Guardsman’s family recovers against mortgage company that tried to foreclose on home

Thitchener v. Countrywide Home Loans, Inc., Nev., Clark County Dist. Ct., No. A-479597, Sept. 30, 2005, appeal filed, Dec. 20, 2005.

On the day of his honorable discharge from the U.S. Air Force, Desert Storm veteran Gerald Thitchener joined the Air National Guard, planning to continue serving his country. After the events of September 11, 2001, Gerald’s unit was activated, and in January 2002 he was sent to Tuscon, Arizona, on a one-year tour of duty. His wife, Katrina, and their two children, who lived in the family’s Las Vegas home, missed him terribly. But when they went to Arizona to reunite their family, the Thitcheners had no idea their Nevada condominium would be ransacked and nearly sold in a mistaken foreclosure.

Katrina and the children joined Gerald in Tucson in July 2002, planning to stay there until Gerald’s tour ended and then return to the family’s home in Las Vegas. While in Arizona, the Thitcheners had the mortgage and utilities bills sent to their Tucson address and paid their mortgage on time each month. However, in early 2003, the Thitcheners stopped receiving an electric bill for the condominium. Calls to the electric company proved fruitless. Suspecting a problem, Katrina asked her mother to stop by the couple’s home. When she did, she noticed a “for sale” sign in the window. She immediately alerted the Thitcheners, who were unable to travel due to Katrina’s pregnancy.

When Gerald returned to Las Vegas about a week later, after the birth of the couple’s third child, he found the home empty. The locks to the condominium had been changed, and everything inside—including the family’s pictures and Katrina’s wedding dress—had been removed. The company that handled the Thitcheners’ mortgage, Countrywide Home Loans, told Gerald it planned to foreclose on the property and had already scheduled a foreclosure sale for failure to pay the mortgage. When he protested, telling the company that they had paid all their mortgage bills on time, Countrywide told him that someone in the legal department would get back to him. No one called. By that point, however, Countrywide had already lost or thrown away all the family’s possessions.

Gerald and Katrina retained Las Vegas attorneys Terry Moore and ATLA member Terry Coffing in April 2003. The attorneys readily accepted the case, feeling that it is important to work to protect the rights of military families whose loved ones have been sent on long tours of duty away from home. When the attorneys began the discovery process, they learned that Countrywide had foreclosed on another condominium in the complex but gave the wrong address to its real estate agent. The attorneys also found that Countrywide had been amply warned that the Thitcheners were not in default. Both the title search company and the realtor assigned to the sale raised red flags, Coffing notes. The title company informed Countrywide that it could not claim title to the condominium. Further, the realtor noted that the Thitcheners had been paying their condominium dues and their utilities bills on time; he also found the home full of furnishings and personal belongings when he visited the property. Countrywide, however, instructed him to ignore the signs of occupation and continue with the foreclosure.

Believing the company should compensate for what it took from them, Gerald and Katrina chose to take the case to trial. The Thitcheners filed suit against Countrywide, alleging trespass, conversion, and breach of contract and the covenant of good faith and fair dealing, as well as negligent infliction of emotional distress. They sought punitive as well as compensatory damages. The road to trial was a rough one, with a contentious discovery process. Countrywide attempted to compel the couple’s children to undergo psychological evaluations to determine the extent of harm they had suffered as a result of the loss. This attempt was denied. The parties also attempted mediation, which was unsuccessful on both occasions.

During the weeklong trial, Coffing and Moore focused on what they termed Countrywide’s arrogance in refusing to apologize for throwing away the family’s personal belongings. The attorneys pointed out how Countrywide attempted to shift the blame onto Gerald and Katrina for the mistake, calling attention to the couple’s earlier bankruptcy in suggesting that they had overstated the value of the personal possessions Countrywide had pitched out. They relied on the testimony of Tom Grimmett, a bankruptcy expert from Las Vegas, to establish that the valuation of belongings for bankruptcy proceedings is quite different from the one used in cases such as this, where a family must replace lost items at fair market value. They also called Shirley Rappaport, a Las Vegas expert on real estate and foreclosure best practices, to explain to the jury what the proper foreclosure procedure should have been and how Countrywide deviated from those standards.

Defense counsel, on the other hand, suggested that the family could be adequately compensated by merely reimbursing them for the monetary value of the things they lost, arguing, as Coffing recounts, essentially that “a roll of film is four bucks; go take a picture.” But as Coffing noted in his closing, the sentimental value of wedding pictures and military medals earned during “tough duty” in the first Gulf War cannot be adequately measured in such terms.

The jury returned a verdict for Gerald and Katrina in the liability phase of the trial, finding that Countrywide was liable on all claims and that it acted with conscious disregard for the Thitcheners’ rights. It awarded the family about $922,700 in compensatory damages. And although Coffing had just 15 minutes to make an argument that Countrywide should pay punitive damages, the jury awarded the Thitcheners $2.5 million in punitive damages after deliberating for less than an hour. Coffing attributes the award in part to the jury’s displeasure with Countrywide’s attitude during trial, saying that “the defense was insulting, and the jury was justifiably angered” by Countrywide’s degrading treatment of the family and its refusal to apologize for its mistake. At counsel’s request, the trial court tripled the trespass and conversion portion of the compensatory damages award pursuant to Nevada law, bringing the total award to about $4.58 million, including attorney fees, costs, and prejudgment interest.

After the trial concluded, Countrywide filed motions for remittitur, a new trial, and judgment as a matter of law. In February 2006, the court granted in part the motion for remittitur, concluding that the state damages cap statute warranted the reduction of the punitive damages award because the jury’s initial award of compensatory damages for conversion and trespass, rather than the trebled amount, formed the basis for the cap on punitive damages. The punitive damages award was subsequently reduced to about $968,100, reducing the total award to about $3.08 million. Both parties have appealed, and the matter is pending before the Nevada Supreme Court.

As they await the final determination of their case, Gerald, Katrina, and their three children remain in Tucson and cannot bear the thought of returning to their Las Vegas condo, though they are still paying the mortgage on it. They were “overwhelmed” that the jury appreciated the loss they suffered, Coffing reports, and grateful that the jury understood that their case “was never a money issue; the thing that made them most upset was that their history is gone.”

CAROLINE B. FLEMING