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Judge declines to sanction lawyer involved in LPS fee-splitting cases

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[Update 1: Adds LPS response] An Alabama circuit court judge denied a motion Wednesday from Lender Processing Services (LPS) for sanctions against attorney Nick Wooten and also declined to seal a transcript and default services agreement at the heart of Wooten's cases. LPS alleged in April that Wooten, who is suing LPS in several cases on behalf of homeowners, used confidential information from a bankruptcy case he was handling between Larry David Wood and Karen Wilborn Wood against Option One Mortgage, and filed multiple lawsuits against LPS in other states using that information. In these other cases, Wooten accused LPS of conducting an illegal fee-splitting scheme with default services attorneys who handle foreclosures using LPS' technology platform. The information in question includes a deposition transcript from LPS employee Bill Newland and a default services agreement involving Option One. After a hearing held May 9 on the motion for injunctive relief brought by LPS, Alabama Circuit Judge Randall Cole ruled the materials were already widely disseminated before LPS designated them confidential in December 2010, and therefore the Newland transcript is publicly available from numerous sources. "This fact compromises the integrity of any protection order the court might now enter, and it is adjudged that the request for injunction is denied," Cole said in his order. He also denied Option One's oral arguments to seal the default services agreement without comment on his reason for the denial. "I think that the problem for LPS is now all of their documents are very widely disseminated," Wooten told HousingWire Thursday. "It really blew up." "LPS will continue to vigorously defend itself against all allegations," said an LPS spokesperson. Wooten said he was going to move on with his cases. "Their litigation tactics are delay and deny. If they were confident that they were innocent, they would probably want to wrap this up as quickly as possible," Wooten said. "That certainly isn't their strategy." Write to Jon Prior. Follow him on Twitter @JonAPrior.

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