SW Legal studies in Business

Improper Foreclosure Results in Punitive Damages

Nevada high court held that a lender that misidentified property subject to foreclosure was liable for trespass and conversion and that punitive damages could be imposed due to willful disregard of the rights of the property owner.

Topic Real and Personal Property
Key Words

Trespass; Conversion; Misidentification; Damages

C A S E   S U M M A R Y

The Thitcheners bought a condo in Las Vegas in 1998. Countrywide provided financing. In 2002, the Thitcheners moved to Tucson and planned to use the condo as a rental unit. They paid all bills related to the unit. Before it was rented, Countrywide began foreclosure proceedings against another unit in the same building as the Thitcheners’condo. Countrywide and the contractor doing the foreclosure got the number of the condo units confused and entered the Thitcheners’ unit. All furniture and personal effects were hauled out, held for 30 days, then sold or thrown away. Months later the Thitcheners figured out what was happening and tried to stop Countrywide, but it ignored their letters and calls. The Thitcheners then sued for damages to real and personal property, asserting negligence, conversion, trespass and other claims. The jury awarded $922,690 in compensatory damages: $322,690 for trespass and conversion, $300,000 for breach of contract, and $300,000 for negligence. It also awarded $2.5 million in punitive damages. The district court trebled the compensatory damages for trespass and conversion. The trial court reduced punitive damages from $2.5 million to $968,070. Countrywide conceded liability but contested the damages and appealed.


Affirmed in part, reversed in part, and remanded. The damage awards of $300,000 each for breach of contract and negligence impermissibly duplicated damage awards for trespass and conversion to personal property. The statute that provided for trebling of actual damages for forcible or unlawful entry did not extend to damages for conversion of personal property, so must be removed, but the calculation of damages for trespass and conversion were otherwise permissible. As the company acted with conscious disregard for the owners’ rights, punitive damages were permissible. The punitive damage award of $968,070 was not excessive.


Countrywide Home Loans v. Thitchener, 192 P.3d 243 (Sup. Ct., Nev., 2008)

Back to Real and Personal Property Listings

©1997-2009 South-Western Legal Studies in Business, A Division of Cengage Learning. All Rights Reserved.