Home / Daily Dose / California Judge Dismisses $16 Million Verdict Against Servicer
Print This Post Print This Post

California Judge Dismisses $16 Million Verdict Against Servicer

"Mortgage

A California judge dismissed a $16.2 million verdict a jury awarded to a California homeowner in July after the homeowner sued mortgage servicer PHH Mortgage to stop foreclosure proceedings on his home.

Yuba County Superior Court Judge Stephen Berrier said in his ruling that there was no "substantial evidence" to support homeowner Phillip Linza's claims of negligence, intentional misrepresentation, interference, and infliction of emotional distress on the part of PHH. Linza had been awarded $15.7 million in punitive damages and more than $500,000 in compensatory damages in July after a 17-day jury trial.

Berrier ruled that Linza was not entitled to compensatory or punitive damages, but the judge did not dismiss the homeowner's claims of breach of contract and good faith, which came to nearly $160,000. The judge acknowledged in his ruling that PHH made "inconsistent demands for payment arguably repudiating the modification contract," and that aside from threatening Linza with foreclosure, the company "refused to return his many calls or to apologize for or correct its errors, refused to enter into a new agreement and even ridiculed his plight." Despite this, the judge said there was no evidence to support Linza's claims that PHH was negligent or guilty of fraud.

"The trial court has confirmed our belief that the previous verdict was not supported by the facts presented in this case or by applicable law," PHH spokesperson Dico Akseraylian said in a prepared statement. "We take our responsibilities to borrowers seriously and remain committed to meeting all of our obligations as a servicer."

Linza, who is from Plumas Lake, California, had entered into a loan modification contact with third-party servicer PHH in 2010 to reduce his monthly mortgage payment on the Sacramento-area home he bought four years earlier. Linza claims PHH kept raising the amount of his monthly payment, and when efforts to resolve the discrepancies were not successful, Linza refused to pay. PHH then began foreclosure proceedings on Linza's home in 2012, and he sued to block the procedure.

Despite the judge's dismissal of punitive and compensatory damages, Linza's attorney, Stephen Foondos of United Law Center, was pleased with the outcome and that Linza was awarded $160,000.

"This is the first case of its kind," Foondos said. "California homeowners in general need to look at this as an absolute victory. This sets a precedent for homeowners, and many of them have much worse cases than Mr. Linza. He wasn't foreclosed on, and many of them have been foreclosed on. This is a wonderful victory for homeowners who might look at this $160,000 verdict as something that is attainable to them."

Foondos said he plans to appeal the dismissal of the compensatory and punitive damages because he believes the judge committed an "abuse of discretion" by "taking it out of the jury's hands and mischaracterizing testimony" heard in the court. One of the main points of the case revolves around defining exactly what "severe" is, Foondos said.

"He's teed this up as high as possible for us to hit and we're going to slam it down the fairway," Foondos said.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
x

Check Also

Putting $331M Toward Affordable Housing and Foreclosure

As California faces a housing crisis, California Governor Gavin Newsom is considering how to spend $331M from a settlement with mortgage lenders on legal aid for homeowners and renters.

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.