UPDATE (3/10/21): National Consumer Bankruptcy Law Firm Agrees to Pay More than $300,000 in Relief to Consumers and to a Six-Year Practice Ban in Settlement with U.S. Trustee Program
Announced March 10, 2021 – The Department of Justice’s U.S. Trustee Program (USTP) has entered into a settlement with national consumer bankruptcy law firm Deighan Law LLC, previously known as Law Solutions Chicago and doing business as UpRight Law (UpRight). The settlement is set forth in a consent order entered by the Bankruptcy Court for the District of Montana on March 9 and resolves enforcement actions filed by the USTP over allegations of misconduct relating to UpRight’s representation of Montana consumers as debtors or prospective debtors in bankruptcy cases. As stipulated in the settlement, UpRight has paid or will pay more than $300,000 in monetary relief and will be barred from representing bankruptcy clients in Montana for six years.
As a result of dozens of USTP actions filed since 2016, UpRight has paid or been ordered to pay almost $900,000 in monetary relief, including returning fees to over 500 impacted consumers and paying court-ordered sanctions, attorney’s fees, and costs. Additionally, bankruptcy courts have imposed practice bans against UpRight in at least four jurisdictions.
“Lawyers who misrepresent their services to vulnerable clients and fail to perform as promised harm debtors, creditors, and the integrity of the bankruptcy system,” said USTP Director Cliff White. “This settlement shows that the USTP will continue to hold accountable attorneys who fail to adequately and honestly represent their clients.”
In the current matter, the USTP alleged that UpRight engaged in misconduct and misrepresentations impacting hundreds of Montana consumers, which came to light due to investigations by the USTP in two bankruptcy cases. In one case, UpRight substantially delayed filing its client’s bankruptcy case for almost a year after it misrepresented that it had a local attorney who was licensed in Montana available to file the case. UpRight’s delay resulted in a creditor garnishing more than $6,000 of the debtor’s wages. In the other case, UpRight obtained payment of its attorney’s fees by advising the debtors to participate in an improper scheme whereby they surrendered their vehicle to an out-of-state towing company. Another bankruptcy court previously sanctioned UpRight for implementing the towing program—which it used in more than 200 cases across the country—describing it as a “scam from the start,” and the towing company’s owners were indicted for their role in the scheme. UpRight’s advice resulted in the debtors being sued by their automobile lender for conversion of its collateral.
In the settlement, UpRight does not contest the USTP’s allegations that it engaged in misconduct in the course of its dealings with Montana consumers, including misrepresenting that it had a sufficient number of local Montana-licensed attorneys available to provide adequate bankruptcy representation, misrepresenting to clients the scope of legal services to be provided and the cost of those services, failing to timely provide its clients with written retainer agreements that clearly and conspicuously explained the legal services to be provided and the cost of those services, failing to discuss non-bankruptcy alternatives, failing to adequately supervise the firm’s non-attorney staff (some of whom engaged in the unauthorized practice of law), providing erroneous legal advice, and failing to adequately supervise its Montana “partner” attorneys. This misconduct contributed to UpRight’s substantial delay in filing bankruptcy cases for Montana consumers. In addition, UpRight filed bankruptcy cases for only 109 of the 473 Montana clients from whom the firm collected at least a partial fee.
To resolve the USTP’s allegations of misconduct, UpRight has refunded or will refund more than $300,000 in fees paid by Montana consumers for whom UpRight never filed a bankruptcy case. UpRight also agreed to pay a civil penalty of $10,309 and to return all fees, totaling $3,770, to the debtors in the two cases in which the USTP brought its enforcement actions. Additionally, UpRight will be barred from accepting bankruptcy clients or providing bankruptcy services to consumers in Montana, effective July 2, 2018, through July 2, 2024.
While the agreement resolves disputes with the USTP in the two underlying bankruptcy cases, it does not impact the rights of the debtors in those cases or any other parties or government agencies not participating in the settlement, including other Montana consumers, nor does it impact the USTP’s rights to litigate enforcement actions against UpRight in other jurisdictions or to seek redress in other Montana cases. The two underlying cases are captioned In re Dailey, Case No. 15-61088-7 (Bankr. D. Mont.), and In re Emerson, Case No. 16-60056-7 (Bankr. D. Mont.).
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more information on the Program at: https://www.justice.gov/ust.
UPDATE: 11th Circuit Court of Appeals find Law Solutions, Upright Law, Mariellen Morrison – “Chief Bankruptcy Judge James J. Robinson of Anniston, Ala., had characterized the firm as “arrogant” and “indifferent” and its defenses as “incredulous” and “absurd.”
August 21, 2020 – Law Solutions of Chicago v. Corbett, 19-11405 (11th Cir. August 21, 2020) Judge Vinson said the firm had “clearly” violated Section 526. Citing Section 526(c)(5), he said that the “evidence supports a finding of a ‘clear and consistent pattern or practice.’” He observed that “$25,000 per case seems to be the normal sanction for serious violations of the Bankruptcy Code.”
Applying a “highly deferential standard of review,” Judge Vinson affirmed, ruling that the monetary sanctions were not grossly excessive or outside the “range of choice” available to the bankruptcy court.
UPDATE: courts find LAW SOLUTIONS CHICAGO, L.L.C., doing business as UPRIGHT LAW,
L.L.C.’s “appalling conduct in the debtor’s case”
May 7, 2019 – IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT UPHOLDS BANKRUPTCY AND DISTRICT COURTS’ RULINGS:
As amply demonstrated by the record, in what should have been a simple and straightforward bankruptcy matter, UpRight Law, LLC misled and neglected the debtor for approximately two years. Considering UpRight Law, LLC’s many rule violations and the egregious way that it mishandled the debtor’s case, the bankruptcy court’s well-reasoned memorandum opinion correctly disposed of this motion.
Sanctioned for causing ‘unconscionable’ harm to their clients
Report from the Department of Justice, 2/13/18 – Law Solutions Chicago, doing business as “UpRight Law”, UpRight’s managing partner Kevin Chern, and affiliated partner attorneys Darren Delafield and John C. Morgan Jr. were sanctioned hundreds thousands of dollars “for causing ‘unconscionable’ harm to their clients”.
The court found that the law firm and its attorneys, “systematically engaged in the unauthorized practice of law, provided inadequate representation to consumer debtor clients, and promoted and participated in a scheme to convert auto lenders’ collateral and then misrepresented the nature of that scheme..” said Director Cliff White of the Executive Office for U.S. Trustees.
UpRight caused harm to the integrity of the bankruptcy system
The court also revoked UpRight’s bankruptcy filing privileges in the Western District of Virginia for not less than five years, and its local partners for 12 and 18 months, respectively. The bankruptcy court also sanctioned Sperro LLC (Sperro), an Indiana towing, ordering turnover of funds.
“Lawyers who inadequately represent consumer debtors harm not only their clients, but also creditors and the integrity of the bankruptcy system,” said Director White. “The damage caused increases exponentially when they operate nationally, like UpRight. This case is demonstrative of the vigorous enforcement actions that the U.S. Trustee Program can and will take to protect all stakeholders in the bankruptcy process.”
Robbins v. Delafield (In re Williams), 16-7024 (Bankr. W.D. Va. Feb. 12, 2018) Link to court decision…
See also an article from Credit Slips :
“To oversimplify (and leave out certain other issues of bad behavior), the law firm steered debtors who owned cars in which they had zero equity into an arrangement in which the debtor’s car would be towed for an (unpaid) fee by an affiliated firm and then stored in Indiana. The existing auto lender would never be notified of any of this. The affiliate would then assert a warehouseman’s lien for the unpaid fee and foreclose on the car, and use the sale proceeds to pay back the fee and pay the debtor’s bankruptcy filing fee to the law firm, with the auto lender getting nothing.”
COMMENT FROM A LADY SCAMMED BY KEVIN CHERN
|Location:||Lawrenceburg, Indiana, United States|
|Client:||S.B. – June 15, 2019|
|Subject:||Upright Law/Kevin Chern Article|
|Message:||I just wanted to say thank you for the article written about Kevin Chern. I just wish I had read it before I gave them my money. From what I have researched online, they have promised many “clients” refunds for the money they drafted to pay for their bankruptcies. They assign attorneys an hour or more from many of their clients, then when clients cancel services, they offer partial refunds, promised in 30-45 days. I was told this in early March, and keep getting told there is a backlog on refunds. In any case, the article you wrote is informative, and I hope that it keeps people from using Upright Law.|
Anyone, especially a lawyer or doctor, who takes advantage of someone should be put in public stockades and branded for life. Law firms like UpRight give all lawyers a bad reputation, but despite all the press they are still finding new people to pray on. If everyone they have ripped off will file reviews (Google, Yelp, AVVO, etc.) it will help to protect new clients from being harmed.
People in financial distress are vulnerable to people who don’t care about the damage they do. Use your common sense with hiring any professional.