Ohai v. Delta Cmty. Credit Union (In re Ohai)
| Docket Number | 12-65475-WLH,Adversary Proceeding 23-5041-WLH |
| Decision Date | 23 August 2023 |
| Parties | IN RE: EMMANUEL OHAI, Debtor. v. DELTA COMMUNITY CREDIT UNION, PNC BANK NATIONAL ASSOCIATION, INC., DEAN ENGLE & PARK TREE INVESTMENTS, LLC, PARK TREE 20 INVESTMENTS, LLC, FCI LENDER SERVICES, INC., DANIEL I. SINGER & SINGER LAW GROUP, PHILLIP L. JAUREGUI D/B/A JAUREGUI & LINDSAY LLC, MICHAEL W. LINDSEY D/B/A, JAUREGUI & LINDSEY, LLC, MICROBILT CORPORATION, Defendants. EMMANUEL OHAI, Plaintiff, |
| Court | U.S. Bankruptcy Court — Northern District of Georgia |
Wendy L. Hagenau, United States Bankruptcy Court Judge THIS MATTER is before the Court on the Motion to Dismiss filed by Dean Engle ("Engle"), Park Tree Investments, LLC ("PTI"), Park Tree 20 Investments LLC ("PTI20"), FCI Lender Services, Inc. ("FCI"), Phillip L. Jauregui d/b/a Jauregui & Lindsey and Michael W. Lindsey d/b/a Jauregui & Lindsey, LLC ("J&L") (collectively the "Engle Defendants") (Doc. No. 6), and Plaintiff's Response thereto (Doc. No. 10). The Court has subject matter jurisdiction over Plaintiff's claims pursuant to 28 U.S.C. § 1334(b) and 28 U.S.C. § 157(a), and the claim of violating the discharge injunction is a core proceeding under 28 U.S.C. § 157(b)(2)(A) & (O). See In re Golden, 630 B.R. 896, 920 (Bankr. E.D.N.Y. 2021) (); In re Harlan, 402 B.R. 703, 710 (Bankr. W.D. Va. 2009).
Plaintiff and his now ex-wife purchased their primary residence at 2715 Tradd Court, Snellville, Georgia (the "Tradd Property") in April 2006 and executed a note and security deed in favor of Delta Community Credit Union ("Delta") (the "Tradd Mortgage Loan"). In March 2008, Plaintiff and his now ex-wife obtained a home equity loan in the amount of $46,000 from Delta, secured by a second security deed (the "Tradd HELOC"). Plaintiff and his now ex-wife defaulted on the Tradd HELOC in 2010.
On June 20, 2012, Plaintiff and his now ex-wife filed a petition under Chapter 7 of the Bankruptcy Code. On Schedule D, Delta was listed as holding two secured claims: one for $98,352.00 and another for $39,615.00, both secured by the Tradd Property. The Chapter 7 Trustee, Janet G. Watts, conducted the 341 meeting of creditors on July 17, 2012, and filed a Report of No Distribution on August 16, 2012. The bankruptcy case was closed and discharged on October 5, 2012 (Bankr. Doc. No. 14).[1]
Plaintiff continued to live in the Tradd Property. Delta allegedly first sold the Tradd HELOC in February 2012 (pre-petition). The Tradd HELOC was then sold to PTI20 by May 23, 2017. PTI was identified as the servicer. PTI transferred servicing of the Tradd HELOC in May 2018 to FCI. Upon receipt of the notice that FCI was the servicer, Plaintiff sent a letter to FCI pursuant to 15 U.S.C. § 1692(f) demanding validation and verification of the debt. FCI and PTI20 engaged the Singer Law Group ("Singer") to respond to the inquiry and in connection with foreclosure proceedings against the Tradd Property. Singer sent two letters dated July 11, 2018 and July 16, 2018 to Plaintiff, as set out below. A foreclosure sale was eventually scheduled for September 3, 2019.
On January 28, 2019 and February 3, 2020, MicroBilt obtained Plaintiff's consumer reports from Experian and/or Equifax (Doc. No. 1, Ex Y). Plaintiff disputed the inquiries, and MicroBilt informed Plaintiff the reports were pulled at the request of PTI. When PTI failed to respond to MicroBilt's request for verification of authority, MicroBilt removed the inquiries.
On May 26, 2020, Plaintiff filed a complaint in the United States District Court for the Northern District of Georgia, Ohai v. Delta Community Credit Union et al Civil Action No. 1:20-cv-02220-SCJ-JEM against Engle, FCI, J&L, PTI, and others. PTI20 was not named as a defendant. Plaintiff alleged violations of several consumer protection statutes (the Fair Credit Reporting Act ("FCRA"), Equal Credit Opportunity Act ("ECOA"), Fair Debt Collection Practices Act ("FDCPA"), Georgia Fair Business Practices Act ("GFBPA")), invasion of privacy, and "defamation-libel". The original complaint did not allege a violation of the discharge injunction. Plaintiff filed an amended complaint (District Court Doc. No. 11) on June 15, 2020. It included a claim that Engle, FCI, J&L, and PTI violated the discharge injunction.
Plaintiff sought to further amend his complaint and filed a Motion for Leave to File the Second Amended Complaint (District Court Doc. No. 108). The court ultimately denied Plaintiff's request to amend the complaint (District Court Doc. No. 149), but the court granted the motion "to the extent that Plaintiff seeks to dismiss his claim for a bankruptcy discharge injunction." Accordingly, the court ruled the First Amended Complaint (District Court Doc. No. 11)-without claim XI regarding the discharge injunction-was the operative complaint (District Court Doc. No. 149 at 45-46.) At this point, then, the discharge injunction was not at issue in the District Court.
Engle, FCI, J&L, and PTI filed motions to dismiss the operative complaint (PTI20 was not a named defendant). The District Court dismissed the complaint against Engle for insufficient service of process (District Court Doc. No. 235). The District Court dismissed the complaint against FCI on the basis that the FDCPA claim was time barred (District Court Doc. No. 236). The District Court dismissed the defamation-false light/invasion of privacy and GFPRA claims against J&L, but retained the claim that J&L violated the FDCPA by sending Plaintiff communications in 2019. J&L subsequently filed a motion for summary judgment, which the Court granted on May 4, 2023 on the basis that J&L was not a debt collector subject to the FDCPA (District Court Doc. No. 291). There are no remaining claims against Engle, FCI, and J&L pending in the District Court.
The District Court initially dismissed the complaint against PTI on the basis that PTI was a note owner and thus not subject to the FDCPA. The District Court later vacated its ruling after determining that PTI was a loan servicing agent and PTI20 was the owner of the subject note.
(District Court Doc. No. 293). The FDCPA claim against PTI remains pending, but it has been stayed pending resolution of this adversary proceeding. Id.
On March 29, 2023, Plaintiff filed the complaint against Engle, PTI, PTI20, FCI, J&L, and Jauregui, and Lindsey, as well as his former mortgage holders, certain debt collectors, and a consumer reporting agency. The complaint relates to two separate properties, but the actions of the Engle Defendants only relate to the Tradd Property. The allegations as to each of the Engle Defendants are as follows.
PTI is a loan servicer. On June 22, 2017, PTI sent Plaintiff a "Borrower Welcome Letter" stating "Park Tree Investments, LLC is your Servicing Agent and is servicing your Promissory Note on behalf of your Lender/Creditor, Park Tree Investments 20, LLC." The second paragraph of the letter was labeled "IMPORTANT BANKRUPTCY INFORMATION" and stated in bold, capital letters, "IF YOU OR YOUR ACCOUNT ARE SUBJECT TO PENDING BANKRUPTCY PROCEEDINGS, OR IF YOU RECEIVED A BANKRUPTCY DISCHARGE ON THIS DEBT, THIS STATEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN ATTEMPT TO COLLECT A DEBT." The letter went on to state the unpaid principal balance on the note was $40,395. The second to last paragraph of the letter stated, "IF YOU ARE NOT IN BANKRUPTCY OR DISCHARGED OF THIS DEBT, BE ADVISED THAT Park Tree Investments LLC as Servicing Agent for your Creditor IS ATTEMPTING TO COLLECT A DEBT and ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE."
Starting in July 2017, PTI sent Plaintiff monthly loan statements. On August 31, 2017, PTI sent Plaintiff a monthly statement stating the amount due was $30,276.53. The statement said, The statement included a return payment coupon with instructions to "Make check Payable to Park Tree Investments 20." The August 31, 2017 statement did not include a bankruptcy disclaimer.
On September 30, 2017, PTI sent Plaintiff a monthly statement stating the amount due was $30,702.96. The statement said, The statement included a return payment coupon with instructions to "Make check Payable to Park Tree Investments 20." The September 30, 2017 statement did not include a bankruptcy disclaimer.
On October 31, 2017, PTI sent Plaintiff a monthly statement stating the amount due was $31,129.39. The statement said, The statement included a return payment coupon with instructions to "Make check Payable to Park Tree Investments 20." The October 31, 2017 statement did not include a bankruptcy disclaimer. Plaintiff alleges PTI continued to send him monthly statements.
In May 2018, PTI transferred its servicing rights to FCI. A "Borrower Welcome Letter," dated May 15, 2018, was sent to Plaintiff stating FCI was the new servicing agent for PTI20 authorized to process and collect scheduled payments.
In 2019 and again in 2020, PTI requested MicroBilt, a consumer reporting agency, pull Plaintiff's credit report. On January 28, 2019 and February 3,...
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