Zombie Debt - The Bills That Won't Die

Gregg Lombardi - Executive Director

The Zombie Debt Eradication Team has been busy this summer. If you’re not familiar with Zombie debts, they are aged credit card debts sold for less than 5 cents on the dollar to collection agencies. When they’re sold, the buyer generally doesn’t receive any evidence of the debt and they cannot prove up the cases in court, but they still get thousands of judgments per year.

Last year the five largest Zombie debt collectors filed more than 5,600 of these cases in Jackson County. I had Ben Embry, my law clerk for the summer and a former KCUR reporter, do a random study of 200 of these cases. He found that in 95% of the cases defendants are not represented by counsel and in roughly 70% of the cases the plaintiffs obtain default judgments (excluding cases in which the defendant is not served).

In contrast, when Legal Aid and other private attorneys represent the defendants in these cases and ask the defendants to prove that they own the debt and prove that they are entitled to judgment, the Zombie plaintiffs routinely are unable to do so and dismiss their cases.

This summer the Zombie Debt Eradication Team, which consists of VAP attorneys: Dale Irwin, Bernard Brown, Amy Sweeney Davis, Michael Williams, Scott Bethune, David DeSimone and Jim Jarrow, along with Legal Aid attorneys Lisa Livingston Martin, Doug Tschauder, Amber Cutler, James Jenkins and myself drafted a proposed local rule that would require plaintiffs in Zombie Debt cases to file a copy of the assignment that gives them the right to sue with the Petition in their case—something that they have been unable to do in virtually every individual cases we’ve worked on.

Today, the Local Rules Committee of the Jackson County Circuit Court, the Honorable Justine Del Muro, Chair, met for an initial consideration of the rule. The Committee expressed interest in the proposed rule and Judge Del Muro indicated she would pursue it. I’ll keep you posted on what happens.

Good News for Legal Aid Clients

Gregg Lombardi, Executive Director

There’s good news from Washington, DC: Missouri Senator Kit Bond announced on Thursday that he is co-sponsoring a bill to provide $10 million of federal funding for a Medical-Legal Partnership demonstration project.

Medical-Legal Partnerships are collaborations between healthcare providers and Legal Aid programs in which medical staff work with legal staff to resolve the legal problems of low-income patients (e.g. guardianship, Medicaid denials, domestic violence and housing issues, etc.). The Medical-Legal Partnership concept started in Boston and has been so successful that it has now been replicated in over 180 hospitals and health centers around the country.

Studies have found that even when a legal problem does not appear to be directly related to a health issue, resolving the legal problem often has health benefits. For example, a mother in a domestic violence situation whose son is diabetic may be so focused on keeping her family safe that she doesn’t monitor her son’s insulin intake and diet. When Legal Aid helps the mother obtain a protective order or divorce, her ability to tend to the child’s treatment for diabetes greatly improves.

Legal Aid of Western Missouri has a tremendous network of Medical-Legal Partnerships, making our MLP one of the 5 largest MLP’s in the country. Our MLP began with our partnership at Children’s Mercy Hospital and its clinic at Operation Breakthrough. Legal Aid also has a partnership with Swope Health Services and a new partnership with KC Free Health Clinic. We also have a collaborative partnership with Kansas Legal Services (KLS) at KU Medical Center’s Department of Family Medicine, in which we represent KU’s patients who are Missouri residents and KLS represents the Kansas residents.

In terms of hospital staff training, outcomes tracking, Medicaid appeals success, and collaboration with other programs, our medical legal partnerships are on the cutting edge.

Katie Cronin has done a tremendous job in creating and growing the medical-legal partnerships at Children’s Mercy, Operation Breakthrough, Swope Health Services and KU Medical Center. Effie Day also has done excellent work in building our Medicaid Appeals project at Truman Medical Center. Although this is technically not a Medical-Legal Partnership because the medical staff is not involved in the program, it is now one of the largest Medicaid Appeals partnerships (and probably the largest) in the country and is the envy of MLP’s across the country.

The other reason why these programs are such a success is because of our partners. Dr. Jeffrey Colvin at Children’s Mercy Hospital worked for the original MLP at Boston Medical Center. He has been a tireless advocate for MLP at Children’s Mercy and throughout the area. Dr. Colvin recently met personally with members of Senator Bond’s staff to encourage the senator to sponsor the MLP demonstration site legislation. Lydia Jones at Truman and Lewis Popper, the former General Counsel at Truman have also been tremendous, tireless advocates for that program.

I believe, if the demonstration project is created, Legal Aid of Western Missouri would be a leading contender to be one of the demonstration projects. So, this is very good news.

Housing Works - Thanks to Legal Aid

By Gregg Lombardi, Executive Director

Word on the street is that The Kansas City Star will be running an editorial this Sunday about the improvements that Kansas City has made in public housing largely as a result of the Tinsley v. Kemp litigation that was brought by Legal Aid in the early 1990’s. In that case, the court put the Housing Authority into receivership and ordered it to make public housing safe, clean and liveable.

The receivership continues on to this day, and the results have been dramatic. When the lawsuit was filed the condition of public housing in Kansas City was abysmal. More than half of the public housing units in Kansas City were unoccupied, many of the remaining units were rat infested and generally in very poor condition; and crime was rampant. Today, Kansas City has some of the best public housing stock in the country. The units are, for the most part attractive, livable and well maintained. The occupancy rate is 97% and the crime rate is down dramatically.

Check out The Star on Sunday for more. And have a great Memorial Day weekend.

Legal Aid's Longtime Employees

by Gregg Lombardi, Executive Director

One of the greatest resources that Legal Aid has in representing our clients is the experience and leadership of our staff. We have nine attorneys and one support staff member in a broad range of practice areas who have been with Legal Aid for more than 30 years. And we have another 15 staff members who have been with us for more than 20 years.

What’s more, not only are our staff experienced, they have stayed on the cutting edge of their areas of expertise. Many are nationally or regionally recognized as some of the best attorneys in their fields. So, regardless of whether our clients need help with Medicaid or SSI issues, public housing problems, immigration questions, foreclosure prevention or help in eradicating urban blight. We have talented, experienced casehandlers to help them.

At this year’s Justice for All Luncheon on June 15, we’ll be honoring the Legal Aid veterans who have been with us for more than 30 years. They are:

Effie Day (Medicaid and other state public benefits)
Suzanne Gladney (Immigration)
Michael Duffy (Community Development)
Bill Shull (Managing Attorney Warrensburg Office)
Jane Worley (Public Housing and private landlord-tenant issues)
Julie Levin (Public Housing and private landlord-tenant issues)
Susan Kephart (Foreclosure prevention)
Sam McHenry (Employment and guardianship issues)
James Marshall Smith (Federal benefits)
Yolanda Hernandez (Bilingual legal secretary)

These seasoned advocates are also great teachers and are bringing along many talented newer attorneys at Legal Aid to follow in their footsteps.

We’ll also be honoring two retirees who were with us for more than 30 years: Dick Halliburton (former Executive Director and consumer law) and Fred Rich (mental health and special education).

Morris Dees, the co-founder of the Southern Poverty Law Center will be our speaker. Please join us if you can. It will be a great event.

Visit http://www.lawmo.org/JFA_MorrisDees.htm to reserve or purchase tickets. Please contact Karen Cutliff at kcutliff@lawmo.org with questions.

Fun with Legal Aid

by Gregg Lombardi, Executive Director

We had two great fundraising events over the weekend. Friday night was the first annual Volunteer Attorney Project Team Trivia Night contest. 120 participants tested their knowledge of the arts, literature, food and bearded coaches in the NCAA basketball tournament-- among other things. It was a blast.

The competition was intense but Mizzou Minutiae a team organized by stalwart VAP supporter Tim Monsees emerged victorious.

And in the beautiful weather on Sunday morning, 175 runners and walkers participated in the Lawyers’ Association of Kansas City’s Run for Justice on the Plaza. Proceeds from the event go to support Legal Aid. Many thanks to the LAKC’s Kent Erickson, Corey Unrein (who was on sight at 4:30 in the morning getting things set up) for their work in organizing another great run.

I am also pleased to report that we had two Legal Aid runners win their age division. Amber Cutler won the women’s 25-30 category and Dick Halliburton completed the course in under 25 minutes to win the men’s 70 and over category. In addition to being a fundraiser for Legal Aid, this was also a Legal Aid Wellness Committee event and we had lots of runners and walkers out soaking up the beautiful morning.

Thanks again to everyone who worked on these events.

Volunteer Attorneys Give Marlborough Neighborhood a Bright Future

by Gregg Lombardi, Executive Director

There are times when you have to fight and scratch to make a project work and then, thankfully, there are times when things work out much better than you had even hoped.

Steve Chinn’s work for the Marlborough Neighborhood is a shining example of the latter. About a year ago Latricia Scott Adams, the Director of our Volunteer Attorney Project and I made a presentation to a group of about 30 Stinson Morrison Hecker LLP attorneys about possible volunteer projects that the firm could take on. One we suggested was adopting an urban core neighborhood. Steve was at that meeting and immediately took interest in the idea.

As the Chair of Stinson's Public Law Practice Group, Steve knows a lot about community problem solving. It’s just that normally he devotes his time to massive, multi-million dollar projects like developing the Kansas Speedway.

Under Steve’s leadership, Stinson Morrison Hecker adopted the Marlborough neighborhood, a low-income neighborhood in southeastern Kansas City. Steve immediately put his skill and experience to work in solving problems for the neighborhood.

And the work that they have done has been tremendous. They have gotten the state and federal government to approve the neighborhood association as a tax exempt not-for-profit organization. They are fighting an unlicensed, under-aged drinking establishment that is a major nuisance and serious danger in the neighborhood. When the federal government suggested using the old Bendix plant, which is just outside the neighborhood, as a lead waste storage facility, Stinson attorneys drafted comments on the draft Environmental Impact Statement and the proposal appears to be dead.

Stinson attorneys are also working closely with the neighborhood and a local community development corporation to create a model block in the neighborhood, in which the city will focus resources.

Steve goes to all the neighborhood association meetings, so he can address whatever legal questions come up. All told, 13 Stinson attorneys and one Stinson paralegal have put in over 300 hours on the project.

Steve reports that the work is gratifying and fulfilling. The neighborhood, in turn, is ecstatic about the firm’s work. Betty Ost-Everly, the Marlborough Community Coalition President reports:

Many people have commented at what Marlborough has been able to accomplish in a very short amount of time and have wondered how. From start-up discussions in May 2008 to present, we have established governance, received Nonprofit status from the State of Missouri and our 501(c)(3), protested against the Federal Government's proposal of placing a Mercury storage facility at the Bannister Federal Complex, and started on the long and arduous task of stablizing housing in the four neighborhood association areas that make up the Coalition. Absolutely none of that could have been possible without Stinson. The firm came to us as part of Legal Aid’s Volunteer Attorney Project, and has worked alongside the Coalition and in partnership with Legal Aid and Neighborhood Housing Services to help us. This area has been neglected for a number of years, but with Stinson's help, we are looking to a much brighter future.

Many thanks to Steve and to Stinson for their fantastic ongoing work on this project.

Post-Foreclosure Task Force Makes a Difference

Gregg Lombardi, Executive Director

Some times, when you have good, practical problem-solving skills you can make a giant difference.

A great example of this is the problem solving work that Legal Aid’s Michael Duffy and the Post-Foreclosure Task Force that he leads has been doing lately. One of the projects that the Task Force has been working on lately has been to assist local community development corporations (“CDC’s”) in overcoming obstacles to their use of $7 million in federal stimulus funding that was provided to Kansas City to rehab blighted, foreclosed properties in the City’s urban core. The City sub-contracted with the CDC’s to do this work.

This funding presents a race against the clock. If the developers fail to have commitments to use the funding by October 1 this year, all of the uncommitted funding must to be returned to the federal government. On the other hand, if the funding is committed to rehabbing specific houses by October 1, then, when the houses are sold, the proceeds will be placed in a revolving fund to rehab more houses. So, if properly and timely used, the funding will actually do much more than $7 million of rehab work.

One of the major obstacles that the CDC’s found in doing this work was that HUD policies for the project prohibited them from spending any money toward the purchase of a house until their plans for renovation of the house had been approved by the City. This process takes approximately 6 weeks and sometimes longer. HUD’s policy meant that the CDC’s would often find a house, negotiate a price with the seller, then having tentatively established a price, prepare plans and submit them to the City for approval. Once the plans were approved, they would return to the seller, only to find that the house had already been sold.

Not only was this a tremendous waste of resources for the not-for-profit developers, it threatened to keep them from meeting their October 1 deadline. Furthermore, the problem, in theory, was easily solvable. If the CDC’s could offer the owners of the houses some sort of contingency or option agreement, that provided the sellers with minor compensation (say $500 per house) in exchange for a commitment to sell the property if City approval came through (which it consistently has), then they could eliminate the risk of the house being sold during the approval process. HUD’s policies for the project, however, prohibited this, not only in K.C., but nationally.

Michael brought this problem to the attention of the Post-Foreclosure Task Force, which includes members of the City Council of Kansas City, representatives of the Federal Reserve, the FDIC, neighborhood organizations, bankers and other major stakeholders who have been impacted by the blight that foreclosures have caused in Kansas City’s urban core. It’s essentially a think-tank for reducing the blight caused by foreclosures.

The Post-Foreclosure Task Force saw the solution to the problem and negotiated with HUD attorneys in Washington for a change of the policy. After lengthy debate, HUD agreed to a change in the rules, nationally. This means that the CDC’s in Kansas City will be able to use all of the $7 million in federal stimulus funding to rehab foreclosed properties and use the proceeds from the sale of those properties to create a revolving fund to rehab even more properties. And developers around the country will be able to do the same. The result is that tens of millions of dollars, and perhaps hundreds of millions dollars, can now be used nationally to rehab blighted urban core properties.

That is good problem solving with a great impact.