The Okavage group is not taking 'No' for an answer when it comes to its anti-ultimatum lawsuit against United Wholesale Mortgage (UWM) per the brokerage's Oct. 17 appeal filed in the U.S. Court of Appeals for the Eleventh Circuit.
The recent filing follows a federal judge in Florida dismissing the brokerage's initial complaint in late September. The original complaint was the first to challenge UWM's ultimatum stemming from its 2021 "All In" Initiative, alleging that the ultimatum violated state and federal laws, including the Sherman Antitrust Act, Florida Antitrust Act, Tortious Interference, and Florida's Deceptive Trade Practices Act.
Okavage Group plaintiffs also claimed UWM-aligned brokers conspired to enforce the boycott.
However, U.S. District Judge Wendy W. Berger, following a magistrate's February recommendations, ruled on Sept. 23 that the plaintiff had not plausibly shown more than UWM brokers being aware of others' intent to comply. Berger wrote in her decision that “the Court is unpersuaded that Plaintiff has plausibly alleged anything more than knowledge by UWM brokers that other brokers intended to assent to the ultimatum and parallel conduct without any ‘plus’ factor, such as abnormal interfirm communications or actions against self-interest.”
In 2021, UWM issued an ultimatum to all of its broker partners stating they can either choose to do business with UWM or its rivals, Rocket Pro TPO and Fairway Independent Mortgage, but cannot continue to do business with both. Fairway subsequently shut down its wholesale division in Feb. 2024.
Since the ultimatum was issued, a number of lawsuits have been filed between brokers and UWM for allegedly violating the ultimatum. Broker partners who breach the ultimatum are required to pay liquidated damages in the amount of $5,000 per loan closed with UWM, or $50,000, whichever is greater.
UWM and CEO Ishbia still face racketeering, civil conspiracy, RESPA violations, and unjust enrichment charges from an April 2024 class action lawsuit, following a report on their relationships with brokers. The Detroit-based company recently had its motion to dismiss the class action denied as moot as of Oct. 3, 2024, due to the plaintiffs' Aug. 30, 2024 submission of an amended complaint.
The Okavage Group did not respond to a request for comment at the time of publication. UWM declined to comment altogether.
