$1.4 million penalty upheld by court
The Colorado Court of Appeals has affirmed nearly $1.4 million in penalties and fees assessed against one of the city’s prolific foreclosure attorneys whom the state sued for billing thousands of consumers facing the loss of their homes for titleinsurance policies that did not exist.
In a pair of decisions issued May 17 but announced Tuesday by Attorney General Cynthia Coffman, the appellate court said Denver District Judge Shelley Gilman’s choice to levy more than $688,000 in penalties against attorney Robert Hopp Jr. and his law firms, and another $700,000 in attorney fees for the state’s investigation into his conduct, were wellgrounded.
Hopp’s appeals could cost him even more as the court ruled the state could pursue additional attorney’s fees for what it expended on defending the appeal.
Hopp could not be immediately reached for comment.
“I am very pleased that the Court of Appeals upheld the judgement against the Hopp law firms and their affiliated businesses,” Coffman said in a statement. “These defendants took advantage of vulnerable homeowners facing foreclosure, making it even more expensive for people to try to avoid losing their homes. Those that prey on Coloradans in crisis deserve to be held accountable.”
Hopp and his nowdefunct law firm billed customers fighting foreclosure for title policies that were never issued and inflated the cost of the few that were, the AG argued in its case against him. He filed for bankruptcy shortly after the state sued him.
Homeowners facing foreclosure had no choice but to pay the costs in order to stop the foreclosure process, and there was no process in place to challenge any of the fees lawyers said they were owed. Gilman originally assessed penalties that topped $1.8 million, but subsequently lowered that amount. Similarly, she reduced the amount of attorney’s fees the state could collect by a third.
The victory is the first of what is expected to be a line of cases in the state’s pursuit of foreclosure law firms that it said wrongly billed consumers millions of dollars during the height of the nation’s financial crisis. At one time, Colorado led the nation in the rate of foreclosures.
Colorado faces a lengthy appeals battle against the most wellknown foreclosure law firm, The Castle Law Group, and its owner, Larry Castle. Although the firm no longer exists, the state pushed a fiveyear court battle against Castle for a litany of alleged transgressions that a Denver judge ultimately ruled against. The state is appealing the decision by Denver District Judge Morris Hoffman, hoping to land a victory much like the one it got years earlier when the city’s other foreclosure giant, Aronowitz & Mecklenburg, settled for about $10 million and closed its doors.