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Quicken Loans, Inc. v. Walters

Case Number: 16-0298
Quicken Loans Inc. v. Sue Walters

Type of Proceeding

Appeal from Circuit Court of Raleigh County (Judge Kirkpatrick)

Issues

Whether the trial court acted appropriately in awarding, calculating and offsetting attorney fees in a consumer case?

Background

In 2007, Respondent, Sue Walters, applied to refinance her home mortgage with petitioner, Quicken Loans.  As part of the loan origination process, Quicken obtained an appraisal valuing Respondent’s home at $152,000.  Respondent alleged that, unbeknownst to her, the appraisal was substantially inflated and that the home had an actual market value of $64,000 at the time of the refinancing.   Quicken wrote a loan in the amount of $135,000.

Thereafter, Respondent sued Quicken along with the appraiser and the loan servicer.  Respondent alleged, inter alia, that Quicken had written a mortgage loan in excess of the home’s actual market value–a violation of W.Va. Code 31-17-8(m)(8).  Quicken, in turn, asserted as a defense that it had reasonably relied on the appraisal.  Settlements totaling $98,000 were reached with the remaining parties and the case went to trial against Quicken only.

The jury found that Quicken had, in fact, violated W.Va. Code 31-17-8(m) (8) and awarded $27,000 in damages.  Finding that there was a single, indivisible injury, the trial court offset the damages against the pretrial settlements.  The trial court also found that Respondent had prevailed on her statutory claim and was entitled to recovery attorney fees.  In all, the trial court awarded over $150,000 in fees.  The trial court offset the fee award also, but in doing so only used those portions of the pretrial settlement that were specifically designated as attorney fees.

 

Positions of the Parties

Petitioner:  (Quicken)

 Initially, Quicken argues that W.Va. Code 31-17-8(m)(8) was misinterpreted by the trial court, and that it only applies when there are multiple mortgages and not, as here, where there is a single mortgage.  Quicken also contests the trial court’s finding that Respondent was the prevailing party, noting that under West Virginia law a party is deemed to “prevail” only by “demonstrat[ing] significant success on a significant claim.”  Schartigar v. Land Use Corp., 187 W.Va. 612, 616, 420 S.E.2d 883 (1991).  Regarding the fees themselves, Quicken argues that the trial court did not adequately account for the time spent pursuing the claims against the settling parties and did not adequately apply the factors under Aetna Cas. & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).  Finally, Quicken complains that the trial court erred in offsetting the attorney fees.

Respondent (Walters):

Respondent argues that the plain language of W.Va. Code 31-17-8(m)(8) applies to all mortgages covering the property in question–whether there is only one mortgage or more than one.  Furthermore, the trial court’s award of attorney fees was warranted because Respondent did, indeed, prevail on her statutory claim.  According to Respondent, the fee shifting provisions of the consumer law “do not dictate any level of success necessary for the consumer to recover attorney fees.”  Quicken Loans, Inc. v. Brown, 236 W.Va. 12, 777 S.E.2d 581, 599 (2014).  Respondent also argues that the trial court’s calculation of the fee amount was proper under the Aetna factors and that offsetting fees against fees was consistent with West Virginia law.

Probable Impact

This could be a significant case.  Because it appears on the Rule 20 docket, we can expect a new syllabus point addressing these issues.  Hopefully, the trial court will provide us with greater clarity regarding the process trial court’s must follow in awarding and calculating attorney fees in consumer cases.

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