PITTSBURGH – A real estate lending firm alleges it was obligated to missed an opportunity to purchase a foreclosed-upon property and pay more than $7,500 in costs, as a result of professional negligence committed by its initial legal counsel.
Steel Vector, LLC filed suit in the Allegheny County Court of Common Pleas on July 2 versus Kushal Dave, Esq. and DeRiso DeRiso & Suher, LLC. All parties are of Pittsburgh.
Steel Vector offers private lending to real estate investors and both executed a note with and entered into a mortgage with Pixburgh Properties, LLC on Aug. 10, 2017, with itself as the mortgagee.
Pixburgh Properties failed to make multiple payments on the note and defaulted on the mortgage, in addition to failing to secure the property, insure the property against damage or prevent and remediate vandalism to the property, causing it to depreciate in value, the suit says.
As defendant Dave drafted the mortgage and note documents, Steel Vector sought his representation related to the mortgage foreclosure on Nov. 3, 2018. Steel Vector and its managing member, Mr. O’Neill, repeatedly tried to contact the defendants about their perceived lack of progress and attention to the action, to no avail, the suit says.
“Steel Vector paid Mr. Dave and DeRiso DeRiso & Suher a total of $6,484.25 for legal services that were ineffective and unprofessional, and caused Steel Vector to incur excessive delays and thousands of dollars in damages. Steel Vector paid Sommer Law Group a total of $1,148 for legal services related to substituting counsel, analyzing Mr. Dave’s mistakes and filing the deed in lieu of foreclosure,” the suit states.
On April 23, 2019, the defendants initiated a civil action mortgage foreclosure against Pixburgh Properties in the Allegheny County Court of Common Pleas and throughout the following July to November, the defendants are alleged to have been remiss in failing to diligently litigate the plaintiff’s claim.
A sheriff’s sale of the property in question was scheduled for Nov. 4, 2019. The date was later postponed to Jan. 6, 2020. However, defense counsel stated the very day before, Jan. 5, that the sale was postponed once again to Feb. 3, 2020 through an amended notice of the date. However, that same amended notice failed to include a certificate of compliance and certificate of service, the suit says.
Believing that the sale wouldn’t take place on Jan. 6, Steel Vector did not send a representative to the sale. But it did take place that day and the property went unsold at the foreclosure sale. O’Neill called Dave seeking an explanation, but did not receive an answer or a return phone call, the suit says.
Steel Vector then obtained new counsel from Sommer Law Group, who recommended the plaintiff accept a deed in lieu of foreclosure and the plaintiff forgave tens of thousands of dollars in principal and interest on the mortgage loan (about $55,000), the suit says.
Furthermore, by accepting the deed in lieu of foreclosure, the plaintiff incurred obligations to pay $2,533.95 in property taxes and $5,017.42 in a lien from the Pittsburgh Water & Sewer Authority, both of which Steel Vector would not have been responsible for had it purchased the property at the sheriff’s sale, the suit says.
For counts of professional negligence, the plaintiff is seeking damages in excess of the arbitration limits of the Court, plus interest, costs, such further legal and equitable relief as the Court may deem just and proper, plus a trial by jury.
The plaintiff is represented by Carter C. Hoel of OGC Law, in Pittsburgh.
The defendants have not yet secured legal counsel.
Allegheny Court of Common Pleas case GD-20-007357
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com