North Versailles homeowner contests attorney fees for debt
A $10.88 bill threatened to cost Carol Carter her home.
Carter, 72, of North Versailles says a Montgomery County law firm tried to force the sale of her McKee Road house to collect a trash collection fee she failed to pay in 2010.
“It's been very hectic,” said Carter, who filed a federal lawsuit this week against Portnoff Law Associates of Norristown. “I don't know what to expect. My anxiety is up.”
The lawsuit claims the firm violated a state law on municipal liens and a federal debt collection law when it tacked on more than $410 in attorney fees to the debt. It says the amount violates a state law restricting municipal claims to “reasonable” attorney fees and a federal debt collection law prohibiting the attorneys from claiming fees they can't legally collect.
Portnoff spokesman Ken Kilpatrick said no one from the firm could speak about the Carter case, saying it's in “settlement discussions.” Portnoff serves as a municipal fee debt collector for North Versailles.
Sam Juliano, North Versailles commissioner, said board members were unaware of Portnoff's actions outlined in the lawsuit.
“I would like to see Portnoff meet with us as commissioners and see what's going on,” Juliano said. “We were surprised when we read about it.”
Eileen Yacknin, Carter's attorney with Neighborhood Legal Services Association, a nonprofit public interest law firm, said cases similar to Carter's are “more common than you think.”
“It's typical for these types of charges now to be imposed against people like Ms. Carter who owe very little in municipal claims,” Yacknin said. “It's a way for companies to ensure they are able to obtain comfortable legal fee compensation, more than what is appropriate or reasonable, in order to make a profit in a fairly easy way.”
Carter inherited her one-bedroom home from her mother in 2000. According to Allegheny County records, it is worth $15,900. Carter's income consists of $644 a month in Social Security survivor's benefits.
She is currently paying Portnoff $50 a month to cover the entire claim of $685.33 in order to avoid the forced sale of her home.
“It's very hard,” Carter said. “I'm struggling with it.”
Others have sued Portnoff over claims they would lose their homes because of high fees. In 2003, Jerry and Theodora Konidaris of McKeesport filed suit in Allegheny County Common Pleas Court because Portnoff levied about $3,800 in fees to collect a $2,150 back tax bill. Portnoff initiated a sheriff's sale, but it was stayed in 2004.
In 2008, the state Supreme Court ruled that a collection agency could collect fees in relation to the collection of delinquent taxes.
On Wednesday, the state Supreme Court agreed to hear appeals by the Konidarises and others, based on whether Portnoff violated credit laws by adding fees.
Ira Weiss, whose Pittsburgh law firm collects delinquent taxes for several school districts — including Moon, West Jefferson and Gateway — said his firm provides payment plans and hardship applications.
“The costs that are authorized by the legislation doesn't generally yield that sort of skewed situation,” Weiss said of Carter's case.
He added that he supports the legislation when it's applied fairly.
“It makes sense. People that pay taxes are subsidizing people that don't,” Weiss said.
The Pennsylvania Municipal Claims and Tax Liens Act stipulates lien amounts can include “reasonable” attorney fees. It is not intended to “require owners to pay ... inappropriate or unreasonable attorney fees, charges or expenses for routine functions.”
“We're not saying they don't have the right to collect attorney fees in appropriate cases, and we're not saying they don't have a right to get paid for their efforts,” Yacknin said. “We do believe ... they are taking huge advantage. It doesn't reflect the spirit of the law.”