Borrower changes theory in mortgage class action against Dean Morris law firm, others

Steve Korris Oct. 7, 2010, 2:34am


NEW ORLEANS – Borrowers who pursued a class action against Dean Morris law firm, banks, and mortgage service companies under state fraud and conversion laws for five years now propose to press their claims under federal law.

On Sept. 9, Jennifer Willis of New Orleans asked U.S. District Judge Stanwood Duval for leave to assert claims under the Fair Debt Collection Practices Act.

In the meantime, Bank One, Chase Home Finance, and Dean Morris, await rulings on summary judgment motions that would put to rest all claims under state law.

"Plaintiffs were aware of any federal claims back in 2005, but disclaimed these claims," Shannon Holtzman of New Orleans wrote for the banks on Sept. 21.

"They should not now, at this late stage in the litigation, be allowed to proceed on different theories," she wrote.

Edward Trapolin of New Orleans wrote for Dean Morris that "plaintiffs should not now be allowed to derail this litigation to assert additional meritless claims."

"Plaintiffs have not alleged a single fact that would support their alleged Fair Debt Collection Practices Act claim against a single defendant," he wrote.

Pending motions for summary judgment argue that plaintiffs either don't have evidence for their claims or the claims are barred, he wrote.

"The addition of alternative legal theories or claims will not create evidence that does not exist or breathe life into nonexistent or barred claims," he wrote.

Plaintiffs started the suit in Orleans Parish, claiming Dean Morris, banks and service companies cheated borrowers in foreclosures and reinstatements.

Defendants removed it to federal court after the Federal Deposit Insurance Corporation placed defendant Washington Mutual Bank in receivership.

FDIC departed from the case, but that didn't bounce it back to Orleans Parish.

This summer, Dean Morris, Chase Home Finance and Bank One submitted to Duval separate summary judgment motions against each plaintiff.

Defendants denied that any borrower suffered damages, and claimed that one reaped a windfall through reinstatement.

Duval set hearings on the motions for Oct. 13 and Oct. 27.

Willis then moved to amend the complaint, and set the motion for Oct. 13.

She claimed Dean Morris violated federal law by making false, misleading or deceptive misrepresentations in connection with collection of a debt.

She claimed the firm collected amounts not authorized by agreement or statute.

She held the lenders vicariously liable for the firm's violations.

Holtzman answered for the banks that federal law contains no provision imposing vicarious liability on third parties for actions of debt collectors.

Trapolin answered for Dean Morris that, "The entire case, pending for over five years, could be resolved in short order."

"Now, plaintiffs want to start the process over," he wrote. "This is unfair, prejudicial, and unwarranted."

On Oct. 1, Willis replied that "plaintiffs stated a cause of action against the lenders for agency for the actions of Dean Morris."

"The attorney-client relationship and the tight rein under which Dean Morris operated strongly support that the lender defendants are vicariously liable for Dean Morris's actions on their behalf," Willis wrote.

For the moment, defendants Banker's Trust of California, Countrywide Home Loans, Sun Finance, Flagstar Bank, Deutsch Financial Services, Continental Casualty, Mortgage Electronic Registration Services, and Ocwen Loan Servicing watch from the sidelines.

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