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)
EXHIBIT A
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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:
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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?
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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
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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?
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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.
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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
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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
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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
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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?
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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
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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
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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
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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?
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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
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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?
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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
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