In re Zine
521 B.R. 31
Bankr. D. Mass.2014Background
- Debtor filed a voluntary Chapter 7 petition on September 17, 2008 and received a discharge on April 27, 2009.
- Debtor listed a condo at 4945 Cougar Court, Naples, Florida with a Mortgage Loan secured by Countrywide/Bermuda Palms interests and indicated surrender of the property.
- BAC Home Loan Servicing reported a zero past due balance in 2009 with a note indicating inclusion in bankruptcy and closure of the case.
- BNY Mortgage/Note holder sought relief from stay in November 2009, with BAC as loan servicer; relief was granted on December 3, 2009.
- Foreclosure of the Property occurred January 19, 2011; Bermuda Palms obtained the property thereafter, and Bayview replaced BAC as servicer on October 16, 2012.
- After Bayview became servicer, Debtor discovered Bayview reported the loan as open and in bankruptcy, and Bayview sent statements and sought payments; a 2014 letter from Bayview acknowledged removal of the tradeline from credit bureaus.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bayview violated the discharge injunction | Bayview’s reports and communications coerced payment on a discharged debt. | Discharge does not bar reporting a discharged debt as due; reports may reflect true status. | Bayview violated the discharge injunction; liability found. |
| Whether BAC is liable for Bayview’s conduct as servicer successor | BAC negligently transferred servicing leading to coercive collection. | No sufficient basis to prove BAC violated the injunction; no direct acts shown. | Motion for Sanctions denied as to BAC. |
| Appropriate remedy and damages for violation of discharge injunction | Damages should reflect coercive acts and possibly treble damages under Chapter 93A. | Treasury and 93A damages require adversary proceeding and may be outside court’s jurisdiction post-discharge. | Damages to be quantified at an evidentiary hearing; treble damages under Chapter 93A denied due to lack of jurisdiction and procedural posture. |
Key Cases Cited
- In re Vogt, 257 B.R. 65 (Bankr.D.Colo.2000) (credit reporting can violate discharge if used to collect)
- In re Irby, 337 B.R. 293 (Bankr.N.D.Ohio 2005) (reporting a discharged debt as due may violate the injunction)
- In re Pratt, 462 F.3d 14 (1st Cir.2006) (burden of proof and evidence standards in discharge-related disputes)