Hrustanovic v. Onemain Fin. Grp., LLC (In re Hrustanovic)
| Decision Date | 02 March 2020 |
| Docket Number | CASE NO. 18-10737(1)(7),AP NO. 19-01017 |
| Citation | 615 B.R. 224 |
| Parties | IN RE: Jasmin HRUSTANOVIC, Debtor(s) Jasmin Hrustanovic, Plaintiff(s) v. OneMain Financial Group, LLC, Defendant(s) |
| Court | U.S. Bankruptcy Court — Western District of Kentucky |
Matthew T. Sanning, Matthew Sanning, Augusta, KY, John M. Simms, Lexington, KY, Robert R. Sparks, Strauss Troy Co., LPA, Cincinnati, OH, for Plaintiffs.
Stephanie J. Bentley, Douglas M. Foley, McGuireWoods LLP, Washington, DC, Edward M. King, Frost Brown Todd LLC, Louisville, KY, for Defendants.
This matter is before the Court on the Motion for Summary Judgment filed by Defendant OneMain Financial Group, LLC ("OneMain") against Plaintiff Jasmin Hrustanovic ("Plaintiff"). The Court considered the Motion for Summary Judgment filed by OneMain, the Response to the Motion for Summary Judgment filed by the Plaintiff, and the Reply to the Response filed by OneMain. For the following reasons, the Court will GRANT the Motion for Summary Judgment of OneMain.
This Court has jurisdiction over this contested matter. 28 U.S.C. § 1334(b). Venue for this matter is proper in this District. 28 U.S.C. § 1409. This is a core proceeding and the Court is authorized to enter a final order adjudicating this matter pursuant to 28 U.S.C. § 157(b)(2)(A) and (O). The parties have consented to entry of final judgment by this Court on all claims presented.
The parties agree that the material facts of this matter are not in dispute. The Court therefore, incorporates herein, the following undisputed facts from the parties' Motion for Summary Judgment and the Response to the Motion for Summary Judgment.1
On June 27, 2016, the Plaintiff borrowed money from OneMain and granted OneMain a first priority lien on a 2005 Chevrolet, which was properly perfected by OneMain. Within two months of obtaining the loan, the Plaintiff informed OneMain he had traded in his 2005 Chevrolet and sought to replace the lien with a lien on a 2010 Mercedes. OneMain released the lien on the 2005 Chevrolet, and recorded a lien on the Plaintiffs 2010 Mercedes with the Warren County Clerk's Office. A few months later, the lien on the 2010 Mercedes was released and replaced with a recorded lien on a 2003 Mercedes E500W (the "Vehicle").
The Plaintiff filed a Chapter 7 bankruptcy case in this Court on July 31, 2018. See Bankr. Doc. #1. On August 1, 2018, the Court entered the Official Form 309A (Bankr. Doc. #5-2), in which paragraph 10 informs creditors that there appears to be no assets for creditors in the Plaintiffs bankruptcy case, and, therefore, creditors were not to file a proof of claim.
Through the Plaintiffs bankruptcy Schedules, the Plaintiff asserted OneMain was undersecured, not unsecured because the Vehicle's value was approximately $7,500 for a purported indebtedness of $9,218 (Bankr. Doc. #24 at 20 and 31). Through the Statement of Intention of Individuals Filing Under Chapter 7 (Official Form 108), the Plaintiff noted his intent to surrender the property securing OneMain's debt. (Bankr. Doc. #24, p.49).
The Plaintiff received a discharge entered by this Court on November 20, 2018 (the "Discharge Order") (Bankr. Doc. #33). Notice of the Discharge Order was dated November 22, 2018 (Bankr. Doc. #34). OneMain does not dispute that it had actual knowledge of the Discharge Order prior to the events discussed below. OneMain also does not dispute the Plaintiffs assertion that the Plaintiff did not reaffirm his otherwise discharged debt to OneMain. (Doc. #3, ¶ 26).
On April 22, 2019, the Plaintiff filed his Amended Motion to Require OneMain Financial Group, LLC to Appear and Show Cause (the "Contempt Motion") (Bankr. Doc. #48), seeking certification of a putative class, and requesting that the Court order OneMain to appear and show cause why it should not be held in contempt of the Court's Discharge Order for purportedly refusing to provide the Plaintiff a lien release as to the inoperable Vehicle. Following a status conference before this Court, the Plaintiff filed the First Amended Complaint on July 2, 2019 (hereinafter referred to as "the Complaint"). The Complaint admits OneMain's in rem rights in the Vehicle survived bankruptcy as "OneMain's lien was not avoided or eliminated in bankruptcy." Compl. ¶ 32. OneMain filed its Answer to the Complaint on July 31, 2019. (Doc. #6).
The Complaint alleges a communication between the Plaintiff and a OneMain branch employee during which the Plaintiff was directed to contact OneMain's Central Bankruptcy Processing Unit ("CBP"). Compl. ¶ 37 (). Regardless of how it occurred, the Plaintiff successfully reached out to CBP, the unit at OneMain designated to handle communications with and about bankrupt borrowers.
After a review of its records, OneMain located five recordings of calls between CBP and the Plaintiff. Copies of those audio recordings were provided to Plaintiff's counsel on April 26, 2019. Transcripts of those recordings have been produced to Plaintiff and are attached to the Becker Declaration as Exhibits 1-5. During those conversations:
OneMain's policies and procedures for its CBP employees includes a method for determining whether OneMain will take possession of a vehicle on which it has a lien after a borrower has filed bankruptcy, received a discharge, and stated he or she will not reaffirm the debt. This analysis uses relevant information such as whether the vehicle is operable and if not, what would be required to repair it. The transcripts with Plaintiff reveal that OneMain requested this information in an effort to value its in rem claim. After obtaining this information, OneMain determined it would not repossess the Vehicle. Becker Declaration ¶¶ 12 and 13.
It is not OneMain's policy to refuse to release surviving in rem liens until a discharge debt is paid in full. Furthermore, OneMain did not refuse to release the in rem lien until Plaintiff paid the discharged debt in full. Becker Declaration ¶ 16.
OneMain seeks an Order granting summary judgment in its favor on all claims asserted against it in Plaintiff's Amended Complaint under Fed. R. Civ. P. 56(c), made applicable to adversary proceedings through Bankr. R. Civ. P. 7056. Under that Rule, the Court must grant summary judgment to the moving party if the movant shows there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. A genuine issue of material fact exists when there are "disputes over facts that might effect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The movant must demonstrate to the Court that the nonmovant's evidence is insufficient to establish an essential element of the nonmovant's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Thereafter, the nonmovant "must come forward with ‘specific facts showing there is a genuine issue for trial.’ " Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), quoting Fed. R. Civ. P. 56(e). Where the record taken as a whole could not lead a rational fact finder to rule for the nonmovant, there is no genuine issue for trial. Id. Here, OneMain has established that there is insufficient evidence to establish essential elements of Plaintiff's claims against it entitling it to summary judgment as a matter of law. The Plaintiff has failed to come forward with specific facts showing there is a genuine issue for trial on any of the claims asserted in the Complaint. Therefore, summary judgment is appropriate on all claims asserted against OneMain by the Plaintiff.
On July 2, 2019, Plaintiff filed his Amended Complaint individually and on behalf of a class of persons seeking class certification and asserting three claims against OneMain.2 Count I asserts a claim for willful violations of the discharge injunction, 11 U.S.C. § 1328(a) and 11 U.S.C. § 524 et seq. Count II seeks imposition of preliminary and final injunctive relief enjoining OneMain from refusing to release liens on discharged debts unless the Plaintiff pays on the discharged loans. Count III seeks declaratory relief in the form of a declaration that OneMain has acted unlawfully, as well as a declaration that OneMain's conduct constitutes an abuse of...
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