Free Brief in Support of Motion - District Court of Colorado - Colorado

Case 1:03-cv-02485-MSK-PAC

Document 339-20

Filed 01/31/2006

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~
1

1

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

2

Civil Action No. 03-MK-2485
3

CAMILLE MELONAKTS-KURZ, individually and on behalf of
4

other s imi larly situated employees,

5
6 7 8 9

Plaintiff,
v.

Defendant. ~ ~~ 7 --------------------- -------------------------~~
HEARTLAND HOME FINANCE, INC.,

VIDEOTAPE DEPOSITION OF:
10
11
¥

-------------------------------------------------------PURSUANT TO NOTICE, the videotape deposi tion of JEFFREY S. HORTON was taken on behalf of the Defendant at 1900 Grant Street, Suite 800, Denver,
Co1 0 r ado 8 0 2 0 3, 0 n De c e mb e r 1, 2 0 0 5 , at 8: 1 2 a. m . be for e

JEFFREY S. HORTON December 1, 2005

12 13
14

\y
\

Stacy L. Armstrong, Certified Shorthand Reporter, Certified Meri t Reporter, and Notary Public wi thin

Colorado.
15

16
For the Plaintiff:

APPEARANCES
JILL M. NOVAK, ESQ. Nichols Kaster & Anderson PLLP

17 18 19

4600 IDS Center
For the Defendant:

20 21

Minneapolis, Minnesota 55402 ELI ZABETH RAYMOND, ESQ. Ice Miller One American Square, Box 82001 Indianapol is, Indiana 46282
Martin Pieczynski Dennis Clayton, Videographer

Also Present:
22 23

~ 25

( 24

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6
1

A.
Q.

A little over five years.

2 3
4

Are you married?

A.
Q.

No.
Are you divorced?

5
6

A.
Q.

Di vorced.

And do you have any children?
Two.
Are they boys or girls?

7
8 9

A.
Q.

A.
Q.

One of each.
Well, that's nice.

10

Did you do anything to

11 prepare for today?
12

A.
Q.

No.
Did you review any documents in preparation

13

14 for today?
15
A.
Q.

I looked over a time sheet or two, I believe.

Okay. And other than your attorney, did you 17 speak with anyone in preparation for today? 18 A. Only from attorneys' side. I don't know who
16

19 the other person was, whether they were an attorney or

20 not, but one other time.
21
Q.

Okay.

Mr. Horton, when were you employed by

22 Heartland Home Finance?
23
A.

I believe that was back in about March, March

24 to October, of '03.
25
Q.

And which branch of Heartland did you work at?

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1 them regarding the various options?
2

MS. NOVAK:

Obj ection; vague as to the word

3 consul t in this context.
4

Q.

(BY MS. RAYMOND)

Do you understand the

5 word consul t, Mr. Horton?
6

A.

I understand the word.

No, I would not say

7 tha t I would consul t wi th the cl ien t .
8

Q.

But you would advise them?
I would -- I would have them rei terate their

9

A.

10 goals, and I would go over their options again so that 11 they could determine which possible scenario, if there 12 was more than one, best fit their objectives and goals.
13
Q.

You said there was no set pattern for

14 presenting to the client the different options, right?
15 A. (Deponent nodded head up and down.)

16 Q. Did you ever present the client wi th a wr i tten
17 proposal, a written loan proposal?

18 A. Not unless we sent out the entire packet of
19 RESPA documents.
20
21
Q.

And did you ever do that?

A.

Yes.

It was the only way that we had of

22 genera ting the signatures required on those documents to 23 proceed and eventually close the loan.
24
Q.

What kind of information would be in a loan

25 proposal?

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1 income, value of the home versus what they owe.

2 Q. And you said that you would present the
3

options, as many as were possible, to the client.

How

4 would you do that?
5 6

MS. NOVAK:
Q.

Obj ect ion; vague.
Do you understand my

(BY MS. RAYMOND)

7 question, Mr. Horton?
S

A.

I think I understand your question.

It's

9 difficult to answer because with each client every

10 situation is different, so there i s no -- there's no set
11 pattern to how i would approach presenting multiple

options. I can tell you that personally I would 13 presen t - - if there were multiple opt ions, I would 14 present them in such a manner that would hopefully lead
12

1S the client to make the decision that put them in the

16 best possible loan. A lot of times -- A lot of times
17 clients just don't understand, to be honest with you,
1S

what's best for them.
theirs, and I respected their

But the decision was always

19

decision .

I f i could

20 possibly do the loan that they wanted me to do, then
21 that's what I would attempt to do.
22
Q.

If a customer was confused by the options,

23 would you explain them to them?
24
A.
Q.

Absolutely.
Is it fair to say tha t you would consult with

25

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1

A.

The function of the application was to give us

2

a lead so that we had a name and number to call.

There

3 would be times when the telemarketer or the individual,

4 if entering the information on line, indicated what they
5

were trying to accomplish.

But the -- the lead that was

6 generated for us was nothing more than a lead, contact
7

informa tion.

It was our job to delve into the client's

8 situation and determine what their goals and needs were.
9

Q.

Correct me if I'm wrong, but did you say that

10 after you got a commitment then you would turn over the

11 file to the processor for the next step?
12

A.

After we got the commitment from the client,
Once we

13

we would generate the RESPAs and mail them out.

14 got the signed documents back, I believe that was the

15 procedure, then we gave the file -- we stacked the file

16 in a folder and gave it to the processor.
17
Q.

Did you ever have a client who hesitated about

18 giving their commitment?
19
A.
Q.

All the time.

20
21 22

What would you do in those situations?

A.

Try and overcome whatever objections that they
to doing a particular loan, and if not

might have to

23 successful, then it's a turndown; went on to the next

24 lead.
25
Q.

Can you recall a specific example of a

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1 customer who had obj ections that you helped them

2 overcome or that you explained the situation to?
3

A.

No, I can't recall a specific situation.

4 Those things happen, you know, on a regular bas is.
5 6

Q.

What kind of objections would a client have?

A.

More often than not, from when I worked at

7 Heartland, it was, as it is with a lot of companies, to

8 be honest, fees.

9 Q. I f a client obj ected to fees, how would you
10 help them overcome that obj ection?
11
A.

Well, if there were fees that -- that I was

12 allowed to reduce or eliminate, and it was still a

13 beneficial loan for the client as well as for myself and
14 the company, then I would eliminate whatever fees I
15

could.

If -- If the loan the way, that it was set up,

16 because there wasn't enough room because of the value of

17 the home versus what they owed, if those fees had
18 already been reduced to the minimum and there was no way

19 the reduce them further, then there wasn't anything that
20 I could do regarding fees.
21
Q.

Can you recall any other obj ections that your

22 clients had other than fees?
23
24
A.
Q.

Not specifically.

Generally can you remember any?
MS. NOVAK:
Obj ection; as ked and answered.

25

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1

Q.

(BY MS. RAYMOND)

You can answer the

2 question.
3

A.

Again, in general terms, I mean, every client

4 is different, so people can object to not saving them
5 enough money, people are going to obj ect to not giving
6 them enough cash, people can obj ect to the length of a
7

fixed term versus an adjustable rate.

It's just --

8 There are li terally hundreds of different possible

9 scenarios, and there's no way to try and recall each and

10 everyone of those.
11
Q.

If the client refused the loan, what was the

12 procedure then?
13
A.

It was considered a turndown, and by RESPA law

14 we i re required to send out a statement of denial, at
15

least at Heartland we were required to.

I don't -- My

16 understanding is that's not truly a requirement of
17

RSP -- of RESPA.

The bank itself, if declined by the

18 bank, the bank is required to send out the denial. 19 But -- But we did send out denial, statement of denial 20 forms to clients.
21
Q.

Was the statement of denial something that you

22 wrote?
23
A.

It's one of the documents that's in the

24 computer system software, just click on a button and

25 print it.
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1 Q. Did you ever explain a denial to a customer?

2 A. If the client's loan was turned down by
3 Heartland, then we would let them know that their loan

4 was declined.
5

Q.

If the loan was declined by Heartland, would

6 you give them examples of where else they could go to

7 get a loan?
8

A.

No, not usually.

I don't recall ever doing

9

that.
Q.

I can't imagine that -- I can't imagine that I

10 would.
11

You said earlier that, for the most part of

12 the time that you were at Heartland, if -- if the loan
13 was declined by Heartland that you could go to an

14 outside lender?
15
A.
Q.

Uh-huh.
Would you describe that process for me,

16

1 7 please?
18
A.

Well, we had other -- other sources for
And if it

19

funding of loans, so we had outside lenders.

20 didn't fi t the parameters under Heartland's guidelines,

21 we were allowed to make contacts wi th other lenders,

22 present the scenario, and see if it would meet their 23 guidel ines, and if so, sel 1 the loan through that 24 outside source, which allowed the client still to get
25 their loan done and allowed us as loan officers to still

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i communica tions?
2

32

A.

To determine value on the property, sometimes

3 to determine what locations different appraisers
4 would -- would go to and what their fees were.
5

Q.

Did your clients ever obj ect to an appraisal
I don't -- I don't recall specifically, but

6 fee?
7

A.

8 I -- that would not be uncommon.
9

Q.

I f they did obj ect to an apprai sal fee, what

i 0 would you do?
11
A.
Again, I don i t recall any specific si tuations

12 where they did.
13
Q.

Mr. Horton, earlier we talked about clients'

14 objections to fees and about how you, if it were

15 possible, based on the situation, might adjust the fees 16 to address those objections; is that right?
17 18

A.
Q.

Uh-huh, tha t' s correct.
How would you decide what fees to charge?

19

A.

There were set fees that we were required to
The only fee, as I

20

charge based upon Heartland's fees.

21 recall, that we had any kind of -- I mean personally

22 that we could make decisions on adjusting was the
23

origination fee.

Everything else, if any fee needed to

24 be reduced or eliminated or changed in any way, had to
25
have management approval.

And I don't recall -- I don't

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1 recall specific situations where that occurred.
2

Q.

But you had discretion to change the

3 origination fee?
4

A.
Q.

Uh-huh.

Yes.

5

What about broker fees, did you have any role

6 in determining what those would be?
7 8

A.
Q.

Can you give me an example of a broker fee?

Sure.
MS. NOVAK:

9

If I can just get something on the

10 record before my client actual ly looks at this document.
11 I want to renew our request for the production of the
12

underlying documents used to make this compilation.

I

13 also want to reserve my right to recall this wi tness 14 should we find out that the data listed in this 15 compilation is unreliable or inaccurate.
16
Q.

(BY MS. RAYMOND)

Mr. Horton, the document

17 that I passed to you is something that Heartland
18

developed.

It's a summary of loans that you closed
Looking at the column

19

while you were at Heartland.

20 for broker fee, does that help refresh your memory

21 about how you might decide to
22
A.

No, because I don't know what they're using to

23 determine broker fee.
24
Q.

Do you recall charging a broker fee in that

25 specific loan?
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1

MS. NOVAK:

Obj ection; counsel didn't ask a

2 question about a specific loan on here.
3

Q.

(BY MS. RAYMOND)

In the Collins loan, for
I don 't

4 example, where there's an $1800 broker fee.
5

A.

I don't know what that fee is for.

6 know wha t -- I don't know what is being used to
7

determine broker fee.
MS. NOVAK:

On the good faith estimate broker

8 fee could be four or five different charges.
9

I don't want you to guess ei ther,
If I saw the good faith

10 if you don't know.
11

A.

I have no idea.

12 estimate from that specific loan, I could tell you.
I f you look at the two 14 columns, Mr. Horton, for fees paid and fees
13
Q.

(BY MS. RAYMOND)

lS backs

lash loan, do you see those two columns?
A.
Q.
I do.

16
17

How did you decide what percentage of the fee

18 would be charged?
19
A.

I don't understand your question.

Whatever

20 the fees total versus the value versus the loan amount
21
is how they determine fees per loan.
It's a

22 compilation.
23
24
Q.

Okay.
Divide one into the other.

A.
Q.

25

And the percentages of the loan amount are

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1

A. Okay.
Q. Did your average hours while you were at
Heartland change at all between the time when you were a
loan officer and a senior loan officer?

2 3
4

5
6 7
8

A. No.
Q. Wha t were your average hours worked weekly
while you were at Heartland?
A.

Per week? Man.

I'd say between -- Average, I

9

would say probably 52 to 55, 56 hours, somewhere around

10
11 12

there.
Q. And what was your average daily schedule while
you were at Heartland?

13
14

A. The average hours per day, or do you want my
schedule in, out?
Q.

15 16
17

Both.

Let i s start wi th per day.

Wha t were

the average number of hours that you would work per day?

A. Very rarely did I work less than nine, nine
and a half hours.

18

I was there usually between 8 and

19

8: 30.

There were days, certainly, that I came in, you
And I would almost -- almost daily be

20
21
22

know, 9 o'clock.

there beyond 6 0 i clock, usually 7, sometimes even
8 0' clock in the evening.

And then on the Saturdays

23
24

that I worked, Saturdays that weren't mandated, some

Saturdays were, but I worked additional Saturdays that

25
(

were -- were not mandated, and I would usually work

\

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came in on Saturdays other than the Saturdays that were

47

2 3
4
S

required.
Q. How many Saturdays did you work while you were
at Heartland?

A. Probably eight.
Q. What time would you get in on a Saturday?

6 7
8

A. Usually 9 o'clock.
Q. And when would you usually leave?

9

A. 2 or 3 0 i clock.
Q. Was there anyone else there on a Saturday when

10
11 12 13
14

you were there?
A. Yeah, I -- I believe there were -- Well, there
certainly -- I wasn't the only one there on every
occasion that I was there. I can't recall who else was

lS
16
17 18

there, but there was always somebody else in the office.
It not necessarily was a full office.
There were

Saturdays where there may have been five or six loan
officers, but there were also Saturdays where there were
just, you know, two or three of us.

19

20
21 22

Q. How many loan officers were there while you

were

at Heartland? A. It varied.
Q.

23
24

What was

the
we

ran ge ?

A.

I

believe

had as many as 20,

if

I

recal l,

25
\

between the two teams.

There were two teams at one

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point as well.

Josh was managing a team that I was on,

and there was another individual too, Rashim -- I'm
sorry, I don i t recall his name -- that was managing

another team.

I believe he had about six on his team,

and I believe Josh at one point had 10 or 11.

So there

might have been

I guess it probably ranged between 10

and maybe 16 or 17.
Q. When you say there were usually other people
there on a Saturday when you were there, do you mean

loan officers or -A.

Yes.

There were -- The processor was in on

Saturdays on occasions when I was in as well.

Q. Was there always a manager or a management
level individual there on a Saturday when you were

there?

A. I don't recall if there -- I know that -- I
know that Josh was there on Saturdays as well.
I don't

know if he was there every Saturday that I was there or

not.
Q. Did you have a key to the building?
A. I don't -- I don't think I ever at any point
did have a key.

I was trying to think near the end

if -- if a key was distributed or not.

I don i t believe

so because I remember having to wai t outside until

somebody else, either a manager or somebody else, one of

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1

" out" in the evening, and a total.

And then at some

2 point they changed to where they had an "in" in the

3 morning and then "out for lunch" and "back in." And we
4 always had to put at least one hour as far as lunch even

S if we worked through it, and then "back in" after lunch
6

and then an "out" for the day, and then a total.
as far as just the
Q.

So

7 time sheets changed two or three times while I was there
8

the structure of the time sheet.

9

How long of a lunch were you supposed to take

10 while you were at Heartland?
11 12

A.

They didn i t necessarily dictate any specific

amount of time, they just wanted us to sign out.

So I

13 would as sume for a t leas t 3 0 minutes that they would

14 want us to sign out 30 minutes, possibly an hour; I
lS
16

don't really recall.

Most of the time we all stepped
May have been to walk down

out away for -- for lunch.

17 around the corner to grab a quick bite to eat and come
18

back.

May have been for an hour.

I'm sure that there

19 were occasions where I was probably gone for more than

20 an hour during the lunch period, but not often.
21
Q.

On times where you were out for more than an

22 hour, could it have been as much as two and a half

23 hours?
24
A.

No.

It typically wouldn't have been more than

25 an hour and a half, possibly two at the most if I -- if
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Q.

Okay.

Did you have any conversations wi th any

61

2 other management level employees at Heartland regarding

3 the instruction you say Josh gave at this informal

4 meeting?
5
6

A.
Q.

No, none wi th management.

Did you change the way that you filled out

7 time sheets after this informal meeting?
8

A. Q.

Yes.
And tell me about that.

9

10 11

A.

Again, I was required to sign in and out at
So I would put

specific times.

More than likely, I

12 would be putting 9 0 i clock with an hour lunch and

6 o'clock out. If it were 10 -- If I worked -- If I 14 worked past 6 0' clock, which was often the case, and I
13

1 S wrote down 7 0' clock as my out time, I would have to
16 write in 10 o'clock as my in time rather than 8:30 or
17

whenever I truly came in.

It had to equal 40 hours and

18 no more.
19
Q.

Was there anybody else at the office when

20 you i d get there at 8 or 8: 30 in the morning?
21 22 23 24
A.
Q.

Yeah.
Who?

A.

Again, Eric used to be a fairly early person.
the newer guys

I think when they hired on some of the

25 before I left, there was typically one or two of the

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1

the las t part of your employment?
MS. NOVAK:

2 3
4

Obj ection; asked and answered.

A. I don i t recall any conversation about that
specifically, no.
Q.
(BY MS. RAYMOND)

5 6
7

Did Josh ini tia te those

phone calls?

A. Which phone calls?
Q. The ones you were mentioning, toward the
latter part of your employment, the last two and a half

8 9

10
11

weeks when you say you were in the office and out of the

office.
A. You mean our conversations, Josh and my -- No,
I did.

12 13
14

(Deposition Exhibit 6 was marked.)

15

Q. Mr. Horton, you've just been passed Exhibit 6.
Do you recogni ze these documents?

16
17

A. It looks like our time sheets that we used at

18

Heartland.

19

Q. Starting with the first page, which is
DEF 00118, is that your name and your signature in the
top left table?

20
21 22

23
24

A. Yes, looks to be. Q. And as to the other three tables, is that also
your name and your initials?

25
/

A. That's not my initials in table 4, it's not
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