A class action settlement rejected over excessive attorneys’ fees, a state supreme court decision in favor of a lender whose worker was hit by a car while on a break and the ability of a federal agency to reverse itself without notice are the themes of this round of mortgage employment law cases.
A decision has not yet been issued in Perez v. Mortgage Bankers Association, the case that has come before the nation’s top court based on the Department of Labor’s flip flop on mortgage loan officers and their entitlement to overtime pay.
The question before the court in Perez is whether a federal agency must engage in a notice-and-comment procedure before it can make a major change to an agency rule. Oral arguments were heard on Dec. 1 in the U.S. Supreme Court. br>
Attorneys must submit time records by Feb. 17 for review by the court in Chapman v. BOK Financial Corp.
The case involves a Tulsa, Okla.-based mortgage banker that classified its loan officers as not entitled to overtime pay under federal law and then entitled to overtime pay but that did not pay back wages when the workers’ status was changed. The federal trial court ruled that the company did not violate federal wage and overtime laws. BOK based its classification on guidance issued by the U.S. Department of Labor in 2006 and 2010.
An unopposed motion for extension of time in which to file an answer was filed on Feb. 11, in Wooley v. Bridgeview Bank Mortgage Co. Several mortgage loan officers sued Bridgeview Bank Mortgage Co., alleging that it failed to properly pay its mortgage loan officers straight and overtime pay under state and federal wage and overtime laws. Bridgeview’s move to dismiss the plaintiffs’ claim under Illinois law — thus narrowing the issues — because they worked exclusively in Kansas was granted on Jan. 23.
In Searson v. Concord Mortgage Corp., a revised Excel spreadsheet was submitted on Jan. 23 in support of the plaintiffs’ damages. The revision includes several plaintiffs who were omitted and corrects that one plaintiff was listed twice.
Loan officers for Concord, which does business as CMC Direct, sought minimum and overtime wages under both federal and state laws. The court entered default judgment for the loan officers when Concord’s controlling officers failed to file an answer to the plaintiff’s complaint. The court did not do a damage calculation because the plaintiffs had not sought one.
After settling with the non-defaulting defendants, plaintiffs moved for damages against the defaulting defendants.
In US Bank Home Mortgage v. Andrea Schrecker, the Supreme Court of Kentucky on Dec. 18 reversed a decision in favor of a worker for US Bank.
Schrecker was hit by a car during a paid break while on the way to a nearby fast food restaurant. The question in the case was whether Schrecker was in the course and scope of her employment when injured. While the court examined several factors in coming to its conclusion, one factor — the hazard Schrecker encountered — outweighed the others. By crossing the street between intersections and walking in front of a moving vehicle, Schrecker voluntarily exposed herself to a hazard outside those normally encountered in going to or coming from work, negating any authority the lender might have had over her.
In Lofton v. Wells Fargo Home Mortgage, a California appellate court rejected a class action settlement because of excessive attorney fees, according to an analysis by Gregory V. Mersol of Baker & Hostetler LLP. The decision was released on Nov. 19.
The case was brought on behalf of home mortgage consultants working for Wells Fargo Home Mortgage seeking damages for unpaid wages.
“The Lofton case is just another in a growing line of opinions questioning attorney fee awards and, in many instances, exposing less-than-stellar conduct by the lawyers trying to support or hide the awards they seek,” Mersol wrote.
A petition for review was denied on Feb. 11.
