LCBF client obtains favorable ruling from 4th circuit in multi-million dollar contract dispute

The Fourth Circuit Court of Appeals has issued an opinion affirming summary judgment on behalf of our client Freddie Mac that it owed Doral Bank PR no more than $124,588 in mortgage servicing fees, rejecting Doral's claims for damages exceeding $10.87 million. The majority opinion held that the contract clause Doral tried to rely upon was an unenforceable liquidated damage clause, rather than an "alternative performance contract," as Doral attempted to characterize it. In mid 2008, Freddie Mac had informed Doral that it would not be transferring more than 45,000 mortgage loans to Doral for interim servicing. In accordance with the parties' agreement, Freddie Mac offered to pay $124,588 representing the costs it understood Doral had incurred to prepare for the potential transfer of these loans. Without documenting additional actual costs, Doral rejected the offer and demanded well over $10 million. The LCBF team was headed by Bill Ballaine and Mark Landman.