Case Conclusion Date: 01.25.2005
Practice Area: Litigation
Outcome: We won at trial and on appeal.
Description: In July 2000, Bomac loaned $288,000 to Anthony Norris to purchase property in Galveston County. American Title provided escrow and other services relating to the closing of the sale. Norris defaulted on the loan after Bomac sold it to a third party, Impac Funding Corporation. Bomac paid $197,343.82 to Impac and sued American Title alleging fraud in the transaction. Although the parties offered contradictory testimony and the case was vigorously contested at trial, some basic facts about the transaction are well established. Lawrence Caldwell, a principal of First Interstate Financial Network and a mortgage broker, contacted American Title through Paulette Lee about providing services in connection with a sale of the property to Norris. At the time American Title opened its file on the transaction, the property was owned by SDGA Investments. The transaction financed by Bomac, however, was a sale of the property from First Interstate to Norris. The parties do not appear to dispute a "flip" took place in which the property was transferred from SDGA to First Interstate for $195,000, then from First Interstate to Norris for $320,000, on the same day. The parties also do not appear to dispute the title commitment was altered to omit ownership information about the property or that $400 of the closing costs originally designated as a "review fee" to an attorney were used for Lee's personal rent payment. Other facts relating to the transactions are disputed. The jury heard evidence regarding the use of proceeds from the Bomac loan to finance both sales, the source of Norris's downpayment, Bomac's instructions relating to the loan and whether the flip was a "simultaneous transaction" of which American Title was required to notify Bomac, whether Bomac relied on the altered closing documents, and other facts. In an eleven to one verdict, the jury found American Title defrauded Bomac, committed theft, and acted unconscionably. In the second phase of the trial, the jury awarded Bomac $250,000 in additional damages under the DTPA for American Title's knowing conduct. The trial judge entered judgment on the jury's verdicts