545 B.R. 62
Bankr. D. Mass.2016Background
- Jackson owned a condo foreclosed in 2008; she vacated in Feb 2009 under a Move Out Agreement and believed the foreclosure was final.
- Jackson filed chapter 7 in Feb 2010, received a discharge May 25, 2010, and the case closed Jan 2011; she later received communications in Oct–Nov 2011 from ING and Portnoy & Greene (P&G).
- P&G sent a November 25, 2011 letter that included a bankruptcy-disclaimer; on Jan 19, 2012 P&G (through attorney Brunelle) sent a follow-up letter demanding immediate payment and identifying itself as a debt collector but omitted any bankruptcy disclaimer.
- Jackson moved back into the condo June 1, 2012; P&G sent a Notice of Sale June 12, 2012 scheduling a foreclosure for July 18, 2012. Jackson filed chapter 13 July 13, 2012 (case dismissed, then reopened and converted to chapter 13 Dec 21, 2012) and reimposed the stay Jan 2013.
- Jackson sued P&G, ING/Capital One and others alleging discharge violation, FDCPA violation, deceit/misrepresentation, breach of contract and wrongful foreclosure; prior rulings voided the 2009 foreclosure and narrowed issues to P&G claims and Capital One’s claim reduction for charges during the vacancy period.
- After a bench trial, the court found P&G violated the discharge injunction and FDCPA §1692e(2)(A); P&G prevailed on deceit/misrepresentation, wrongful foreclosure and breach of contract claims. Capital One’s secured claim was allowed reduced to $246,242.22 to omit charges during the vacancy period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether P&G violated the bankruptcy discharge injunction (11 U.S.C. §524) by demanding payment in Jan 2012 | Jackson: January 2012 letter demanded payment despite her 2010 chapter 7 discharge; P&G knew of the discharge | P&G: attorney Brunelle did not actually know of discharge; prior Nov 2011 letter had disclaimer so Jan letter was not a violation | Court: P&G knew of the discharge by Nov 2011 and Jan 2012 letter—demanding payment—violated the discharge injunction (intentional act); judgment for Jackson |
| Whether P&G violated the FDCPA by misrepresenting the debt or creditor identity | Jackson: P&G misrepresented that ING held the mortgage and demanded payment, violating §1692e(2)(A) | P&G: any error was unintentional and is excused by the FDCPA bona fide error defense (§1692k(c)) | Court: P&G is a debt collector; Jan 2012 letter misidentified mortgage holder and demanded payment; P&G failed to prove reasonable procedures—FDCPA violation sustained |
| Whether Jackson proved deceit / misrepresentation under Massachusetts law | Jackson: statements about creditor identity and collection demand were deceitful and caused reliance/detriment | P&G: no actionable deceit or Jackson did not rely to her detriment | Court: Jackson failed to prove reasonable reliance/detriment; judgment for P&G on deceit/misrepresentation |
| Whether Jackson may recover reduction of Capital One's claim for charges during vacancy period and attorneys’ fees | Jackson: Claim should exclude interest, escrow and other charges during vacancy plus attorneys’ fees and costs | Capital One: agreed to exclude vacancy-period interest/escrow/late fees (~$48,822) but opposed attorneys’ fees; procedural bars to further amendment | Court: Capital One’s claim reduced by $48,822 to allowed claim $246,242.22; no attorneys’ fees awarded |
Key Cases Cited
- Boston Reg'l Med. Ctr. v. Reynolds, 410 F.3d 100 (1st Cir.) (related-to jurisdiction over estate claims)
- Pratt v. GMAC, 462 F.3d 14 (1st Cir.) (discharge injunction protects debtor's fresh start; coercive collection may violate discharge)
- Pollard v. Law Office of Mandy L. Spaulding, 766 F.3d 98 (1st Cir.) (unsophisticated consumer standard for FDCPA communications)
- Edlow v. RBW, LLC, 688 F.3d 26 (1st Cir.) (elements of misrepresentation and reliance under Massachusetts law)
- Bessette v. Avco Fin. Servs., 230 F.3d 439 (1st Cir.) (procedural vehicle for enforcing discharge injunction)
- In re Zine, 521 B.R. 31 (Bankr. D. Mass.) (standard for contempt of discharge order)
- Harrington v. CACV of Colo., LLC, 508 F. Supp. 2d 128 (D. Mass.) (FDCPA §1692k(c) requires reasonable procedures to avoid errors)
- Krasnor v. Spaulding Law Office, 675 F. Supp. 2d 208 (D. Mass.) (elements to establish FDCPA claim)
- U.S. Bank Nat’l Ass’n v. Schumacher, 467 Mass. 421 (Mass.) (Mass. Gen. Laws c. 244, § 35A provides cure-rights pre-foreclosure; relief limited to injunction and compliant notice)