June 19, 2014

We have two separate cases involving Branch Banking & Trust (BB&T) in two separate states (Tennessee and Delaware) where matters which have occurred demonstrate that BB&T cannot be trusted. Jeff Barnes, Esq. represents the borrowers in both actions, assisted by local counsel Andrew Farmer, Esq. in the Tennessee case, and local counsel Stephen Brauerman, Esq. in the Delaware case.

In the Tennessee case, the borrowers had a series of construction loans which had been originated by a lender which was thereafter bought by BB&T. The series of loans involved several parcels of real estate being developed as part of a planned resort community. For a period of three years (from 2006 through 2009), BB&T continually amended the time for performance of payments under the loans on request of the borrowers without ever threatening default or foreclosure. The requests for extensions of time to make payments were the result of numerous factors incident to construction issues.

At some time in 2009, BB&T notified the borrowers that there was an error in the loan documents which had been prepared by the bank, and that as a result, BB&T did not have perfected lien rights against the properties. BB&T requested that the borrowers jointly participate in legal proceedings to reform the loan documents to correct the errors. The borrowers agreed to do so on the condition that the relationship between them and BB&T as to extending the time for performance (payment) on the loans, which BB&T had been doing with the borrowers for the prior 3 years, did not change. BB&T agreed to this.

The proceeding to reform the documents to correct the bank errors consummated. However, shortly thereafter, BB&T refused to grant any modifications to the time for the borrowers to make payments under the loans, and thereafter declared the borrowers in default and initiated foreclosure proceedings. It is thus more than evident that BB&T lied to the borrowers so that BB&T could (a) correct bank errors in the loan documents which errors resulted in BB&T having no lien rights so that (b) BB&T could then set up the borrowers for foreclosure. The borrowers have sued for fraud in the inducement/misrepresentation, breach of contract, unjust enrichment, and injunctive relief to enjoin any foreclosure activity.

The original foreclosure Complaint in the Delaware case had been filed by MERS. The homeowner challenged the Complaint on the grounds that MERS was not one of the specific parties identified in the applicable Delaware statute governing who is entitled to institute a foreclosure. That action was dismissed.

BB&T filed a subsequent action and prevailed on summary judgment, which the homeowner appealed. However, the form of the Memorandum Opinion did not conform to the proper form of a final order which Delaware law permits to be appealed. The homeowner’s counsel, Mr. Brauerman, and BB&T’s counsel thus negotiated a stipulation dismissing the appeal without prejudice to permit the trial court to enter the proper form of Order so that the summary judgment ruling could be appealed.

However, BB&T’s counsel did not include the homeowner’s counsel (Mr. Brauerman) on the form of Order submitted to the Court, only listing, as the borrower’s counsel, an attorney who had previously represented the borrower but who had left the law Firm representing the borrower long before. That attorney had not been involved in the negotiation of the stipulation and his name was not on the stipulation. At all times, BB&T’s attorney only dealt with Mr. Brauerman as to the agreement to dismiss the appeal without prejudice, which BB&T’s counsel knew was being done so that the trial court could enter an appealable form of Order, and was thus on notice that Mr. Brauerman fully intended to appeal the summary judgment decision (as he had already done as to the Memorandum decision which granted BB&T’s Motion for Summary Judgment).

As a result of BB&T’s counsel placing the name of an attorney who did not represent the borrower on the Order and not including Mr. Brauerman’s name on the Order, no notice of the proposed Order nor the Order itself were provided to Mr. Brauerman. The homeowner only learned of the existence of the (erroneous) Order when the property was posted for sale, which was after the appeal period had already expired.

The homeowner filed a Rule 60 Motion to vacate the Order. Incredibly, BB&T’s counsel took the position that the time for appeal had expired and thus the homeowner could not appeal, period. The court apparently saw through the unethical and prejudicial actions of BB&T’s counsel and granted the homeowner’s Rule 60 Motion, vacating the infirm Order.

BB&T’s conduct in these two cases is reprehensible and beyond atrocious: lying to homeowners in Tennessee so BB&T could try to steal valuable resort property, and trying to take advantage of a BB&T-manufactured misleading court filing situation in Delaware. The moral: Beware BB&T!

Jeff Barnes, Esq.,