Nice – WFB hit with $3.2 million in Punitive Damages in Favor of little ol’ Homeowner

Nice opinion from Louisiana:

“On April 13, 2007, the Court entered an Opinion and Partial Judgment awarding [the debtor] $24,441.65, plus legal interest for amounts overcharged by Wells Fargo.  In addition, [the bankruptcy court] found Wells Fargo to be in violation of the automatic stay because it applied postpetition payments made by [the debtor] and his trustee to undisclosed postpetition fees and costs not authorized by the Court, noticed to Debtor or his trustee, and in contravention of Debtor’s confirmed plan of reorganization and the Confirmation Order.  Wells Fargo’s conduct was found to be willful and egregious.”

Later the court awarded $67,000 in attorney’s fees as “compensatory sanctions.”  The court did not award punitive damages.    On appeal, the district court increased the judgment to $170,000.  The Fifth Circuit remanded (ultimately) with an order to reconsider the punitive damages.  On remand, the bankruptcy court increased the compensatory award to $292,000 for the additional fees involved in the appeal and said,

“After considering the compensatory damages of $24,441.65 awarded in this case, along with the litigation costs of $292,673.84; awards against Wells Fargo in other cases for the same behavior which did not deter its conduct; and the previous judgments in this case none of which deterred its actions; the Court finds that a punitive damage award of $3,171,154.00 is warranted to deter Wells Fargo from similar conduct in the future.”

The opinion is here.  WFB Hammered  Thanks to Marc Stern in Seattle for the FYI on this.

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