Jan. 4, 2008 – Jackson County jury awards $5.1 million in actual damages and $99 million in punitive damages in favor of plaintiffs’ class in Mitchell vs. Residential Funding Company, LLC. The plaintiffs’ class is comprised of those individuals who, on or after July 29, 1997, obtained a second mortgage loan secured by Missouri residential real estate from Mortgage Capital Resource Corporation, a now-defunct California mortgage lender. The second mortgage loans at issue were purchased and assigned to defendants Residential Funding Company, LLC, Household Finance Corporation, III and Wachovia Equity Servicing, LLC. Also named as a defendant was Homecomings Financial, LLC, which serviced some of the loans. Defendant Residential Funding Company has indicated that it plans to appeal.
March 12, 2010 – The case is currently on appeal to the Court of Appeals for the Western District of Missouri. The briefing for the appeal was recently completed as Plaintiffs� Final Reply Brief was filed on March 12, 2010. The parties are now awaiting an order from the Court of Appeals docketing the case for oral argument. In addition to the appeal, also pending before the Court of Appeals is Plaintiffs� Motion for Sanctions filed against Defendants Wachovia Equity Servicing, LLC, Residential Funding Company, LLC, and Homecomings Financial, LLC, for alleged discovery violations that occurred while the case was pending before the Circuit Court of Jackson County, Missouri.
August 3, 2010 – The case was recently submitted to the Court of Appeals for the Western District of Missouri, which heard oral arguments by the parties on July 8, 2010. The Court panel consisted of three judges: the Honorable Thomas H. Newton, the Honorable Gary D. Witt, and the Honorable Stephen K. Wilcox.
Typically, oral arguments before the Court of Appeals last approximately 23 minutes. In cases involving complex matters and cases, the Court may permit oral arguments lasting approximately 35 minutes. In our case, given the complexity, the number and importance of the issues, and the magnitude of Plaintiffs’ $100 million verdict, the Court extended oral argument to one full hour.
The oral arguments made by Plaintiffs and Defendants dealt with the issues on appeal and with Plaintiffs’ pending motion for sanctions against Defendants Wachovia Equity Servicing, LLC, Residential Funding Company, LLC, and Homecomings Financial, LLC, for alleged discovery violations that occurred while the case was pending before the Circuit Court of Jackson County, Missouri. The oral argument can be downloaded here.
There is no current time table for the Court of Appeals to issue an opinion on the case.
November 23, 2010 – We are pleased to now have the Court of Appeals ruling on a number of important issues for this and other similar cases with respect to Missouri’s Second Mortgage Loans Act. The Missouri Court of Appeals opinion affirms the liability of predatory lenders and their assignees under Missouri law in many important respects. This opinion will serve to protect Missouri citizens from the unscrupulous lending practices of lenders and secondary market purchasers of mortgage loans. The opinion affirms that lenders and their assignees who either directly or indirectly charge, contract or receive illegal fees and/or interest shall be held accountable for their conduct. While the Court held that a technicality regarding the wording of a jury instruction will require the issue of punitive damages to be retried, we welcome that opportunity. The appellate court has affirmed that the conduct of Residential Funding Company, LLC, Household Finance Corporation and Wachovia Equity Servicing, LLC was such that it was appropriate for the trial court to submit the issue of punitive damages to the jury for each of them. We believe that any jury faced with the facts of this case will again find the conduct of these lenders to be outrageous and in reckless disregard of the rights of the Missouri borrowers and we anticipate that a new trial on punitive damages will result in a similarly significant, if not greater, punitive damage assessment.
This case is but a small but powerful indictment of the excesses of the mortgage lending industry that exemplifies profit over people and has brought our national economy to the brink of disaster. Hopefully this opinion is one small step that will serve to reform the behavior of the mortgage lending industry’s insatiable appetite for profit at the expense of Missouri citizens and the laws that protect them as the loans move from Main Street to Wall Street. Click here to read the Opinion
April 26, 2011 – Good News! The Supreme Court denied the defendants’ Applications to Transfer to the Supreme Court on Tuesday, April 26th. Click here to see the Minutes Entry,
Links to Pleadings, Orders, Reports and Documents