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Supreme Court Victory for Alumnus Andrew Stilwell ’03

February 2, 2016

The California Supreme Court has issued a landmark decision in a case led by Thomas Jefferson School of Law alumnus Andrew Stilwell, ’03, vindicating more than 200,000 distressed homeowners that Stilwell said were victimized during the statewide mortgage collapse.

On Jan. 21, the high court upheld a ruling issued by California’s 4th District Court of Appeals rejecting attempts by Chase Bank to collect against Carol Coker, a San Diego resident who sold her home at a loss, in what is commonly known as a “short sale.”

Coker’s short sale had been completed with the blessing of Chase Bank, according to Stilwell. But much to her surprise, shortly after closing escrow, the bank began demanding an additional $116,686.89 “deficiency judgment” – the difference between the amount of her loan and what she was able to sell her home for amid the mortgage collapse that swept the country between 2008 and 2011.

“Ordinarily, California’s anti-deficiency statutes bar mortgage lenders from seeking a deficiency judgment, but the courts had only applied them after a foreclosure sale.” Stilwell explains. “Chase Bank took advantage of the situation. In fact, Chase Bank specifically sanctioned the ‘short sale’ so that they could try to avoid the law and collect against my client.”

In 2013, California’s 4th District Court of Appeal unanimously overturned a trial court’s decision to side with Chase Bank. Chase Bank then appealed its case to the California Supreme Court. And once again the mortgage giant was turned away with a unanimous rejection of their claims.

The court’s decision is a significant blow for the banking industry, said Stilwell. He sees the victory as nothing short of “David beating Goliath…again” when considering the size of his opponent, the multinational JP Morgan Chase Bank. The ruling affects more than 200,000 Californians and is the first case in California dealing with short sales.

“Now the victims of the housing crisis might finally get some relief after more than eight years of being hounded by banks and collection agencies for debts they never owed,” Stillwell said, adding that his years at Thomas Jefferson, both as a student and an adjunct professor of Mortgage Law, prepared him well for the monumental case.

“It’s like what Professor Slomanson always told me, ‘if you can draw it out, you can argue anything.’ And that has stuck with me ever since my first year of law school. It certainly helped me in the biggest case of my career.”