Shader v. Brattleboro Sav. & Loan Assocation & River Valley Credit Union
| Decision Date | 12 December 2014 |
| Docket Number | Case No. 5:14-cv-00152 |
| Court | U.S. District Court — District of Vermont |
| Parties | ANDREA KONTROVITZ SHADER, Appellant, v. BRATTLEBORO SAVINGS & LOAN ASSOCATION and RIVER VALLEY CREDIT UNION, Appellees. |
(Doc. 3)
Debtor Andrea K. Shader ("Debtor") appeals a July 1, 2014 Order from the United States Bankruptcy Court for the District of Vermont denying Debtor's motion to continue and dismissing her case with prejudice. Debtor also appeals: (1) a March 27, 2014 Order reopening Debtor's bankruptcy case without reinstating the automatic stay; (2) an April 9, 2014 Order denying Debtor's motion to reconsider; and (3) a June 30, 2014 Order that allowed David Dunn, Esq. to represent both Brattleboro Savings & Loan ("Brattleboro Savings") and River Valley Credit Union ("River Valley") (collectively, "the Banks"). The Banks oppose Debtor's request for relief, asserting that the Bankruptcy Court properly dismissed Debtor's case with prejudice and did not abuse its discretion in the remaining orders which are the subject of this appeal.
On October 3, 2014, this court held oral argument. The parties' post-hearing filings were completed on October 14, 2014, at which point the court took the matter under advisement. Debtor is self-represented. Attorney Dunn represents the Banks.
On April 7, 2010, Debtor filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code. In her bankruptcy petition, Debtor stated she intended to reaffirm the mortgages secured by her personal residence, but she later decided not to reaffirm those debts because of the loss of her employment. On January 8, 2013, the Bankruptcy Court granted Debtor a discharge and closed the case. On January 23, 2014, Debtor moved to reopen the bankruptcy case, alleging the Banks had violated the automatic stay and discharge injunction by attempting to collect on Debtor's mortgages.
On February 7, 2014, the Bankruptcy Court held a hearing to determine whether to reopen Debtor's bankruptcy case. At the hearing, "Brattleboro Savings & Loan . . . admitt[ed] that there was a violation of the automatic stay." (Doc. 3-39 at 8:4-8:5.) River Valley stated its "position is somewhat similar to that of Brattleboro Savings & Loan," id. at 11:14-11:16, but contested "any violation of the stay on behalf of the credit union[.]" Id. at 13:5-13:6.
After discussing some of the alleged violations of the automatic stay, the Bankruptcy Court informed Debtor: "the issue here is whether you suffered any damages," id. at 14:13-14:14, and noted that the record did not show Debtor suffered damages "other than obviously the, you know, stress of finding out that the foreclosure was filed and having to take some steps to take care of it." Id. at 15:13-15:15. The Bankruptcy Court advised Debtor that reopening the case "in and of itself will reinstate the stay[.]" Id. at 3:23. Thereafter, the Bankruptcy Court issued a scheduling order that stated: (Doc. 3-9 at 1.)
On February 18, 2014, Debtor filed a motion asking that she be granted an additional week to file her supplemental materials with the Banks' response due a week thereafter. She advised that because she was not an attorney, she had sought assistance from a bankruptcy attorney who was reviewing her file and whom she hoped would take her case. She asked to continue the hearing scheduled for March 21, 2014 to March 27,2014. On February 18, 2014, without apparently awaiting the Banks' response, the Bankruptcy Court granted Debtor's motion regarding the deadlines for the parties' filings, but denied her motion for a continuance.
On February 28, 2014, Debtor filed a supplemental brief that identified the Banks' alleged violations of the automatic stay and discharge injunction. Debtor also provided a timeline of the Banks' collections efforts, which included allegations of dozens of contacts from the Banks with descriptions and dates of those contacts. Debtor attached exhibits where the alleged contacts occurred in writing. At the Bankruptcy Court's continued hearing on March 21, 2014, the parties contested the scope of the alleged violations committed by the Banks. At that time, River Valley admitted "that some phone calls have been made, those phone calls were made in—a letter was sent in response and a request for information." (Doc. 3-40 at 7:20-7:22.) Brattleboro Savings, in turn, requested clarification on "whether the stay goes to stop the pending foreclosure action in Superior Court . . . we do not believe it does[.]" Id. at 9:12-9:14. The Bankruptcy Court took Debtor's motion to reopen the bankruptcy case under advisement.
On March 27, 2014, the Bankruptcy Court ordered that Debtor's bankruptcy case be reopened to "afford the Debtor an opportunity to prove her claims for damages arising from alleged violations of the automatic stay and discharge injunction." (Doc. 3-43 at 2.) The March 27, 2014 Order further provided that "the automatic stay shall not be reimposed" and that Brattleboro Savings could proceed with its "foreclosure action in state court against property of the estate." Id. The Order noted Id.
On April 3, 2014, Debtor filed a motion to reconsider that portion of the Bankruptcy Court's March 27, 2014 Order which stated that the automatic stay would not be reimposed. Debtor argued the stay was necessary to protect her interests and the Banks failed to show good cause why it should not be reimposed. Debtor stated that in light of the Bankruptcy Court's advice that reopening the bankruptcy case "in and ofitself will reinstate the stay," (Doc. 3-39 at 3:23), she did not understand that she was obligated to object to Brattleboro Savings' request for clarification regarding whether the state foreclosure proceedings would be stayed. On April 9, 2014, the Bankruptcy Court declined to reconsider its March 27, 2014 Order because:
(3) the Debtor has not presented any new facts or demonstrated any error of law in the decision she seeks to have reconsidered, and
(4) the Debtor has failed to show that she made a mistake, or was precluded from raising an argument in opposition to [Brattleboro Savings'] request, based upon her pro se status.
(Doc. 3-17 at 3.) The Bankruptcy Court noted that it found "Debtor's assertions attributing her failure to object, alleged reliance upon the Court's statements, and resulting mistake with respect to reimposition of the stay to be both disingenuous and unpersuasive." Id. It further explained:
As noted in [the court's] March [27]th order, the Debtor There was nothing particularly complex in the Court's comment about reimposition of the stay as to the state court foreclosure action at the February 7th hearing and the Debtor did not respond to it.
Id. at 2.1 On April 15, 2014, the Bankruptcy Court informed the parties that the hearing on Debtor's damages was scheduled for July 1, 2014.
To prove her damages, Debtor hired a forensic psychologist, Gladys Frankel, Ph.D., to evaluate the impact of the Banks' alleged violations of the automatic stay and discharge injunction on Debtor's mental health. On June 2, 2014, Debtor disclosed Dr. Frankel as an expert witness to the Banks via email. On June 5, 2014, Brattleboro Savings moved to shorten the response period for interrogatories to twenty days. OnJune 6, 2014, without awaiting a response from Debtor, the Bankruptcy Court granted Brattleboro Savings' motion because "the evidentiary hearing in this matter is scheduled for July 1 and 2, 2014, and Debtor did not designate an expert until June 2, 2014, and Brattleboro Savings & Loan timely filed its Interrogatories and Requests for Production of Documents shortly thereafter[.]" (Doc. 3-21 at 1.) The June 6, 2014 Order required Debtor to "respond to the Interrogatories and Requests for Production of Documents within twenty (20) days of service thereof, so that the responses will be timely available to Brattleboro Savings & Loan." Id. The Bankruptcy Court imposed the same deadlines for any discovery requests made by River Valley. Thereafter, Debtor did not oppose the shortened deadlines.
On June 26, 2014, Debtor filed a motion to disqualify River Valley's counsel, Steven Bonnett, Esq., for a conflict of interest based on Debtor's alleged consultation with Attorney Bonnett regarding Debtor's divorce, mortgages, and an individual who falsely claimed Debtor owed him money. Attorney Bonnett initially objected to the motion to disqualify, asserting that he did not discuss any matter related to Debtor's mortgages and on the further ground that Debtor's allegations lacked evidentiary support. He subsequently supplemented his filing to acknowledge he had in fact received information from Debtor about her divorce. On June 30, 2014, one day prior to the scheduled hearing, Attorney Bonnett moved to withdraw as counsel and requested that the Bankruptcy Court permit Attorney Dunn, who...
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