Opinion ID: 1384611
Heading Depth: 2
Heading Rank: 5

Heading: Joint Venture, Agency or Conspiracy

Text: The Herrods contend that Washtenaw had an agreement with First Security with regard to obtaining loans like the one which the Herrods signed that involved the use of the yield spread premium as a so-called kickback to reward the broker for obtaining the loan. The trial court granted summary judgment to Washtenaw on this count, finding that there was no evidence that it was involved in any joint venture, conspiracy and/or agency with any of the other defendants in this civil action. Appellants argue that the question of whether or not a joint venture exists is to be answered by the jury and further that `[a] plaintiff has a right to a jury trial upon the factual issues to determine whether a joint venture existed.' Bowers v. Wurzburg, 207 W.Va. 28, 37, 528 S.E.2d 475, 484 (1999) (quoting Lasry v. Lederman, 147 Cal.App.2d 480, 305 P.2d 663 (1957)). While we agree that the evidence in the record on this issue is inferential at best, the Appellants' expert does set forth various theories in his report as to how the loans were approved and the involvement of other parties. The Herrods allege that there was an arrangement between Washtenaw and First Security with regard to the exchange of loan information and terms that was instrumental in the securement of the loan at issue. [36] Through these allegations of joint venture, agency, and conspiracy, the Herrods seek to impose liability on Washtenaw for any wrongdoing that they are able to prove against First Security. In the report prepared by Appellants' expert witness that is part of the record, Mr. Byers opines that a close inspection of the underwriting documents in the Washtenaw document file indicate that First Security worked hand-in-glove with them on the processing and approval of the Herrod loan from very early in the application process. He explains further: Washtenaw's own internal documents show a submission date to Washtenaw by First Security of April 20, 2000, yet the Desktop Underwriter system notes on April 19, 2000 that Washtenaw submitted the loan package for approval by Fannie Mae. In my opinion, First Security worked with their own version of Desktop Underwriter, or one supplied by Washtenaw, and pulled the Herrod credit reports through this system. At some point, however, either First Security processed the Herrod loan application through Desktop Underwriter in Washtenaw's name and using their lender identification in Fannie Mae's system, or Washtenaw was involved in the processing of the Herrod loan much earlier than their internal underwriting documents indicate. Given Earl Young's deposition testimony that 90% of First Security's Fannie Mae loans were brokered to Washtenaw, it is highly likely they processed the loan in Washtenaw's name. He continues: The implications of this processing for the Herrods gets back to the April 6, 2000 Good Faith Estimate mailed by Earl Young of First Security, and the very specific yield spread premium noted on this form. I mentioned earlier that Mr. Young would need a lender rate sheet to calculate such a specific yield spread, and the Desktop Underwriter processing by First Security through Washtenaw would be a logical extension of an April 6, 2000 yield spread pricing based on rate sheets provided to First Security by Washtenaw. While this may be a good business arrangement to close deals and maximize profit for the broker and lender, for the Herrods it meant the pricing fix was in long before they ever had any idea they were approved for a loan. While this report of Appellants' expert appears to be the sole evidence of an arrangement between First Security and Washtenaw with regard to loan approval, we conclude that it should be up to a jury to determine whether there is sufficient evidence of a joint venture, agency, or conspiracy between these parties. Based on the foregoing, the decision of the Circuit Court of Kanawha County as to the granting of summary judgment to Washtenaw is affirmed as to the counts pertaining to credit services organization, fraud, and unfair or deceptive practices or acts, but reversed as to the counts pertaining to unconscionability and joint venture or conspiracy. Affirmed, in part; Reversed, in part. Justice BENJAMIN, deeming himself disqualified, did not participate in the decision of this case. Judge JOHN S. HRKO, sitting by temporary assignment.