An Oregon bankruptcy court slapped Wells Fargo Bank with counsel fees and $4000.00 in damages based on its repeated calls to the borrowers to discuss “alternatives to foreclosure”. (In re Culpepper, 451 B.R. 650 (2012)). The facts of this case are important to understand this result.
The homeowners filed a bankruptcy and initially stated they wanted to surrender their home. Despite this they made three applications for a loan modificatoin, none of which were put into effect. At some point in time they were locked out of the house. Shortly afterwards, they began getting a series of telephone calls. sometimes twice a day to discuss “alternatives to foreclosure”. The savvy homeowner, Ms. Culpepper, recorded these calls (Note: many states make this illegal unless the caller is informed the call is being recorded). The callers were knowledgeable and professional. However, Ms. Culpepper was clearly distressed and repeatedly told them to stop. Each time she was told the calls would stop only if she sent a “cease and desist” letter to a fax number. A total of about 100 such calls continued, even after Ms. Culpepper’s attorney sent a letter to Wells Fargo demanding the calls stop. Fed up, the Culpeppers reopened their case and filea a motion to hold Wells Fargo in contempt of the discharge order.
The court granted that relief, finding that the Culpeppers had met their burden of producing “clear and convincing” evidence that Wells Fargo knowingly persisted after knowledge of the bankruptcy discharge. In awarding damages, the Court had some cogent remarks:
“I find that Wells Fargo knew that the discharge injunction applied with respect to Ms. Culpepper, and I find that Wells Fargo intended to continue to route calls to Ms. Culpepper in an effort to reinstate all of some of a discharged debt, i.e., the Loan, through a loan modification, after Ms. Culpepper had clearly advised knowledgeable, thinking Wells Fargo employees that she was not interested in pursuing a modification of the Loan with Wells Fargo and wanted the calls to stop. Accordingly, I conclude that Ms. Culpepper has established by clear and convincing evidence that Wells Fargo violated the discharge injunction under § 524(a)(2).