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Samantha Joseph, Daily Business Review
May 22, 2015
Butler & Hosch, a national foreclosure law firm in the process of dismantling, can add a class action lawsuit by former employees to its troubles.
Former employees Stephen Regal and Gianna Hillis filed suit Thursday seeking back pay and benefits from the Orlando-based law firm that abruptly laid off more than 700 employees May 14. The case was assigned to U.S. District Judge Beth Bloom in Fort Lauderdale.
They say the firm, which represented lenders and servicers, failed to provide 60 days' written notice as required by the federal Worker Adjustment and Retraining Notification Act. Without the notice, Regal and Hillis said the mass layoffs deprived hundreds of workers and their families of a transition period to adjust to their new unemployed status.
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Butler & Hosch CEO Bob Hosch issued a letter to employees informing them he'd voluntarily stepped down as head of the law firm, which was considered one of the largest foreclosure practices in the country. He said he'd turned over firm operations for liquidation to a third-party fiduciary, Michael Moecker of Michael Moecker & Associates in Hollywood.
Before the sudden announcement, the firm controlled about 90 percent of the nation's foreclosure litigation, according to Hosch. It had a national footprint spanning 27 states and the District of Columbia, with 700 attorneys, paralegals and back-office staff working on up to 60,000 foreclosure files.
"Though Mr. Moecker has complete access to our assets, he will not have sufficient cash on hand to fund payroll at the end of this week," Hosch wrote employees. "Without BH employees and attorneys, there is no ongoing operation. BH cannot continue to function."
The employees bringing suit say the letter implied the firm's administration "knew that terminations were anticipated but failed to provide employees, nor state and local authority, with advance notice as required" under the law. They demanded a jury trial.
Plaintiffs attorney Seth Lehrman said the employees worked without pay for three weeks. The complaint suggested the layoffs were the second round for the firm, following a cut of dozens of employees in December.
Besides back pay, the employees are seeking expenses, commissions, bonuses, accrued vacation and holiday pay, pension and 401(k) contributions as well as medical benefits for 60 days.
The proposed class would include all former full-time Butler & Hosch employees, including temporary workers.
The employees are represented by Farmer Jaffe Weissing Edwards Fistos & Lehrman partners Gary Farmer, Steven Jaffe, Mark Fistos and Lehrman in Fort Lauderdale.
Roy Kobert, a shareholder in the Orlando and Tampa offices of GrayRobinson, is representing Butler & Hosch. He did not respond to a request for comment by deadline.
The firm grew quickly through a series of acquisitions but appeared to have underestimated costs associated with a February merger with Atlanta-based Morris Schneider & Wittstadt. That deal provided a new revenue stream, but the firm might not have fully anticipated all costs associated with the new business, according to St. Petersburg foreclosure defense attorney Matt Weidner, who handles hundreds of cases around the state.
"I think these files were a lot more expensive than they anticipated," Weidner said. "I suspect it just proved costly."
Samantha Joseph can be reached at 954-468-2614.
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