Judge releases confidential contract between company and attorney in ADA cases

A federal judge has publically released another confidential contract that further exposes an Arizona group’s attempt to turn lawsuits filed under the Americans with Disabilities Act into a lucrative money-making operation.

New Mexico District Court Judge Karen Molzen issued an order this week and attached copies of the contracts between Litigation Management and Financial Services, LLC and its plaintiff and attorney.

“Having reviewed the agreements, the Court finds that they should be made available to the Defendants and that a protective order is not necessary,” Molzen wrote.

FULL COVERAGE: Cash for Complaince?

ABC15 had previously obtained a copy of the plaintiff Alyssa Carton’s contract and reported on its details: Plaintiffs are paid $50 per lawsuit. In return, the company pays all attorney, legal and court costs associated with the case and is “first entitled” to the proceeds.

The contract with attorney Sharon Pomeranz is a structured differently.

It states Litigation Management and Financial Services pays Pomeranz $100 per filed case. The company then collects $2,000 for each case that results in a financial award through settlement or judgement.

Read a copy of the judge’s order and the attorneys contract below:

ABC15 has confirmed through attorneys, sources and internal documents that Litigation Management and Financial Services is comprised of the same people behind the Valley group, Advocates for Individuals with Disabilities, or AID.

In Arizona, AID sued 1700 businesses in a six month period. After an ABC15 investigation, the Arizona Attorney General’s Office intervened and convinced a judge to dismiss all of the group’s open cases. During that time, AID formed Litigation Management Services and recruited attorneys and plaintiffs to file hundreds of cases in Colorado, Nevada and New Mexico.

The plaintiff in New Mexico, Alyssa Carton, has since expressed her regret for working with AID and Litigation Management Services.

In recent hearings, Carton and Pomeranz specifically mention working with multiple people who work for AID in order to file the cases in New Mexico. Carton also said that Broadbent drove her around to scope out businesses to sue. (Read a transcript of the May 11 hearing)

The employees connected to AID that were mentioned in the hearing: Alex Callan, Sean Conway, Emily Branch, and Craig Broadbent.

In an email to Pomeranz, Broadbent expressed his concern and confusion about why AID, Litigation Management and Financial Services, and its employees were the topic of discussion in open court. The concern likely attributed to the fact that the judge is considering sanctions that could hit Pomeranz and the company for tens of thousands of dollars because of conduct that could be ruled unethical.

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Broadbent wrote, “I am further confused by the comment on sanctions….While those AID cases have been dismissed, there is no punitive award issued, neither fees nor sanctions. I am unaware of any Arizona state court or federal court for the district of Arizona ruling that any ADA suit was malicious.”

But that’s not accurate.

Federal judges in Arizona have ruled that AID’s attorneys acted in “bad faith” and used “bait-and-switch” tactics. Here’s an ABC15 report from October in one such case.

AID and the Attorney General’s Office are also locked in an ongoing legal battle. As part of that case, the Attorney General’s Office is alleging that AID operated a fraudulent scheme and is seeking evidentiary hearings and sanctions.

A court hearing to argue those issues is scheduled for next month.

Contact ABC15 Investigator Dave Biscobing at dbiscobing@abc15.com.

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