City of St. Clair Shores General Employees Retirement System v. Lender Processing Services, Inc. et al

Filing 41

AMENDED COMPLAINT against Jeffrey S. Carbiener, Francis K. Chan, Lee A. Kennedy, Lender Processing Services, Inc., Michelle Kersch with Jury Demand filed by Baltimore County Employees Retirement System. (Attachments: # 1 Appendix Index of Exhibits, # 2 Exhibit A, # 3 Exhibit B, # 4 Exhibit C, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K, # 13 Exhibit L, # 14 Exhibit M)(Reise, Jack)

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EXHIBIT A Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 2 of 326 FREDOM COURT REPORTING IN THE CIRCUIT COURT OF DEKALB COUNTY ALABAMA CIVIL ACTION NO.: 08-183 LARRY DAVID WOOD, JR., and KAREN WILBORN WOOD, Individuals, , . Plaintiffs, vs. OPTION ONE MORTGAGE CORPORATION, WELLS FARGO BANK, N. A. , FIDELITY NATIONAL FORECLOSURE & BANKRUPTCY SOLUTIONS, Defendants. / VIDEOTAPED DEPOSITION OF BILL NEWLAND Taken on behalf of the Plaintiffs TIME: Tuesday, June 16, 2009 9:10 a.m. - 5:30 p.m. PLACE: Fideli ty National REPORTED BY: 601 Riverside Avenue Jacksonville, Florida Cindy D. McClary, RPR, CRR DATE TAKEN: 367 VALLEY AVENU 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Exhibit 3 to amended complaint Page 8 of 326 Desc FREEDOM COURT REPORTING Page 7 1 2 Q Okay. So you were a fact witness to that specific case? 3 A Yes. 4 Q I understand that you've played some role in 5 this case up to this point with respect to answering 6 interrogatories and propounding affidavits; is that 7 correct? 8 A Yes, it is. 9 Q So I take it from that that you have 10 personally made yourself familiar with this litigation 11 and the allegations that have been made; is that 12 correct? 13 A Yes, it is. 14 Q If you will, sir, please tell me how long 15 you've been an employee of Fidelity National 16 Foreclosure Services. 17 A Approximately five years. 18 Q Okay. 19 How long have you been employed as a vice president? 20 A Approximately four years. 21 Q The position that you currently hold, 22 exactly what is your title? 23 A I'm first vice president of operations. 24 Q What are your responsibilities with that 25 title, please, sir? 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Exhibit 3 to amended complaint Page 9 of 326 Desc FREEDOM COURT REPORTING Page 8 1 A I have primary oversight for the 2 Jacksonville facility and also manage our attorney 3 management area and special assets for our foreclosure 4 department. 5 Q 6 department? 7 A What is a special asset in the foreclosure Basically, we handle title resolution, 8 assist in correspondence with title resolution, 9 probates, things of that nature. 10 11 12 13 14 Q Have you held any other titles as an employee of Fidelity? A I held a title primarily when I was hired on here as assistant vice president. Q 15 Okay. MR. CASH: Just for the record to be clear, 16 can we make an agreement that when we use the 17 term Fidelity, we're talking about the defendant 18 Fidelity National Foreclosure & Bankruptcy 19 Solutions? 20 every time. 21 22 MR. WOOTEN: 25 It'll probably save my tongue, so, frankly, that'll be fine with me. 23 24 Then we just don't have to repeat it MR. CASH: Okay. BY MR. WOOTEN: Q I think that's what the industry more or 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 53 of 326 FREEDOM COURT REPORTING Page 52 1 A Uh-huh. 2 Q Is that a vehicle by which you provide data 3 to your clients? 4 A Yes. 5 Q Tell me what screens you are aware of Fiserv 6 updates. 7 A I do not know. 8 Q Who in your employ would be the person with 9 10 the most knowledge about that? A Probably our securities area. 11 Q Who is that person? 12 A I don't know off the 13 Q Would Fiserv also be 14 top the of my head. vehicle by which your firm delivered bills to its customers? 15 A No. 16 Q Is Fiserv the vehicle by which your company 17 18 would add fee charges to customer accounts? A We do not add -- MR. CASH: Objection to the form. 19 20 Q You can answer if you know. 21 A We do not add fees. 22 Q Okay. When LPS provides services to its 23 clients, does it charge fees? 24 A No. 25 Q I'm sorry? 367 VALLEY AVENU 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 54 of 326 FREDOM COURT REPORTING Page 53 1 A To our clients, no. 2 Q Okay. Let me ask it another way. When you 3 provide services to the mortgage servicers which hire 4 you to do foreclosure work, do you charge fees for 5 that work? 6 A No, we don It. 7 Q Okay. Tell me what you charge, how you get 8 paid for the work that you do, please, sir. 9 MR. CASH: I'm going to object to that 10 question. That i s proprietary, and there i s no 11 reason to go into it based upon the allegations 12 set forth in this lawsuit. There i s no relevance 13 based upon any claim being made in this lawsuit. 14 Unless, Nick, you can point me to one of the 15 allegations in here that supports that question. 16 MR. WOOTEN: Well, let i s do this, Mr. Cash. 17 We i II come back to that question in a few 18 minutes. I don i t want to get too far out of order. 19 MR. CASH: Okay. The objection will be the 20 21 same later, but 22 MR. WOOTEN: That i II be fine. You i II be 23 welcome to make it. 24 BY MR. WOOTEN: 25 Q Make sure I understand this, Mr. Newland. 367 VALLEY AVENU 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Exhibit 3 to amended complaint Page 96 of 326 Desc FREEDOM COURT REPORTING Page 95 1 2 off of Process Management, yes. Q Sure. Are there any attorneys who are not 3 members of the Fidelity -- or the LPS attorney network 4 who can access your Process Management system? 5 A Not that I'm aware of. 6 Q And is it a fact that the only attorneys who 7 are using Process Management are attorneys who have 8 signed a referral agreement with LPS? 9 A That would be correct. 10 Q So, while your clients are free to choose 11 whomever as a foreclosing attorney, if they are an MSP 12 user and they are an LPS -- they have an LPS agreement 13 with you for Default Solutions, the only attorneys 14 available on LPS system are attorneys who have signed 15 a contract with LPS? 16 A That have signed a contract with LPS, yes. 17 Q So when you say that your servicing clients 18 are free to choose whomever, with respect to referring 19 it through LPS, that is illusory, isn't it? 20 21 22 23 A I don't understand what you mean by illusory. Q Well, there are 14,000 lawyers in the state of Alabama approximately. 24 A Uh-huh. 25 Q And your testimony is, is that Option One 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Exhibit 3 to amended complaint Page 97 of 326 Desc FREEDOM COURT REPORTING Page 96 1 could've chosen any lawyer to foreclose on this loan 2 if they wanted to, but if they have a contract with 3 LPS to provide default solutions, does that contract 4 not require them to make a referral through LPS? 5 A Not necessarily. 6 Q Have you -- well, never mind. 7 A Clients -- clients can choose to refer any 8 9 way they'd like. Q If they want the loan to stay on the MSP and 10 LPS system, don't they have to go through LPS and use 11 an attorney network member? 12 13 14 A The clients? Yes. They need to use our system at their choice. Q So, again, while you say that they can 15 choose whomever, if they keep the loan on your system, 16 they can only choose attorneys in your network? 17 A No. They can -- they can choose to use an 18 attorney outside the network and be able to update 19 that information through the client. 20 the ability to be able to update the system just like 21 an attorney. 22 agreement, then basically the updates can be provided 23 through the client into our LPS system. 24 25 Q The client has If the attorney chooses not to sign the Well, let me ask you this. Do you have any statistics on whether or not any foreclosures which 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Exhibit 3 to amended complaint Page 98 of 326 Desc FREEDOM COURT REPORTING Page 97 1 were referred to LPS or sent to an attorney who was 2 not a member of LPS's attorney network? 3 A No, I do not have statistics on that. 4 Q Is it because the number would be zero? 5 A No. 6 Q And there are no reporting functions in your 7 software that will give you that information? 8 A I don't know. 9 Q And you've never asked that question? 10 A No, I have not. 11 12 THE VIDEOGRAPHER: Excuse me. May I change videotape? 13 MR. WOOTEN: 14 THE VIDEOGRAPHER: 15 (Brief recess.) 16 THE VIDEOGRAPHER: 17 18 Sure. Off record at 11:07. Back on record at 11:19, beginning of Videotape No. 3. MR. WOOTEN: I need to go ahead and tell 19 y'all, I've got a 2:30 that I'm going to have to 20 take a short break, 2:30 local time. 21 call in a federal case that I've got to deal 22 with. So -- 23 MR. CASH: 24 MR. WOOTEN: 25 I've got to Okay, whatever works for you. -- we'll try to structure breaks around that, so -- but I wanted to give 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Exhibit 3 to amended complaint Entered 02/05/11 16:24:31 Page 144 of 326 Desc FREEDOM COURT REPORTING Page 143 1 regarding plaintiffs' mortgage loan. 2 A That is correct. 3 Q Now, are you speaking generally about any 4 payment at all from Option One, are you talking about 5 specifically the services provided regarding this 6 foreclosure that took place? 7 A Specifically. 8 Q Okay. 9 So we're dealing with -- your testimony is that for the support and services that 10 you provide regarding a foreclosure, that Option One 11 does not pay you any money? 12 A That is correct. 13 Q Now, with respect to Scott Humphrey, he pays 14 you a referral fee for having this loan come to him 15 through the referral network of LPS Default Solutions? 16 17 A administrative support fee. 18 19 Q Okay. Tell me what the administrative support fee is. 20 21 He does not pay a referral fee, he pays an A Basically to help maintain the information within the system of record. 22 Q Okay. 23 A I don't know off the top of my head what And what is the fee? 24 the -- you're talking about the exact amount of the 25 fee? 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Exhibit 3 to amended complaint Entered 02/05/11 16:24:31 Page 145 of 326 Desc FREEDOM COURT REPORTING Page 144 1 Q Well, how is that fee derived? I mean, is 2 it a percentage or is it a set dollar amount, or how 3 do you arrive at that fee? 4 5 6 7 A It's a dollar amount that's determined by our executives, I believe. Q Okay. Is it based on the dollar value of the loan or is it -- 8 A No. 9 Q -- based on the service to be provided? 10 A It's -- it's a flat fee. 11 Q Okay. Do you know if Mr. Humphrey would 12 have added the amount of that support fee to the 13 attorney fees which he billed to Option One? 14 A I don't know. 15 Q Do you know if your agreement with 16 Mr. Humphrey's firm required him to perform the 17 foreclosure services for a set fee? 18 A Yes. I mean, it's all basically relative to 19 the fees that are incurred, that are set forth by the 20 client. 21 Q All right. And when you say they're set 22 forth by the client, there actually is a fee structure 23 for these types of services. 24 generalization, Mike, but even with respect to 25 bankruptcies and foreclosures, most of those And this is a 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 155 of 326 FREEDOM COURT REPORTING Page 154 1 uploaded, but I do not know if those -- if there was 2 copies of anything behind those. 3 Q Is it your testimony that LPS Default 4 Solutions does not increase the amount billed to any 5 consumer for any charge or service provided during the 6 time that it manages the foreclosure process? 7 A That's correct, we do not. 8 Q Does LPS Default Solutions have any 9 agreement with any provider of services who does 10 charge a fee to a consumer in the foreclosure process 11 whereby that fee is shared with LPS Default Solutions? 12 A No. 13 Q And your testimony is that never happens, 14 not with respect to any fee, including any attorney's 15 fee? 16 17 18 A No. Q Does Fidelity charge to Option One -- I'm sorry. 19 Does LPS Default Solutions charge to Option 20 One any amount of money at any time for referring a 21 foreclosure file for foreclosure services through the 22 LPS Default Solutions platform? 23 24 25 A No. Q Does it receive any remuneration of any type from any source for Option One uploading a foreclosure 367 VALLEY AVENU 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 156 of 326 FREDOM COURT REPORTING Page 155 1 to LPS Default Solutions? 2 A No. 3 Q So I just want to be sure. What you Ire 4 testifying to is that there is no compensation ever 5 paid by the servicer to LPS Default Solutions for all 6 this work that it does on behalf of the servicer with 7 respect to the foreclosure? 8 A No. 9 Q There is compensation or there is not 10 compensation? 11 A No, there i s no compensation. 12 Q Is it your testimony then that the only fees 13 which LPS Default Solutions collects with respect to 14 the foreclosure of any given loan is the 15 administrative support fee charged to the network 16 attorneys? 17 A Yes. 18 Q And the division of LPS Default Solutions 19 which we are here about today and which you are 20 testifying as a 30 (b) (6) representative, the only 21 source of income it derives for its work with respect 22 to foreclosure is the administrative support fee? 23 A That i S my understanding. 24 Q Other than the administrative support fee, 25 does it charge a fee for accessing documents on the 367 VALLEY AVENUE 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Exhibit 3 to amended complaint Entered 02/05/11 16:24:31 Page 157 of 326 Desc FREEDOM COURT REPORTING Page 156 1 new document system? 2 A No. 3 Q So your testimony today is that the only 4 compensation of any type, of any nature, paid to LPS 5 Default Solutions is the administrative support fee, 6 and it funds all of the activities and makes all the 7 profit, pays all the overhead of LPS Default 8 Solutions? 9 A That's my understanding, for the third time. 10 Q Paragraph 11 of your affidavit says that LPS 11 Default Solutions has no record of receiving any 12 portion of funds received from any foreclosure of 13 plaintiffs' mortgage? 14 A That is correct. 15 Q And is that comment based upon the contents 16 of the Process Management system? 17 A Yes. 18 Q And it is your testimony that your employees 19 do have access to MSP as a portion of the work that 20 they do, correct? 21 22 A MSP, correct. 23 24 25 They have access to certain screens within Q Would that be the foreclosure screens within A It would be access to limited amounts of the MSP? 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 168 of 326 FREDOM COURT REPORTING Page 167 1 asked Ann Russo if her office had any info regarding a 2 possible insurance claim or action on this property? 3 A Tha tIs correct. 4 Q Wha t is the APR score or ranking wi th 5 respect to your foreclosure attorneys? 6 A What is the APR ranking? 7 Q Or score, attorney performance review or 8 a ttorney performance ranking, APR? 9 A Uh-huh. 10 Q What is that? 11 A It i S a scoring mechanism we utilize to show 12 where the attorneys are performing in relation to the 13 other attorneys wi thin the state. 14 Q Within the state? 15 A Yes. 16 Q Does that extend at all beyond the state to 17 18 the region or to the country? A Well, there are service levels that are also 19 in the national. 20 21 22 23 Q And how is that APR measured? MR. CASH: I have a better question. How is that relevant to this lawsuit? MR. WOOTEN: It i S relevant to this lawsuit, 24 Mike, because what you will learn about the APR 25 ranking is that it requires the attorneys to 367 VALLEY AVENU 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Entered 02/05/11 16:24:31 Desc Exhibit 3 to amended complaint Page 170 of 326 FREEDOM COURT REPORTING Page 169 1 other attorneys within a state. 2 So is that to be assumed from that response 3 that a higher APR ranking means that that attorney, by 4 your measure, is doing better than a lower APR 5 ranking? 6 A They could be performing better, yes. 7 Q Okay. And how do you determine the APR 8 9 10 ranking of a given attorney? A The APR ranking is based off of the completion of events that are wi thin the APR scoring 11 module. These events are based off the data that IS 12 inputted by the attorneys, then it i S compared against 13 their peers within that state, based off of days to 14 complete the actions. 15 Q So, for instance, there is a recommended 16 time frame from delivery of a foreclosure referral to 17 completion of the foreclosure sale, correct? 18 A There is a time frame, yes. 19 Q What is that time frame, sir? 20 A Time frame for the state of Alabama? 21 Q Uh-huh. 22 A I believe it i s 90 days. 23 Q And that is from, in this case, June 1st of 24 2007, which -- when it was opened and sent to Scott 25 Humphrey, until the sale is complete? 367 VALLEY AVENU 877-373-3660 BIRMINGHA , AL 35209 205-397-2397 Case 10-01172-DWH Doc 76-3 Filed 02/05/11 Exhibit 3 to amended complaint Entered 02/05/11 16:24:31 Page 171 of 326 Desc FREEDOM COURT REPORTING Page 170 1 A That's correct. 2 Q And your APR measures how the attorney does 3 in completing these events within those time frames, 4 correct? 5 A That's correct. 6 Q And so, that is based entirely upon the data 7 which is entered in the Process Management system, 8 correct? 9 A Yes. 10 Q And I'm assuming that there is a reporting 11 function within the Process Management system which 12 tracks these key events for each of these attorneys? 13 A Yes, there is. 14 Q Other than the time to complete the 15 foreclosure sale from beginning to end, what other 16 measures does your firm employ with respect to your 17 network attorneys who are engaged in foreclosure 18 practice? 19 20 21 22 23 24 25 A What other measurements as far as the APR? We also measure service levels. Q When you indicate service levels, can you explain that for me? A Sure. How often do they complete their re-projections on time. Q A re-projection is when a date has to be 367 VALLEY AVENUE 877-373-3660 BIRMINGHAM , ALABAMA 35209 205-397-2397

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