Last month, Stradley Ronon Stevens & Young filed a declaratory action in the Eastern District of Pennsylvania, to put an “end to ongoing and baseless assertions and threats of malpractice” by Sovereign Bank. Stradley had advised Sovereign Bank on a loan agreement with a mortgage financing company that went bankrupt after the agreement, and asked for a ruling that it did not commit legal malpractice in advising Sovereign Bank. Stradley filed the action in an attempt to get ahead of the complaints made by Sovereign Bank. Last week, Sovereign Bank responded with a legal malpractice action in the Philadelphia Court of Common Pleas, which alleges errors by Stradley in creating $200 million in loans to subprime lender Taylor, Bean & Whitaker Mortgage Corp. The action by Sovereign Bank alleges, among other things, that two investors were omitted from a list of servicers. Sovereign Bank asserts that the declaratory judgment action was merely an attempt by Stradley to secure what Stradley believes would be a more favorable forum.
While the declaratory action did not stop the legal malpractice lawsuit from being filed, it will be interesting to see if Stradley is able to maintain the forum of its choice.-Josh J.T. Byrne, Esquire