The American Tort Reform Association has labeled West Virginia a judicial hellhole. Fact or fantasy, this perception makes the state less attractive to businesses. And a case before the state Supreme Court does not help the image any.
The case in question is a terrible tort by Quicken Loans, which loaned too much money at a high interest rate to Lourie Brown and her mother, Monique, in 2006.
The Browns had purchased the home in East Wheeling in 1988 for $35,000 and refinanced it for $67,348 in 2005. But a year later, Quicken’s appraiser said the property was worth $181,700.
This absurd appraisal allowed Quicken to lend $144,800 to the Browns at 9.25 percent interest for three years, afterward the rate would be adjusted to 7.75 percent to 16.25 percent.
Used car loans are cheaper.
The mother died and the daughter underwent major surgery which meant she was unemployed. In August 2007, the daughter sued and the Ohio Circuit Court invalidated the loan. It awarded restitution of the $17,476.72 the Browns paid on the loan.
That was a good decision. This was a tort -- a legal wrong -- and not only should the company write off the loan and give the women back their money, the company should pay punitive damages.
Ohio County Circuit Judge Arthur Recht awarded $2,168,868.75 in punitive damages.
That was a little steep.
The state Supreme Court heard Quicken’s appeal. Justices upheld the verdict but sent the case back to the circuit to reconsider punitive damages.
Instead of reducing the punishment, Judge David Sims, Recht’s successor, increased the penalty to $3.5 million -- or 20 times the actual damages.
Mind you, this is on top of the $700,000 out-of-court settlement the women made with the appraiser and his company.
This week, the high court heard Quicken’s appeal of the increased damages. The question seems to be whether Judge Sims punished the company for daring to appeal the original verdict.
Let us hope not because that is what one expects when one lives in a judicial hellhole.