ACA International and its members are reviewing the judge’s decision reversing significant fraud allegations against Lexington Law Firm and Progrexion, Inc. for promising credit repair services. Editor’s note: This content is available for members only.
2/10/2020 12:00
A judge in the U.S. District Court for the Northern District of Texas, Dallas Division, overturned a jury verdict in a successful ACA International member fraud case against credit repair companies Lexington Law Firm and Progrexion Inc. ACA members The CBE Group, Inc. and RGS Financial, Inc., will appeal the decision.
In July 2019, The CBE Group, Inc. and RGS Financial, Inc., secured the original jury verdict against Lexington Law Firm and Progrexion, Inc. In the original 23-page complaint, the member collection agencies meticulously outlined the defendants’ fraudulent practices of luring in vulnerable consumers by promising “credit repair” services, ACA previously reported.
After the verdict, on July 19, 2019, plaintiffs The CBE Group Inc. and RGS Financial Inc., represented by ACA member Malone Frost Martin PLLC, filed a Motion for Entry of Final Judgment. According to the Memorandum Opinion and Order issued from the judge in the case Feb. 6, 2020, the motion asked, “the court to enter final judgment in a separate document … including actual and exemplary damages awarded by the jury, as well as post-judgment interest.”
However, defendants Lexington Law and Progrexion Inc. filed a Renewed Motion for Judgment after the verdict, contending that the plaintiffs did not “[support] their fraud claim with a demonstration of any material misrepresentation and cannot legally prove that any fraud occurred because they failed to demonstrate a material false statement which defendants knew to be false.”
The court’s February order notes that “[i]n opposition, plaintiffs argue that all elements of their fraud and fraud by nondisclosure claims were met, that the jury did not err in finding in their favor on these claims, and that the jury’s exemplary damages award should not be disturbed.”
ACA and its members continue to review the judge’s decision to overturn the jury verdict in the case originally supported through the Industry Advancement Fund.
“I am disappointed in the judge’s ruling in this matter but am very confident that the evidence presented at trial was sufficient for the jury to provide the verdict it did,” said Michael Frost, partner at Malone Frost Martin PLLC. “That said, I do believe that CBE and RGS will be successful on appeal.”
Malone Frost Martin PLLC, The CBE Group and RGS Financial are working together and considering what’s next in the case, including whether to seek additional funding from the Industry Advancement Fund. At the same time, ACA will be examining the appeal to determine whether amicus support through the Industry Advancement Fund might be justified.
“We are obviously very disappointed in the judge’s ruling and working with our legal team to assess possible next steps,” said RGS Financial President Michael Ryalls. “The fraud alleged was very clear to the jury and Lexington Law needs to be held accountable for the harm they have caused [The]CBE Group and RGS Financial. Ruling to discount the unanimous opinion of a very capable jury was to undermine the entire trial by jury process and discount the great work of Malone Frost Martin in exposing Lexington’s immense fraud.”
By granting the defendants’ Renewed Motion for Judgment as a Matter of Law, the jury’s verdict in favor of the plaintiffs is vacated.
“We feel the judge was wrong on the evidence presented at trial, the factual basis of his analysis, and the law. We are appealing,” added Robbie Malone, member/attorney at law at Malone Frost Martin PLLC.
Despite the judge’s decision to overturn this verdict, the original lawsuit filed by Malone Frost Martin PLLC is just the beginning of exposure to the fraudulent practices carried out by Lexington Law Firm and Progrexion, Inc. Several other lawsuits with similar allegations have been filed against these groups, ACA previously reported.
ACA is proud of the effort put forth by its members in this lawsuit and will continue to fight for its original merits through support in the Industry Advancement Fund.