Florida’s First District Court of Appeal issued a per curium affirmance on an appeal brought by Bank of America. Judge Thomas issued a specially concurring opinion stating that the trial court found that Bank of America engaged in egregious and intentional misconduct. First, Bank of America reassured the homeowners (the Pates) that it would issue a home equity loan in addition to a mortgage loan based upon an appraisal of a home that was in poor condition. The home equity loan was needed in order to make needed repairs and restore the home.
After closing, Bank of America refused to issue the home equity loan because it claimed the appraisal was flawed. The Pates invested their labor and money in order to repair and restore the house. Bank of America also required the Pates to obtain an insurance binder. The binder was used to pay the first year’s insurance premium and the remainder of the funds were placed in escrow to pay future premiums. Bank of America failed to pay the subsequent premiums and the Pates were forced to obtain force-placed insurance because no insurance company would insure the house since it was in poor condition. As a result of the forced-placed insurance, the Pates’ monthly mortgage payment went from $496.34 to $2,128.74 which Bank of America demanded that the Pates pay.
To make matters worse, Bank of America broke into the Pates home several times and attempted to remove furniture as well as place locks on the outside doors. The Pates had to get the sheriff to force Bank of America’s agents from the property on two occasions. As a result the Pates were forced to obtain alternative housing for 28 months incurring thousands of dollars in additional expenses.
The trial court found that Bank of America demonstrated unclean hands and was not entitled to a foreclosure. Additionally, the trial court awarded punitive damages finding that Bank of America showed a “”concscious indifference to consequences” and “reckless disregard” to the rights of the Pates. Judge Thomas states:
Here, the Bank’s intent to defraud was shown by its reckless disregard for its actions. The facts showing the Bank’s “conscious indifference to consequences” and “reckless indifference” to the rights of the Pates is the same as an intentional act violating their rights. See White Constr. Co., 455 So. 2d at 1029. The record evidence provides ample support for the trial court’s ruling in favor of the Pates’ claim for punitive damages against the Bank.
To read the entire concurring opinion, click Bank of America, N.A. v. Phillip V. Pate, et al.