HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
Real Estate

BBVA Compass ordered to pay $96.2 million for defrauding Texas real estate developer

Dallas judge awards damages over development of high-end housing

BBVA Compass will pay more than $96 million to a Texas real estate developer and several associated business entities after a Dallas jury ruled that the bank committed fraud against the developer involving the financing of several high-end housing developments in the midst of the financial crisis.

According to court documents, the developer, David Bagwell, claimed that BBVA Compass and one of the bank’s vice presidents, Sam Meade, misled him during negotiations over the terms and conditions of the financing for the North Texas housing developments.

Bagwell claimed that BBVA Compass and Meade made “repeated assurances” to Bagwell that the maturity dates for the financing for the housing developments would be extended, as had been done in the past, while the bank was simultaneously and secretly negotiating with a different developer to sell the notes at a deep discount.

When the new developer eventually acquired the debt, Bagwell’s partnerships that were developing the properties were forced into bankruptcy and then lost control of the properties.

Bagwell and his partnerships sued the bank, and a Dallas jury ruled in December that the bank had indeed committed fraud against Bagwell.

And last week, a Dallas County judge ordered BBVA Compass to pay $96.2 million to Bagwell and the associated entities over the bank’s conduct.

Judge Staci Williams awarded actual damages of $56.2 million, plus exemplary damages of $40 million, which was “meant to punish Compass and deter future behavior,” according to Bagwell’s legal representation.

In a statement provided to HousingWire, BBVA Compass said that it plans to fight the decision in this case.

“BBVA Compass strongly disagrees with the court’s judgment and believes that both the law and the evidence support a take-nothing judgment in favor of BBVA Compass,” a bank spokesperson said in a statement. “We have faith that the judicial system is just and fair and we look forward to seeking vindication of our position through the appellate process.”

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please