990 F.3d 782
4th Cir.2021Background
- Plaintiffs (class of 2,769 West Virginia homeowners who refinanced with Quicken Loans from ~2004–2009) allege Quicken Loans and appraisal manager TSI provided borrowers’ own estimated home values to appraisers and sometimes pressed appraisers to revalue properties upward.
- Plaintiffs claim this conduct was concealed and used to inflate appraisals, giving rise to (a) unconscionable inducement under the West Virginia Consumer Credit and Protection Act (WVCCPA), (b) breach of contract (deposit/agreement to obtain appraisal), and (c) civil conspiracy.
- The district court certified the class, granted summary judgment for plaintiffs on the statutory unconscionable-inducement and contract/conspiracy claims, and awarded statutory penalties ($3,500 per loan) plus appraisal-fee damages; defendants appealed.
- Evidence was mixed: the practice was industry-common pre-2009 and sometimes defended as legitimate (helping price/assign appraisals), but internal Quicken emails and certain appraiser testimony show targeted "requested/estimated" values and follow-up pressure; Quicken/TSI stopped the practice by 2009.
- The Fourth Circuit: affirmed class certification; affirmed summary judgment for plaintiffs on the unconscionable-inducement (statutory) and conspiracy claims; vacated and remanded the district court’s summary judgment and damages on the breach-of-contract claim for further factwork.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class certification (predominance) | Common conduct (sharing estimates and pressuring appraisers) predominates; class-wide remedies appropriate | Individualized issues (standing, reliance, damages, SOL) predominate | Affirmed: district court did not abuse discretion; common questions predominate |
| Unconscionable inducement (WVCCPA §46A‑2‑121) | Quicken’s concealed practice corrupted a central part of loan formation (appraisal) and “contributed to” borrowers’ decisions; liability need not show damages | Practice was industry-standard, not unconscionable; borrowers were not induced because they received and benefited from loans | Affirmed summary judgment for plaintiffs: concealment/pressure was unconscionable and contributed to inducement; statutory relief available without showing damages |
| Breach of contract (deposit agreement) | Deposit agreement required Quicken to obtain an acceptable/fair appraisal; providing estimates and pressuring appraisers breached that duty and rendered appraisals worthless | Agreement disclaims liability for appraisal delays; no contractual promise as to appraisal quality; many appraisals unbiased so no damages | Vacated & remanded: court finds a contract (deposit agreement) was formed, but summary judgment on breach/damages premature; district court to evaluate breach and causation/damages (may consider implied covenant) |
| Civil conspiracy | Conspiracy claim derivative of statutory/conduct claims; defendants conspired to influence appraisals | If statutory claim fails, conspiracy fails; otherwise no independent challenge raised | Affirmed summary judgment for plaintiffs as derivative of the affirmed statutory claim |
| Standing / Statute of limitations | Class members paid appraisal fees and suffered financial injury; SOL manageable by ministerial review | Some class members may be uninjured or untimely; individualized inquiries defeat class | Standing and SOL do not defeat certification: Article III injury shown (paid fees); SOL issues susceptible to class-wide or ministerial resolution |
Key Cases Cited
- Quicken Loans, Inc. v. Brown, 737 S.E.2d 640 (W. Va. 2012) (discusses fraudulent concealment and holds common-law fraudulent inducement can support statutory unconscionable-inducement)
- McFarland v. Wells Fargo Bank, N.A., 810 F.3d 273 (4th Cir. 2016) (interprets WVCCPA to allow unconscionable-inducement claims based on pre-contract conduct affecting formation)
- Evans v. United Bank, Inc., 775 S.E.2d 500 (W. Va. 2015) (recognizes implied covenant of good faith and fair dealing applies to contracts)
- Vanderbilt Mortg. & Fin., Inc. v. Cole, 740 S.E.2d 562 (W. Va. 2013) (statutory penalties under WVCCPA may be awarded based on violation even without quantifiable harm)
- Comcast Corp. v. Behrend, 569 U.S. 27 (2013) (plaintiffs bear burden to show damages and predominance for Rule 23(b)(3) class certification)
- Krakauer v. Dish Network, L.L.C., 925 F.3d 643 (4th Cir. 2019) (deferential standard of appellate review for class-certification decisions)