WEST VIRGINIA RECORD

WHEELING – A federal judge has ruled that only $55,000 is in dispute in a lawsuit brought against Quicken Loans that alleges violations of the West Virginia Consumer Credit Protection Act.

U.S. District Judge Frederick Stamp, of the Northern District of West Virginia, made the ruling July 19 in an order remanding Lourie Jefferson and Monique Brown’s lawsuit against Quicken Loans to Ohio County Circuit Court, where it was originally filed.

It is the second lawsuit filed by Jefferson and Brown against Quicken Loans, with the first one having been recently decided by the state Supreme Court.

Quicken Loans had removed the second case to federal court in May, alleging the amount in controversy exceeded a $75,000 threshold that allows removal of a lawsuit.

Adding attorneys fees to the $55,000 figure does not guarantee the amount in dispute will exceed $75,000, Stamp ruled

“(T)he amount of attorney fees presented by the defendant here are speculative for several reasons are therefore insufficient to make it ‘more likely than not’ that the amount in controversy will exceed $75,000,” Stamp ruled.

“First… even if the plaintiffs prove their claims stated in the complaint and the required conduct, the award of attorney fees will be left to the discretion of the court. Second, the amount of attorneys must take into account the Aetna factors, which include, inter alia, the results obtained by the attorneys and the time and labor involved, which are difficult to assess in advance of a trial.”

Brown and Jefferson filed their lawsuit earlier this year in Ohio Circuit Court, alleging Quicken Loans violated debt collection laws by contacting them after being notified they were represented by counsel.

In 2006, Quicken loaned to Jefferson $144,800, secured by a deed of trust encumbering the property owned by the plaintiffs.

Quicken Loans would not consider Jefferson’s pleas for a loan modification, and Jefferson filed a predatory lending lawsuit in 2008 against the company, the complaint says.

Months earlier, Quicken Loans was notified Jefferson and Brown were represented by the Wheeling law firm Bordas & Bordas, the complaint says. However, the company left a note at the plaintiffs’ door and made inquiries directly to Jefferson about the status of her homeowners’ insurance policy, it adds.

The loan was ruled void after a trial in February 2010 and Quicken Loans was also found liable for $18,000.

Judge Arthur Recht also awarded $2.1 million in punitive damages and $600,000 in attorneys fees.

Later that year, Quicken Loans left a note stating it was urgent that the plaintiffs call Quicken Loans, the complaint says.

The company made more inquiries about the insurance policy, the complaint says.

In November, the state Supreme Court affirmed the earlier ruling over the loan. Jim Bordas called it a significant victory for consumers in West Virginia.

The total amount recovered by the plaintiffs was $3.7 million after adding a $700,000 settlement reached with the appraisal company

The Supreme Court ruled the amount of compensatory damages should have been offset by the settlement. It remanded the case to establish a new punitive damages amount, as Recht had used the plaintiffs’ recovery and multiplied it by three to arrive at the $2.1 million figure.

“The simple fact is that this plaintiff was wrongfully awarded nearly $3.7 million in damages in relation to a $145,000 mortgage on a single family home,” the company said in a release.

“We fully expect the Circuit Court’s continued review of the case to find that the irrational award to this plaintiff is out of line with any near reasonable review of the facts and the law surrounding this case.”

The court ruled Recht did not conduct a “meaningful and adequate” analysis under the 1991 decision.

Under that decision, factors to be considered in awarding punitive damages include:

-Punitive damages should bear a reasonable relationship to the harm that is likely to occur from the defendant’s conduct as well as to the harm that actually has occurred;

-The reprehensibility of the defendant’s conduct;

-If the defendant profited from its wrongful conduct, the punitive damages award should discourage future bad acts;

-Punitive damages should bear a reasonable relationship to compensatory damages; and

-The financial position of the defendant.

“We look forward to the circuit court providing a more detailed order that sets forth the analysis that was used to award over $2 million in punitive damages,” Bordas said.

From the West Virginia Record: Reach John O’Brien at jobrienwv@gmail.com.