First Judicial District of Pa. files suit over botched Family Court deal

By Jon Campisi | Nov 7, 2011

The chief justice of the Pennsylvania Supreme Court and the entire First Judicial District of Pennsylvania have filed a lawsuit over the botched plan for a new Family Court facility in Philadelphia.

Veteran Philadelphia attorney Richard A. Sprague filed the civil action on behalf of the judicial district and Chief Justice Ronald D. Castille Nov. 1 at Philadelphia’s Common Pleas Court.

It names as defendants Radnor, Pa. attorney Jeffrey B. Rotwitt, his former law firm of Obermayer Rebmann Maxwell & Hippel, and the Deilwydd Property Group, a limited liability company that shares the same address as that of Rotwitt.

The legal malpractice claim was filed to recover funds that Castille said the courts were fraudulently misled into paying relating to the Family Court building that was planned to be constructed at 15th and Arch streets in Center City, Philadelphia.

The First Judicial District of Pennsylvania, commonly known as Philadelphia’s court system, retained the services of Rotwitt and his law firm back in February 2006 at the direction of the Pennsylvania Supreme Court, according to the complaint.

Rotwitt, chairman of Obermayer’s business and finance department at the time, was chosen because of his apparent trustworthiness; he served as legal counsel to the First Judicial District at the time.

At the time Obermayer was chosen as the involved law firm in the Family Court deal, it was made clear that any fees would be paid to the firm by the eventual provider of the new facility, and not upfront by the First Judicial District, the suit claims.

However, once involved in the project, the complaint alleges, Obermayer, through Rotwitt, “induced the FJD [First Judicial District] to begin paying it and others involved in the project substantial amounts of the FJD’s own funds from a dedicated account by misleading the FJD into believing that the project to develop the new facility would be jeopardized unless funding was begun immediately.”

In early 2007, the lawsuit states, Rotwitt began talks with Donald Pulver, a Conshohocken, Pa.-based developer who owned air rights to the 15th and Arch streets location.

“By July 2007, while the FJD was still evaluating potential sites, Rotwitt had secretly negotiated a ‘50/50’ fee-splitting deal with Pulver that would funnel millions of dollars into Rotwitt’s own pocket – but only if the facility was built at the 15th & Arch site,” the lawsuit claims.

From that point forward, the suit states, “in abject breach of his duty of undivided loyalty to the FJD, Rotwitt continuously guided his client toward the 15th & Arch Site.”

The suit also alleges that Rotwitt used his connections with former state Sen. Vincent Fumo to amend the 2007-08 capital budget legislation to require, as a condition of $200 million in state funding for the project, that the new Family Court be built at the 15th and Arch Street location.

(Fumo was convicted in 2009 of various white-collar crimes unrelated to this case. He was sentenced to 55 months in federal prison. Prosecutors are currently appealing his sentencing, contending he should have been given more time behind bars).

The complaint also states that when then-Gov. Ed Rendell delayed the release of Family Court project funding after the passage of the 2008 capital budget, Rotwitt took advantage of the delay by “repeatedly and falsely” warning Chief Justice Castille, the First Judicial District’s liaison on the facility project, that if the FJD didn’t immediately begin paying for past and future services, Rotwitt and his team would be forced to abandon the project, thus causing it to fail.

Using this threat, Rotwitt induced Castille and the FJD to execute a series of interim funding agreements, the suit states, which enabled large amounts of monthly payments to be funneled to Rotwitt and Pulver, (who was not named as a defendant in the civil suit), and to the design people and other professionals working on the project.

The fact that taxpayer money was used forced Castille to hire an investigative consultant, Chadwick Associates, to determine a full public accounting.

Last week, the Philadelphia Inquirer reported that Chadwick’s report, originally anticipated to be released publicly, will be shielded from public view for the time being, since it will be used as supporting evidence in the civil case.

The complaint alleges that Rotwitt went to “extraordinary lengths to conceal his secret fee-splitting scheme from Chief Justice Castille and the FJD.”

“These actions by Rotwitt clearly evidenced his belief that Chief Justice Castille and the FJD would not have condoned such self-dealing and would have terminated Rotwitt’s role in the Project had they known of the secret fee-splitting agreement.”

Rotwitt was able to pocket $825,000 of the public’s money between October 2008 and May 2010, the lawsuit states. That May, the Philadelphia Inquirer exposed the alleged shady dealings in an investigative report.

The Inquirer previously reported that Rotwitt was fired from his position of 35 years with Obermayer in May 2010, the day after Castille killed the planned Family Court deal.

Had the fee-splitting deal not been exposed, the lawsuit claims, Rotwitt could have pocketed at least $2,615,000 under the FJD funding agreement. The sums were in addition to the more than $1. 5 million that the FJD paid to Obermayer, the law firm, for Rotwitt’s and its other lawyers’ services during that same time period, the suit claims.

“This action is brought to recoup the millions of dollars wrongfully appropriated by the defendants, as well as the additional unnecessary expenses that arose from the defendants’ unlawful conduct, and to otherwise hold them fully accountable for their personal and professional acts of infidelity,” the lawsuit states.

Accompanying the civil claim is a motion for recusal of the entire bench of the First Judicial District and a request for an out-of-county judge to handle the matter when it gets to trial because of the potential conflicts of interest.

“The assignment of this action to any judge within the Philadelphia County Court of Common Pleas, First Judicial District, may create an appearance of impropriety and impartiality, which could conflict with the Pennsylvania Code of Judicial Conduct,” the motion states.

The case ID number is 111004286.

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