Plaintiffs in North Carolina Mortgage Fraud Case Win Important Preliminary Ruling
Case to be Governed by North Carolina Law
Judge Calls Attempt to Remove "without merit"
CHARLOTTE, N.C., Aug. 17 /PRNewswire/ -- A Federal Court Judge for the Eastern District of North Carolina has rejected a request to send a mass tort action alleging fraudulent practices against all of the major mortgage lenders in developments at Summerhouse, Cannonsgate and Cravens Grant (South Carolina) to a Virginia Federal Court hearing a similar case.
Charlotte attorney John O'Connor and Detroit attorney David Binkley filed the lawsuit on behalf of 48 individuals who purchased lots in new developments created by RA North Development (Summerhouse and Cannonsgate) and Maryville Partners (Cravens Grant) from 2006 through 2007. In their suit they allege that Bank of America, BB&T, Wachovia Bank, Carolina First, Cooperative Bank, Woodlands Bank and a host of individual developers and appraisers "rigged" the appraisal process to fraudulently inflate the prices paid by their clients.
A similar case was filed in January, 2009 in the Eastern District of Virginia, but there the Court recently ruled that the case against the banks be dismissed.
"Our clients and those who choose to follow our course of action are the only purchasers who are left standing in a favorable forum with a state law that provides a remedy against the fraudulent acts of these multiple complicit parties," said John O'Connor in a joint statement released today. Asked to compare this action and one filed in Virginia - where the banks had succeeded in having the case dismissed - O'Connor noted, "you cannot really compare the two cases fairly. Here we allege that the appraisal process was rigged but also that the banks had actual knowledge of the process and that our clients were specifically relying upon that very same appraisal process to show them what the property was worth. Not a single closing would have taken place had the banks and the appraisers played by the rules, but they inflated the prices, engaged in flip transactions and our clients were harmed."
David Binkley of Giarmarco, Mullins & Horton, P.C. said in the joint statement that "the Virginia case was well intentioned but flawed because of the forum Plaintiffs chose to file in. The risk to those Plaintiffs was the application of Virginia law and not North Carolina law. North Carolina does not shield the banks from liability but Virginia law does. We were prepared for the challenge that Defendants would want our case transferred to Virginia and we responded with solid legal authority and a factual basis demonstrating that the case belonged in North Carolina. Naturally we are delighted that Judge Boyle agreed that the case should stay in, and be governed by the laws of North Carolina."
The case, Thompson, et al vs. Bank of America, et al, is assigned to Judge Terrance Boyle, Federal District Court Judge, Eastern District of North Carolina, Southern Division. No trial date has been set.
SOURCE Giarmarco, Mullins & Horton, P.C., Attorneys and Counselors at Law