Llano Cases – A Nightmarish Affair

Llano Cases - A Nightmarish Affair

Llano cases against appraisers

The mass litigation against appraisers fueled by Impac Mortgage/First Mutual Group/Llano/Savant is definitely consuming too much of this blog’s space. I will in the future likely create a special home just for their coverage — because their legal and economic assault on appraisers could cause profound harm for U.S. appraisers if unchecked. Until that separate place exists, here is another update:

“This is literally a nightmare for me and I am literally shaking as I write this reply.” Those are the words of First Mutual Group and Llano Financing’s own attorney Henry Portner to describe the predicament he is in because of his client’s failure to pay court filing fees.

Mr. Portner has filed more than 90 lawsuits against appraisers for First Mutual Group and Llano Financing — these are the entities affiliated with Savant LG/Chris Ganter that serve as litigation vehicles for investors to sue appraisers over claims assigned by Impac Funding (a subsidiary of Impac Mortgage Holdings, IMH) and possibly others. As of this date, all but 7 of the 90+ cases filed by Mr. Portner have been dismissed, and I have seen no indication that either First Mutual Group or Llano has recovered any monetary damages in any of the cases.

As reported last week, however, Mr. Portner now has a bigger problem than simply have his First Mutual Group / Llano cases dismissed in bulk. Judge Roy B. Dalton, Jr., a U.S. District Court Judge in the Middle District of Florida, took notice that checks issued by Savant LG and another related entity to pay for the filing fees for six Llano cases against appraisers had bounced and remained unpaid for nearly a year. And, yesterday, Judge Dalton discovered that the fees for seven additional Llano cases also had not been paid. The court called it “a pattern of repeated disregard of counsel’s professional obligations” and stated that “this matter has proceeded well beyond a simple failure to pay the required fees.”

Mr. Portner today submitted a written response to the Court’s order. In his response, he threw himself on the mercy of the Court. He said that this client First Mutual Group was responsible for the fees under his retainer agreement, but that he would pay the fees himself, and he said the situation “is literally a nightmare for me.”  Here are his own words:

Other attorneys — though not confronted with the same downfall as Mr. Portner — have sought to withdraw from cases because of First Mutual Group’s non-payment. Problems like these are a good sign that the master plan of Savant LG/Chris Ganter, First Mutual Group, Llano and Impac Mortgage to sue hundreds of appraisers is unraveling.

One of First Mutual Group and Llano’s representatives Ben Ganter (the brother of Chris Ganter) testified in a recent deposition that the law firms who take these cases against appraisers do so on a contingency fee basis — meaning that the firms will receive a percentage of any recovery in a case and zero if there is no recovery. When attorneys start losing confidence in the strength of a case taken on contingency, they will often decrease the time or effort they spend or flatly seek to withdraw. I can only imagine the lack of confidence in their cases that attorneys representing First Mutual and Llano must now be feeling. In Nevada, one attorney who has filed more than 25 cases already has lost two motions to dismiss on clear cut grounds. In Colorado, an attorney who filed a lawsuit against an appraiser for Llano soon found out that Mutual First (another litigation entity) had sued the same appraiser over the same appraisal a year earlier in Texas.  In another state, two different law firms are wasting their time suing the same appraiser over the same appraisal in separate lawsuits — they don’t realize it yet.  And, then there is the fact that law firms representing both First Mutual Group and Llano unknowingly have sued appraisers who were deceased. All of these blunders are more good signs that the mass litigation fueled by loans held or serviced by Impac will soon fail.

Portner Throws Himself on the Mercy of the Court.

Peter Christensen
Peter Christensen

Peter Christensen

Peter Christensen is an attorney, licensed in California and Washington. His legal practice primarily serves the real estate valuation community - Valuation Legal. He's the author of Risk Management for Real Estate Appraisers and Appraisal Firms, published by the Appraisal Institute.

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Llano Cases – A Nightmarish Affair

by Peter Christensen time to read: 3 min