Schneiderman files contempt order against Legal Docs by Me for failing to refund customers

WATERTOWN, N.Y. — New York Attorney General Eric Schneiderman is seeking a contempt order against the business formerly known as Legal Docs by Me, saying it has violated two previous court orders to pay restitution to consumers.

Schneiderman’s office announced the court filing in a news release issued Monday. The office used the word “defrauded” in the release headline to describe what it says Legal Docs by Me did to its customers.

New York State Supreme Court Justice James McClusky has issued an order to show cause to the business and its owner, Derek Distenfield, as to why they should not be held in contempt of court for violating the prior court orders.

In a case brought last summer, Schneiderman accused the business — which is now operating as NextGenJustice — of “engaging in the unauthorized practice of law and deceiving consumers by regularly misrepresenting its pricing, its expertise in the preparation of legal documents, and the nature of the services it provided.”

The NextGenJustice website lists a Watertown office at 137 Franklin St. and a Syracuse office at 617 N. Salina St. with additional locations in Jacksonville and Tampa, Florida.

 “This company’s refusal to provide restitution to consumers is just the latest in its pattern of disrespect for the courts and people of New York,” Schneiderman said in the latest news release. “My office will fight to ensure that those taken advantage of by unscrupulous business owners get the refunds they deserve, and to prevent additional consumers from being victimized.”

The evidence submitted in this contempt proceeding alleges that Legal Docs by Me has violated the consent order by failing to pay restitution to consumers and also violated the court’s prior temporary restraining order. Schneiderman seeks full restitution to all consumers harmed by the business’s contempt, along with other fines and costs, his office said.

As part of the consent order entered last October, Judge McClusky required Legal Docs by Me to provide restitution to “every consumer for all money collected.”

Despite the “clear mandate,” the company has failed to issue refunds to a number of consumers, according to the attorney general’s office.

It has further violated the consent order by continuing to use “deceptive” advertising, primarily with its new tax-return preparation services, the office contended.

For example, though NextGenJustice advertises that they are “fully credentialed by the IRS” and licensed to prepare tax returns in all 50 states, the attorney general’s investigation has demonstrated that the business has no IRS-recognized credentials and is not a licensed tax preparer in many states.

Schneiderman also contended that Legal Docs by Me violated the temporary restraining order which was in place “to protect the public from likely damaging legal consequences” during the pendency of the litigation.

The court’s order was signed in June 2014 and in effect until the consent order was finalized in October.

The restraining order barred the business from providing any legal services other than simply handing out official form legal documents for completion by the consumers themselves.

Legal Docs by Me, however, “blatantly disregarded” the court’s directive and continued to provide “unlicensed” legal services to consumers, including the sale of divorce documents, living trusts, and a deed, Schneiderman’s office argued.

A hearing on the contempt application is set for May 14 at 9:30 a.m. in Judge McClusky’s court.

Contact Reinhardt at ereinhardt@cnybj.com