Denise Minter v. Wells Fargo Bank, N.A. , 762 F.3d 339 ( 2014 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2131
DENISE MINTER, Individually and on behalf of a class of
consumers similarly situated; JASON ALBOROUGH; RACHEL
ALBOROUGH; LIZBETH T. BINKS,
Plaintiffs – Appellants,
and
FRANK LAROCCA; CATHERINE LAROCCA; MEHDI NAFISI; FOROUGH
IRANPOUR; KENNETH PFEIFER; ANGELA PFEIFER,
Intervenors/Plaintiffs,
v.
WELLS FARGO BANK, N.A.; LONG & FOSTER REAL ESTATE, INC.;
PROSPERITY MORTGAGE COMPANY; WALKER JACKSON MORTGAGE
CORPORATION, formerly doing business as Prosperity Mortgage
Corporation; WELLS FARGO VENTURES, LLC,
Defendants – Appellees.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. William M. Nickerson, Senior District
Judge. (1:07-cv-03442-WMN)
Argued: May 14, 2014 Decided: August 5, 2014
Before NIEMEYER and WYNN, Circuit Judges, and Robert J. CONRAD,
Jr., United States District Judge for the Western District of
North Carolina, sitting by designation.
Affirmed by published opinion. Judge Wynn wrote the opinion,
in which Judge Niemeyer and Judge Conrad joined.
ARGUED: Cyril Vincent Smith, ZUCKERMAN SPAEDER LLP, Baltimore,
Maryland, for Appellants. William M. Jay, GOODWIN PROCTER LLP,
Washington, D.C., for Appellees. ON BRIEF: William K. Meyer,
ZUCKERMAN SPAEDER LLP, Baltimore, Maryland; Richard S. Gordon,
Benjamin H. Carney, GORDON, WOLF & CARNEY CHTD., Baltimore,
Maryland, for Appellants. Irene C. Freidel, Brian M. Forbes,
K&L GATES LLP, Boston, Massachusetts; Andrew Jay Graham, John A.
Bourgeois, KRAMON & GRAHAM, P.A., Baltimore, Maryland, for
Appellees Wells Fargo Bank, N.A., and Wells Fargo Ventures, LLC.
David L. Permut, Sabrina M. Rose-Smith, GOODWIN PROCTER LLP,
Washington, D.C., for Appellee Prosperity Mortgage Company. Jay
N. Varon, Jennifer M. Keas, FOLEY & LARDNER LLP, Washington,
D.C., for Appellees Long & Foster Real Estate, Incorporated, and
Walker Jackson Mortgage Corporation.
2
WYNN, Circuit Judge:
In this class action suit, Plaintiffs Denise Minter, Jason
and Rachel Alborough, and Lizbeth Binks brought suit on behalf
of a group of consumers alleging that Wells Fargo and Long &
Foster Real Estate (collectively, “Defendants”) violated Section
8 of the Real Estate Settlement Procedures Act (“RESPA”), 12
U.S.C. § 2607. Specifically, Plaintiffs allege that Defendants
created a joint venture, Prosperity Mortgage Company
(“Prosperity”), to skirt RESPA’s prohibition on kickbacks while
failing to disclose this business arrangement to its customers.
After a trial on a portion of Plaintiffs’ claims, the jury
returned a verdict that foreclosed Plaintiffs’ untried kickback
claims. Plaintiffs moved for a new trial on the kickback claims
but were denied. Due in large part to Plaintiffs’ failure to
move for judgment as a matter of law before the jury reached its
verdict, as well as the highly deferential lenses through which
we must review the issues before us, we conclude that the
district court did not abuse its discretion as to any of
Plaintiffs’ challenges. Accordingly, we affirm.
I.
In 1993, Wells Fargo and Walker Jackson Mortgage
Corporation, a subsidiary and affiliate of Defendant Long &
Foster Real Estate, formed Prosperity Mortgage Company as a
3
joint venture.1 Prosperity was created as “a mortgage lender
that funded its loans via a wholesale line of credit provided by
Wells Fargo[.]” J.A. 205.
Plaintiffs Denise Minter and Jason and Rachel Alborough,
along with a class of similarly situated consumers, purchased
their homes with a Long & Foster realtor and obtained mortgages
through Prosperity in 2006 and 2007. In late 2007, Plaintiffs
brought this class action suit alleging that Wells Fargo and
Long & Foster created Prosperity as a “sham” or a front
organization formed to facilitate unlawful referral fees and
kickbacks in violation of RESPA, as well as a variety of other
state and federal law claims.2 In particular, Plaintiffs alleged
that Defendants created Prosperity to allow Long & Foster to
refer mortgage clients to Wells Fargo in exchange for kickbacks.
Plaintiffs also alleged that Prosperity performed little to no
1
At that time, the parties to the joint venture were
Norwest Mortgage, Inc. and Walker Jackson Mortgage Corporation,
which was then known as Prosperity Mortgage Corporation.
Norwest Mortgage later became Wells Fargo. For the purposes of
this opinion, the companies’ current names, Wells Fargo and Long
& Foster, will be used.
2
Plaintiffs also alleged violations of the Racketeer
Influenced and Corrupt Organizations Act, the Maryland Consumer
Protection Act, and derivative tort claims, but none of these
are the subject of this appeal. Before trial, the parties
stipulated to dismiss most of the counts in the complaint, and
Plaintiffs proceeded only on their RESPA and RESPA conspiracy
claims. Later, the district court found that RESPA does not
support a cause of action for conspiracy and granted Defendants
summary judgment on the conspiracy claim. Thus, the only
remaining claims on appeal are the three RESPA claims.
4
real work in connection with the mortgage transactions and that
Wells Fargo was the real lender. Plaintiffs asserted three
RESPA violations:
1. The Section 8(a) claim alleged that Wells Fargo paid
kickbacks to Long & Foster in exchange for settlement
services.
2. The Section 8(c) claim alleged that Wells Fargo and
Long & Foster operated Prosperity as a “sham” lender,
i.e., not a bona fide provider of settlement services,
to funnel Long & Foster real estate customers to Wells
Fargo for mortgage products.
3. The Section 8(c)(4) claim alleged that Defendants, as
members of an affiliated business arrangement as
defined by RESPA, did not comply with RESPA’s
requirement to provide borrowers with valid affiliated
business arrangement disclosures.
J.A. 206, 250, 292-301, 1036-37, 1095-97.3
Plaintiffs moved to certify a class for all of their
claims. The district court bifurcated Plaintiffs’ proposed
class into two separate classes: (1) the Timely Class, including
all the class members whose claims were brought within RESPA’s
one-year statute of limitations, and (2) the Tolling Class, for
3
The district court and the parties refer to the claims as
Section 8 claims in light of the Section’s location in the
statute as enacted by Congress, RESPA, Pub. L. No. 93533, 88
Stat. 1724, but these references correspond to subsections of 12
U.S.C. § 2607. Section 8(a) sets out RESPA’s prohibition on
kickbacks while Section 8(c) provides exemptions from that
prohibition. In this case, Plaintiffs alleged direct violations
of Section 8(a)’s prohibition as well as Section 8(c) claims,
which assert that Defendants failed to meet the requirements for
the Section 8(c) exemptions from Section 8(a). In this appeal,
we are not asked to decide whether Section 8(a) and Section 8(c)
provide separate claims, and we therefore take no position on
that issue.
5
all class members whose claims were brought after the statute of
limitations period expired.
Thereafter, the district court certified Plaintiffs’
Section 8(c) and 8(c)(4) claims, but did not certify the Section
8(a) claims because “only those Prosperity clients who were
referred [to Prosperity] by Long & Foster may proceed under [the
Section 8(a)] claim” and certifying a sub-class for that
particular sub-set of members would “unnecessarily complicate
and obscure” the central inquiry into Prosperity’s legitimacy as
a lender. J.A. 260-61. The district court noted that “[s]hould
Plaintiffs fail under their Section 8(c) claims, the Court may
entertain further briefing with respect to the Section 8(a)
theory.” J.A. 261. The district court also chose not to
certify the Tolling Class on any of the claims because it did
not have a representative member.
In response, Plaintiffs amended their complaint to include
a new named plaintiff, Lizbeth Binks, as a representative of the
Tolling Class, and renewed their motion to certify the Tolling
Class on all their claims. The district court reiterated that
it would not certify the Section 8(a) claims for either the
Tolling or the Timely Class. After completing a class
certification analysis, the district court certified the Tolling
Class on its Section 8(c) and 8(c)(4) claims only.
6
Defendants then moved for summary judgment on the Timely
and Tolling Classes’ claims. The district court denied their
motions due to factual disputes that could not be resolved at
the summary judgment stage.4 Before trial on the Section 8(c)
and 8(c)(4) claims, Plaintiffs suggested that the individual
Section 8(a) claims, although not certified as a class, should
be tried in the same trial. The district court rejected that
request, stating that “[f]ollowing the upcoming trial, the Court
will solicit proposals from the parties related to scheduling a
trial of Plaintiffs’ individual § 8(a) claims.” J.A. 1097. See
also J.A. 1100 n.2 (“Plaintiffs’ individual claims under § 8(a)
will be tried at a later date.”).
Before trial, Defendants moved to decertify both the Timely
and the Tolling Classes. The district court decertified the
Tolling Class due to the court’s concerns about the tolling
4
However, the district court noted that it would consider
decertifying the Tolling Class at a later point:
While the Court concludes that summary judgment should
be denied . . . as to Binks’ claim, after delving into
the arguments regarding tolling, . . . the Court finds
it must at least consider the option to which it
alluded when certifying the Tolling Class, i.e.,
exercising its discretion to decertify that class
should issues of manageability begin to overwhelm the
advantages of certification. The Court will delay
that determination, however, until after the
completion of the Petry trial.
J.A. 780 (citation omitted).
7
doctrine’s individualized application.5 The district court also
amended the Timely Class by limiting it to class members who
were referred to Prosperity by Long & Foster and excluding any
class members whose loans were not transferred to Wells Fargo
but were instead sold to others.
Also before trial, Plaintiffs moved to exclude evidence and
argument about whether Plaintiffs had suffered economic injury,
including testimony from one of Defendants’ experts, Dr. Marsha
Courchane. The district court agreed, ruling that Dr.
Courchane’s testimony and other “evidence of a lack of economic
damages” was minimally relevant and deemed the probative value
of the expert testimony “substantially outweighed by a danger of
unfair prejudice, confusion, misleading the jury, or delay.”
J.A. 1119-20. However, the court stated that it would
reconsider that ruling if Plaintiffs “open[ed] the door to
evidence of economic injury during their case-in-chief[.]” J.A.
1120. Later, the district court ruled that Defendants would be
allowed to ask about whether Plaintiffs “shopp[ed] around for
their mortgages and whether they chose Prosperity because it was
5
After the trial, the district court entered Administrative
Order Number 5. That order explained the re-definition of the
classes, stayed the decertification of the classes until notice
was provided, and severed the individual 8(a) claims of the
Timely Class representatives, Minter and the Alboroughs, from
the individual Section 8(a) claims of the Tolling Class
representative, Binks, and ordered “that those claims shall be
subject to separate proceedings, if necessary.” J.A. 1267-69.
8
offering better rates[,] lower costs, or better service.” J.A.
1162 (quotation marks omitted). The court explained that this
evidence “is relevant background on the Named Plaintiffs’
claims[,]” distinct from unfairly prejudicial evidence of their
lack of economic harm. Id.
After resolving these motions, the district court held the
trial on Plaintiffs’ Section 8(c) and Section 8(c)(4) claims.
During this trial, several matters arose to become the bases for
the issues now on appeal. First, throughout the trial,
Plaintiffs objected to Defendants’ questions regarding whether
Plaintiffs suffered economic harm from using Prosperity, whether
Prosperity’s loans were competitive in the market, and whether
Prosperity gave the named Plaintiffs the best deal. Second,
during closing arguments, Long & Foster’s counsel stated that “I
think the only thing I agree [with] for sure is that Long &
Foster did refer the named plaintiffs to Prosperity. There’s no
dispute about that.” J.A. 1686. Third, counsel for Prosperity
and Wells Fargo stated that the named Plaintiffs received
financially beneficial deals in their loans. And finally,
during his closing argument, Wells Fargo’s counsel implied that
Plaintiffs’ attorney had a financial interest in the case.
After the district court instructed the jury and
deliberations concluded, the jury returned a verdict in favor of
Defendants. Specifically, the jury decided that Plaintiffs did
9
not prove by a preponderance of the evidence that Prosperity was
a sham and not a bona fide provider of settlement services. In
addition, the jury decided that Plaintiffs did not prove that
Long & Foster referred or affirmatively influenced Plaintiffs to
use Prosperity or that Prosperity referred or affirmatively
influenced Plaintiffs to use Wells Fargo for settlement
services. Accordingly, the district court entered judgment in
favor of Defendants.6
Thereafter, Plaintiffs moved for a new trial under Federal
Rule of Civil Procedure 59(a). The district court denied the
motion and issued an order entering judgment “in favor of
Defendants and against Named Plaintiffs on Named Plaintiffs’
claims under § 8(a) of [RESPA], 12 U.S.C. § 2607[,]” i.e.,
claims that had not yet been tried (as opposed to the Section
8(c) claims, which had been tried). Appellants’ Br. at Addendum
31. Plaintiffs timely appealed.
II.
Plaintiffs first challenge the district court’s rejection
of their Rule 59(a) motion for a new trial. “A district court’s
denial of a motion for a new trial is reviewed for abuse of
6
The district court later entered an amended judgment that
reflected the exclusions from the class that were discussed
above.
10
discretion, and will not be reversed ‘save in the most
exceptional circumstances.’” FDIC v. Bakkebo, 506 F.3d 286, 294
(4th Cir. 2007) (quoting Figg v. Schroeder, 312 F.3d 625, 641
(4th Cir. 2002)).
Rule 59 states that “[t]he court may, on motion, grant a
new trial on all or some of the issues . . . after a jury trial,
for any reason for which a new trial has heretofore been granted
in an action at law in federal court[.]” Fed. R. Civ. P.
59(a)(1). We have recognized that, under this rule, the
district court must
“set aside the verdict and grant a new trial[] if . .
. (1) the verdict is against the clear weight of the
evidence, or (2) is based upon evidence which is
false, or (3) will result in a miscarriage of justice,
even though there may be substantial evidence which
would prevent the direction of a verdict.”
Knussman v. Maryland, 272 F.3d 625, 639 (4th Cir. 2001) (quoting
Atlas Food Sys. & Servs., Inc. v. Crane Nat’l Vendors, Inc., 99
F.3d 587, 594 (4th Cir. 1996)).
Plaintiffs brought three RESPA claims: Section 8(a),
Section 8(c) and Section 8(c)(4) claims. The Section 8(c) and
Section 8(c)(4) claims proceeded to trial, but the Section 8(a)
claims did not but were instead adjudicated after trial.
Appellants’ Rule 59 motion is unusual in that Plaintiffs are not
seeking a new trial for the purpose of re-trying their Section
11
8(c) claims. Instead, they are seeking “only a first trial on
their [Section] 8(a) claims[.]” Appellants’ Br. at 49.
Plaintiffs’ Rule 59(a) motion specifically challenged the
jury’s negative answer to Question Three of the verdict form:
“Have Plaintiffs proved, by a preponderance of the evidence,
that Long & Foster Real Estate, Inc. referred or affirmatively
influenced the Plaintiffs to use Prosperity Mortgage Company for
the provision of settlement services?” J.A. 1212. Because
Plaintiffs’ Section 8(a) claim also required Plaintiffs to prove
that Long & Foster referred Plaintiffs to Prosperity, the
district court held that the jury’s finding on this issue
undermined both the Plaintiffs’ tried and untried RESPA claims.
Plaintiffs thus seek to overturn the jury’s finding on this
question and attain a trial on the Section 8(a) claims.
On appeal, Plaintiffs make two arguments for reversal of
the district court’s denial of their Rule 59 motion: 1) Long &
Foster’s counsel made a judicial admission that removed the
referral issue from dispute, and 2) the jury’s verdict was
against the clear weight of evidence. We disagree with both.
A.
First, Plaintiffs argue that the district court abused its
discretion by finding that Long & Foster’s counsel’s statement
12
in closing argument that Long & Foster referred the named
Plaintiffs to Prosperity was not a judicial admission.
A judicial admission is a representation that is
“‘conclusive in the case’” unless the court allows it to be
withdrawn. Meyer v. Berkshire Life Ins. Co., 372 F.3d 261, 264
(4th Cir. 2004) (quoting Keller v. United States, 58 F.3d 1194,
1198 n.8 (7th Cir. 1995) (further defining judicial admissions
as “formal concessions in the pleadings, or stipulations by a
party or its counsel, that are binding upon the party making
them”)). Judicial admissions include “intentional and
unambiguous waivers that release the opposing party from its
burden to prove the facts necessary to establish the waived
conclusion of law.” Id. at 264-65. “[A] lawyer’s statements
may constitute a binding admission of a party[]” if the
statements are “‘deliberate, clear, and unambiguous[.]’”
Fraternal Order of Police Lodge No. 89 v. Prince George’s Cnty.,
Md., 608 F.3d 183, 190 (4th Cir. 2010) (quoting Meyer, 372 F.3d
at 265 n.2). “We review the district court’s determination as
to whether a particular statement constitute[d] a judicial
admission . . . [for] abuse of discretion.” Meyer, 372 F.3d at
264 (quotations omitted) (alterations in original).
In this case, during closing arguments, Long & Foster’s
counsel stated:
13
First of all, at the outset, I would just ask you to
ask yourselves if your assessment of the witnesses, of
the documents, of their credibility, of what you heard
in this case really matches what [Plaintiffs’ counsel]
told you. It’s your job to weigh what occurred here.
And frankly, I’m sure you won’t be surprised, I
have a lot of differences, and differences of
recollection, differences in what was said.
I think the only thing I agree way [sic] for sure
is that Long & Foster did refer the named plaintiffs
to Prosperity. There’s no dispute about that.
J.A. 1686. Plaintiffs did not object, move for judgment as a
matter of law, or seek to amend the jury verdict form after this
alleged admission. After deliberations, the jury found that
Plaintiffs had not proven that Long & Foster referred or
affirmatively influenced Plaintiffs to use Prosperity.
Plaintiffs then moved for a new trial, arguing for the first
time after the jury’s verdict, that counsel’s statement during
argument had constituted a judicial admission that Long & Foster
had referred the plaintiffs to Prosperity.
The district court recognized that “[t]aken alone, [Long &
Foster’s counsel’s] statement could possibly be considered an
admission[,]” but rejected the motion for a new trial. J.A.
1353. The district court explained that
giving due regard to the context of this litigation
and considerations of fairness, the Court is troubled
by the fact that the supposed admission is being
raised for the first time post-verdict. While the
time between [Long & Foster counsel’s] statement and
submission of the case to the jury was indeed short,
the Court believes it was a sufficient amount of time
for Plaintiffs to reconsider the task with which the
jury would be charged in light of counsel’s statement,
14
and to raise the supposed admission with the Court and
with counsel. Obviously, Plaintiffs did not and, . .
. the conclusion which urges itself at this time is
that it occurred to no one at the trial that the
remarks in question constituted an admission of the
nature here urged. As a result, the Court believes it
would be decidedly unfair and inconsistent with the
purpose of motions under Rule 59 to allow Plaintiffs
to do now, what they failed to do at trial.
J.A. 1353-54 (quotation marks, citations, and footnote omitted).
On appeal, Plaintiffs claim that this ruling was an abuse
of discretion. We disagree. The record reflects that
Plaintiffs had ample opportunity to raise the alleged admission
but failed to do so. And the fact that it occurred to no one at
trial that this isolated remark constituted a binding admission
undercuts the notion that the statement was sufficiently
deliberate and clear so as to have preclusive effect. In the
face of Plaintiffs’ failure to undertake any steps whatsoever at
trial to have the statement deemed an admission or have the
issue removed from the jury’s province, it simply cannot be said
that “an error occurred in the conduct of the trial that was so
grievous as to have rendered the trial unfair.” Bristol Steel &
Iron Works v. Bethlehem Steel Corp., 41 F.3d 182, 186 (4th Cir.
1994) (quotation marks omitted). Accordingly, we conclude that
the district court did not abuse its discretion on this issue.
15
B.
Second, Plaintiffs contend that the district court abused
its discretion by denying their motion for a new trial because
the jury’s verdict was against the clear weight of the evidence.
While a party is not required to make a Rule 50 motion for
judgment as a matter of law before moving for a new trial, when,
as here, a party does not do so, “our scope of review is
exceedingly confined, being limited to whether there was any
evidence to support the jury’s verdict, irrespective of its
sufficiency, or whether plain error was committed which, if not
noticed, would result in a manifest miscarriage of justice.”
Bristol Steel, 41 F.3d at 187 (quotation marks and citations
omitted); accord Nichols v. Ashland Hosp. Corp., 251 F.3d 496,
502 (4th Cir. 2001).
In other words, when “reviewing the evidence through the
medium of a motion for a new trial after failure to move for
judgment as a matter of law, we do not review sufficiency in its
technical sense. What is at issue is whether there was an
absolute absence of evidence to support the jury’s verdict.”
Bristol Steel, 41 F.3d at 187 (quotation marks and citations
omitted). Therefore, we must affirm the district court’s
decision unless there was “an absolute absence of evidence”
supporting the jury’s finding that Plaintiffs did not prove by a
preponderance of the evidence that Long & Foster referred or
16
affirmatively influenced them to use Prosperity for settlement
services. Id.Under RESPA’s regulations,
[a] referral includes any oral or written action
directed to a person which has the effect of
affirmatively influencing the selection by any person
of a provider of a settlement service or business
incident to or part of a settlement service when such
person will pay for such settlement service or
business incident thereto or pay a charge attributable
in whole or in part to such settlement service or
business.
12 C.F.R. § 1024.14(f)(1) (2011). The district court provided
this definition to the jury during its final instructions.
We cannot say that there is an “absolute absence of
evidence” supporting the jury’s determination that Long & Foster
did not refer the plaintiffs to Prosperity. For example, Long &
Foster executive George Eastment testified that it was Long &
Foster’s independently contracted real estate agents who were
responsible for referring Plaintiffs to Prosperity, not Long &
Foster itself. Specifically, he stated that Long & Foster’s
“contact is not with the buyers and sellers,” rather the
“independent contractors who are agents . . . have the contact
with the buyers and sellers[.]” J.A. 1495. He later reiterated
that “[a]gents who were affiliated with Long & Foster made the
referral. The company itself did not make the referral.” J.A.
1511.
17
Further evidence supported Defendants’ theory that the
actions of Long & Foster real estate agents did not qualify as a
referral under RESPA because Long & Foster’s agents’ actions did
not “affirmatively influenc[e]” Plaintiffs to choose Prosperity.
12 C.F.R. § 1024.14(f)(1). For example, Long & Foster real
estate agent Konstantino Tsamouras testified that Prosperity was
not the only lender he recommended to Plaintiffs. The record
supports this testimony, reflecting that Tsamouras recommended
loan officers from both Prosperity and Bank of America to the
Alboroughs, and that Tsamouras referred other individuals to
First Mortgage. Further, the named Plaintiffs testified that
they shopped around and conducted an independent search for a
lender before deciding to use Prosperity and selected Prosperity
because it offered the best deal. See J.A. 1526-30, 1563-69,
1570-71.
Undoubtedly, the evidence would have supported a verdict
going the other way. But in light of Plaintiffs’ failure to
move for judgment as a matter of law before the jury did its job
and the ensuing high bar Plaintiffs face, we cannot conclude
that there was an “absolute absence of evidence” supporting the
jury’s verdict. Bristol Steel, 41 F.3d at 187. We therefore
must affirm the district court’s denial of the Plaintiffs’
motion for a new trial.
18
III.
Plaintiffs also challenge the district court’s decision to
admit testimony regarding the economic harm, or lack thereof,
that they suffered due to using Prosperity's settlement
services. “We review a trial court’s rulings on the
admissibility of evidence for abuse of discretion, and we will
only overturn an evidentiary ruling that is arbitrary and
irrational.” United States v. Cole, 631 F.3d 146, 153 (4th Cir.
2011) (quotation marks omitted). See also United States v.
Myers, 589 F.3d 117, 123 (4th Cir. 2009). To be admissible,
evidence must be relevant – a “low barrier” requiring only that
evidence be “worth consideration by the jury[.]” United States
v. Leftenant, 341 F.3d 338, 346 (4th Cir. 2003) (quotation marks
omitted).
Under Federal Rule of Evidence 403, determining whether the
probative value of evidence is substantially outweighed by the
danger of unfair prejudice, misleading the jury, or confusion of
the issues is within the district court’s broad discretion.
United States v. Love, 134 F.3d 595, 603 (4th Cir. 1998). We
will not overturn a Rule 403 decision “except under the most
extraordinary of circumstances, where [a trial court’s]
discretion has been plainly abused.” Id. (quotation marks
omitted) (alteration in original). When reviewing the district
court’s decision to admit evidence under Rule 403, “we must look
19
at the evidence in a light most favorable to its proponent,
maximizing its probative value and minimizing its prejudicial
effect.” United States v. Udeozor, 515 F.3d 260, 265 (4th Cir.
2008) (quotation marks omitted).
Before trial, the district court excluded Dr. Courchane’s
expert testimony regarding Prosperity’s loan prices and all
other testimony, evidence, or argument about whether Plaintiffs
suffered economic injury. The district court explained that
Plaintiffs were not required to establish economic injury to
prove their RESPA claims and that the probative value of such
evidence would be minimal. The district court warned that “if
Plaintiffs open the door to evidence of economic injury during
their case-in-chief, [the court] will reconsider this decision.”
J.A. 1120.
During trial, however, the district court ruled that it
would allow Defendants to question Plaintiffs about whether they
“shopp[ed] around for their mortgages” and whether they chose
Prosperity because it offered “better rates[,] lower costs, or
better service” than its competitors. J.A. 1162 (quotation
marks omitted). The district court explained that such
questioning was relevant as background information on the
Plaintiffs’ claims, but it cautioned that Defendants would not
be allowed to suggest from the Plaintiffs’ “decisions to shop
around or their decision to choose Prosperity because of its
20
rates and/or fees” that Plaintiffs consequently did not suffer
any economic harm. Id.At trial, over Plaintiffs’ objections, Defendants asked
witnesses about how Prosperity’s prices compared with other
lenders. See J.A. 1538, 1568-1571, 1586-92, 1638-39.
Defendants’ witnesses testified that, generally, Prosperity
offered lower prices on loans than Wells Fargo. See J.A. 1592,
1638-39. In addition, the district court allowed Defendants to
ask whether Plaintiffs suffered financial harm due to their
involvement with Prosperity. See J.A. 1536-38, 1570.
Specifically, during cross-examination, Wells Fargo’s defense
counsel asked Minter: “You have absolutely no evidence that by
doing your loan with Prosperity, and having Prosperity sell its
loan on the secondary market to Wells Fargo, that you incurred
any financial consequence one way or the other, negatively?”
J.A. 1538. Minter responded that she did not know and had not
looked at Wells Fargo’s rates. Id. Likewise, during cross-
examination, Prosperity’s defense counsel asked Jason Alborough
if he decided to use Prosperity because he thought Prosperity
was “giving [him] the best deal[,]” to which Jason Alborough
responded that Prosperity’s pricing was “[o]ne of the factors”
that led him to use Prosperity. J.A. 1570.
During Minter’s cross-examination, the district court
distinguished between allowing such questioning on direct
21
examination and allowing it on cross-examination, stating “the
fact of whether she has or has not suffered any economic damage
is not off the table with respect to cross-examining her[,]”
although “[i]t’s off the table with respect to any element to be
required to prove the plaintiffs’ case, and I’ll instruct the
jury in that respect.” J.A. 1536. During Alborough’s cross-
examination, the district court allowed questioning on whether
Alborough had received the “best deal for [his] loan[,]” saying
“He says he felt cheated, I think this cross-examination is
appropriate.” J.A. 1570. The district court later explained
that:
From my perspective, the evidence has not
indicated from individual plaintiffs any financial
loss. To the contrary, particularly with regard to
Mr. Alborough, who was grilled at length as to why
he’s here as a plaintiff and never uttered a word that
sounded to me as though there was any financial loss
involved.
Nor did that come from Miss Minter, in addition
to which, as I’ve already indicated, the jury’s going
to be instructed that financial loss is not an issue
for them to be concerned about.
So simply put, the door has not been opened, in
my view. The ruling will be as before. Motion in
limine sustained.
J.A. 1640.
The district court’s decision to allow Defendants to adduce
general testimony from their own witnesses and cross-examination
testimony about Prosperity’s competitive loan pricing did not
constitute an abuse of discretion. In particular, that
22
testimony was relevant to determining whether Prosperity was a
sham business and whether Prosperity independently priced its
loans to be competitive in the market rather than being
exclusively controlled by Wells Fargo and Long & Foster.
Moreover, any potential prejudicial impact was mitigated by
the district court’s jury instructions that stated:
[P]laintiffs are not required to prove they were
overcharged by any of the defendants in connection
with their loans, or that they incurred any financial
detriment, or that they’ve suffered any poor service
as a result of their dealings with the defendants.
Instead, for the plaintiffs to succeed on their
claims, they’re only required to prove that Prosperity
was a sham because it was not a bona fide provider of
settlement services.
J.A. 1733.
Given the relevance of this line of questioning to the
Plaintiffs’ claims and the district court’s mitigating
instructions to the jury in the context of the trial as a whole—
which lasted seventeen days and had over twenty witnesses—the
district court’s decision to allow this limited questioning
about Plaintiffs’ economic harm was not an abuse of discretion.
We therefore affirm these evidentiary rulings.
IV.
Finally, Plaintiffs contend that the district court
erroneously failed to strike, or instruct the jury to disregard,
Defendants’ improper statements during closing arguments. We
23
review this issue for abuse of discretion. See Arnold v.
Eastern Air Lines, Inc., 681 F.2d 186, 195, 197 (4th Cir. 1982),
rev’d on other grounds, 712 F.2d 899 (1983) (en banc); see also
United States v. Baptiste, 596 F.3d 214, 226 (4th Cir. 2010).
This standard is met only where there is a “reasonable
probability” that the conduct improperly influenced the jury in
reaching its verdict, i.e., the conduct “effective[ly]
subver[ted] . . . the jury’s reason or . . . its commitment to
decide the issues on the evidence received and the law as given
it by the trial court.” Arnold, 681 F.2d at 197.
In analyzing this issue, we recognize that this question is
“one of judgment to be exercised in review with great deference
for the superior vantage point of the trial judge and with a
close eye to the particular context of the trial under
review[.]” Id. On appeal, we must consider the “‘totality of
the circumstances, including the nature of the comments, their
frequency, their possible relevancy to the real issues before
the jury, the manner in which the parties and the court treated
the comments, the strength of the case (e.g. whether it is a
close case), and the verdict itself.’” Id. (quoting City of
Cleveland v. Peter Kiewit Sons’ Co., 624 F.2d 749, 756 (6th Cir.
1980)).
Courts have found that the abuse of discretion standard was
met where attorney misconduct permeated the trial and repeatedly
24
exposed the jury to improper comments. See Bufford v. Rowan
Cos., Inc., 994 F.2d 155, 157 (5th Cir. 1993); City of
Cleveland, 624 F.2d at 758 (finding that “improprieties
permeated the entire trial, from opening statement through
closing argument”). By contrast, where the improper comments
were an isolated occurrence during an opening statement in the
course of a three-week trial, this Court found no abuse of
discretion and described the absence of prejudice as “self-
evident.” Ins. Co. of N. Am., Inc. v. U.S. Gypsum Co., Inc.,
870 F.2d 148, 154 (4th Cir. 1989).
In this case, defense counsel’s remarks that Plaintiffs’
counsel was putting on a “sham lawsuit” and had “an interest in
the outcome of this case” were inappropriate. J.A. 1700;
Arnold, 681 F.2d at 196-97 (finding that “tasteless and
irrelevant” comments about opposing counsel “were improper under
applicable professional standards and justified censure if for
no other reason than to preserve some degree of respect among
the attending public for the profession and the process”).
However, these improper remarks about Plaintiffs’ counsel were
made during closing argument only, rather than throughout the
course of the seventeen-day trial. In the context of the full
trial, it is unlikely that these comments alone influenced the
jury in reaching its verdict. Moreover, defense counsel’s
disparaging reference to Plaintiffs’ counsel did not have a
25
direct bearing on the real issues before the jury: whether
Prosperity was a sham provider of settlement services and
whether Long & Foster referred Plaintiffs to Prosperity.
The district court charged the jury that the “statements,
the objections, or the arguments that were made by counsel are
not evidence in the case.” J.A. 1731. Further, the improper
comments did not permeate the trial, but rather were isolated,
mildly offensive remarks made during closing arguments. Thus,
it is not reasonably probable that such comments subverted the
jury’s commitment “to decide the issues on the evidence received
and the law as given it by the trial court.” Arnold, 681 F.2d
at 197. Accordingly, we conclude that the district court did
not abuse its discretion in refusing to strike, or instruct the
jury to disregard, the statements.
V.
For the foregoing reasons, we affirm the judgment of the
district court.7
AFFIRMED
7
Plaintiffs also challenge the district court’s decision to
dismiss Binks’s Section 8(a) claims along with Minter’s and the
Alboroughs’ claims. In response, Defendants contend that
Plaintiffs abandoned Binks’ Section 8(a) claims. Plaintiffs did
not challenge this dismissal below, and the district court had
no opportunity to rule on it. Such a decision should have been
made in the district court in the first instance, and we
therefore do not address it.
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