IN RE ANDERSON

• Decision Date: 13 April 2010
• Docket Number: No. 09-04486-als7.,09-04486-als7.
• Citation: 430 B.R. 882
• Parties: In the Matter of Richard Timothy ANDERSON, Ethel M. Anderson, Debtors.
• Court: U.S. Bankruptcy Court — Southern District of Iowa

430 B.R. 882

In the Matter of Richard Timothy ANDERSON, Ethel M. Anderson, Debtors.

No. 09-04486-als7.

United States Bankruptcy Court, S.D. Iowa.

April 13, 2010.

COPYRIGHT MATERIAL OMITTED

Michael L. Jankins, Des Moines, IA, for Debtors.

MEMORANDUM OF DECISION (date entered on docket: April 13, 2010)

ANITA L. SHODEEN, Bankruptcy Judge.

An evidentiary hearing was conducted on February 18, 2010 related to the Debtors' Motion for Sanctions Against GE Money Bank (JC Penney) ("GEMB"). Michael L. Jankins represented Richard and Ethel Anderson ("Debtors"). Michael Sherwood Dove appeared for Recovery Management Systems Corporation ("RMSC"). The Debtors assert that action was taken by GE Money Bank (JC Penney) ("GEMB") in violation of the provisions of 11 U.S.C. section 362(a). RMSC responded to the Debtors' Motion, and appeared at the hearing as the agent for GEMB asserting that no stay violation had occurred. No appearance or filing was made by GEMB to the Debtors' Motion. At the conclusion of the hearing a briefing deadline was established. The matter is now considered fully submitted.

The court has jurisdiction of these matters pursuant to 28 U.S.C. sections 157(b)(1) and 1334. Upon review of the pleadings, evidence, briefs and arguments of counsel, the following findings and conclusions of law are entered by the Court pursuant to Federal Rules of Bankruptcy Procedure 7052 and 9014.

FACTS

Richard Timothy Anderson, and his wife, Ethel M. Anderson, filed a voluntary chapter 7 proceeding on September 16, 2009. No other names are listed for either Debtor on the petition. Schedule F of the filing included an obligation owing to GEMB for a JC Penney credit card account ending in 3301¹ with a stated balance of $629.00. Notice of the bankruptcy filing was provided to this creditor at JC Penney-GE Money Bank, Attn: Bankruptcy Dept, PO Box 103104, Roswell GA 30076. On October 15, 2009, RMSC, on behalf of GEMB, filed a Request for Notice pursuant to Bankruptcy Rule 2002.

A series of mailings were sent to Richard T. Anderson ("Debtor") beginning on November 9, 2009. The first mailing was a Notice to Customer of Right to Cure Default which was addressed to Richard T. Anderson from a JC Penney post office box in El Paso, Texas. Utilizing the address from the bankruptcy filing, and the Texas post office box, Debtors' counsel responded with written verification of the bankruptcy filing on behalf of his clients. On November 22, 2009, JC Penney sent a letter inquiry directly to Richard T. Anderson to provide bankruptcy information. Debtor's counsel returned the form letter with the requested documentation on November 30, 2009. A billing statement with an outstanding balance of $736.59 which requested a minimum payment of $237.00 was directed to Richard T. Anderson in December 2009. Encore Receivable Management ("Encore") contacted the Debtor, Richard T. Anderson, on December 8, 2009, for payment of the JC Penney Credit Card account. Debtors' counsel responded with written verification of the Debtors' bankruptcy filing on December 17, 2009. During this same month two telephone calls were placed to Richard T. Anderson in an attempt to collect the obligation owing to JC Penney. During each conversation, the Debtor indicated that he had filed bankruptcy.

On December 17, 2009, this Motion was filed alleging violation of the automatic stay. On December 23, 2009, Debtors' counsel served the Notice and Order regarding Hearing on the Motion for Sanctions for Violation of the Automatic Stay to three separate addresses for GEMB and to RMSC. On December 29, 2009, Debtors' discharge entered. On January 6, 2010, GEMB sent another request for bankruptcy information to Richard T. Anderson.

Mr. M. Ronnie Cohen, Senior Operations Officer of RMSC ("Cohen"), is responsible for all aspects of bankruptcy procedures for RMSC. Upon receipt of a Notice of Bankruptcy Filing, his company undertakes certain actions on behalf of GEMB pursuant to a servicing agreement. His testimony included a lengthy rendition of the process that occurs from the time a bankruptcy notification is received, through its continued monitoring and case closing. Upon receipt of a Notice of Bankruptcy Filing, a "match" is attempted by comparing the bankruptcy filing information with data stored in the GEMB mainframe computer. Although RMSC has authorized user rights to this mainframe computer, it does not have control, or direct knowledge, as to what content is entered into the system related to an individual account. This initial match is based upon name, address, birth date, and social security number. Using the information from the Andersons' Notice of Bankruptcy Filing, the system reached an "inconclusive" result. The same information was then submitted into a database maintained by RMSC in which sophisticated algorithms were utilized in its "search-and-locate process." Under this process, a match was located for Ethel Anderson. Richard T. Anderson was a match on the following four criteria: name, address, date of birth and joint account holder. However, the social security number maintained in the system did not match the social security number stated on the bankruptcy notice.

In situations where a match is not conclusive, a manual review is conducted by an RMSC employee to attempt to verify whether an individual can be matched based upon demographic or external information that can be obtained. "Eventually, any document that needs the attention of a human being is brought in front of a paralegal or a clerk that is trained to deal with it." Transcript of Record at 85:3-5 (emphasis added). The letters sent by Debtor's counsel were reviewed by employees at RMSC, and this resulted in an additional letter that went out to Richard T. Anderson requesting the information on his bankruptcy filing. RMSC contends that the bankruptcy information provided was more of the same information already received which did not correspond to the data contained in the computerized system. Cohen stated that the "Richard T. Anderson who's sitting here in court, we knew he'd filed bankruptcy; we received the notice." Transcript of Record at 79:14-15. RMSC admits that it did not attempt to contact Debtors' counsel to identify or attempt to resolve the continuing problem with "matching" this account.

RMSC asserts that it believes that another Richard T. Anderson is responsible for the credit card at issue, and consequently no violation of the stay has occurred. This conclusion relies upon the use of "Senior" after the Debtor's name. Cohen opined that in many instances when a joint account-single filer is identified it is due to similar names across generations, and that in his experience, inability to provide information matching the system data is an attempt to "hide" from creditor contact. Cohen has no information or explanation for why the social security number that appears in the system of GEMB is not that of the Debtor. The original application cannot be obtained due to its age or the fact that it may never have existed.

The Debtor, Richard T. Anderson, testified that his legal name does not contain the moniker "Senior"; that he utilized the social security number appearing on his bankruptcy petition to open his JC Penney account in 1985; and that no one other than he and his wife made charges and payments on the JC Penney account. The Debtor has a son named Richard T. Anderson, Junior. He has not lived at the Debtors' address for twenty years; he does not receive mail at this parents' home; he has never held a JC Penney account.

At the conclusion of the hearing, the Debtor's counsel submitted an attorney fee statement in the amount of $2,420.00. The total billing was orally amended to include billing for the entire hearing which increased the total billing time by 1.5 hours. With this revision, the total hours submitted for attorney time are 13.6 for total fees requested in the amount of $2,720.00.

DISCUSSION

At the hearing, Debtor's counsel objected to the testimony of Cohen related to his authority to appear on behalf of GEMB. This issue is the subject of inconsistent responses in the record. Upon a question by the Court inquiring as to whether the service agreement permitted his testimony as to actions taken directly by GEMB or JC Penney, Cohen responded, "I don't believe it does...." Transcript of Record at 73:12-17. Prior to review of the transcript, the Court believed the witness had indicated he did have such authority. When later asked again about his authority, the witness indicated he could respond under the provisions of the service agreement. Transcript of Record at 75:17-25 to 76:8. The substance of Cohen's testimony regarding the systems utilized by RMSC is informative, but not relevant to a determination of whether GEMB violated the stay. Both Debtors' counsel, and the Court, questioned why RMSC appeared and participated in this proceeding. There has been no allegation that RMSC violated the automatic stay. Statements on the record, and in the brief filed on behalf of RMSC, indicate that RMSC does not believe a stay violation occurred. This opinion is not evidence which is dispositive of the pending Motion.

A Motion for Sanctions for Violation of the Automatic Stay is a contested matter pursuant to Bankruptcy Rule 9014. The rule provides in part: "relief shall be requested by motion, and reasonable notice and opportunity for hearing shall be afforded the party against whom relief is sought." Bankruptcy Rule 9014(a) (emphasis added). Black's Law Dictionary defines a party as: "a technical word having a precise meaning in legal parlance; it refers to those by or against whom a legal suit is brought ... all others who may be affected by the suit, indirectly or consequently, are persons interested but not parties." Black's Law Dictionary (5th ed.1979). RMSC is not a party to the Debtors' Motion.

The automatic stay becomes effective upon the filing of a bankruptcy...