ALBUQUERQUE, N.M. -
A New Mexico judge has issued a $3.2 million judgment against
Wells Fargo & Co. for foreclosing on a man's home after his
death, even though he had a purchased an insurance policy through
the bank that would have paid the remaining balance on his
Beatrice Brickhouse said the bank's conduct was shocking and so
reprehensible that in addition to actual damages, attorney's fees
and court costs, she awarded James Dollens' estate $2.7 million in
the ruling Feb. 14. It was reported Friday by a news outlet
Jim Hines, a
spokesman for San Francisco-based Wells Fargo, said the bank will
appeal and it disagrees with several parts of the ruling,
including the award of punitive damages.
a lawyer for Dollens' estate, said Friday that the ruling
"protected people over profits. We are confident that the
appellate courts will do the same."
purchased an accidental death mortgage insurance policy for his
Rio Rancho home that was marketed by Wells Fargo and issued by
Minnesota Life. When he died Aug. 18, 2010, in a workplace
accident, he owed $125,000 on his mortgage.
His death was
reported immediately to Minnesota Life and to Wells Fargo to make
a claim under the policy.
But instead of
seeking funds from the insurance policy, Wells Fargo sent notices
about the loan being in default and referred the loan for
foreclosure in December 2010. The foreclosure proceeded despite
requests from representatives of the estate to hold off pending
the insurance payout.
When the bank
received a $133,559 check from the insurance company in May 2011,
it collected delinquent payments, late fees, and fees for lawyers
and for 18 property inspections, leaving only $4,400 for Dollens'
estate "because of ... misapplication of the insurance
proceeds," the judge said.
Wells Fargo said
the family should have continued making payments regardless of the
Brickhouse said Wells Fargo disregarded the terms of the insurance
policy before moving to foreclose.
That, the judge
said, was a breach of the covenant of good faith and fair dealing.
She said the bank's "unwillingness and failure" to hold
off on the foreclosure even when requested to do so by the
insurance company was "shocking."