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Judge Grants UWM Partial Win In Ultimatum Lawsuit

Katie Jensen
Jan 04, 2023
Uwm front building with sign

AML’s declaration that the ultimatum violated antitrust law survived.

  • UWM’s lawsuit states AML submitted 560 loans to UWM rivals and claims AML owes it $2.8 million.
  • Judge Laurie Michelson granted UWM’s motion to dismiss parts of American Moneyline’s (AML) counter lawsuit.
  • AML continued submitting loans to UWM after ultimatum was issued, which the court said constitutes acceptance of the contract.

The broker ultimatum that United Wholesale Mortgage’s (UWM) issued in 2021 has stirred up plenty of controversy, as well as a few lawsuits, but the company recently scored a partial win in federal court in Michigan.

Judge Laurie Michelson granted UWM’s motion to dismiss parts of American Moneyline’s (AML) counter lawsuit.

The legal battle began when UWM sued AML, a high-volume California-based brokerage, in February 2022 for continuing to do business with UWM competitor Rocket Companies, after AML signed the “All-In” Initiative UWM established in March 2021. UWM’s lawsuit stated that AML submitted 560 loans to Rocket Mortgage and Fairway Independent Mortgage. Due to a stipulation in the contract that any broker that continues to do business with Rocket or Fairway while working with UWM would face fines upwards of $5,000 per loan or $50,000, whichever was greater, UWM claims AML owes it $2.8 million.

A few days later, AML counter-sued, claiming that UWM Director of National Accounts Bryan Miller verbally assured AML Chief Operating Officer Dean Lob over a telephone call that UWM would not seek to enforce the ultimatum and liquidated damages provision. The lawsuit also describes other promises UWM made to AML, like improving their pricing. The broker argued promissory estoppel should apply, making the ultimatum invalid and unenforceable. 

According to, promissory estoppel applies when a person makes a false statement to another, and the listener relies on what was told to him/her in good faith and to his/her disadvantage. 

UWM filed a motion asking the court to dismiss AML’s counterclaims, which it did, but only in part. 

“AML’s fraud and promissory estoppel claims fail because they are based on an alleged oral promise not to enforce the terms of the contract,” UWM states in its motion to dismiss. “This, by definition, is a contradiction of the express, integrated agreement, and reliance on such an alleged promise is unjustifiable as a matter of law.” 

The court order explains that AML had already agreed to the ultimatum and associated damages before UWM made the assurances not to enforce those provisions. AML acknowledged the public announcement of the ultimatum on March 4, 2021, and received an email about the amended agreement the next day, yet it continued submitting loans to UWM after that date. The court states that it constitutes acceptance of the ultimatum by performance. 

Additionally, UWM’s earliest promise not to enforce the ultimatum was made on June 1, 2021, well after the date of acceptance by performance. Therefore, AML could not have relied on a promise made on June 1 when it had already accepted the ultimatum weeks or months prior, the court order states.

However, AML’s declaration that the ultimatum violated antitrust law survived. The court order states that illegality is a viable contract defense in Michigan, and because UWM did not propose any other basis to dismiss this counterclaim, the antitrust subclaim will survive. 

A UWM spokesperson said the company does not "comment on legal matters that are currently pending."

AML did not immediately responded to a request for comment. 

UWM also sued California-based brokerage shops Kevron Investments Inc. and Mid Valley Funding & Inv.estments Inc., for sending loans to Rocket and Fairway, with combined damages amounting to $420,000. 

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