Philadelphia firm Ciardi Ciardi & Astin is defending a legal malpractice lawsuit in Florida after ex-clients alleged two attorneys put them on the hook for a $4.3 million deficiency judgment over a Palm Beach County property foreclosure in 2009.

The federal lawsuit points the finger at commercial litigators Albert A. Ciardi III, the firm's partner and managing attorney, and former associate Thomas D. Bielli, now of Philadelphia firm Bielli & Klauder. It accuses the attorneys of trying to hide the judgment from their clients and preventing them from moving promptly against it.

Ciardi and Bielli deny any wrongdoing and claim their former clients knew about the judgement ordered in 2011.

But now represented by Boca Raton lawyers Charles J. Bennardini and Steven M. Katzman of Katzman, Wasserman, Bennardini & Rubinstein, plaintiffs Patrick McAteer and J. Douglas Wilkins allege otherwise. They claim they only found out about it years later in November 2017, then hired new counsel. Before then, they allegedly had no idea they'd been hit with a motion for deficiency judgment — let alone that their lawyers had signed off on it.

The defendant firm and attorneys have hired Cole, Scott & Kissane attorneys Justin B. Levine, S. Jonathan Vine and Lizza C. Constantine in West Palm Beach to fight the allegations. They did not respond to requests for comment before deadline.

|

What happened?

In 2007, McAteer and Wilkins borrowed $6.3 million from one bank and $3.3 million from another to buy 2.029 acres of waterfront land in Jupiter, the northernmost town in Palm Beach County.

The land was was largely undeveloped and worth $10.5 million at the time, according to the legal malpractice complaint. But the economic recession hit, knocking the property's worth down to $8.8 million. One bank filed for foreclosure when McAteer and Wilkins defaulted on the $6.3 million promissory note, so the borrowers retained Ciardi, Ciardi & Astin. The firm has no Florida office, but partner Ciardi was able to work on the Florida litigation, as well as tackling another suit against the borrowers from a Philadelphia lender. Ciardi also filed for Chapter 11 bankruptcy protection in Delaware for the borrowers.

At that point there was no talk of deficiency, according to the complaint, which said a bank appraisal suggested McAteer and Wilkins would end up about $1 million in the green. The borrowers claim they signed off on the bankruptcy strategy, so long as the property was worth more than what they owed — meaning they wouldn't be personally liable.

But things took a turn when a bankruptcy appraiser valued the property at $4 million. McAteer and Wilkins say they disputed that finding, pointing to their prior $8.8 million appraisal. They argue their lawyers should have pursued that claim, but instead focused on a reorganization plan, which the bankruptcy court ultimately rejected.

The attorney-defendants claim they acted in good faith. They also argue the suit fails to state a claim, and can't move forward until the court has ruled on a motion to vacate the underlying judgment.

The plaintiffs seek damages and reimbursement of a “considerable” amount in attorney fees.

U.S. District Judge Robin L. Rosenberg is presiding over the case in the Southern District of Florida. Discovery is underway.

Read the full complaint:

Read more: