Consider the following set of facts. Jerry is solicited by a mortgage broker. The broker convinces Jerry that he should refinance his home and hires an unscrupulous appraiser, who gives an inflated value for Jerry's home. Using this inflated appraisal, the broker dupes Jerry into taking a higher loan--so high, in fact, that the loan is more than the home's actual value. With this higher loan, of course, come higher loan payments. The broker knows that Jerry can't really afford the loan, but no matter. The broker simply pockets his fees and moves onto the next victim.
Does Jerry have a claim against the broker? Absolutely.
But what if the broker goes out of business, or declares bankruptcy, or simply disappears? What then? Our legislature has provided protection for just such an eventuality. Mortgage brokers are required to post a bond for the protection of all West Virginia consumers, including Jerry.
Next question: What happens if Jerry gets a judgment against the broker? Does the insurance company that issued the bond have to pay up?
You would think the obvious answer would be yes. But insurance companies are not so fast to part with their money. In Hartford Fire Ins. Co. vs. Curtis, 2000 WL 2460723 (W.Va. 4/17/13), Hartford argued that the homeowner, Jerry Rhodes, would have to try his case all over again. Scott Blass of Bordas & Bordas, together with Dan Hedges, represented Jerry and secured a major win for consumers. The West Virginia Supreme Court held that the bond was a judgment bond. Therefore, getting a judgment against the broker was enough to obligate Hartford to pay.
But that's not the end of the story. Jerry also sued Hartford for bad faith, alleging that Hartford acted inappropriately by denying Jerry's claim and compelling him to sue to recover money that was clearly due and owing. Incredibly, Hartford has taken the position that Jerry was not a "first party claimant" who had a right to sue for bad faith. But that's simply not true. The bond was written for the purpose of protecting all of the "Jerrys" who might be victimized by predatory lending practices. It was Jerry who had to sue in the first place. It was also Jerry who had to endure years of delay at Hartford's hands until it was finally ordered to pay. Obviously, then, it was Jerry who had the right to sue Hartford for its illegal tactics in delaying payment of the claim.
These bad faith issues are presently before the Fourth Circuit Court of Appeals. As always, Bordas & Bordas is committed to protecting consumers and insuring that their legal rights are vindicated. We are confident that the Fourth Circuit will follow the law and reach a result that enables consumers, like Jerry, to fully enforce their rights and keep insurers, like Hartford, from violating them. This means giving Jerry, along with other West Virginians, the right to sue for bad faith when insurance companies engage in delay tactics and otherwise refuse to honor their contractual obligations.
The results in a legal case depend on a variety of factors, many of which are unique to each case. Prior results by this firm or any other do not guarantee future results. Case results presented here are illustrations of the type of work done by Bordas & Bordas and not a guarantee that any prospective case will yield any particular amount.