Expert Witness Case Summaries

This page is dedicated to summarize some of the court cases where Lee Tabas participated as an expert witness as an experienced businessman, banker, bank president, and investor.

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

 

Lee Tabas is available as an expert witness in banking and business litigation matters.  After 30 years of banking exposure, He has experienced a variety of financial institution lawsuits.  He has testified many times in court, 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

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 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 inform the Scouts, or to obtain a subordination from the Scouts.  The president of the Scouts was served at his home and pressured him into signing a subordination which allowed the property to go to tax sale. The property was bought at the sale by the bank, sold to the new borrower, and the Scouts position was wiped out.  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 procedures. The construction loan only provided for 4 months of construction interest. 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.  Further, against sound practices, the bank began providing construction funding even though all permits were not in place.  Additionally, 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 Judge’s opinion issued September 18, 2015 found that the President had the authority to bind the Boy Scouts, and having done so, the Scouts lost their position. The Judge’s opinion did not deal with the adequacy of construction loan procedures.

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Expert Witness Matter
Date Submitted: September 2, 2011

Darby V. Rahman et al, Philadelphia, Pennsylvania  US Eastern District April 2010  

Case Synopsis: Gloria Darby applied for a loan. The money was to be used to acquire the house from the landlord where she lived. The bank was promoting loans aggressively, and did not require a title search or title insurance, and the bank was unaware of a prior mortgage existing on the property. The prior mortgage was not repaid at the closing. 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 loan, wondered what was happening. 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. It was odd that Wachovia requested that the borrower sign a disclosure document regarding title services, when there were none used at the first mortgage settlement. This should have been a red flag to the bank’s representative. This matter settled with a satisfactory result for the plaintiff. Read more about the details of this case, 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 November 2007

Case Synopsis: A Quadriplegic military veteran who received a million dollar settlement against the
VA hospital system claimed that an officer at Hudson United Bank gave his private financial information
to a friend, and conspired to have her seduce and marry him. The friend proceeded to plunder his bank
accounts, while the bank officer did nothing about it. Raymond Hughes 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. Further, 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

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. State and local officials have estimated that
the fire caused in excess of $100 million in damages.

Class Action Plaintiffs alleged that Royal Bank of Pennsylvania had liability for the fire, because it
used an engineer for disbursement of its construction loan. Plaintiffs alleged that the Bank’s engineer
should have discovered faulty electrical work. 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 so that the bank could disburse its loan. He explained the
construction loan disbursement procedures. With the small amount of time spent and modest billing from the
bank’s engineer, and with the engineer’s reports distributed only to the bank, it did not make sense that
the building owner relied on the engineer’s reports.

Result: While some aspects of the case may be ongoing, the bank and its carrier settled with the Plaintiffs
before trial.

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