The CEO of Quicken Loans Inc., the nation’s largest online home lender, says a West Virginia circuit court judge’s decision to award one of its former customers $2 million in punitive damages “made absolutely no sense.”
Bill Emerson, who was promoted to CEO of the company in 2002, says Quicken plans to fight the verdict, which stems from a lawsuit filed in Wheeling in 2009.
The plaintiff, Lourie Brown, had applied for a mortgage with the company, hoping to refinance her home.
Based on an assessment of her home — completed by a licensed West Virginia appraiser — Quicken loaned Brown $144,800. The loan reduced her monthly mortgage payments by about $300 a month, reduced her interest rate and provided her with cash to buy a new car.
“The client was happy and rated us very high,” Emerson said.
Then, two to three months after the transaction closed, Brown stopped making payments.
That’s when Quicken received notice of a lawsuit by Brown. In it, she accused the company of lending her too much money and that it took advantage of her.
“We, of course, disagreed with that,” Emerson said. “And we fought the lawsuit.”
However, Quicken eventually was found liable for $18,000, and the entire note and mortgage was canceled.
On top of that, Circuit Judge Arthur Recht awarded punitive damages in the amount of $2 million, plus $600,000 in attorney fees.
In the end, the total awards ended up being more than 25 times higher than the entire loan amount.
“We received the verdict and we completely disagreed,” Emerson said.
“I sort of scratched my head and said, ‘really?’ It absolutely made no sense to me.”
Now, Quicken is taking its fight to the West Virginia Supreme Court of Appeals. It filed a 47-page appeal brief with the state’s high court on Sept. 6.
Andrew Lusk, counsel for Quicken, said last week he wasn’t sure whether the Court would issue a quick decision or require a hearing.
Either way, the company says it doesn’t expect the Court to take any action until early 2012, at least.
Going in, the company realizes West Virginia is a more plaintiff-friendly state.
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