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Minter Certification Order 05-03-2011

Minter Certification Order 05-03-2011

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Published by OAITA
RESPA Section 8 class action certification order involving Wells Fargo Bank and Long & Foster Real Estate.
RESPA Section 8 class action certification order involving Wells Fargo Bank and Long & Foster Real Estate.

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Published by: OAITA on May 06, 2011
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DENISE MINTER et al. **v. * Civil Action WMN-07-3442*WELLS FARGO BANK, N.A. et al. *BRADLEY PETRY et al. **v. * Civil Action WMN-08-1642*PROSPERITY MORTGAGE CO. et al. ** * * * * * * * * * * *
Before the Court is a motion to certify plaintiff classesin the above-captioned related disputes. Plaintiffs DeniseMinter, Jason Alborough and Rachel Alborough have moved theCourt on behalf of themselves and other similarly situatedindividuals, ECF No. 185 in Minter, while Plaintiffs Bradley andStacey Petry seek to represent the interests of a class in theirrelated dispute, ECF No. 123 in Petry. After the partiesexhaustively briefed both motions, they are ripe for review.Upon consideration of the applicable law and facts, the Courtdetermines: (1) no oral argument is necessary, see Local Rule105.6; (2) the motion to certify in Minter will be granted inpart and denied in part; and (3) the motion to certify in Petrywill be granted.
Case 1:07-cv-03442-WMN Document 253 Filed 05/03/11 Page 1 of 81
2I. BACKGROUNDAnimating both cases is Plaintiffs’ theory that ProsperityMortgage Company (Prosperity), the product of a joint venturebetween Wells Fargo Bank, N.A. (Wells Fargo) and Long & FosterReal Estate, Inc. (Long & Foster), operated not as anindependent mortgage lender but rather as a mere frontorganization formed to circumvent legislation designed toprevent market-distorting business practices within the realestate settlement services industry. Thus, with only minorexceptions, Plaintiffs’ success or failure in both cases willturn on the independence and legitimacy of Prosperity’soperations.Prosperity, as it exists today, was formed in 1993 in ajoint venture between Wells Fargo, then known as NorwestMortgage, Inc., and Walker Jackson, then known as ProsperityMortgage Corporation (PMC).
Walker Jackson is a wholly ownedsubsidiary of The Long & Foster Companies and is an affiliate ofDefendant Long & Foster. In the early 1990s, PMC was strugglingas a mortgage lender. The Long & Foster Companies, which owned
PMC, as it existed prior to 1993, is not to be confused withDefendant Prosperity. Despite their identical names, the twocompanies are separate corporate entities and are related onlyinsofar as the latter (Defendant Prosperity) is the product ofthe former’s (PMC’s) 1993 joint venture with Wells Fargo. Forthe sake of simplicity, the Court will refer to all parties bytheir current names. Thus, except where necessary, PMC andWalker Jackson will be referred to as Long & Foster, whileNorwest Mortgage will be referred to as Wells Fargo.
Case 1:07-cv-03442-WMN Document 253 Filed 05/03/11 Page 2 of 81
3PMC, sought a larger, more established lender with which topartner to turn PMC into a more profitable venture. Wells Fargohad the expertise of a well-run financial institution and wastherefore an attractive partner for PMC. Thus, Wells Fargo andPMC entered into a joint venture in 1993 (Joint Venture), inwhich the companies agreed to leverage their respective assetsand develop Prosperity as a mortgage lender.Upon consummation of the Joint Venture, Prosperity beganoperating as a mortgage lender that funded its loans via awholesale line of credit provided by Wells Fargo, and itcontinues to operate today as such. The details and motivationsof the parties surrounding the Joint Venture, the manner inwhich Prosperity operated then and now, and the relationshipbetween Prosperity and its parent companies are of significantimport to these cases and bear directly on the merits ofPlaintiffs’ claims.The Complaint in Minter is predicated on transactionsbetween Prosperity and Denise Minter and Jason and RachelAlborough (Named Minter Plaintiffs). Denise Minter obtained amortgage through Prosperity in 2006, while the Alboroughs didthe same in 2007. All Named Minter Plaintiffs purchased theirhomes with the help of a Long & Foster realtor. Later, uponlearning that Prosperity may not have been operating inaccordance with the law, may have charged them illegal fees, and
Case 1:07-cv-03442-WMN Document 253 Filed 05/03/11 Page 3 of 81

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