Henriquez v. Green Tree Servicing, LLC (In re Henriquez)
536 B.R. 341
| Bankr. N.D. Ga. | 2015Background
- Plaintiffs obtained a mortgage on Massachusetts property in 2005, filed Chapter 7 in April 2010, and received a discharge in August 2010; they indicated intent to retain the property and did not reaffirm the debt.
- Plaintiffs left the property and contend they later informed Bank of America they intended to surrender it; loan transferred to EverBank in 2013 and Green Tree (Defendant) began servicing in May 2014.
- Defendant conducted a foreclosure sale on May 27, 2014 and recorded the deed in October 2014.
- Plaintiffs received multiple communications from Defendant at their Georgia address: (1) informational letters (servicer change, account rep, loss-mitigation options, privacy notice) and (2) two insurance/force-placed insurance notices (one stating a premium and that Plaintiffs are responsible).
- Defendant reported the loan to credit bureaus showing the account as discharged with zero balance; Plaintiffs also called Defendant but presented no evidence Defendant initiated collection calls.
- Plaintiffs reopened bankruptcy and sued for contempt and damages under the discharge injunction (11 U.S.C. § 524(a)(2)); cross-motions for summary judgment followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Informational letters (servicer change, rep, loss mitigation, privacy) | Letters pressured Plaintiffs to pay or otherwise violated discharge injunction | Letters were purely informational, many contain bankruptcy disclaimers, no demand for payment | Court: No violation — objective effect not to pressure payment; allowed communications about collateral rights |
| Insurance / force-placed notices | Notices saying Plaintiffs were responsible for insurance cost coerced payment | Notices were statutorily required under RESPA and protected creditor's in rem rights; included bankruptcy disclaimers | Court: No violation — servicer may protect collateral and comply with RESPA; no evidence Defendant sought personal payment |
| Credit reporting to bureaus | Reporting harmed Plaintiffs' ability to get new mortgage and was inaccurate | Reporting showed account discharged with zero balance; new account number is not actionable | Court: No violation — reporting a discharged debt with zero balance is proper and not coercive |
| Phone calls & overall pattern | Combined communications and contacts constituted coercion and contempt | Calls were initiated by Plaintiffs; communications were not voluminous, repeated, or demands for payment | Court: No violation — no willful attempt to collect personal liability; overall conduct not sufficiently coercive to violate §524 |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard)
- United States v. Four Parcels of Real Prop., 941 F.2d 1428 (resolving factual inferences for summary judgment)
- Hairston v. Gainesville Sun Publ’g Co., 9 F.3d 913 (courts should not weigh evidence or make credibility determinations at summary judgment)
- In re McLean, 794 F.3d 1313 (Eleventh Circuit test: objective effect of creditor's action to pressure debtor determines §524 violation)
- In re Hardy, 97 F.3d 1384 (civil contempt for willful violation of discharge requires knowledge of injunction and intent to act)
- In re Mele, 486 B.R. 546 (discharge removes personal liability but preserves secured creditor's lien and in rem rights)