KABOOM: BANK OF AMERICA, N.A., vs PATE AFFIRMED – Homeowners Awarded $250,000 in Punitive Damages Due to Unclean Hands and Fraud

Bank of America Stealing Homes

KABOOM: BANK OF AMERICA, N.A., vs PATE AFFIRMED – Homeowners Awarded $250,000 in Punitive Damages Due to Unclean Hands and Fraud

CASE NO. 1D14-251

In this civil foreclosure case, the trial court found that Appellant Bank of America (the Bank) engaged in egregious and intentional misconduct in Appellee Pates’ (Pate) purchase of a residential home. Thus, based on the trial court’s finding that the Bank had unclean hands in this equity action, it did not reversibly err in denying the foreclosure action and granting a deed in lieu of foreclosure. In addition, the trial court did not err in ruling in favor of the Pates in their counterclaims for breach of contract and fraud, and awarding them $250,000 in punitive damages and $60,443.29 in compensatory damages, against the Bank and its affiliate, Homefocus Services, LLC, which provided the flawed appraisal discussed below. Finally, the trial court did not reversibly err in granting injunctive relief and thereby ordering the Bank to take the necessary measures to correct the Pates’ credit histories.

In the bench trial below, the trial court found that the Bank assured the Pates, based on the appraisal showing the home’s value far exceeded the $50,000 mortgage loan, that it would issue a home equity loan in addition to the mortgage loan. This was a precondition to the Pates’ agreement to purchase the home, which was in very poor condition but had historical appeal for the Pates. The Pates intended to restore the home, but needed the home equity loan to facilitate restoration.

Before the closing on the property, the Bank informed the Pates that it would close on the home equity loan “later,” after the mortgage loan was issued. The Bank later refused to issue the home equity loan, in part on the ground that the appraisal issued by Homefocus was flawed. The Pates were forced to invest all of their savings and much of their own labor in extensive repairs. Thus, the trial court found that the Pates detrimentally relied on the representations of the Bank that it would issue the home equity loan. The record supports the trial court’s conclusion that the Bank acted with reckless disregard constituting intentional misconduct by the Bank. See generally, Lance v. Wade, 457 So. 2d 1008, 1011 (Fla. 1984) (“[E]lements for actionable fraud are (1) a false statement concerning a material fact; (2) knowledge by the person . . . that the representation is false; (3) the intent . . . [to] induce another to act on it; and (4) reliance on the representation to the injury of the other party. In summary, there must be an intentional material misrepresentation upon which the other party relies to his detriment.”).

The trial court further found that the Pates complied with the Bank’s demand to obtain an insurance binder to provide premiums for annual coverage, and that the Bank agreed to place these funds in escrow, utilizing the binder to pay the first year of coverage and calculate future charges to the Pates. Although the Pates fulfilled this contractual obligation, the Bank failed to correctly utilize the escrow funds. Consequently, the Pates’ insurance policy was ultimately cancelled due to nonpayment. The Pates attempted to obtain additional coverage but were unsuccessful due to the home’s structural condition. The Bank then obtained a force-placed policy with $334,800 in coverage and an annual premium of $7,382.98, which was included on the mortgage loan, quadrupling the Pate’s mortgage payment.

The Pates offered to pay the original $496.34 monthly mortgage payment, but the Bank refused, demanding a revised mortgage payment of $2,128.74. The trial court found it “disturbing that Bank of America could financially profit due to [the Bank’s] failure to pay the home insurance. . . . [T]he profits for one or more months of forced place insurance would have been substantial.”

The trial court further found that during the four years of litigation following the Pates’ default, the Bank’s agents entered the Pate’s home several times while the Pates resided there, attempted to remove furniture, and placed locks on the exterior doors. Following the Bank’s action, the Pates had to have the locks changed so their family could enter the residence. During two of the intrusions, the Pates were required to enlist the aid of the sheriff to force the Bank’s agent to leave their home. The trial court found as fact that, due to the Bank’s multiple intrusions into their home, the Pates were forced to obtain alternative housing for 28 months, at a cost of thousands of dollars.

The Bank’s actions supported the trial court’s finding that punitive damages were awardable. In Estate of Despain v. Avante Group, Inc., 900 So. 2d 637, 640 (Fla. 5th DCA 2005), the court held that “[p]unishment of the wrongdoer and
deterrence of similar wrongful conduct in the future, rather than compensation of the injured victim, are the primary policy objectives of punitive damage awards.” See also Owens-Corning Fiberglas Corp. v. Ballard, 749 So. 2d 483 (Fla. 1999); W.R. Grace & Co.-Conn. v. Waters, 638 So. 2d 502 (Fla. 1994).

In Estate of Despain, the court held that “[t]o merit an award of punitive damages, the defendant’s conduct must transcend the level of ordinary negligence and enter the realm of willful and wanton misconduct . . . .” 900 So. 2d at 640. Florida courts have defined such conduct as including an “entire want of care which would raise the presumption of a conscious indifference to consequences, or which shows . . . reckless indifference to the rights of others which is equivalent to an intentional violation of them.” Id. (quoting White Constr. Co. v. Dupont, 455 So. 2d 1026, 1029 (Fla. 1984)). 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.

The learned trial judge found that the Bank’s actions demonstrated its unclean hands; therefore, the Bank was not entitled to a foreclosure judgment in equity. Unclean hands is an equitable defense, akin to fraud, to discourage unlawful
activity. See Congress Park Office Condos II, LLC v. First-Citizens Bank & Trust Co., 105 So. 3d 602, 609 (Fla. 4th DCA 2013) (“It is a self-imposed ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief[.]”) (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945))). The totality of the circumstances established the Bank’s unclean hands, precluding it from benefitting by its actions in a court of equity. Thus, the trial court did not err by denying the foreclosure action.


PDF of the opinion below…







12 Responses to “KABOOM: BANK OF AMERICA, N.A., vs PATE AFFIRMED – Homeowners Awarded $250,000 in Punitive Damages Due to Unclean Hands and Fraud”
  1. robin says:

    Gerald Escala of N.J looks the other way to banks fraud and is known to ignore due process and foreclosure laws in NJ but gets away with that since the state of new jersey don’t bother
    to see what the hell Is he doing in Bergen county court

  2. Marva says:

    My husband and I are fighting one of the most despicable fraudulent foreclosure cases in Cleveland, Ohio we are citimorgage v Patterson, this case is the linchpin case that is being used to fraudulently foreclose against homeowners here in our County of Cuyahoga. We were one of many homeowners who found themselves caught up in Bank fraud after the FDIC investigations into the robo-signed documents and forged bank notes and alonge to notes. Under our case the so called bank listed was The First National Bank of Arizona who we discovered forged my husbands signature took me off the deed, an at some point in time citimorgage continued the fraud, they then had our house foreclosed on. We were told the only thing that could save your house is a chapter 13 so after many discussions we entered into a chapter 13, not a chapter 7, as this despicable bank stated, we were paying into a chapter 13 when citimorgage went to the court had our stay lifted illegally and the judge let them, they moved toward the foreclosure anyway. My husband and I had no clue at the time what was going on. We finally picked up an attorney Marc Dann who filed our motion to the court on fraud, we won at the trial court even though the attorneys (Lerner Sampson & Rothfuss) representing the bank were already noted as a foreclosure mill also lied to the judge on numerous occasion during the hearing, they still got away with it. The judge should’ve made a sue es sponte desicion, due to the fraud before the court, but he didn’t. After many months later we realized they were apart of this decision all along, they wanted it to go before the appellate judges who overturned our victory and allowed citimorgage to steal our house, this decision in our case changed the law and allowed the theft of our chapter 13 monies and allowed for our illegal eviction by the sheriff. We filed criminal charges against the bank, the attorneys and all representatives of the bank, we filed with the FBI twice, to no avail. As of today 6/26/2015 we are still waiting for the investigation. Many people continue to be affected by our bad case, we continue to call and levy complaints, my husband levied complaints with our Congressional office the honorable Marcia Fudge, she has asked for an investigation as well, so what’s the hold up? Fraud and theft are illegal actions that should be prosecuted. We will not be forced victims of continual theft, do not use us to continue stealing homes from innocent homeowners, we want this bad case law gone and people made whole. If anyone out there can help us please do so. Call your congressional offices call your sheriff office, call everybody, let them know this case is fraud ab a nitio (fraud at the conception), as homeowners we had no idea until our federal government made us aware of the fraud.
    Marva: 216-334-7013

  3. Susan says:

    I was very pleased to read this article. Homeowners need to educate themselves on their loan. They need to learn that the secondary market is very unclean. Homeowners need to save their statements sent by the banks and list of servicers and marry each statement to their bank statement proving you sent the money and the money was received by the bank on x date. By doing an audit of your records against your “servicing” bank records the truth is in the results. The banks take home owners for fools who are not going to keep their records and who are not going to educate themselves as to banking terminology. By reading the posts I am excited that American Homeowners are not letting go of the fight. I am excited that homeowners are educating themselves on the differences of owner’s of a mortgage loan, servicer of a mortgage loan, and a security trust!!! The more knowledge you have about these banking terms and your loan and all of those who touched your loan the better chance you have of winning your case in a court of law. And more importantly interviewing attorneys who are capable of representing you on your case! Not all attorneys practice mortgage law!

  4. phillip pate says:

    Hi i’am the guy in this case and it was a long fight that I was not willing to give up on even after all the legal bs i thank you for your support

    • Phillip, are you guys still fighting for your settlement? I messaged you on Facebook but I think it went to your other folder. I have been in a 2 year battle with them to no avail. I’ve been subjected to similar abuses, force placed insurance, breaking and entry by their agents, theft of items from my home, fraudulent charges on my statements (almost $10k worth) and they’ve also done over $60,000 worth of damage to my property and left me to figure out how to fix it. They need to be stopped. Why isn’t our government doing anything about this?? Can anyone say RICO STATUTE?

  5. LDTX says:

    Yes Bank of New York Mellon does not own loan or property, no Lender under New York Law or Texas Law America’s Wholesale Lender but on Tuesday, April 7, 2015, Harvey Law Group is stealing my house for Bank of America. Lawless America, welcome to it. Why should I pay an attorney all of my hard earned money for him to help the banks win?

  6. common law private attorney general Chris says:

    They have a LIE-SIN-ce to STEAL and will continue to Use IT Liberally, until the Enabler Aider and Abettors make them them Stop. But as long as they can Just Pay a few Hundred millions or Billions, to LOOT TRILLIONS, Crime Pay$. it just the Cost of Racketeering Extortion Business? No Justice in a Lawless GanGstaristic KleptocrRAT socialist communist society.

  7. jaklegal says:

    I think people need to realize this is a VERY narrow decision under a VERY specific set of facts. The likelihood of this result being reproduced is slim to none due to its specific facts.

  8. jerry says:


  9. Leah says:

    Really is anybody shocked about BOA doing something criminal and fraudulent? It certainly isn’t shocking to me. They want to say that my Lender is Bank of New York Mellon clearly when my Deed of Trust and Promissory Note say America’s Wholesale Lender “A Corporation” Existing under the Laws of New York. Just last week I called and the girl on the other end states, I am reaching out to you for a Loan Modification. I asked her “Who is My Lender? She responded “Bank of New York Mellon”. I advised her that was untrue, I have it in writing Bank of New York Mellon is not a Lender, should not be represented as such. I clearly wanted her to know I was not interested in a Loan Modification with Bank of America nor did I care to do business with Bank of America. Then she proceeded to tell me Bank of America is a “Debt Collector” So, who are you collecting a debt for I asked? She stated Bank of New York Mellon. Bank of New York Mellon is initiating foreclosure on your property April 7, 2015. I said “really”?
    Bank of New York Mellon also wrote they are a Trustee for Investors, have no say in loan modifications, past due fees etc. Bank of New York Mellon does not own my Loan or Property.
    Does anybody get the big picture here? Anybody that reads this page….. Do you get the picture? No Lender folks…… None/Nada AWL a fictitious entity, assumed name, DBA, MERS??? What a freaking joke…. AWH was never a MERS Member. Go ahead, look it up. Not even as a DBA. How does AWL have a beneficiary or nominee with anyone? How did MERS assign my property to Bank of New York Mellon. Go ahead look it up 155397447 Located in Pool of Loans CWABS 2007-2. Under PSA New York Trust Law. Was in the pool on Jan 23, 2007 when I closed on my property. Was this ever disclosed? No it wasn’t. Did anybody including the Homebuilder, Title Company, Countrywide, Bank of New York Mellon, Bank of America, CWABS 2007-2, MERS, did they advise me of this? Where is my TILA from any of these parties besides the Fictitious Lender? Bank of America, yes you will go bankrupt, you will fall, and who will be blamed??? Deadbeat Homeowners. Yeah right? Can’t wait till your all unemployed, begging for a job, and nobody wants to hire you because your crooks. You can’t get government aid to fee yourself, you loose your home, your car, everything you stole from others gets taken away from you. Do you contribute to our economy. No you bottom scum feeders live off bail outs and tax payer dollars and stuff your pockets full of our hard earned money. Truly I wash they would remove America from your title and call you Bank of Thieves.
    Your are a disgrace and should never have a log to represent anything to do with America.

  10. Its about time those homeowners got what their deserved!

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