Class certification was warranted in Chapter 7 debtor’s breach of contract and fraud action against mortgage servicing agent.
on July 6th, 2008Class certification was warranted in a breach of contract and fraud action brought by a Chapter 7 debtor against a mortgage servicing agent on grounds that the common issues of law or fact would predominate and a class action was a superior method of adjudicating the dispute. The action, which arose from the agent’s alleged misrepresentations regarding the amount of its legal fees incurred in pursuing its stay relief motions, would produce a small monetary return for the individual class members of less than $100, the litigation had been pending before the bankruptcy court for several years, and a fair amount of discovery had already been completed. Litigation in the bankruptcy court was desirable, moreover, since the damages allegedly arose in bankruptcy cases during the resolution of stay relief motions. In addition, issues raised by the fraud claims, including reliance and damages, were determinable on a class-wide basis under Texas law.
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