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In 1987, petitioner applied for a $2,000 home loan from
American Home and was denied. However, in July 1988, a represen-
tative of American Home contacted petitioner and advised her that
her application could be approved if she made certain repairs to
her house. The repairs would cost $6,000, and this amount would
be added to American Home's loan to petitioner. On August 2,
1988, petitioner contracted with American Home to make the
necessary repairs, and, in return, American Home lent $8,000 to
petitioner. Soon thereafter, American Home assigned the $8,000
mortgage to Union. The day after the contracts were signed,
petitioner decided against making the repairs and attempted to
cancel the repair contract and mortgage loan. However,
representatives from American Home told petitioner that it was
too late to cancel the repair contract, and the repairs were made
to petitioner's home.1
On May 11, 1989, petitioner filed suit in the Circuit Court
of Lowndes, Alabama, against Union and American Home. The
complaint sought compensatory and punitive damages for the
defendants' alleged acts of fraud, conspiracy, and breach of
contract. The jury awarded petitioner a $6,153,000 verdict
against Union, of which $152,000 was for compensatory damages and
the remaining $6,001,000 consisted of punitive damages. After a
1The documents ultimately received by petitioner indicate
that, contrary to the representations made by American Home
Improvement Services of Alabama, Inc., on Aug. 3, 1988,
petitioner had until Aug. 5, 1988, to rescind the contracts.
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