A Denver judge on Friday awarded more than $1.9 million to attorney Larry Castle and two associated businesses, who successfully defended themselves against state allegations of price gouging during the nation’s foreclosure crisis.
The judgment for attorneys’ fees is small compared with the $26 million the state sought against Castle, his lawyer wife, Caren, the Castle Law Group and the two companies, Absolute Posting & Process Services and Colorado American Title, for allegedly puffing fees and other expenses while handling the bulk of the foreclosure work across the state over several years.
The judgment is to be reduced by $119,500, the amount the state was awarded earlier against the Castle firm on a charge it had failed to tell federal mortgage insurers about a financial relationship it had with Absolute.
In Friday’s order, Denver District Judge Morris Hoffman chastised Attorney General Cynthia Coffman’s office for complaining that defense lawyers’ fees were excessive while asserting it spent more than it had actually won in court.
“They sought more than $612,000, representing 1,534 attorney hours and 350 paralegal hours, which I found ‘ridiculously high,’” Hoffman wrote of the AG’s office. “I am flabbergasted that our Attorney General thought it appropriate to represent to this court that it was reasonable for her to spend more than $612,000 in taxpayers’ money to achieve a $119,500 judgment, but now argues it was unreasonable for the Castle defendants to spend less than $1.5 million of their own money to successfully defend against damage claims that originally exceeded $26 million.”
Hoffman had earlier ruled the state’s civil lawsuit was “substantially groundless and substantially frivolous” enough to merit the award of the defendants’ attorneys’ fees.
Coffman’s office said it will appeal the attorney’s fee award. Each side has filed an appeal of Hoffman’s verdicts, which came in November, about five years after the state filed the civil lawsuit.
“The attorney general’s consumer-fraud lawyers brought a groundless case, put hundreds of people out of work, and wasted millions of dollars in taxpayer money,” defense attorney Larry Pozner said Friday. “On Monday, these (state) lawyers will still be employed, and that is the consumer fraud.”
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The state had earlier turned down a $698,000 settlement offer from Castle and chose to go to trial.
State prosecutors reached a $10 million in 2014 with Castle’s biggest competitor, Aronowitz & Mecklenburg, whom they sued at the same time for similar alleged infractions. The Aronowitz firm closed and later agreed to pay about $2.5 million more to affected homeowners who sued in a separate class-action case.
In the end, Hoffman awarded Castle $1.45 million in attorney’s fees, Absolute was given $445,256, and CAT is to get $19,979.
It’s likely those amounts will be held in abeyance until the appeals are finished.
