Here is the Appellate Decision on Wells Fargo Inspection Case

Posted by on Feb 27, 2017 in Questions and Answers | 17 comments

8th Circ. Affirms $8.6M Fees Grant In $26M Wells Fargo Deal

by Suevon Lee …The Eighth Circuit on Thursday affirmed the awarding of $8.6 million in attorneys’ fees to class counsel arising out of a $25.7 million settlement with Wells Fargo in December 2015 over the bank’s policy of ordering property inspections, saying the fee grant was not unreasonable.
A three-judge panel ruled on an appeal brought by three objectors to the class settlement who claimed the district court abused its discretion in calculating attorneys’ fees based on one-third of the gross settlement amount, rather than the lower net settlement fund, which deducts costs and settlement administration fees.

The chosen method of calculation, the objectors contend, resulted in the class receiving more than $1 million less than it otherwise would have, with the remainder primarily benefitting lawyers and Wells Fargo.

The appeals court, however, disagreed with that assessment, saying the trial court was not out of bounds in arriving at the fees amount based on the nature of the litigation and that, besides, the amount and its proportion to the settlement are in line with other awards in the circuit.

“Because the amount of attorneys’ fees was not unreasonable, we conclude that the court did not abuse its discretion,” wrote Judge Raymond W. Gruender for the panel.

The appeal comes out of the seven-year case involving Wells Fargo and its policy of ordering and charging for automatic property inspections on delinquent homeowners behind in mortgage payments. The class claimed that Wells Fargo violated the Racketeer Influenced and Corrupt Organizations Act through this policy.

In December 2015, seven years after the case was filed, the class and the bank reached a $25.7 million settlement believed to impact about 2.7 million homeowners affected by Wells Fargo’s policy.

After class counsel requested one-third of the total settlement fund in attorneys’ fees, three class members filed objections based on the method of calculation.

U.S. District Judge Robert W. Pratt granted final approval of the settlement, including of the $8.6 million in fees, without addressing the objections. That prompted the objectors’ appeal to the Eighth Circuit, led by Steven Buckley.

In his appellate brief, Buckley pointed out that the administration costs were “not negligible,” at $3.25 million. He argued that a more proper valuation of attorneys’ fees would have been to base the percentage off the net fund, to reach a figure of $7.4 million.

But Thursday’s panel said Buckley and fellow objectors Jennifer Deachin and Julius Dunmore Jr. failed to show that this $3.25 million in costs were “unjustifiable.”

It also agreed with the district judge that a one-third cut of fees overall was appropriate, based on time and work required, inability of plaintiffs’ counsel to do other work while involved in this case, the contingent nature of the fee, results obtained and experience and ability of the attorneys.

Plus, the award is “in line with other awards in the Eighth Circuit,” the panel wrote, saying the courts have often awarded attorneys’ fees rising up to 36 percent in class actions.

An attorney for the objectors and a representative for the class didn’t immediately return a request for comment on Thursday.

Circuit Judges Lavenski R. Smith, Raymond W. Gruender and Bobby E. Shepherd sat on the panel. …

The case is Edward Huyer et al. v. Steven Buckley, case number 16-1681, in the U.S. Court of Appeals for the Eighth Circuit.


Note from Linda Fessler: The case can be appealed to a higher court. It remains to be seen if it will be appealed.


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17 Responses to “Here is the Appellate Decision on Wells Fargo Inspection Case”

  1. Maurice Bell says:

    Linda, this was the most through and complete update on this case I have seen as of yet. You are not only a great Attorney. You are a compassionate one as well. Although, I’d like more in the line of a distribution as a class member, I will pray that we do in fact get compensated more in line with the others. Thank you!

  2. VERONICA says:

    So what does this mean for us that filed a claim , are we still to expect a check ? And when?

  3. cynthia says:

    Do you know how much money we will be getting from the lawsuit

  4. Julia Hill says:

    What is not very much. Can I expect? at least a grand?

  5. What does it matter if they inspected the home one or hundred times? The fact is they inspected my house while I was still living in it and trying to fight off foreclosure while in the middle of chapter thirteen. I wasn’t six months in default only two. They compiled a huge amount of fees and put it under other in the bankruptcy in which I paid for a five-year plan. They would never explain what the other fees were, but I paid the plan off. In my opinion, class action lawsuits are a joke the only people that prosper or benefit from these type of lawsuits are the attorneys and the court.

    • You are right that the plaintiffs seldom get much money from a class action although sometimes they do receive other kinds of relief. Also remember, that a person has the option of filing their own lawsuit.

  6. What happened to the 10,000 they said we would receive says:

    What happened to the 10,000 they said we would receive

    • I don’t know who told you $10,000, but usually those larger amounts are reserved for the first 10 people who are actually named in the lawsuit.

  7. Andee Crager says:

    So will I get back the fee for EACH inspection or just a set amount?

    • insight says:

      It has not been announced, but probably a set amount relative to how many times they inspected your home.

  8. ROSALEE J Leino says:

    Good afternoon well it’s been 7 years hopefully the checks will be mailed soon I know for a fact that came out to my house over 15 times for three years I struggled to stay in my house and they came out even while I was making payment arrangements to try to save my house

  9. Stanley Brown says:


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