive damages and at least $15,500 in compensatory damages, was moved from Prince George’s County Circuit Court in March. Coyle’s new firm, Coyle Law Group LLC, was removed as a defendant soon after.
According to court documents, the case settled in June but was reopened July 1 because Coyle did not execute the settlement agreement, which called for him to make a payment within 10 days.
Coyle and Nager are represented by Edward J. Hutchins Jr. and Emily Patterson of Eccleston & Wolf P.C. Hutchins was out of the office and unavailable to comment on the case on Monday, and Patterson did not immediately return a telephone call seeking comment.
In 2006, the Tuckers obtained a “construction to permanent” mortgage from Fulton Bank to finance the building of a custom home.
But in April 2008, with construction on the home almost completed, the bank told the Tuckers that it no longer intended to finance the construction and advised them to sell their existing home and negotiate a separate loan agreement with the builder of the new home, Mona Design Build Inc., which they did, according to the complaint. Under that agreement, the Tuckers began making $2,000 monthly interest-only payments.
Construction on the new home was completed in August 2008, and the Tuckers made a final payment to the bank on the construction loan as a condition of its conversion to a permanent mortgage. However, the bank refused to convert the loan to a permanent mortgage.
After many unsuccessful attempts to negotiate with the bank, according to the lawsuit, the Tuckers eventually refused to continue making the $2,000 interest-only payments to Mona Design, “as Mona and Fulton Bank had a pre-existing undisclosed relationship and appeared to be sharing information and acting secretly in concert, thus undermining the Tuckers’ ability to obtain a permanent mortgage.”
As a result, Mona Design sued the Tuckers in Prince George’s County Circuit Court for defaulting on their construction loan. In March 2011, the Tuckers retained Coyle and Nager to represent them, with the goal of negotiating a “mutually agreeable settlement” with Mona Design.
But instead of pursuing settlement negotiations, the attorneys told the Tuckers that filing for bankruptcy was “the only viable option” to obtain a long-term payment agreement, according to the suit.
“[Coyle] advised the Tuckers that the only way to gain leverage in negotiations with Fulton Bank and Mona was to file bankruptcy and hope the bankruptcy court would set up a 10 year structured payment plan,” the lawsuit states. “The Tuckers did not understand why they should file bankruptcy because they were not struggling financially or behind in their bills other than their refusal to pay Mona under the current interest only agreement.”
The Tuckers consented to bankruptcy in January 2012. However, Coyle and Nager mishandled submission of their monthly financial reports and advised them to stop paying their mortgage but did not tell them this would lead to increased interest and penalties and possibly the foreclosure of their home, according to the suit.
In February 2013, the Tuckers settled with Mona Design for about $100,000, the lawsuit states. They paid the attorneys a total of at least $15,500 to represent them, according to the suit, which alleges legal malpractice and breach of contract.
Mark G. Chalpin, a Gaithersburg-based solo attorney who is representing the Tuckers, did not immediately respond to a request for comment on the case on Monday.
The case is Dexter O. Tucker, et al. v. Michael Coyle et al., 8:15-cv-00682-PWG.