Prospective home buyer and mortgage lender seek dismissal in case alleging they backed out of real estate contract

By Heather Isringhausen Gvillo | Nov 29, 2014


A prospective home buyer and her mortgage lender seek to dismiss a lawsuit alleging the defendants backed out of a valid contract only to purchase another home, arguing the case should have been resolved in arbitration.

Plaintiff Kathryn Miller filed the lawsuit on Oct. 30 against Shelly Stines and DAS Acquisition Company, doing business as USA Mortgage.

According to the lawsuit, Miller claims she had a valid contract with Stines for the defendant to purchase Miller’s home at 1061 Edgewood Drive in O’Fallon. Stines was supposed to close on the property Aug. 11.

While USA Mortgage originally had pre-approved Stines’ purchase, it notified Miller that Stines was no longer financially qualified for a loan, and on July 28 it disqualified Stines from a loan for the home, the suit states.

However, USA Mortgage did approve Stines for a loan on another, Miller alleges.

“Stines had this other home under contract simultaneously with the home she had under contract with plaintiff,” the suit states.

As a result of Stines’ original contract, Miller claims she turned down three other buyers, was later forced to lower the sales price of the home and is incurring monthly mortgage and utility costs that she could have otherwise avoided.

Stines filed a motion to dismiss for lack of jurisdiction on Nov. 26 arguing that arbitration is proper in this case.

She explains that according to a contract, which Miller signed, all claims over $5,000 shall be handled through mediation. She argues that Miller failed to follow the agreed arbitration clause when she filed this action.

On Dec. 1, USA Mortgage also filed a motion to dismiss, arguing that according to the contract, the case should be resolved in arbitration.

The mediation clause of the contract “indicates that the plaintiff and defendant Stines agreed to settle those disputes unresolved during mediation by engaging in ‘binding arbitration using the services of United States Arbitration & Mediation Midwest Incorporated, in accordance with its relevant arbitration rules.’”

The defendant argues that there is no proper venue for this case, so dismissal is proper here.

Miller seeks a judgment of more than $300,000, plus punitive damages, costs and other relief the court deems just.

Circuit Judge Robert LeChien scheduled a status conference for Feb. 10 at 9:30 a.m.

Paul J. Evans of Evans Law Firm in O’Fallon represents Miller.

Stines is represented by Blake G. Meinders of Sprague and Urban in Belleville.

USA Mortgage is represented by Albert S. Watkins of Kodner Watkins & Kloecker, LC, in St. Louis.

St. Clair County Circuit Court case number 14-L-719

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