Thomas v. Seterus Inc. (In re Thomas)
554 B.R. 512
| Bankr. M.D. Ala. | 2016Background
- Plaintiffs (Jack and Angela Thomas) filed Chapter 7 and indicated intent to surrender residential property securing a Chase mortgage; they received a Chapter 7 discharge without reaffirmation.
- Chase sent monthly mortgage statements after the petition and attached multiple prominent bankruptcy disclaimers stating the statements were informational and not attempts to collect personal liability.
- Chase also sent letters threatening to force-place hazard insurance if Plaintiffs failed to provide coverage; those letters included mandated RESPA/Regulation X language and a disclaimer stating the notice was for compliance/informational purposes.
- Chase transferred servicing of the loan to Seterus, which allegedly made repeated collection calls, mailed statements, and notified Plaintiffs it had purchased force-placed insurance and would hold them liable.
- Plaintiffs sued both Chase and Seterus for willful violations of the automatic stay; Chase moved to dismiss, arguing its communications were informational or RESPA-mandated and thus not stay violations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether monthly mortgage statements violated §362(a)(6) | Statements communicating the debt are acts to collect; disclaimers equivocal | Statements were informational, had prominent disclaimers, and served legitimate post-petition purposes | Not a stay violation; informational statements with clear disclaimers are permitted |
| Whether hazard-insurance letters violated §362(a)(6) by attempting to collect | Threat to charge for force-placed insurance enforces discharged in personam obligation | Letters were necessary to comply with RESPA/Regulation X and to protect creditor’s in rem interest | Not a stay violation; creditor may protect collateral and charge against debtor’s equity if notices include adequate bankruptcy disclaimer |
| Whether Chase can be held liable for Seterus’s post-transfer conduct | Chase retained responsibility as principal/failed to notify servicer of bankruptcy | Chase argues agency not pleaded; servicer becomes liable once it learns of bankruptcy | Plaintiffs failed to plead facts supporting agency or Chase’s continued liability; claim dismissed against Chase |
| Standard for treating communications as "acts to collect" under §362(a)(6) | Any communication of a debt to debtor or third party is an act to collect | For mortgage-secured debts, communications may be informational and permissible when limited and disclaimers are clear | Court: communication is an act to collect only if it overtly demands or coerces payment or lacks valid informational purpose; otherwise permissible |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: disregard conclusory statements; assess plausibility)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility standard for complaints)
- Jove Eng'g, Inc. v. I.B.S., 92 F.3d 1539 (11th Cir. 1996) (willfulness under §362 requires knowledge of stay and intentional act)
- Mann v. Chase Manhattan Mortgage Corp., 316 F.3d 1 (1st Cir. 2003) (discusses communications and bookkeeping entries post-petition)
- Henriquez v. Green Tree Servicing, LLC, 536 B.R. 341 (Bankr. N.D. Ga. 2015) (mortgagee may force-place insurance to protect collateral and offset costs against debtor’s equity)