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Bank told to pay $3.2M in lawsuit for 'shocking' foreclosure

Oldgamer

Oldgamer

Diamond Member
ALBUQUERQUE, N.M. (AP) — A New Mexico judge has issued a $3.2 million judgment against Wells Fargo for foreclosing on a man's home after his death, even though he had purchased an insurance policy through the bank that would have paid the remaining balance on his mortgage.

District Judge Beatrice Brickhouse said the bank's conduct was shocking and so reprehensible that in addition to actual damages, attorney's fees and court costs, she awarded James Dollens' estate $2.7 million in punitive damages.

Brickhouse issued the ruling Feb. 14. It was reported Friday by the Albuquerque Journal.

Jim Hines, a spokesman for San Francisco-based Wells Fargo, said the bank will appeal and it disagrees with several parts of the ruling, including the award of punitive damages.

Katy Duhigg-Kennedy, a lawyer for Dollens' estate, said Friday that the ruling "protected people over profits. We are confident that the appellate courts will do the same."

Dollens had purchased an accidental death mortgage insurance policy for his Rio Rancho home that was marketed by Wells Fargo and issued by Minnesota Life. When he died Aug. 18, 2010, in a workplace accident, he owed $125,000 on his mortgage.

His death was reported immediately to Minnesota Life and to Wells Fargo to make a claim under the policy.

But instead of seeking funds from the insurance policy, Wells Fargo sent notices about the loan being in default and referred the loan for foreclosure in December 2010. The foreclosure proceeded despite requests from representatives of the estate to hold off pending the insurance payout.

When the bank received a $133,559 check from the insurance company in May 2011, it collected delinquent payments, late fees, and fees for lawyers and for 18 property inspections, leaving only $4,400 for Dollens' estate "because of ... misapplication of the insurance proceeds," the judge said.

Wells Fargo said the family should have continued making payments regardless of the insurance policy.

However, Brickhouse said Wells Fargo disregarded the terms of the insurance policy before moving to foreclose.

That, the judge said, was a breach of the covenant of good faith and fair dealing. She said the bank's "unwillingness and failure" to hold off on the foreclosure even when requested to do so by the insurance company was "shocking."

Link to News article

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Wow, that is messed up. Glad to see the judge awarded that amount to the family.
 
Credit Life is such a tight industry to start with. I'm surprised their CL vendor didn't exert pressure to stop WF.

This kind of story sticks in peoples heads and CL is a hard sell to start with. They certainly dont need to create bad publicity.
 
Too bad the family will never get the money. How long do you think Wells Fargo will drag out the settlement process before paying/settling out of court for a much lower undisclosed amount?
 
$2.7M in punitive damages is outrageous. Yes, Wells Fargo fucked up, but to pay 20x the disputed amount in punitive damages is making a mockery of the court system.

Actual damages, court fees, lawyer fees, and lost wages are all that should be awarded here.

It will be significantly reduced on appeals.
 
drebo said:
$2.7M in punitive damages is outrageous. Yes, Wells Fargo fucked up, but to pay 20x the disputed amount in punitive damages is making a mockery of the court system.

Actual damages, court fees, lawyer fees, and lost wages are all that should be awarded here.

It will be significantly reduced on appeals.
Click to expand...



Yea so let the bank keep dragging this out as if what you are saying is how it work they have nothing to lose.

There is a reason we have punitive damages, its exactly for cases like this.
 
So the punitive damages is "outrageous" to you, more so than the bank stealing this family's home in the first place and then also stealing the insurance payout to use for reimbursing themselves for their own mis-issued fees and penalties? That's thievery and abuse of power x2, but being punished for taking advantage of their position of power shocks you more?

By the way, outrageous, to whom? Nobody, except the bank, and you it seems.

Unless punitive damages are substantial, large, financially strong institutions like banks would feel little pressure to not engage in banditry and frauds of various kinds. The risk/reward ratio would be too low to be an effective deterrent.

If it was up to me I'd raise the damages further on appeal purely because of the bank persisting in their asshattery behavior rather than fessing up and doing what's right, what they should have done in the first place. Preferably, (high-ranking) bank staff ought to be prosecuted for felonies as well and not just having the bank itself slapped with a fine.
 
drebo said:
$2.7M in punitive damages is outrageous. Yes, Wells Fargo fucked up, but to pay 20x the disputed amount in punitive damages is making a mockery of the court system.

Actual damages, court fees, lawyer fees, and lost wages are all that should be awarded here.

It will be significantly reduced on appeals.
Click to expand...

Why do you support the scamming Banks, you work at one?
 
As I read the story, if a private citizen did what this bank did, wouldn't they be charged with insurance fraud?
 
drebo said:
$2.7M in punitive damages is outrageous. Yes, Wells Fargo fucked up, but to pay 20x the disputed amount in punitive damages is making a mockery of the court system.
Click to expand...

No, it's not. The punitive damages are a needed punishment intended to deter similar conduct by Wells Fargo and other banks in the future. If anything, the punishment probably should have been higher and perhaps should have required Wells Fargo to pay for TV and newspaper ads to publicize the outcome of the lawsuit.
 
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drebo said:
$2.7M in punitive damages is outrageous. Yes, Wells Fargo fucked up, but to pay 20x the disputed amount in punitive damages is making a mockery of the court system.

Actual damages, court fees, lawyer fees, and lost wages are all that should be awarded here.

It will be significantly reduced on appeals.
Click to expand...
That word, punitive, I do not think you know what it means.
 
Sounds about right to me.

The family was already burdened by the man's unexpected death, then were put through a foreclosure of their home? Shameful.

Somebody needs to be fired and/or face some personal penalty.

Fern
 
drebo said:
$2.7M in punitive damages is outrageous. Yes, Wells Fargo fucked up, but to pay 20x the disputed amount in punitive damages is making a mockery of the court system.

Actual damages, court fees, lawyer fees, and lost wages are all that should be awarded here.

It will be significantly reduced on appeals.
Click to expand...

im of the opinion that is not enough money. F the bank
 
MagickMan said:
I agree with it all, except the punitive damages. Maybe $1M, but >3M? No.
Click to expand...



original amounts overwhelming get reduced in appeals. If it was only 1million it would be more toward cost of business then we need to fix it, let alone it being reduced on appeal.

Now after appeal and/or settlement they might end up with a million.
 
The punitive damages are peanuts to Wells Fargo, even though it looks like a lot of money to us.

Dicks in suits, fighting their way to the top, future business leaders & jerb creators.

Shower your free market praise & adulation upon them.
 
MagickMan said:
I agree with it all, except the punitive damages. Maybe $1M, but >3M? No.
Click to expand...

Well, at $3.2M that's about what the family will end up with. The lawyer and the IRS will each get approx a $1M, leaving the family with one $1M.

Edit: IDK if awarded court fees take the place of lawyer 'commissions' in cases.

Fern
 
Fern said:
Well, at $3.2M that's about what the family will end up with. The lawyer and the IRS will each get approx a $1M, leaving the family with one $1M.

Edit: IDK if awarded court fees take the place of lawyer 'commissions' in cases.

Fern
Click to expand...

Sounds right. I suspect that the plaintiffs offered settlement for far less, they usually do. Big firms are known for blowing sunshine up the skirts of deep pocket defendants to insure fee churn down the road with endless appeals & motions, all billed by the hour.

" I thought about your case while I was on the crapper, so that's 15 minutes at $500/hr."

Defendants also stall when they can earn with the money they should have paid out. My wife's employer represented a client clear to the SCOTUS over $12M, a process that took nearly 10 years. At 7%, the original $12M would become $24M for the defendant, easing their "pain" enormously.
 
I actually agree with the judge this time. The bank was way out of line and deserves what it has to pay now.

This type of crap shouldn't just be civil, some of the people in charge should be in jail.
 
dmcowen674 said:
Why do you support the scamming Banks, you work at one?
Click to expand...

I don't. I would prefer they throw the person responsible in prison, as I've said multiple times on this board.

Excessive punitive damages that will get reduced considerably on appeals (as they always do) are completely pointless, except to make lawyers lots of money. Appeals take time.
 
drebo said:
Excessive punitive damages that will get reduced considerably on appeals (as they always do) are completely pointless, except to make lawyers lots of money. Appeals take time.
Click to expand...
These are not excessive..in fact they did not award enough for punitive damages.
 
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