Denise Minter v. Wells Fargo Bank, N.A.
2014 U.S. App. LEXIS 15041
| 4th Cir. | 2014

Background

  • In 1993 Wells Fargo and Walker Jackson (Long & Foster affiliate) formed Prosperity Mortgage as a joint-venture wholesale lender; plaintiffs purchased homes in 2006–07 and used Prosperity.
  • Plaintiffs brought a class action alleging RESPA violations: §8(a) (kickbacks/referrals), §8(c) (Prosperity a sham lender), and §8(c)(4) (failure to provide affiliated business disclosures).
  • District court certified §8(c) and §8(c)(4) claims for a Timely class and (later) a Tolling class, but declined to certify §8(a) as a class-wide claim; individual §8(a) claims were to be tried later.
  • Trial proceeded on §8(c) and §8(c)(4); jury found Defendants not liable (found Prosperity was not a sham and Long & Foster did not refer/affirmatively influence plaintiffs to use Prosperity).
  • Plaintiffs moved under Rule 59 for a new trial to obtain a first trial on their individual §8(a) claims, arguing (1) defense counsel made a judicial admission in closing that Long & Foster referred the named plaintiffs, and (2) the verdict was against the clear weight of the evidence.
  • District court denied the new-trial motion; Fourth Circuit affirmed, finding no abuse of discretion as to the admission, sufficiency review, evidentiary rulings about economic harm, or closing-argument misconduct.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether defense counsel’s closing remark that “Long & Foster did refer the named plaintiffs to Prosperity” was a binding judicial admission removing referral from the jury The remark was a deliberate, clear, binding admission that should have precluded submission of referral to the jury and requires a new trial on §8(a) The remark was an isolated closing comment, not a deliberate formal admission; plaintiffs waived the issue by failing to raise it at trial Court: Not a binding admission; plaintiffs had opportunity to raise it at trial and failed to do so—no abuse of discretion in denying new trial
Whether the jury verdict was against the clear weight of the evidence (entitling plaintiffs to new trial) Evidence showed Prosperity was a sham and Long & Foster referred/affirmatively influenced plaintiffs; verdict was against clear weight There was evidence supporting a contrary finding (agent referrals, plaintiffs shopped, multiple lender recommendations); plaintiffs failed to move under Rule 50 so review limited Court: Under highly deferential standard, there was not an "absolute absence of evidence" supporting verdict; deny new trial
Whether district court abused discretion by permitting testimony/questions about whether plaintiffs suffered economic harm or whether Prosperity’s pricing was competitive Such evidence was prejudicial and irrelevant because economic injury is not an element of RESPA sham/affiliated-business claims; precluded expert testimony on pricing Limited cross-examination and lay testimony about shopping and pricing were relevant background to sham issue; court gave curative instructions Court: Admission of limited testimony was within discretion given relevance to sham inquiry and jury instructions mitigating prejudice
Whether district court erred in refusing to strike or instruct jury to disregard defense counsel’s improper closing statements accusing plaintiffs’ counsel of financial interest in case Remarks unfairly prejudiced jury and warrant new trial or corrective instruction Remarks were isolated, occurred only in closing, did not permeate the trial, and the court instructed jury that arguments are not evidence Court: No abuse of discretion; isolated remarks unlikely to have subverted jury decision

Key Cases Cited

  • FDIC v. Bakkebo, 506 F.3d 286 (4th Cir. 2007) (denial of new trial reviewed for abuse of discretion)
  • Figg v. Schroeder, 312 F.3d 625 (4th Cir. 2002) (standards for new trial review)
  • Knussman v. Maryland, 272 F.3d 625 (4th Cir. 2001) (standards when granting new trial because verdict against clear weight of evidence)
  • Atlas Food Sys. & Servs., Inc. v. Crane Nat’l Vendors, Inc., 99 F.3d 587 (4th Cir. 1996) (legal standards for new trial)
  • Meyer v. Berkshire Life Ins. Co., 372 F.3d 261 (4th Cir. 2004) (definition and effect of judicial admissions)
  • Fraternal Order of Police Lodge No. 89 v. Prince George’s Cnty., Md., 608 F.3d 183 (4th Cir. 2010) (when counsel’s statements may bind a party)
  • Bristol Steel & Iron Works v. Bethlehem Steel Corp., 41 F.3d 182 (4th Cir. 1994) (scope of review where no Rule 50 motion made)
  • Nichols v. Ashland Hosp. Corp., 251 F.3d 496 (4th Cir. 2001) (limitations to appellate review after failure to move for judgment as a matter of law)
  • United States v. Cole, 631 F.3d 146 (4th Cir. 2011) (abuse-of-discretion standard for evidentiary rulings)
  • United States v. Leftenant, 341 F.3d 338 (4th Cir. 2003) (relevance standard is low)
  • United States v. Love, 134 F.3d 595 (4th Cir. 1998) (Rule 403 review highly deferential)
  • United States v. Udeozor, 515 F.3d 260 (4th Cir. 2008) (view evidence favorably to proponent on Rule 403 review)
  • Arnold v. Eastern Air Lines, Inc., 681 F.2d 186 (4th Cir. 1982) (standards for assessing prejudicial closing argument misconduct)
  • Ins. Co. of N. Am. v. U.S. Gypsum Co., 870 F.2d 148 (4th Cir. 1989) (isolated improper remarks in long trial unlikely to require new trial)
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