Foreclosure law firm accused of conspiring to inflate prices is mostly victorious at trial
The largest foreclosure law firm in Colorado has successfully fought civil allegations that it conspired with competitors and related businesses to fix prices and make more money on side costs, such as title insurance and foreclosure notices.
Judge Morris Hoffman of Denver ruled on Tuesday that there was no conspiracy by the Castle Law Group and the lawyers who ran it, Larry and Caren Castle, the Denver Post reports. The state had sought $16 to $26 million from the Castles and two related businesses, which also were found not liable.
Hoffman ruled against the firm on one point, however. He said the firm will have to pay a civil penalty of $119,500 for failing to tell Fannie Mae and Freddie Mac about their interest in a summons-posting company, according to the Denver Post account.
The state had contended the Castle firm conspired with its biggest competitor, Aronowitz & Mecklenburg, to inflate the price of foreclosure notices. Aronowitz had settled the case for $10 million. The state also settled with six other foreclosure law firms, albeit for smaller amounts.
Hoffman said the state was unable to prove its thesis that “in taking advantage of the extraordinary entrepreneurial opportunity presented by the economic crisis, [the defendants] crossed the line from lawful self-interest into deception or anti-competitive collusion.”
Hat tip to Bloomberg Big Law Business.
