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Clerk of court reviews suits on ground rent

The clerk of Baltimore's Circuit Court said yesterday that he ordered a review of the legal practices of a real estate attorney who has filed at least 10 lawsuits to seize homes owned by dead people over unpaid ground rent.

Frank M. Conaway also asked the state's legal oversight panel to immediately suspend attorney Heidi Kenny's law license and appoint a conservator, saying heirs might have been denied "just inheritances."

The clerk's office will begin examining every lawsuit Kenny has filed over unpaid ground rent or property taxes "to make certain that other abuses have not slipped through the cracks," Conaway wrote in a letter sent to the state's Attorney Grievance Commission yesterday.

Kenny, whose office is in Baltimore County, did not return a phone call seeking comment.

She has filed 481 lawsuits, most of them foreclosure actions, this year in the city Circuit Court. Melvin Hirshman, bar counsel to the Attorney Grievance Commission, could not be reached.

Conaway's action follows pledges by Evelyn Omega Cannon, the judge in charge of the Circuit Court's civil docket, to look into how cases against dead property owners are handled.

One such judgment -- in a case filed by a ground-rent firm represented by Kenny -- was stricken on Nov. 27 by Circuit Court Judge Martin P. Welch, who said it was a "mistake" to rule against someone who had died.

The daughter of the dead man sued in that case told The Sun she had never been notified of the lawsuit -- even though her name and address were on a death certificate that Kenny submitted to the court.

Conaway said that lawyers in such cases are required by law to open estates and go through steps of probate. That would assure that heirs receive whatever is left over after ground-rent owners and lawyers receive what they are owed, he wrote.

Tens of thousands of Baltimore residents pay small rents twice a year to lease ground underneath rowhouses. Kenny has organized or represented firms that buy up ground rents and use their extraordinary power under state law to seize the homes of people who fail to pay the rents.

In his letter to the disciplinary panel, Conaway cited articles in The Sun documenting 10 cases in which companies Kenny set up or represented filed ground rent "ejectment" lawsuits against dead property owners.

In some instances, her law firm submitted death certificates to support a claim that a property owner could not be found.

Kenny has won judgments by default in at least three of those suits, court records show. One was a Canton rowhouse legally owned by Joseph and Mary Onheiser, who both died in the mid-1990s.

Their son, Vernon Onheiser, who lives in the home with his two teenage sons, was the subject of an article in The Sun last week detailing his near-eviction by a company called Neighbor Saver, LLC, represented by Kenny.

Vernon Onheiser didn't respond to a lawsuit filed by Neighbor Saver over unpaid ground rent of $24, though court records indicate that he was served with papers in the case.

Neighbor Saver bought Onheiser's ground rent for $400 in July 2004; in November of that year it filed suit against Joseph and Mary Onheiser for not paying it -- even though both of them had died. The suit claimed $7,831, including $6,652.34 in property taxes Neighbor Saver alleges it is owed, attorney fees and other charges.

The home was recently valued at $161,000. There is no mortgage on the property.

Vernon Onheiser, who never became the legal owner of the house, said he had no idea Neighbor Saver was planning to seize the home until a Sun reporter told him the day before he was scheduled to be ejected. He was spared after City Councilman James B. Kraft, who represents the district where the Onheisers live, negotiated a three-week extension.

Court clerk Conaway noted that in the Onheiser case and others Kenny knew the legal homeowners were dead.

Calling the docket in his courthouse the "busiest in the state," Conaway said officials don't have time to check on whether people named in lawsuits are living or dead.

"We rely on practicing attorneys to maintain a level of professionalism, competence, decorum and integrity," he wrote. "At the very least, we assume that named defendants in lawsuits are alive and able to handle their affairs."

The court clerk also noted that taxpayers might have an interest in unclaimed property owned by the deceased.

Some proceeds in those cases are supposed to revert to local school boards when rightful heirs cannot be found, he wrote. In some cases, an estate tax of 10 percent also is payable to the state, according to Conaway.

Phillip R. Robinson, executive director of Civil Justice Inc., a legal advocacy group, applauded the court clerk's investigation.

"The step taken by the court will put other professionals and stewards of the foreclosure process on notice that they need to follow the rules or that the state may investigate their actions," he said.

fred.schulte@baltsun.com june.arney@baltsun.comFor archived coverage of ground rent issues, go to baltimoresun.com/groundrent

Copyright © 2014, The Baltimore Sun
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