Derrick Boyd's client had a problem: he'd borrowed money for real estate developments that he couldn't pay back. But that didn't stop the Decatur lawyer from convincing a Dallas jury recently that Compass Bank had committed bank fraud against the client, awarding him $98 million in damages.

Boyd represents David Bagwell, a Dallas real estate developer who sued the bank alleging that instead of restructuring the loans he held on property in Colleyville, Texas, during the 2008 financial crisis, they lied to him and sold loans to a competitor who developed the property.
“The biggest issue we faced — and it was exactly how the bank tried the case — is that David Bagwell borrowed this money and didn't pay it back,” said Boyd, a partner in Boyd, Powers & Williamson. “They sort of tried it like a contract case. And our biggest issue was explaining to the jury that this was a fraud case, not a contract case.”

Bagwell had been a successful developer for 30 years who hit a rough spot in 2008 when the real estate market crashed in Texas and across the nation. He requested loan modifications from Compass and was reassured the notes would be extended and not sold. Instead an executive from the bank shopped them to a developer friend who bought the loans for three proposed developments in Colleyville, according to Bagwell's petition in the case.

Boyd said he likely would have not been able to prove the case to the jury, but for the bank's internal emails that showed Compass was shopping Bagwell's loans at a substantial discount.

“We were able to show and compare publically what David Bagwell was being told and what the bank was saying in its internal emails,” Boyd said.

“In the emails they said they were going to package the loan — and it was to a friend of the CEO of the bank,” Boyd said. “I think that struck a chord with the jury. Internal emails are the DNA of a civil case . . . it let the jury see in black and white what the bank was doing.''

In its Dec. 13 verdict, the jury found that Compass had committed fraud against Bagwell and several of his partnerships, awarding $58 million in actual damages to Bagwell and his partnerships and another $40 million in punitive damages.

“We argued that he lost the properties and we argued primarily what he lost was a chance to get out from underneath this and have a clean slate,” Boyd said of the actual damage award. “He had two other developments with two other banks at the same time. And they came to him and said 'Hey you need to move these loans' and he was able to. The jury could see that had Compass been honest with David, he could have moved the loans and avoided all of this loss.''

As for the $40 million punitive damage award, Boyd to the jury Compass' net worth was $12 billion and “suggested they use that to determine a number to get their attention.”

Michael Logan, a director in Dallas Kane Russell Coleman Logan who represents Compass in the case, did not return a call for comment.

“I was glad to get David's case in front of a jury,” Boyd said. “And the fact that the jury decided it in only three hours showed how unanimous they were.''