Ridley v. M&T Bank (In re Ridley)

Decision Date31 May 2017
Docket NumberCASE NO. 11–81817–TRC, CASE NO. 16–8008–TRC
Citation572 B.R. 352
CourtU.S. Bankruptcy Court — Eastern District of Oklahoma
Parties IN RE: Charles D. RIDLEY, Debtor. Charles D. Ridley, Plaintiff v. M & T Bank, Defendant.

Greggory T. Colpitts, The Colpitts Law Firm, Tulsa, OK, for Plaintiff.

Paul G. Durdaller, Brian J. Levy, Stites & Harbison, PLLC, Atlanta, GA, Michael J. George, III, Kivell, Rayment and Francis, P.C., Brian J. Rayment, Julie Hird Thomas, Kivell, Rayment and Francis, Tulsa, OK, for Defendant.

MEMORANDUM OPINION

TOM R. CORNISH, UNITED STATES BANKRUPTCY JUDGE

Plaintiff Charles D. Ridley seeks an order from this Court finding that Defendant M & T Bank violated the automatic stay and discharge injunction. After conducting a trial in this matter, the Court finds that Defendant M & T Bank did violate the discharge injunction and should therefore be found in contempt of court. The Court also awards damages including lost wages, punitive damages and attorney fees to Ridley.

Jurisdiction

This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a) and 1334(b). This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (G) and (O ).

Post Trial Motion to Strike

After trial, M & T Bank filed a Motion to Strike Statements and Exhibit from Ridley's Proposed Findings of Fact and Conclusions of Law. M & T Bank objects to an exhibit attached to Ridley's Proposed Findings and Conclusions which it states was not admitted at trial and should therefore not be considered by this Court. The Court agrees and therefore grants the Motion to Strike Exhibit A. As for the specific paragraphs M & T Bank seeks to strike on the grounds that they are misleading, inflammatory and hearsay, the Court declines to grant that relief. The Court accepts the offer of both parties regarding their views of the evidence submitted. The Court is capable of evaluating the proposed findings and conclusions and rendering its decision on the merits.

Findings of Fact
A. Stipulated Facts

The Court adopts the following facts pursuant to the parties' stipulation in the Pre–Trial Order:

1. On July 15, 2002, the Plaintiff executed a promissory note and mortgage in the amount of $85,000.00 at a fixed interest rate of 6.375% in favor of Beacon Financial Group, an Oklahoma Corporation (the "Note and Mortgage" or individually the "Note" and "Mortgage").

2. The Note is currently serviced by M & T Bank or M & T Bank is the current holder of the Note.

3. On November 22, 2011, the Plaintiff filed his Chapter 13 Bankruptcy Petition and Schedules with the Court. The Plaintiff completed the Chapter 13 Plan and received his Discharge on December 11, 2015.

4. On October 15, 2015, the Chapter 13 Trustee filed his Notice of Final Cure Payment and provided notice to M & T Bank that the Trustee's records indicated that the payments under the confirmed Chapter 13 Plan were sufficient to cure all delinquencies, and the loan should be contractually due for November 2015, as of the final Trustee payment.

5. On November 5, 2015, M & T Bank filed its Statement in Response to Notice of Final Cure Payment (the "Statement in Response") wherein M & T bank stated it agrees that the Debtor was current with regard to all pre- and post-petition default payments. The Statement in Response states that $0.00 is due for both pre- and post-petition default payments.

6. Pursuant to the Chapter 13 Trustee's Notice of Final Cure Payment and M & T Bank's Statement in Response, the Plaintiff was, as of October 2015, current on the Note as though no default had ever occurred.

7. Pursuant to the Chapter 13 Trustee's Notice of Final Cure Payment, the Plaintiff was responsible for making payments to M & T Bank beginning with the month of November 2015.

8. M & T bank or its predecessor did not file a Notice of Post–Petition Fees, Charges or Expenses during the pendency of the Plaintiff's bankruptcy.

9. Following completion of his Chapter 13 Bankruptcy case, the Plaintiff was contractually due for November 2015.

10. Following completion of his Chapter 13 Bankruptcy case, the Plaintiff made each of the post-completion payments from November 2015 to December 2016.

a. November 2015 Payment—On October 24, 2015, the Plaintiff mailed check number 206 in the amount of $700.00, which was received by M & T Bank on November 2, 2015.
b. December 2015 Payment—On November 24, 2015, the Plaintiff mailed check number 209 in the amount of $700.00, which was received by M & T Bank on December 1, 2015.
c. January 2016 Payment—On December 23, 2015, the Plaintiff mailed check number 213 in the amount of $700.00, which was received by M & T Bank on December 30, 2015.
d. February 2016 Payment—On January 25, 2016, the Plaintiff mailed check number 219 in the amount of $700.00, which was received by M & T Bank on January 29, 2016.
e. March 2016 Payment—On February 23, 2016, the Plaintiff mailed check number 222 in the amount of $700.00, which was received by M & T Bank on February 29, 2016.
f. April 2016 Payment—On March 23, 2016, the Plaintiff mailed check number 226 in the amount of $692.00, which was received by M & T Bank on March 28, 2016.
g. May 2016 Payment—On April 20, 2016, the Plaintiff mailed check number 231 in the amount of $692.00, which was received by M & T Bank on April 28, 2016.
h. June 2016 Payment—On May 23, 2016, the Plaintiff mailed check number 234 in the amount of $692.00, which was received by M & T Bank on May 25, 2016.
i. July 2016 Payment—On June 23, 2016, the Plaintiff mailed check number 244 in the amount of $692.00, which was received by M & T Bank on June 27, 2016.
j. August 2016 Payment—On July 23, 2016, the Plaintiff mailed check number 249 in the amount of $692.00, which was received by M & T Bank on X.1
k. September 2016 Payment—On August 23, 2016, the Plaintiff mailed check number 254 in the amount of $692.00, which was received by M & T Bank on August 30, 2016.
l. October 2016 Payment—On September 23, 2016, the Plaintiff mailed check number 258 in the amount of $692.00, which was received by M & T Bank on X.
m. November 2016 Payment—On October 23, 2016, the Plaintiff mailed check number 261 in the amount of $692.00, which was received by M & T Bank on October 29, 2016.
n. December 2016 Payment—On November 23, 2016, the Plaintiff mailed check number 267 in the amount of $692.00, which was received by M & T Bank on November 29, 2016.

11. M & T Bank has attempted and continues to attempt to collect from the Plaintiff Fees, Charges and Expenses that were not disclosed in the course of the Plaintiff's Chapter 13 Bankruptcy as required by F.R. Bankr. P. 3002.1.

12. Despite receiving payments sufficient to pay the pre-petition arrearage, the post-petition Mortgage Fee, and the regular monthly mortgage loan payments, M & T Bank has, following the completion of the Plaintiff's Chapter 13 bankruptcy, continued to show the Plaintiff delinquent on his mortgage loan.

13. The Plaintiff has incurred attorney's fees and costs associated with this action.

B. Additional Findings of Fact

In addition to the stipulated facts, the Court makes the following findings of fact:

14. Ridley was current on his mortgage at the time of the Notice of Final Cure Payment dated October 15, 2015, and on the date of this Court's Discharge Order on December 11, 2015. M & T Bank admitted this at trial and in its Proposed Findings of Fact and Conclusions of Law.

15. To ensure his mortgage payments were paid on a timely basis, Ridley had a regular practice of marking the date to mail the payment on his calendar the first full week before the payment was due, and mailing the payment on that date by depositing it in the mail at the post office.

16. Twenty Mortgage Statements were sent to Ridley from February 1, 2016 through January 17, 2017. Ridley's mortgage statements reflected varying amounts due, from $ 1,569.69 to $ 4,815.83.

17. The first post-discharge mortgage statement sent by M & T Bank to Ridley was dated February 1, 2016. It reflected that Ridley owed $ 2,261.69, which included his regular monthly payment of $ 692.00, a delinquent payment of $ 692.00, and "$ 877.69 in fees outstanding on your M & T account." These fees were identified as a "Return Item/Other Fee(s)" of $ 25.00 and a "Recoverable Corporate Advance" of $ 852.69.

18. All Mortgage Statements dating from February 1, 2016 through August 30, 2016 reflected an amount due of either $ 1,569.69 or $ 2,261.69, and included additional charges designated as a "Return Item/Other Fee(s)" of $ 25.00 and a "Recoverable Corporate Advance" of $ 852.69.

19. Beginning in September of 2016, the additional charges increased. Ridley was billed for late charges of at least $ 31.38, and as high as $ 125.52. "Recoverable Corporate Advance" charges increased from $ 852.69 to $ 1,727.69, and were as high as $ 3,337.69.

20. Also beginning with the September statement, M & T Bank began adding charges identified as Foreclosure Attorney Fees. Usually these included several separate charges each month, with total Foreclosure Attorney Fees charged each month ranging from $ 787.50 to $ 875.00.

21. On October 3, 2016, M & T Bank sent a letter to Ridley notifying him that his mortgage loan was in default. It advised him to contact its "Homeowner Assistance Center Team" to consider a repayment plan, loan modification, short sale, or deed in lieu of foreclosure.

22. The October 31, 2016 Mortgage Statement included additional Foreclosure Attorney Fees, and an Insurance Inspection Fee.

23. The last statement Ridley received before trial was dated January 17, 2017. It listed the total amount due as $ 2,839.09, and included a Recoverable Corporate Advance charge of $ 1,450.19.

24. Ridley received calls from M & T Bank every other week reporting that he was one month delinquent in his payments.

25. Ridley believed that M & T Bank was planning to foreclose on his home.

26. Ridley never received a summons or notice that a foreclosure lawsuit had been filed against him.

27. Ridley incurred lost wages of $155 per day to appear and...

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1 books & journal articles
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    ...2006 WL 2091199, at *4 (B.A.P. 10th Cir. July 24, 2006) (internal quotation marks omitted). [92] Ridley v. M&TBank (In re Ridley), 572 B.R. 352, 361"”62 (Bankr. E.D. Okla. 2017) ("[T]he first requirement of willfulness is simply an intent to commit the act; it does not require a specific in......

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