Expert Witness Case Summaries

This page summarizes some of the court cases where Lee Tabas participated as an expert witness. His work draws on his experience as a successful businessman, banker, bank president, and investor.

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“Ongoing matters are not listed. These examples are concluded matters only.”

 

Lee Tabas is available as an expert witness in banking financial and business matters.  In 30 years of banking, as well as life experience, he has experienced a variety of banking and financial related lawsuits.  He has testified many times in court and depositions, and is able to communicate and explain banking procedures and concepts in simple terms.  See my resume.

Expert Witness Matter
Date Submitted: August 31, 2017

Northeastern Pennsylvania Council, Inc. Boy Scouts of America V. Community Bank, CCP Lackawanna County

Case Synopsis: The Boy Scouts owned a parcel of land in Lackawanna County, Pennsylvania that had become valuable over time.  The Scouts agreed to sell the land to a real estate developer who intended to construct a gas station and convenience store there. In order to facilitate the sale, the Boy Scouts agreed to take-back financing as a second mortgage of $575,000 behind the bank’s construction loan of $2.1 million.

Construction over-runs caused the bank loan amount to be insufficient, and the borrower fell behind in their payments. The bank agreed to provide $3,650,000 to a new borrower, but neglected to inform the Scouts, or to obtain a subordination from the Scouts.  Without subordination, the Scouts second mortgage position would move to first, putting it ahead of the new bank money.

The president of the Scouts was served by the bank at his home and unwisely, without counsel, signed the subordination on behalf of the Scouts, which allowed the property to go to tax sale. Tax sales clean property titles, allowing them to be purchased with confidence.   The property was purchased at the sheriff’s sale by the bank, then resold to the new borrower.  The Scouts’ position was wiped out at the sheriff’s sale.  Mey and Sulla L.P. of Scranton represented the Scouts, and alleged that the president’s signature was improperly obtained, and that the Boy Scouts loan should not have been extinguished. They also asserted that the initial $2.1 million construction loan had been disbursed with improper construction practices and dissipated.

Expert Analysis: Lee Tabas was engaged as an expert on construction loans.  He opined as to construction loan procedures. When the initial loan was set up, terms offered by the bank only provided for 4 months of construction interest to be set aside. Construction loan-interest reserves are a common procedure, allowing the interest to be paid until the property is in use and open for business.  The idea that a $2.1 million project would be finished in 4 months was naive.  Additionally, there was no architect or engineer engaged by the bank prior to commencement of construction to evaluate the reasonableness of the cost estimates. This would be a normal procedure in a loan of this type.

Further, against sound banking construction loan practice, the bank began disbursing the construction loan even though all permits were not in place.

Lee Tabas opined that the bank owed a duty of communication to the Boy Scouts for their mutual benefit. The bank is presumed to be a lending professional, while the Boy Scouts are amateurs.  Had the bank done a better job administering the construction loan, the outcome for both the Boy Scouts and the Bank would have been better.

Result: The outcome of the case had nothing to do with construction loan practices, the subject on which Mr. Tabas opined.  In the end, the Judge’s opinion issued on September 18, 2015 found that the president of the Boy Scouts had the authority to bind the Boy Scouts, and having signed the subordination, the Scouts lost their position at sheriff’s sale. Lee Tabas’ observation: my father used to say “a putz with a pen” can really mess things up.

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Expert Witness Matter
Date Submitted: September 2, 2011

Darby V. Rahman et al, Philadelphia, Pennsylvania,  US Eastern District PA

Case Synopsis: Gloria Darby, a salt of the earth, a solid citizen, applied for a loan to purchase the house from the landlord where she lived.  Wachovia bank was promoting loans aggressively, and did not require a title search or title insurance.  Because of the lack of title search or insurance, the bank was unaware of a prior mortgage existing on the property. Because the bank was unaware, the prior mortgage was not repaid at the purchase of the house.

The same bank, Wachovia made both loans, and began foreclosure upon the house for the defaulted mortgage. Meanwhile, the borrower, who had faithfully made all the payments on her new loan, wondered what was happening. She worked at the 76ers organization for many years as a vendor, and met Thomas Kline, esquire there and asked for his help.  Kline and Specter engaged Lee Tabas as a banking expert.

Expert Analysis: Lee Tabas provided expert opinion that the bank and bank officials had a duty to protect their soon-to-be customer. He opined as to banking industry standards for various loan types, and that title searches and title reports were standard procedure when approving mortgages. At the time of the loan, Wachovia requested that Gloria Darby sign a disclosure document that it was OK for the bank not to order title reports. This should have been a red flag to any knowledgeable person, including the Wachovia representative who handled the closing.

Result:  This matter settled with a satisfactory result for the plaintiff. Read more about Lee Tabas’ comments on bank responsibility, CLICK HERE.

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Expert Witness Matter
Date Submitted: October 15, 2009

Hughes v. Angelo, Hub Bank (now TD Bank), et al, Philadelphia CC Pleas 

Case Synopsis: A Quadriplegic military veteran, Raymond Hughes,  received a million dollar settlement from the Veterans Administration hospital system for mis-care and treatment.  After receiving the funds, his attorneys introduced him to Hub Bank, and opened accounts for him there.  He discussed his need for care with the local bank manager.  She introduced him to a friend who the manager thought could help. From there, things got pretty wild. The manager shared Hughes personal financial condition with the friend, against bank policy.  The manager’s friend then seduced Hughes and married him. The now Mrs. Hughes proceeded to plunder his bank accounts, while the bank officer did nothing about it. Raymond Hughes, the victim, sued the officer and the bank for damages.

Expert Analysis: Lee Tabas provided Expert opinion that the officer and Bank had a duty prior to making an introduction, to check criminal record, work history, and references.  The officer and Bank had a duty to maintain the confidentiality of the customer, and to preserve and protect the depositor’s assets.

Result: The matter was settled by the Bank and awarded a payment to Raymond Hughes.

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Expert Witness Matter
Date Submitted: October 15, 2009

Class Action, v. Royal Bank of Pennsylvania re: Continental Business Center, CCP Montgomery County, PA

Case Synopsis: On May 15, 2001, the Continental Business Center (CBC) in Bridgeport, Pennsylvania burned to the ground. Thereafter, High Swartz LLP, in tandem with the Philadelphia law firm of Kline & Specter, filed a lawsuit against the CBC’s owner, Bushar Corporation, on behalf of all persons damaged by the catastrophic fire. Judge O’Neill certified the class action.

Plaintiffs alleged that Royal Bank of Pennsylvania ( Lee Tabas’ employer) had liability for the fire, because the bank used an engineer for disbursement of its construction loan. Plaintiffs alleged that the Bank’s engineer should have discovered faulty electrical work and reported it. Since it did not do so, the plaintiffs alleged that the bank had a responsibility to them.  The bank was represented by Post and Schell.

Expert Analysis: Lee Tabas testified for the bank that the engineer did not supervise construction, but only vouched for the percentage of completion of construction when the bank was ready to disburse its loan. In deposition, he explained the construction loan disbursement procedures. With the small amount of time spent and modest billing from the bank’s engineer, Lee Tabas said, and with the engineer’s reports distributed only within the bank, it did not make sense that the building owner relied on the engineer’s reports.

Result: The bank and its carrier settled with the plaintiffs before trial.

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