498 B.R. 313
Bankr. D.N.M.2013Background
- Debtor plaintiff discharged in Chapter 7; defendant Green Tree/its affiliate servicing loan after discharge
- Defendant engaged in extensive collection activity targeting plaintiff over 2011–2012, including harassing telephone calls and skip tracing
- Defendant’s procedures purportedly limited contacts to once per month and to inform of non-liability post-discharge
- October 2012 telephone campaign involved 134 calls in one month to plaintiff and her circle, plus skip-trace notes
- Court finds the collection activity violated the discharge injunction and was willful; damages, attorney fees, and punitive damages awarded
- Plaintiff seeks relief for discharge violation; defendant defends as enforcing security interest; court awards contempt-based remedy; burden of proof clear and convincing transferred to plaintiff
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §524(a)(2) creates a private right of action | Plaintiff argues for civil remedies under the statute | No private right of action exists; remedy via contempt | No private right of action; remedy via contempt sanctions |
| Whether defendant's 2011–2012 collection calls violated the discharge injunction | Calls/coercive tactics violated discharge injunction | Calls were part of enforcing security interest; not prohibited | Yes, willful violations; calls violated §524(a)(2) |
| What is the appropriate sanction/damages for the violation | Damages, fees, and punitive damages warranted | Only necessary damages and fees should be awarded | Actual damages $251, attorney fees $5,700, punitive damages $10,000; total $15,951 |
Key Cases Cited
- Walls v. Wells Fargo Bank, 276 F.3d 502 (9th Cir.2002) (no private right of action for §524(a)(2) damages)
- Pertuso v. Ford Motor Credit Co., 233 F.3d 417 (6th Cir.2000) (no private right of action; contempt as remedy)
- Cox v. Zale Delaware, Inc., 239 F.3d 910 (7th Cir.2001) (no private right of action; contempt remedy appropriate)
- Bessette v. Avco Financial Services, 230 F.3d 439 (1st Cir.2000) (contempt-based enforcement of discharge injunction)
- In re Paul, 534 F.3d 1303 (10th Cir.2008) (discusses contempt remedy for §524(a)(2) violations)