Trial Magazine

Deanna McAtee owned The Mortgage Source, a mortgage company that brokered loans under a line of credit with Whitefish Credit Union (WCU). The borrowers of a construction loan McAtee had brokered defaulted, exposing McAtee as the loan’s personal guarantor. Doug Johnson, a WCU employee, allegedly instructed McAtee to foreclose on the property to save WCU foreclosure expenses. After a trustee sale, The Mortgage Source obtained title to the property and sought additional financing from WCU to complete construction so the property could be sold. When WCU refused, McAtee obtained a loan from another source.

The law firm Morrison & Frampton, on behalf of WCU, filed a civil complaint against McAtee, alleging she had committed fraud when she foreclosed on the property and pledged WCU’s collateral as security for the new lender’s mortgage. The firm reported the fraud allegations to federal law enforcement, which led to McAtee’s indictment on federal banking fraud charges. The criminal and fraud claims were later dismissed. McAtee, who filed for bankruptcy, was unable to continue working in banking and incurred approximately $399,300 in economic losses.

McAtee sued WCU and the firm, alleging malicious prosecution. The plaintiff asserted that the defendants had wrongfully sued her for civil fraud and that the prosecution continued despite evidence proving her position.

WCU settled confidentially. The jury awarded more than $1.49 million, including $100,000 in punitive damages. The parties later settled for a confidential amount.

Citation: McAtee v. Morrison & Frampton, PLLP, No. DV-14-1017D (Mont. Dist. Ct. Flathead Cnty. Apr. 28, 2023).

Plaintiff counsel: AAJ members Mark M. Kovacich and Ben A. Snipes, both of Great Falls, Mont.; and AAJ member Michael J. McKeon Jr., Butte, Mont.