Castille sues lawyer, firm over Family Court deal

Pennsylvania's chief justice sued his once-trusted attorney and a prominent Philadelphia law firm Tuesday, saying he was misled into paying millions in unnecessary fees for the Family Court building project.

Chief Justice Ronald D. Castille says he was the victim of fraud and legal malpractice by attorney Jeffrey B. Rotwitt, who was paid by the court to put together a deal for a new Family Court building at 15th and Arch Streets - and ended up as the codeveloper of the project.

The suit also names Rotwitt's former law firm, the politically connected Obermayer Rebmann Maxwell & Hippel L.L.P., saying "high-ranking members" of the firm share responsibility for concealing a legal conflict of interest.

The filing, which comes after the failure of months of negotiations between the court and Obermayer, means that the tangled dispute over who knew what in the Family Court deal may finally be aired in public.

With the Commonwealth of Pennsylvania now acting as the developer, construction on the building is under way. After public bids, the cost for the project came in at $140 million, far less than Rotwitt's original $200 million estimate.

The original deal, supervised personally by Castille, blew up in May 2010 when The Inquirer published a story detailing Rotwitt's dual roles: as the public's representative and as one-half of a project team with builder Donald W. Pulver, splitting the development fees 50-50.

Rotwitt has insisted that he never tried to hide his arrangement with Pulver - from Castille, from his partners at Obermayer, or anyone else.

It first came to light when he told Inquirer architecture critic Inga Saffron that he was being paid as Pulver's codeveloper.

"As we have previously stated, Mr. Rotwitt's widespread and prior disclosure was documented in writing," said his attorney, Catherine M. Recker.

"Consequently, this is a baseless suit and Mr. Rotwitt will respond accordingly."

Obermayer fired Rotwitt a week after The Inquirer report, with its top lawyers saying they, too, knew nothing about the side development deal - even though Rotwitt, in an e-mail to other Obermayer lawyers, had spelled it out more than two years earlier.

In a statement, partner Thomas A. Leonard said he was sure "an unbiased and appropriate judicial process" would show that the news about Rotwitt's dealings had not reached the top lawyers in the firm.

"The firm views this dispute as one between the Chief Justice and Mr. Rotwitt," the statement says.

To pursue Rotwitt and Obermayer, Castille has retained Richard A. Sprague, a prominent lawyer who served as president judge of the court that handles discipline for state judges.

In a 44-page complaint bristling with charges of a "corrupt deal" and a "carefully orchestrated scheme," Sprague lays out a detailed account that depicts Castille as the trusting victim of a long campaign of deception by Rotwitt.

"Rotwitt went to extraordinary lengths to conceal his secret fee-splitting scheme from Chief Justice Castille," says the suit filed by Castille acting as trustee for the Philadelphia courts.

The suit says Rotwitt reached his 50-50 side deal with Pulver before Castille even settled on the 15th and Arch location, where Pulver controlled the development rights - then kept pushing Castille to select the site.

The location was nailed down for good when then-State Sen. Vincent J. Fumo - acting on Rotwitt's request, the suit says - inserted a provision into a state appropriations bill that specified the project had to be built at 15th and Arch Streets.

Rotwitt later convinced Castille that the deal would fall apart unless he started paying fees to Obermayer, Pulver, and others. The payments began, even though there was no signed development contract.

Obermayer was paid $1.1 million for Rotwitt's work, and Rotwitt collected an additional $825,000 as his half of Pulver's fees before the deal blew up.

"Rotwitt could have pocketed at least $2,615,000" under his arrangement with Pulver had The Inquirer not reported the deal, the suit says.

Unraveling the Family Court deal has never been simple.

Rotwitt, as an attorney, was under an ethical obligation to clearly disclose that he had crossed to the other side of the deal. That's to give the client - in this case, Castille - the chance to get a new lawyer.

Rotwitt has pointed to documents that he says prove he was open about his role. Contractors knew he was working with Pulver, he said. He formed a company named after his Radnor estate, Deilwydd Property Group FC L.L.C., that shows up on agreements sent to the court.

To make the case that Rotwitt was trying to conceal his role, the suit includes new details gleaned from documents gathered in an internal investigation ordered by Castille.

For example, the suit says one draft of a development proposal explicitly says that the court would waive any conflict arising from Rotwitt's deal with Pulver.

But before the deal was sent to the court, the language was changed and the word conflict dropped - though it still said Rotwitt's company had become "a constituent partner" with Pulver's firm.

No one picked up that Rotwitt owned Deilwydd, Castille said in earlier interviews.

When The Inquirer started asking questions, Rotwitt wrote a response defending his arrangement - and Castille agreed to send it out as his statement.

According to the lawsuit, Rotwitt changed the wording slightly after Castille read it - making it clear that he controlled Deilwydd.

The changes were made to "create the entirely false impression" that Castille knew about Rotwitt's dual roles, the suit says.

The whole mess cost the court a total of nearly $6 million, according to Sprague's count.

Besides the $1.1 million paid to Obermayer as Rotwitt's fee, there is an additional $440,000 paid to Obermayer for more legal work; $1.65 million in development fees split by Pulver and Rotwitt, "for which no service was performed"; an additional $1 million for "land cost" to Pulver; $200,000 for Pulver's lawyers; $350,000 to buy back the architectural plans; and $443,000 to pay lawyers.

That's not all.

The suit does not include Pulver. Because of a deal he had made with the Philadelphia Parking Authority, Pulver owned development rights to the site and, after the deal unraveled, he filed a suit in Bankruptcy Court to protect his claim.

With the courthouse project at risk, Castille agreed to settle with Pulver, paying him an additional $1.1 million.

After the deal blew up, the FBI began an inquiry, but no charges have been filed. Castille hired his former deputy in the Philadelphia District Attorney's Office, William Chadwick, to conduct an internal investigation.

But Chadwick's report has never been released. The documents he gathered are now being used in the court battle. So far, the suit says, Chadwick has been paid $780,540.