On April 28, Carlsbad’s Michael T. Pines filed a lawsuit in bankruptcy court boasting that “Michael T. Pines is considered one of the few and earliest experts in the legal issues involved in the foreclosure and real estate crisis. Pines has a law practice.”
That same day, the State Bar of California suspended Pines’s license to practice law. He believes, as he has said in a court filing, that “The vast majority of foreclosures in California are illegal and based on fraud.” So he has counseled clients to break into foreclosed homes and begin living there again. Sometimes Pines has accompanied clients on the break-ins, inviting the media. He has been arrested several times. The state bar judge said Pines doesn’t recognize he is violating the law, legal ethics, and his responsibilities as an officer of the courts.
In his decision, the judge did not refer to Pines’s Chapter 7 (liquidation) bankruptcy case. In 2007, Pines got loans totaling $500,000 from California Bank & Trust. He pledged his office at 732 North Coast Highway as collateral. The bank stated that the contract gave it the right to inspect the interior of the property. Pines defaulted but would not let the bank in the door. Pines charged the bank with fraud, and the bank said he was perpetrating a mortgage elimination scam. On January 11 of last year, Pines filed a Chapter 11 bankruptcy.
In a recent email exchange, I asked him why he would not let the bank in his office. His reply: “I won’t let any bank on any of my property — ever.”
On May 13 of 2010, the United States Trustee’s office, which oversees the administration of bankruptcy cases, filed a motion to appoint a trustee to Pines’s case. Pines was charged with “grossly mismanaging the estate. He has failed to maintain proper insurance, failed to file reports required by the Bankruptcy Code and Rules, and failed to abide by orders of the court by failing to appear at the continued case status conference, failing to file a statement of financial affairs, failing to employ a property management company, and failing to obtain an order authorizing the payment of insider compensation.” A trustee to manage his bankruptcy was named.
I asked Pines if these charges were true. “The trustees are criminals under criminal investigation,” said he. “The [district attorney] has assigned a special operations investigator — Dan Schmitt.” I sent one email to Schmitt and left two phone messages for him. He did not reply.
As the bankruptcy dragged on, Pines continued to refuse to supply documents such as the statement of financial affairs to the trustee in the case, Leslie Gladstone. On June 17, 2010, the bankruptcy was shifted from a Chapter 11 (reorganization) to a Chapter 7 (liquidation). Why did he not file the statement of financial affairs? “I don’t give criminals information,” he told me.
In court filings, Pines has made a number of charges against Gladstone and her lawyer, Gary Slater. One accusation was that the Region 15 United States Trustee Tiffany Carroll, Gladstone, and Slater were secretly conspiring with illegitimate creditors of the estate. Wrote Pines to me, “All creditors except a few of mine have committed criminal fraud.” In that same filing, he used a technique he has used before. He wrote to Slater, said he was preparing a lawsuit against Gladstone, and said if Slater didn’t get back by 4:30 p.m. that day, he would conclude that Gladstone had no basis for seizing his assets. His explanation: “He never responds. She had no authority.”
In April 2010, the United States Trustee in a court filing questioned “whether [Pines] is improperly depleting estate cash for personal use.” I asked if he were doing so: “Absolutely. It’s my cash and I will do what I want with it,” he replied.
Early this year, Pines tried to disqualify Judge Laura Taylor, who has twice hit him with contempt of court judgments. His main argument was that before going on the bench, she worked for a law firm that had banks as clients. This presented an appearance of impropriety because the banks were a major cause of the foreclosure calamity, he argued. The judge denied his attempt. “The judge’s prior representation of banks in matters wholly unrelated to the matters currently before the court does not create an appearance of impropriety,” she wrote, noting that as a private lawyer she also represented debtors in disputes with banks.
Pines’s statement to me: “She is a liar. (You can quote me.)”
On February 2, Pines wrote the California Commission on Judicial Performance and the chief judge of the Bankruptcy Court in San Diego. Penned Pines, “I am writing to request an investigation of the Honorable Laura S. Taylor. At a minimum she is allowing herself to be manipulated by criminals. At worst she has been involved in a criminal conspiracy herself.” The judge is biased in favor of the United States Trustee, Pines complained. “She has consistently berated me in open court, accusing me of lying, of being unethical, and of malpractice.”
In the case he filed April 28 of this year, Pines named as defendants Gladstone, Slater, the United States Trustee, the United States Marshal, the Federal Bureau of Investigation, the Carlsbad Police Department, the California State Bar (which he calls “corrupt”), and two individuals for whom he has special animus, Christian McLaughlin and his friend Lisa De Benedittis. McLaughlin, an attorney, had once been a tenant in Pines’s office. Pines charged them with a number of sins, such as wrongfully accessing his computers and defaming him. McLaughlin and De Benedittis have restraining orders against Pines.
Then Pines charged that McLaughlin and De Benedittis solicited Gladstone and Slater “to become involved in their conspiracy to harm Pines and they agreed.”
Of the suit, McLaughlin says, “Nobody is really taking it seriously.” McLaughlin once held seminars featuring Pines as a speaker, but McLaughlin got out of the office when he realized what a financial bind Pines was in. He denies the charges, including that of conspiracy.
Michael T. Pines, of Encinitas, is not related to San Diego personal injury lawyer Michael Pines.