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First Tennessee National Bank Association v. H.I.S. Mortgage

December 22, 2006

FIRST TENNESSEE NATIONAL BANK ASSOCIATION, PLAINTIFF
v.
H.I.S. MORTGAGE, ET AL., DEFENDANTS



The opinion of the court was delivered by: Judge Graham

Magistrate Judge Abel

ORDER

Plaintiff First Tennessee National Bank Association ("First Tennessee Bank") filed this action alleging that defendants communicated fraudulent information to it and caused it to issue a secured mortgage loan that the lender defaulted on. This matter is before the Court on plaintiff's November 7, 2006 motion for default judgment against defendants Aaron Hansome, Janette Harless, Jerry Connor, Appraisal Ohio and Virtual Title Agency (doc. 12).

The complaint alleges that defendant Aaron Hansome, an employee of defendant H.I.S. Mortgage, purchased 482-484 Olpp Avenue, Columbus, Ohio 43207 in December 2001 for $47,405. He purportedly transferred the property to his mother, defendant Janette Harless. Then Hansome arranged through H.I.S. Mortgage for Harless to take out a mortgage from First Tennessee Bank in March 2002 for $85,000. Complaint, ¶¶ 6 and 25. Defendant Virtual Title Agency was the closing agent for both the December 2001 and the March 2002 transactions. Complaint ¶ 25. On January 24, 2002, defendant Jerry Connor of defendant Appraisal Ohio appraised the property for $85,000. The appraisal misrepresented that Harless owned that property and that she was refinancing it. Complaint, ¶ 26. This appraisal, which did not consider that the property was purchased one month before for $47,405, materially misrepresented the actual fair market value of the property. Complaint, ¶¶ 26 and 27.

The loan application to First Tennessee Bank falsely represented that it was a request for a refinancing by Harless, who had no interest in either the property or the mortgage Hansome made on it. Complaint, ¶ 31. It also falsely stated that Harless owned the property and that it was her primary residence. Complaint, ¶ 32. On January 29, 2002, after Hansome and Harless made the false loan application, Hansome transferred the property to both himself and Harless for a sale price of zero dollars. Complaint, ¶ 36. Virtual Title closed the loan on March 28, 2002 "as a refinance with the money going directly to purchase the property, as evidenced by Aaron Hansome's transfer of the subject property to Janette Harless on April 4, 2002, after the loan was obtained." Complaint, ¶ 39. Virtual Finance and its employee, representative, or affiliate Katheryn M. Bockover "knew or should have known that such a transaction was not a refinance and the broker [Hansome] had an interest in the property being sold, and/or the closing agent directly participated in the scheme against First Tennessee Bank." Complaint, ¶ 40. Virtual Title was contractually bound to follow First Tennessee Bank's closing instructions. Complaint, ¶ 41. Finally, the loan now is in default. Complaint, ¶ 2.

The complaint pleads the following claims against the defaulting defendants:

* Fraud--Counts I (Hansome and Harless), V (Connor and Appraisal Ohio) and VIII (Virtual Title).

* Unjust enrichment--Counts II (Hansome and Harless), VI (Connor and Appraisal Ohio) and IX (Virtual Title).

* Civil conspiracy--Count III (Hansome, Harless, Connor, Appraisal Ohio and Virtual Title).

* Breach of contract--Count X (Virtual Title).

On November 8, 2006, the Clerk of Court entered default against defendants Aaron Hansome, Janette Harless, Jerry Connor, Appraisal Ohio and Virtual Title Agency (docs. 18 through 22).

The uncontroverted November 2, 2006 affidavit of Richard C. Stern, First Tennessee Bank's vice president for asset recovery, states that the March 28, 2002 mortgage loan agreement extended a loan to Hanette Harless in the amount of $85,000, plus interest, to be repaid in full by April 2, 2007. First Tennessee Bank has sustained a loss on the loan in the amount of $75,223.55 plus interest at the rate of 10.225%.

Plaintiff's November 7, 2006 motion for default judgment against defendants Aaron Hansome, Janette Harless, Jerry Connor, Appraisal Ohio and Virtual Title Agency (doc. 12) is GRANTED. The Clerk of Court is DIRECTED to enter JUDGMENT against defendants Aaron Hansome, Janette Harless, Jerry Connor, Appraisal Ohio and Virtual Title Agency in the amount of $75,223.55 plus interest at the rate of 10.255% and costs. The ...


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