On September 19, more than 160 New York-based loan officers won a $9 million judgment against TopDotMortgage, Premium Capital’s now defunct home mortgage arm and its executives in the U.S. District Court for the Eastern District of New York.
According to the Complaint filed in this matter, the loan officers worked on a commission-only basis. They were not paid any minimum salary or wage and were not paid overtime when they worked more than 40 hours a week. The company’s response was that the workers were exempt from FLSA classification. Although the docket showed that the parties had been negotiating until June 2010, they were not able to reach a settlement agreement before trial.
This judgment puts an ending to nearly three years of litigation during which the Defendant faced many legal allegations. The Defendant’s license was revoked by the Federal Housing Administration and on September 12, U.S. Judge Leonard Wexler doubled the damages awarded to Plaintiffs after a jury verdict found TopDot Mortgage’s violations were willful.
Each Plaintiff is now entitled to $54,000 for two years of unpaid wages. But with such a big verdict – one of the highest awarded damages in a Fair Labor Standards Act case – the big question is: will Premium Capital be able to pay? Considering its license has been revoked and its website has just disappeared, Plaintiff’s Counsel, Ryan F. Stephan of Stephan Zouras LLP, fears an imminent bankruptcy petition, though Premium Capital has not yet filed anything.