Complaint Against B of A on Unintended Consequences

A $70-million lawsuit against Bank of America and one of its executives in Florida illustrates how negligence and mortgage banking procedure oversight complaints can lead to a very costly chain of litigation action.

Unfortunately, litigation seems to be the only viable strategy left to millions of at-risk homeowners in foreclosure states like Florida who are running out of time and financial resources.

Six months after a Palm Beach resident filed the lawsuit on grounds of negligence that brought about millions of dollars in losses in different states, including the foreclosure auction of a house in New Orleans and a pending default judgment in Baltimore, a Florida judge denied the bank’s motion to dismiss.

The 15th Judicial Circuit Court of Florida Judge Thomas H. Barkdull III overrode B of A’s arguments that Florida’s “Economic Loss Rule” shields financial institutions from responsibility and accountability for losses resulting from negligence and opened the door to new discovery.

The Palm Beach and New Orleans resident TJ Fisher filed the negligence claim case against B of A and Peter Kafouros, a former B of A Palm Beach branch vice president.

According to her attorney Timothy W. Schulz, the importance of this ruling is that the judge determined to consider the legal cause of action against Bank of America for negligence, negligent training and supervision, and for breaching its duty to disclose critical information to its customers—which the bank tried to dismiss—despite “Fisher’s dramatic tale and unusual legal odyssey.”

There are many ways foreclosure litigation can turn into a complicated web. In Fisher’s case the negligence claim against B of A—which remains entrenched in state, not federal court jurisdiction—is just one of a handful of pending lawsuits she is currently facing.

A separate court action proceeding in the same Palm Beach County courthouse is related to a foreclosure case with two B of A mortgages on her Palm Beach home. Like one in every four Florida homeowners, her attorney said, Fisher is trying to avoid seeing her home go on the auction block.

In New Orleans she lost her Bourbon Street house in the French Quarter to foreclosure auction in late September. According to Fisher, it was a direct consequence of “the intricacy of being locked into the domino-effect spiral of losses that B of A actions and irregularities.”

Fisher is a plaintiff and a defendant in several real estate related lawsuits.

For example, the member of the Writers Guild of America says that over the course of various pending litigation including one against her that is connected to her spouse and his former business partner in a real estate development deal in New Orleans, she “has been divested of virtually every asset and personal belonging,” except her three dogs, cat and two parakeets.

Fisher was held legally liable for her spouse’s financial dispute and fallout with his New Orleans business partner Michael McCrary. In 2008 she received a $33.3 million default judgment complaint levied against her in Baltimore. The complaint was later overturned on appeal but the case is not closed.

It launched legal actions naming Fisher as a “co-conspirator” in a dispute over an insurance settlement that dragged her in 13 separate federal and state courts in Florida, Louisiana, Maryland and the District of Columbia. Court documents still reflect a default decree in favor of McCrary and against Fisher, “pending from a recent judicial opinion to uphold default judgments.”

While stuck in her personal financial crisis Fisher sees herself as some sort of vigilante.

According to her lawyer, Fisher seeks to establish how improper B of A transactions extend “to the culpability of entangling her into a firestorm of civil litigation first filed in 2007.”

She believes that her negligence claim lawsuit against B of A “will have long-term ramifications” on repairing banking industry standards because her story illustrates how spouses, other family members, or shareholders can become unsuspectingly caught up in litigation, “due to banking procedure oversight and errors, and lack of proper due diligence.”

She also stated that banks and bankers do not necessarily mean to “but they can cause a lot of harm” through irregularities in their banking transactions that at least in her case set off the “ultimate financial freefall.”