Just Mild About Berry

Bankruptcy judges slow to clamp down on People's Paralegal, a notorious Tempe document-preparation firm

A phlegmatic man in his mid-30s, Taylor seemed dazed during the first of the two appearances, before Judge Case. Case was considering whether to order Taylor to repay eight bankruptcy clients with whom he had little or no contact, and if he should recommend Taylor's suspension from practicing law in federal court.

Taylor admitted that People's Paralegal still was performing legal tasks for him, though he said he was "in the process" of ending his professional relationship with Dick Berry and company. Sharing fees with People's Paralegal, Taylor has become the lawyer of record in 488 cases since January. That has made him, volume-wise, the Valley's number one bankruptcy attorney.

The arrangement seems to have violated an Arizona Supreme Court rule against "fee splitting." The rule says "a lawyer shall not give anything of value to a person for recommending the lawyer's services . . ."

U.S. Trustee Kalyna in July filed a complaint against Taylor with the State Bar of Arizona. It accuses him of fee-splitting and other ethical violations, which Taylor has denied.

"I certainly have to acknowledge that I found myself in a tough situation based on some information I received and some miscalculation on my part," Taylor told Judge Case of his experience with Berry. "Then there was some bad publicity and what have you. . . . Consequently, I have been struggling."

Case asked Taylor if he'd reviewed the files to determine if his inferior work on the eight cases under consideration had affected their outcomes.

Taylor replied that he'd looked at the paperwork "somewhat," but had drawn no conclusions.

"If I were in your spot," the judge replied, "I would have been up all night to determine if these clients suffered because you didn't show up [for hearings]. . . . I think it's dangerous when lawyers treat these matters as high-volume and rote."

An attorney for a large car-loan company told Case that at least one of the eight unnecessarily lost her car solely because Taylor had failed to reply to the attorney's numerous inquiries.

Case ordered Taylor to reimburse the eight clients, and to immediately write to his remaining 200-plus clients and offer them the opportunity to seek new representation. The judge also told Taylor to take on no new clients during a 60-day "probation" period.

"Clean up this mess first," the judge instructed.
Taylor asked Case for clarification on one point. Could he hire People's Paralegal employees to do "specific tasks" at his office?

Case appeared incredulous at the question, then shook his head before replying.

"I'm not going to tell you who to hire," the judge told the barrister. ". . . But contract work with someone who works for People's is not acceptable."

Last Friday afternoon in Judge Marlar's courtroom, Taylor faced another barrage of questions about his relationship with People's Paralegal.

"Is this a shell game?" the judge asked. "Are you basically a front for Mr. Berry and his group . . . [Are you] going to set up another kind of scheme? I need to know this."

"I have no intention of violating the court orders," Taylor replied.
"But you are doing it," Marlar continued. ". . . It's going to get you disbarred. [Berry's] not going to get disbarred, he's already been disbarred. . . . He's already been in jail."

After the hearing, Taylor told a reporter, "This is a real mess, isn't it? I guess I'm really going to have to struggle to pull myself out of this.

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