Countrywide Wins Appeal Against Former Executive

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MORTGAGE EXPERT
2 · 20 · 13

A multi-million dollar judgment against Countrywide Financial Corp. in favor of a former executive who claims he was wrongfully terminated after the company was sold to Bank of America Corp. has been reversed on appeal.

Michael Winston was hired by Countrywide Financial Corp. in April 2005 to assist the lender in executive leadership development and succession planning, according to court documents. Winston had 30 years’ experience in human resources at various Fortune 500 companies.

He was promoted in June 2006 and subsequently received a personal compliment from former Countrywide chairman and chief executive officer Angelo Mozilo for his work on a leadership development program.

But a July 2006 restructuring of the human resources division reduced the number of employees reporting to Winston.

Later that same month, Winston complained that vapor droplets falling from the office ceiling were immediately followed by extreme dizziness, nausea, a headache and shortness of breath. In testimony by his assistant, she said she saw “a fog” and felt like her lungs had been “seared.” Ten other employees near his office complained of similar symptoms.

But testing by Countrywide’s safety office turned up nothing, and his supervisor allegedly expressed anger over the incident. When the company failed to report the incident to the state, as requested by Winston, he personally reported the incident to the California Division of Occupational Safety and Health and claims that, following the report, many of his programs were cancelled or put on hold in retaliation. He also said that the atmosphere turned hostile.

Five months later, Winston alleges he refused a request by Countrywide’s president, Dick Sambol, to mislead Moody’s Investors Service Inc. about how much time had elapsed between the abrupt departure of former president and chief operating officer Stan Kurland and the appointment of Sambol.

The following month, Mozilo allegedly called for his immediate termination in an e-mail to his supervisor and Sambol. But his supervisor and Sambol disagreed and convinced Mozilo to let Winston stay on.

After BofA announced in January 2008 that it planned to acquire Countrywide, a process was implemented to determine which employees would be brought on board to BofA. Winston claims that Countrywide spoke badly of him to the BofA executive who was in charge of deciding which Countrywide human resource employees would join BofA in retaliation for his earlier actions.

Winston sued Countrywide and parent BofA in Los Angeles Superior Court for allegedly wrongfully terminating him after BofA acquired the former mortgage giant. He cited a document that ranked him lowest among his peers — though no such document was admitted at trial.

The BofA executive who decided not hire Winston testified than none of Winston’s six peers were hired and that Winston’s position was the same as his own and his salary was less than Winston’s. He also testified that he found Winston to be arrogant and didn’t believe he’d be a good fit for BofA’s corporate culture.

Winston was terminated in July 2008 and received a severance package valued at $877,086. He was subsequently unable to find another company willing to hire him despite “Herculean” efforts.

Winston sued Countrywide and parent BofA in Los Angeles Superior Court and won a jury verdict of $3,828,166 for wrongful termination on Feb. 24, 2011. A motion for judgment notwithstanding verdict by Countrywide went unanswered by the trial court and was denied.

Countrywide filed an appeal with the Court of Appeal of the State of California on May 5, 2011. Oral arguments were made earlier this month, and the appeals court reversed the trial court’s decision on Tuesday.

“Although a jury verdict is entitled to broad deference, Winston’s evidence was insufficient to establish Bank of America declined to offer him a job based on impermissible motives,” the decision stated.

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