DC High Court Affirms Punitive Damages Award Slamming Sale Leaseback Peddlers For $3.3M In Equity Stripping Foreclosure Rescue Ripoff
The court also affirmed a jury award to the homeowner of $60,000 in compensatory damages as the group's liablity for common law fraud and for violating the D.C. Consumer Protection Procedures Act ("CPPA") for their various misrepresentations and omissions of material facts and for including "unconscionable terms" in the transaction, and which the trial judge tripled to $180,000 pursuant to the CPPA,
For the ruling, see Modern Mgmt Co. v. Wilson, Case Nos. 08-CV-18, 08-CV-85 & 08-CV-187 (D.C. June 3, 2010).
Representing the victimized homeowner was Jessica L. Ellsworth, with whom N. Thomas Connally III and Jeffrey D. Pariser were on the brief, with the firm Hogan Lovells in Washington, D.C.
See also:
- Washington City Paper: Old Lady Wins Out in Seven-Year Battle Over Petworth Home,
- Washington Examiner: D.C. court upholds $3.3 million penalty for foreclosure scam: ("Abell spent time in prison 20 years ago for playing a role in loan-insurance fraud case. He is now operating under a new company called Phoenix Real Estate, according to a woman who answered the phone at a number listed for Modern Management.")
- Hogan & Hartson Wins $3.3 Million Verdict in Pre-Foreclosure Scam Case,
- Md. couple wins $1M in rescue-scam lawsuit (homeowners awarded $350,000 for their mental anguish, which was then tripled after a finding the defendants "willfully and knowingly violated" Maryland's Protection of Homeowners in Foreclosure Act),
- Prince George's County Circuit Court awards $500K to victim of foreclosure scam (for the related court order, see Smith v. Abell, (Prince George's County Cir. Ct., Feb. 7, 2006),
- Loan Scam Targets Seniors' Homes (Washington Con Artists Preyed On Elderly People In Financial Trouble) (go here to watch related CBS News' video),
- From Foreclosure to the Cleaners (Indebted Homeowners Say 'Rescue' Services Bilked Them),
- Foreclosure Rescue Scam, Businessman Vincent Abell pays five homeowners $120,000 settlement,
- Testimony of Mr. Walter Malone [foreclosure rescue victim] Before Senate Aging Committee (U.S. Senate, Feb. 13, 2008),
- Wilson v. Modern Management Co. (homeowner's brief in an appeal of a lower court eviction order),
- Bilaal v. Abell, et al., 983 A.2d 349; 2009 D.C. App. LEXIS 573 (2009),
- Media Coverage Not New For D.C.-Area Foreclosure Rescue Operator,
- Anatomy Of An Equity Stripping, Sale Leaseback Foreclosure Rescue Scam.
(3) The victimized homeowner filed suit alleging common law fraud, and statutory fraud pursuant to:
- the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C.A. §§1961-1964.;
- the District of Columbia Consumer Protection Procedures Act ("CPPA"), D.C. Code §§ 28-3901 to 3-905 (2001 & 2009 Supp.);
- the Truth In Lending Practices Act ("TILPA"), 15 U.S.C.A. §§ 1635-1640;
- the District of Columbia Loan Sharking Act, D.C. Code § 26-901 (2009 Supp.);
- the District of Columbia Consumer Credit Services Amendment Act, D.C. Code §§ 28-4601 to -4603 (2001);
- the Home Ownership and Equity Protection Act ("HOEPA"), 15 U.S.C.A. §§ 1602, 1639; and
- the District of Columbia Usury Statute, D.C. Code § 28-3301 (2009 Supp.).
- the award of punitive damages against them was constitutionally excessive;
- the trial court erred in permitting the victimized homeowner to pursue her RICO claims and admitting evidence that appellants had completed one hundred similar transactions, which caused the jury to inflate the punitive damages awards;
- the compensatory damage award must be reduced by the amount of the settlement agreement the victimized homeowner reached before trial with appellants' former co-defendant;
- the trial court erred in submitting to the jury the issue of whether the victimized homeowner was a "consumer" as defined in the CPPA; and
- the jury verdict finding appellants liable for common law fraud and for violations of the CPPA was against the weight of the evidence.
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