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Case Summaries

Fraud: Verdict Reached in Clayton Home Two Year Fraud Case

A federal jury found one of the nation’s largest mobile homebuilders liable for damages related to fraud and civil racketeering in a South Texas case.

Vanderbilt Mortgage and Finance Inc., an affiliate of Clayton Homes, initially sued homeowners Cesar Flores and Alvin King for foreclosure of their mobile home in 2009. Upon investigation, Flores and King’s attorneys discovered a lien release unbeknownst to the homeowners, filed with the county clerk in 2005. Flores and King then sued Vanderbilt Mortgage, alleging they had continued to pay their mortgage for four years after the loan had been declared paid in full. Trevino’s attorney, David Rumley, also faulted Clayton Homes of using fraudulent mortgages to raise more money, misleading their investors.

A verdict was rendered against the defendants. The final judgment awarded Flores and King $216,000 in damages and prejudgment interest, respectively, for a total of $432,000. Similarly, the U.S. District Judge awarded the landowners, Maria and Arturo Trevino, more than $127,000 in statutory damages as well. The Trevino’s alleged their signatures were forged on land collateral documents from the company. This case settled for a confidential sum.