Suffering an Unfair Job Loss is Tough, our california employment attorneys can help.

South Dakota Supreme Court Returns Case of Alleged Abuse by Bank Attorney to Trial - Fix v. First State Bank of Roscoe

December 20, 2011

The Fontana foreclosure defense lawyers at Howard Law, P.C., represent a lot of clients who believe they were pushed around and mistreated by their lenders. While mortgage servicers and lenders have the same rights to legal remedies that everyone else has, some of the practices that have become widespread during the mortgage crisis cross the line into illegal or negligent behavior. Our lead attorney, Vincent Howard, has won many victories for clients who were foreclosed without a discussion of alternatives, for example, or issued a predatory loan to begin with. So we were interested to see a decision from the South Dakota Supreme Court about a bank's attorney who allegedly abused his position as a prosecutor to pressure an older woman into giving up title to her home. In Fix v. First State Bank of Roscoe, the court ultimately sent the case back for a new examination of a claim for intentional infliction of emotional distress.

Rita Fix sold her home to her son and daughter-in-law in 1997, but retained a life estate on the property. Two years later, the couple took out a farm loan from the Bank and borrowed against the home, which required Fix to sign a warranty deed to the couple. The Bank assured her in writing that she would retain possession even if the couple defaulted. In 2004, Fix filed for bankruptcy. In 2005, her son and daughter-in-law defaulted on their loan and conveyed the home to the Bank in lieu of foreclosure. The Bank sold the house and sought to remove Fix, despite its written promise. Fix sued the Bank in federal bankruptcy court, and the case eventually made its way to the Eighth Circuit, which ruled that Fix's trustee must bring each of her claims except the one for intentional infliction of emotional distress. She brought this in state court.

Meanwhile, the family was indicted in state court for a fraudulent scheme in which Fix's son sold grain in her name and had her send him the profits, in order to avoid having the income taken by the Bank to satisfy his debt. The son pleaded guilty, but the charges against Fix remained dormant despite her attorney's requests to proceed or dismiss. The county prosecutor on that case also represented the Bank civilly. He eventually approached Fix and offered to drop the charges if she would deed her house to the Bank. She modified her state-court lawsuit to include a claim for abuse of process against the prosecutor as well as the Bank, alleging they conspired to use the criminal case to resolve the dispute over the home's ownership. The prosecutor settled; the court dismissed the count for intentional infliction of emotional distress. The abuse of process count against the bank went to a jury, which found for Fix but awarded no damages.

On appeal, Fix argued that the trial court was incorrect to tell jurors she needed to suffer "extreme and disabling" emotional distress to recover for emotional distress from the abuse of process. The South Dakota Supreme Court agreed. The trial court incorrectly relied on a previous decision that was not a tort action like this one, it said. Indeed, that case said emotional damages were unavailable except in cases accompanied by an independent tort. For an intentional tort like abuse of process, the court said, South Dakotans may claim emotional distress damages without proving the heightened standard of "extreme and disabling" emotional distress. Because the jury received bad instructions, the high court reversed and remanded for a new trial. Fix had less luck with her other arguments, but the court also noted that any damages awarded on retrial, not just compensatory damages, should be reduced by the amount of the prosecutor's settlement.

As Aliso Viejo foreclosure defense attorneys, we're pleased to see penalties are again possible for what appears to have been an abuse by the bank and its attorney. Southern California's larger legal community makes this kind of case less likely in Orange County, but businesses and lawyers across the United States should be barred from abusing their power. At Howard Law, P.C., we very often work with mortgage borrowers who believe their lenders and loan servicers abused their power by railroading them into foreclosure. Often, these clients are facing a foreclosure after months of fruitless attempts to work with the lender on a loan modification, and sometimes after intentionally hurting their finances in order to qualify for help that never appeared. Our Perris foreclosure defense lawyers help clients hold these lenders responsible whenever they broke the law.

If you believe your foreclosure is avoidable, but your lender has rejected numerous opportunities to avoid it, call Vincent Howard and the team at Howard Law, P.C., to discuss your legal options. You can reach us through our website or call 1-800-872-5925 toll-free.

Similar articles:

Seventh Circuit Allows Survival of Homeowners TILA Lawsuit Alleging Faulty Notice - Marr v. Bank of America

Minnesota Law Does Not Require Foreclosing Bank to Hold Note and Mortgage - Stein v. Chase Home Finance

New York High Court Allows Lawsuit Alleging Appraisal Company Inflated Home Prices - People v. First American Corp.