HELENA — Reversing a summary judgment, the Montana Supreme Court on Wednesday cleared the way for a Meagher County couple to proceed with its lawsuit in District Court against Bank of America over allegedly fraudulent dealings.
The court majority reversed all but one issue in the summary judgment issued by District Judge Kathy Seeley of Helena that went in favor of the bank and against Abraham and Betty Jean Morrow.
The Supreme Court sent the case back to District Court “for further proceedings consistent with this opinion.”
Writing for the court’s majority, Chief Justice Mike McGrath said the court affirmed Seeley’s grant of summary judgment in favor of Bank of America regarding “breach of contract and tortuous breach of the implied covenant of good faith and fair dealing.”
However, the Supreme Court reversed Seeley’s judgment in favor of the bank on the Morrows’ “claims of negligence, negligence misrepresentation, actual fraud, constructive fraud and violations of the MCPA (Montana Consumer Protect Act) and remand for further proceedings with his opinion.”
The Morrows’ attorney, David K.W. Wilson, of Helena, praised the ruling as significant.
“Banks had been saying as long as there was a written contract, you couldn’t hold them accountable for their fraudulent (oral) statements,” Wilson said. “The message to me is that banks and lenders just cannot make misstatements and deceptive statements to borrowers. They have to act truthfully and honestly in their dealings with Montana consumers.”
Abraham Morrow called the court decision “absolutely fantastic,” adding: “We were run through a wringer by these people.”
Attempts to reach a Bank of America spokesman for comment were unsuccessful.
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The Morrows, who were from South Carolina, bought 50 acres in Meagher County in 2003 and built a house there three years later. They planned to spend their retirement there.
In April 2008, the Morrows entered into a refinance montage loan with Quicken Loans. They borrowed $291,200 and agreed to make monthly payments of $2,301 over 15 years at an interest rate of 4.99 percent. A month later, Countrywide Home Loans bought their loan from Quicken and began servicing it.
Two months later, Bank America acquired Countrywide.
The Morrows ran into financial problems when another couple from South Carolina bought two of their businesses there, but defaulted on one and filed for bankruptcy on the other, depriving them of $10,000 in anticipated monthly income.
The Morrows informed Bank of America of their changing finances. They said a Bank of America representative told them to deliberately skip a payment to qualify for the federal Home Affordable Mortgage Program (HAMP). The bank has said no written record of that conversation exists.
The Morrows made a reduced payment of $1,240 in December 2009 and for the next 14 months.
The bank then tried to foreclose on their home, the Morrows said. The couple obtained an injunction to block the foreclosure attempt and it remains in place.