consumer protection

New Lawsuit: Ayers Basement Systems, LLC Contaminated Grand Rapids Family’s Home with Lead

When Tyler and Megan Freeman hired Ayers Basement Systems, LLC to fix the foundation of their Grand Rapids home, they couldn’t have imagined what would happen next. Unknown to them, their home, built in 1948, contained lead paint. If left undisturbed, lead paint isn’t hazardous to humans; however, it becomes toxic–especially to young children like the Freemans’ two-year-old daughter–if it is ingested or inhaled in the form of dust.

Contractors like Ayers who renovate pre-1978 homes in ways that could disturb lead paint are required by law to obtain certification from the EPA. The law also requires them to follow a precise set of rules to ensure that any lead dust they create is contained and properly disposed of. Ayers was not certified and did not follow the lead-safe rules when it began to grind lead paint off the basement walls in the Freemans’ home. The entire home is now contaminated with lead dust and unsafe for habitation. It may cost hundreds of thousands of dollars to clean, and Ayers has refused to pay the cost.

This was far from an innocent mistake. Ayers maintained an EPA certification from 2015 to 2020, so it was well aware of the legal requirements for dealing with older homes where lead may be present. Ayers was fined by the EPA in 2019 for failing to follow lead-safe rules in a Lansing home. Notwithstanding the lapse of its EPA certification, Ayers has not stopped doing renovation projects in older homes. Recently, Ayers was cited by the Michigan Department of Health and Human Services (“MDHHS”) for failing to follow a state law requiring contractors like Ayers to distribute to homeowners a brochure that explains the dangers of disturbing painted surfaces in older homes.

Ayers is one of the largest residential renovation companies in Michigan, with over 100 employees and annual revenues in the tens of millions of dollars.

Westbrook Law PLLC represents the Freeman family in its lawsuit against Ayers, which seeks to recover the cost of lead remediation in their home, compensation for mental stress and emotional distress, and exemplary damages due to the extreme and outrageous nature of Ayers’s unlawful actions.

TJW

Mortgage Servicer Disregarded Loan Modification Agreement and Is Liable for Debt Collection Abuses, Federal Court Finds

The United States District Court for the Western District of Michigan issued an important published opinion early this month in the case of Macholtz v. Carrington Mortgage Services, LLC, finding, after a “journey through a thick summary judgment record” that detailed a “15-year struggle between plaintiff and a series of lenders,” that the mortgage servicer defendant’s refusal to acknowledge a loan modification agreed to by its predecessor made it liable to the consumer plaintiff under various state and federal consumer protection laws. The lawsuit, filed in early 2019 by Westbrook Law PLLC in Grand Rapids, Michigan, seeks damages for the plaintiff and to unwind a foreclosure sale.

The lawsuit challenged the conduct of the mortgage servicer, Carrington Mortgage Services, LLC, and the bank it worked for, Wilmington Savings Fund Society FSB. Carrington qualified as a “debt collector” under the Fair Debt Collection Practices Act (“FDCPA”) because it began servicing the mortgage after the predecessor servicer, CitiMortgage, had declared a default. CitiMortgage had also previously entered into a modification agreement with the plaintiff, but failed to ever “on-board” the modification or acknowledge its existence. Eventually, after demanding to be paid huge sums of money that were not justified under the modified terms of the loan, Carrington and Wilmington foreclosed on the plaintiff’s Berrien County home, which he had owned for 22 years.

The lawsuit alleged violations of the Real Estate Settlement Procedures Act (“RESPA”); Truth in Lending Act (“TILA”); FDCPA, Michigan Mortgage Brokers, Lenders and Servicers Licensing Act (“MBLSLA”); Michigan Regulation of Collection Practices Act (“MRCPA”), and common-law wrongful foreclosure and breach of contract. The court found violations of TILA, FDCPA, MBLSLA, and MRCPA on the part of Carrington and Wilmington and set the case for trial regarding damages and other remedies.

Consumer advocates in Michigan have often lamented the erosion of protections for homeowners under state and federal law over the last 20 years. It is true that consumers in Michigan have fewer protections than they did during the 1980s and 1990s. However, while holding mortgage servicers and banks accountable remains challenging, the Macholtz opinion shows that the remaining federal and state protections can be potent tools for redressing consumer abuses.

TJW