Quicken Loans, Inc. v. Brown, No. 13–0764.

CourtSupreme Court of West Virginia
Writing for the CourtBENJAMIN, Justice
Citation236 W.Va. 12,777 S.E.2d 581
PartiesQUICKEN LOANS, INC., Defendant Below, Petitioner v. Lourie BROWN and Monique Brown, Plaintiffs Below, Respondents.
Docket NumberNo. 13–0764.
Decision Date25 November 2014

236 W.Va. 12
777 S.E.2d 581

QUICKEN LOANS, INC., Defendant Below, Petitioner
v.
Lourie BROWN and Monique Brown, Plaintiffs Below, Respondents.

No. 13–0764.

Supreme Court of Appeals of West Virginia.

Submitted April 8, 2014.
Decided Nov. 25, 2014.


Thomas R. Goodwin, Esq., Johnny M. Knisely, Esq., Goodwin & Goodwin, LLP, Charleston, WV, for the Petitioner.

James G. Bordas Jr., Esq., Jason E. Causey, Esq., Bordas & Bordas, PLLC, Wheeling, WV, for the Respondent.

Opinion

BENJAMIN, Justice:

This is the second time this case has been before the Court. The case was first brought by plaintiffs below and respondents herein, Lourie Brown (“Plaintiff”) and Monique Brown, against defendant and petitioner herein, Quicken Loans, Inc. (“Quicken”), in the Circuit Court of Ohio County, Judge Arthur M. Recht presiding. Plaintiff alleged that Quicken committed common law fraud and violated provisions of the West Virginia Consumer Credit and Protection Act (“WVCCPA”), as set forth in Chapter 46A of the West Virginia Code, in connection with a loan agreement between Quicken and Plaintiff.

777 S.E.2d 585

1 Following a bench trial, the circuit court entered judgment in favor of Plaintiff. Quicken appealed that judgment to this Court.

We decided Quicken Loans, Inc. v. Brown (Quicken I ), 230 W.Va. 306, 737 S.E.2d 640 (2012), on November 21, 2012, affirming the trial court's order, in part, and reversing, in part. The reversal was premised on the following conclusions: the circuit court improperly cancelled Plaintiff's obligation to repay the loan principal; the circuit court failed to support its $2,168,868.75 punitive damages award with the analysis required by Garnes v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991) ; and the circuit court failed to offset the compensatory damages award against Plaintiff's pretrial settlement with defendants who did not proceed to trial. We remanded the case to the circuit court for further proceedings consistent with our opinion.

Following remand, the circuit court, Judge David J. Sims presiding,2 entered an Opinion and Order on June 18, 2013. Quicken now appeals that order, alleging the circuit court did not comply with the direction provided by this Court. After a thorough review, we reverse and again remand this matter to the circuit court for further proceedings consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Because we set forth a comprehensive rendition of the underlying facts in Quicken I, 230 W.Va. at 312–18, 737 S.E.2d at 646–52, we proceed by providing a brief summary of those facts here. On July 7, 2006, Plaintiff entered into a loan agreement with Quicken. The loan totaled $144,800, which was secured by Monique Brown's home. Plaintiff defaulted on the loan after only two payments, and Quicken instituted foreclosure proceedings. Plaintiff then filed suit against Quicken, alleging that Quicken violated the following provisions of the WVCCPA: unconscionability, W. Va.Code § 46A–2–121 (1996)3 ; unfair and deceptive acts, W. Va.Code § 46A–6–104 (1974)4 ; and illegal balloon note, W. Va.Code § 46A–2–105 (1974).5 Plaintiff also claimed

777 S.E.2d 586

breach of the covenant of good faith and fair dealing, fraud,6 and illegal appraisal pursuant to W. Va.Code § 31–17–8(m)(8) (2002).

In addition to bringing this action against Quicken, Plaintiff also filed suit against Appraisals Unlimited, Inc.; an appraiser, Dewey Guida; and John Doe Note Holder.7 Appraisals Unlimited, Inc. and Mr. Guida settled with Plaintiff prior to trial for $700,000. The only defendant to proceed to trial was Quicken.

The circuit court, Judge Arthur M. Recht presiding, conducted a six-day bench trial. In its February 25, 2010, order, the court found in favor of Plaintiff on all of her claims except the claim for breach of the covenant of good faith and fair dealing. The court determined that the Note and Deed of Trust were unenforceable as a matter of law. The court did not order Plaintiff to repay the loan principal, and the court awarded $17,476.72 in restitution to Plaintiff.

A subsequent bench trial was conducted on September 1, 2010, to decide awards of attorney fees and costs and punitive damages. In its February 17, 2011, order, the circuit court awarded $596,199.89 to Plaintiff in attorney fees and costs. The court also awarded $2,168,868.75 in punitive damages. The multiplier used by the circuit court in calculating the punitive damages award was 3.53. Quicken's post-trial motion to offset the compensatory damages award against Plaintiff's $700,000 pretrial settlement was denied by order entered May 2, 2011.

Quicken appealed both the February 25, 2010, order and the February 17, 2011, order to this Court. In the opinion we issued, Quicken I, we determined that with regard to the fraud allegations, the circuit court did not err in finding that Quicken had committed fraud by failing to disclose the amount of the balloon payment in the loan agreement. We also determined that the circuit court did not err in finding that Quicken had falsely promised to refinance Plaintiff's loan and that Plaintiff was justified in having relied on that promise. Furthermore, we agreed with the circuit court that Quicken had induced Plaintiff into entering into the loan through unconscionable conduct, that the loan agreement included unconscionable terms, and that the loan was itself unconscionable. We affirmed the circuit court on all of those points.

In addition to challenging the circuit court's fraud and unconscionability findings, Quicken contested the circuit court's use of attorney fees and costs in calculating punitive damages. We explained in syllabus point 11 in Quicken I, 230 W.Va. 306, 737 S.E.2d 640, that the attorney fees and costs, when awarded pursuant to the WVCCPA, are properly considered compensatory damages for the purpose of calculating punitive damages. Thus, we concluded that because the attorney fees and costs were properly awarded under the WVCCPA, the circuit court did not err by using attorney fees and costs to calculate the punitive damages award.

We determined that the circuit court lacked the authority to cancel the Plaintiff's loan obligation. We also determined that the circuit court failed to adequately support and justify its punitive damages award because it failed to analyze the award as required by Garnes, 186 W.Va. 656, 413 S.E.2d 897. Additionally, we concluded that the circuit court erred by failing to offset the compensatory

777 S.E.2d 587

damages award by the $700,000 pretrial settlement amount. We reversed on these points, remanding the case to the circuit court.

After we filed Quicken I, we issued the following mandate on December 24, 2012:

Pursuant to Revised R.A.P. 26, the opinion previously issued in the above-captioned case is now final and is hereby certified to the Circuit Court of Ohio County and to the parties. The decision of the circuit court is hereby affirmed, in part; reversed, in part; and remanded with directions, and it is hereby ordered that the parties shall each bear their own costs. The Clerk is directed to remove this action from the docket of this Court.

The parties submitted briefs to the circuit court regarding their positions on the matters remanded. The circuit court, Judge David J. Sims presiding, held a hearing on April 9, 2013, to discuss the proper procedure moving forward. The court addressed the parties during the hearing as follows:

[A]s you all know, I had written a letter to the Supreme Court and suggested that Judge Recht8 ought to continue on this case since he heard all of the evidence.
The Chief Justice sent me a letter and said that, no, I should handle the matter on remand, which—um—I'm not sure exactly what it is the Court expects me to do.9 So, I'm going to ask you all what you all expect me to do.
Um—one is—um I don't know if the Court expects me to make a determination as to what Judge Recht's analysis and findings were, or if the Court expects me to make a determination independently by reviewing the transcripts and the exhibits submitted.

If I'm expected to do it independently, then the next question is, can I review the evidence and find that punitive damages are or are not justified in this case? And if I do find that they're justified, do I have to award the same amount that Judge Recht did, or am I free to award a lesser or greater amount?

(Footnotes added.) On the issue of punitive damages, counsel for Plaintiff advised the court that he believed the circuit court had the authority to increase the original damages award, but that he did not think the court had the authority to reduce the award. Counsel for Quicken answered affirmatively when asked by the court if he believed the court should do an independent analysis of the record to determine and set whatever award the court believed was appropriate.

The circuit court entered an Opinion and Order on June 18, 2013. In a footnote in that order, the circuit court stated:

This Court, as directed by the Supreme Court, obtained from counsel
...

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8 practice notes
  • Quicken Loans, Inc. v. Walters, No. 16-0298
    • United States
    • Supreme Court of West Virginia
    • June 15, 2017
    ...to recover attorney's fees ...," although the result obtained in litigation is one factor to be considered. Quicken Loans v. Brown , 236 W.Va. 12, 30, 777 S.E.2d 581, 599 (2014) (Quicken Loans II ). Further, Ms. Walters argues that "[b]ecause attorney's fees themselves are a measure of comp......
  • Heavner v. Three Run Maint. Ass'n, Inc., No. 18-1080
    • United States
    • Supreme Court of West Virginia
    • June 10, 2020
    ...unless specifically provided by law." (emphasis added). Furthermore, inPage 14 syllabus point two of Quicken Loans, Inc. v. Brown, 236 W. Va. 12, 777 S.E.2d 581, 584 (2014), we held:Pursuant to Rule 24 of the West Virginia Rules of Appellate Procedure, attorney fees and costs may be awarded......
  • McFarland v. Wells Fargo Bank, N.A., No. 14–2126.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • January 15, 2016
    ...that he return the loan principal to Wells Fargo, which is of course the very outcome he seeks to avoid. See Quicken Loans, Inc. v. Brown, 236 W.Va. 12, 777 S.E.2d 581, 592 (2014) ("Quicken Loans II ") (requiring return of loan principal as part of remedy for unconscionable loan agreement).......
  • Kessler v. Fay Servicing, LLC, CIVIL ACTION NO. 2:18-cv-00518
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • September 27, 2018
    ...basis for Plaintiff's other claims, "does not provide a statutory basis for an award of punitive damages." Quicken Loans, Inc. v. Brown, 777 S.E.2d 581, 598 n.20 (W. Va. 2014). More importantly, as with respect to Plaintiff's request for actual damages, Defendant asks this Court to assume t......
  • Request a trial to view additional results
8 cases
  • Quicken Loans, Inc. v. Walters, No. 16-0298
    • United States
    • Supreme Court of West Virginia
    • June 15, 2017
    ...to recover attorney's fees ...," although the result obtained in litigation is one factor to be considered. Quicken Loans v. Brown , 236 W.Va. 12, 30, 777 S.E.2d 581, 599 (2014) (Quicken Loans II ). Further, Ms. Walters argues that "[b]ecause attorney's fees themselves are a measure of comp......
  • Heavner v. Three Run Maint. Ass'n, Inc., No. 18-1080
    • United States
    • Supreme Court of West Virginia
    • June 10, 2020
    ...unless specifically provided by law." (emphasis added). Furthermore, inPage 14 syllabus point two of Quicken Loans, Inc. v. Brown, 236 W. Va. 12, 777 S.E.2d 581, 584 (2014), we held:Pursuant to Rule 24 of the West Virginia Rules of Appellate Procedure, attorney fees and costs may be awarded......
  • McFarland v. Wells Fargo Bank, N.A., No. 14–2126.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • January 15, 2016
    ...that he return the loan principal to Wells Fargo, which is of course the very outcome he seeks to avoid. See Quicken Loans, Inc. v. Brown, 236 W.Va. 12, 777 S.E.2d 581, 592 (2014) ("Quicken Loans II ") (requiring return of loan principal as part of remedy for unconscionable loan agreement).......
  • Kessler v. Fay Servicing, LLC, CIVIL ACTION NO. 2:18-cv-00518
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • September 27, 2018
    ...basis for Plaintiff's other claims, "does not provide a statutory basis for an award of punitive damages." Quicken Loans, Inc. v. Brown, 777 S.E.2d 581, 598 n.20 (W. Va. 2014). More importantly, as with respect to Plaintiff's request for actual damages, Defendant asks this Court to assume t......
  • Request a trial to view additional results

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