Brown v. Bank of America (In re Brown)
481 B.R. 351
| Bankr. W.D. Pa. | 2012Background
- Bank of America serviced the loan on the Debtor's residence at 2017 West Washington St., New Castle, PA, with FHA insurance.
- A 2007 foreclosure judgment was entered in Lawrence County, PA in favor of the lender, but the property was not sold at sheriffs sale and the Debtor remained in the home.
- The Debtor filed a Chapter 7 bankruptcy on August 14, 2009 and was discharged on December 2, 2009; the case was later closed.
- Relief from stay was granted in October 2009 allowing foreclosure or other enforcement actions, but foreclosure proceeded with little activity.
- In 2012 the Debtor, pro se, moved to reopen the case and alleged discharge-injunction violations by Bank of America, seeking substantial damages; Bank of America denied violations.
- The court ultimately found Bank of America violated the discharge injunction by sending mortgage statements seeking payment of the discharged debt and imposed sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mortgage statements seeking payment violated the discharge injunction | BofA violated injunction by demanding payment post-discharge | Statements were informational or permissible under lien enforcement; no personal liability sought | Bank of America violated the discharge injunction by statements seeking payment |
| Whether other conduct (contact, foreclosure delay, reporting delinquency, credit reporting) violated the injunction | Conduct constituted ongoing attempts to collect discharged debt | Most conduct was benign or within permissible foreclosure and reporting duties | No violation found for most conduct; only the payment-demand statements violated |
| Whether the Debtor is entitled to damages for emotional distress or other costs | Damages for emotional distress and moving costs are warranted | No egregious conduct; damages should be limited | Damages awarded were limited to a nominal amount of $3,000; no emotional-distress award |
Key Cases Cited
- Joubert v. ABN AMRO Mortg. Group, Inc. (In re Joubert), 411 F.3d 452 (3d Cir. 2005) (private right of action under § 524 not clearly implied)
- Butz v. People First Fed. Credit Union (In re Butz), 444 B.R. 301 (Bankr.M.D.Pa.2011) (distinguishes between collection attempts and lien actions)
- Schatz v. Chase Home Fin. (In re Schatz), 452 B.R. 544 (Bankr.M.D.Pa.2011) (disclaimer language in statements informs informational purpose)
- Casarotto v. Mo. Dep’t of Revenue (In re Casarotto), 407 B.R. 369 (Bankr.W.D.Mo.2009) (emphasizes contextual evaluation of notices in discharge disputes)
- Wingard v. Altoona Reg’l Health Sys. (In re Wingard), 382 B.R. 892 (Bankr.W.D.Pa.2008) (emotional distress considerations in stay/discharge contexts)