A Dallas jury has decided to award more than $98 million to plaintiffs in a lawsuit against BBVA Compass.
The plaintiffs, led by real estate developer David Bagwell, accused the bank and executive Sam Meade of misleading them into believing loans would be renewed and extended. Texas State Bank in 2006 had issued three promissory notes to partnerships formed by Bagwell: real estate development companies Broughton Ltd. Partnership, Old Grove Ltd. Partnership and Broadland Ltd. Partnership. Compass Bank later acquired Texas State Bank and negotiated extensions on the loans with Bagwell when they matured.
Eventually, a third renewal was under discussion, and Meade was the new loan officer assigned to Bagwell. According to the plaintiff's claims, repeated assurances that the loans would be extended led the borrowers to not seek other refinancing opportunities.
The bank in January 2010 sold the loans to Toll Bros., which foreclosed on the loans. Broughton, Old Grove and Broadland filed for bankruptcy in April 2010.
Bagwell sued, seeking monetary relief of more than $1.0 million. The jury awarded $37.9 million to Bagwell and $20.2 million to the related business entities and returned $40 million in punitive damages.
A BBVA Compass spokesperson said the company "strongly disagrees with the jury's findings in this case and will pursue all actions to remedy what it feels is an unfair verdict, including an appeal upon judgment."
The case is David Bagwell et al v. BBVA Compass and Sam Meade. It was filed in the 101st Judicial District Court in Dallas County.