CARYL E. DELANO, Bankruptcy Judge.
THIS CASE came on for hearing on February 25, 2016, and May 26, 2016, on the Second Verified Motion for Sanctions against Nationstar Mortgage, LLC for Violation of the Discharge Injunction (Doc. No. 68) (the "Motion") filed by Debtor Arlene Roth ("Debtor") and the opposition to the Motion filed by Nationstar Mortgage, LLC ("Nationstar") (Doc. No. 72). In the Motion, Debtor sought sanctions against Nationstar for its actions to collect a prepetition debt from Debtor after confirmation of her Chapter 13 Plan and entry of her bankruptcy discharge.
On May 26, 2016, the Court announced its ruling and requested that Nationstar's counsel submit an order that denied the Motion for the reasons stated orally on the record in open court. Debtor's counsel requested that the Court issue a written opinion. After some delay,
On June 24, 2016, Debtor filed a notice of appeal,
On December 22, 2010, Debtor filed her petition for bankruptcy relief under Chapter 13. In her bankruptcy schedules, Debtor listed "Bac Home Loans Servici[ng]" as the holder of the first mortgage on the property at 2617 Nightshade Lane, Fort Myers, Florida (the "Property") and stated that she would surrender the Property.
BAC Home Loans Servicing, LP, timely filed a proof of claim.
Debtor made all payments due under the Plan. On June 27, 2014, the Court entered the Discharge of Debtor after Completion of Chapter 13 Plan (the "Discharge Order).
Commencing in October 2014, after the Discharge Order had been entered, Nationstar began sending monthly statements to Debtor. Debtor filed a motion for sanctions against Nationstar for violation of the discharge injunction (the "First Sanctions Motion").
Just a few weeks later, on November 18, 2015, Nationstar sent Debtor a notice titled "Informational Statement."
At the bottom of the second page of the Informational Statement is a detachable coupon, labeled "VOLUNTARY PAYMENT COUPON."
Upon receipt of the Informational Statement, Debtor filed the instant motion, again seeking sanctions against Nationstar for violation of the discharge injunction (the "Second Sanctions Motion").
Under § 524(a)(2), a discharge "operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived."
Section 524 prohibits behaviors such as calling and sending letters to a debtor that are tantamount to debt collection practices.
To establish a violation of § 524, Debtor must prove that Nationstar willfully violated the discharge injunction.
Here, Nationstar had actual knowledge of Debtor's discharge. Indeed, Nationstar had settled Debtor's claims in the First Sanctions Motion. Therefore, the issue before the Court is whether the Informational Statement was an attempt to collect a discharged debt as a personal liability from Debtor or a mere communication regarding a discharged loan.
In determining whether a communication is an attempt to collect a debt under the Fair Debt Collection Practices Act ("FDCPA"),
Relying upon the holdings of In re Draper
In Draper, the debtor filed a Chapter 13 case. Her Chapter 13 plan provided for the cure of mortgage arrearages and, presumably, the debtor was also making monthly regular mortgage payments through the plan. After the plan was confirmed, the mortgage holder sent monthly invoices to the debtor soliciting additional payments from her. The invoices included two sentences that informed the debtor that the statement was for informational purposes only and the debtor could request to discontinue receiving the statements. Despite the debtor's numerous requests that the mortgage holder cease sending the monthly invoices, she continued to receive them. The court found the disclaimer language of the invoice to be insufficient, held that mortgage holder had violated the automatic stay, and assessed fees against the mortgage holder in the amount of $1,020.00.
The language in Nationstar's Informational Statement is significantly broader than that of the language of the invoice in Draper. And in Draper, the invoices solicited additional payments, and the mortgage holder continued to send the invoices despite the debtor's repeated requests that it stop doing so. Here, the Informational Statement includes no payment demand, deficiency notice, or acceleration notice, the types of content that were found by the court in In re Grihalva,
In Leahy-Fernandez, the debtor filed a Chapter 13 bankruptcy. She listed a mortgage serviced by creditor Bayview in her bankruptcy schedules and stated her intent to surrender the mortgaged property. Although the debtor successfully completed her Chapter 13 plan and received a discharge, Bayview continued to send billing statements stating that the debtor was past due in her payments. Despite debtor's attorney sending letters to Bayview instructing it to cease communications with the debtor, Bayview continued to send statements. After reviewing Bayview's statements, the court found that its communications constituted an attempt to collect a debt. The court reasoned that a one-sentence disclaimer in fine print on the second page of the statement was insufficient to shield the loan servicer from liability.
But here, the disclaimer language in the Informational Statement is not limited to one sentence buried in boilerplate language on the second page. Rather, the disclaimer is prominently displayed in bold on the first page and extensively describes the purpose for the communication: that the Informational Statement does not attempt to collect a debt, and that Debtor can request the discontinuation of further communication. The Informational Statement does not demand payment, nor — unlike creditor Bayview's statements in Leahy-Fernandez — does it even request that payment be made.
The language of the Informational Statement is substantially similar to that analyzed by the court in a case brought under the FDCPA. In Helman v. Udren Law Offices, P.C.,
The Helman court found that this express language did not constitute a demand for payment, as it was specifically addressed to those persons who received a bankruptcy discharge and, as a matter of law, that the statements "did not constitute debt collection activity."
Here, the Informational Statement includes language identical to that in the Helman disclaimer. And as in Helman, the disclaimer language of the Informational Statement is prominently displayed and clearly states it is for informational purposes only. In Bailey v. Sec. Nat. Servicing Corp.,
The payment coupon attached to the Informational Statement is labeled "Voluntary Payment Coupon" indicating that any payment made would be made voluntarily by Debtor and was not required or demanded from Nationstar. Section 524(f) specifically contemplates a debtor's ability to make voluntary payments on a discharged debt.
As noted above, a creditor may have contact with a debtor post-discharge so long as the communication does not amount to an attempt to collect a debt. Although Debtor stated her intent to surrender the Property in her Chapter 13 case — filed nearly six years ago — and therefore argues that Nationstar had no reason to contact her other than to collect a debt, she still retained certain rights as the owner of the Property until Nationstar exercised its in rem foreclosure rights against the Property. Debtor's circumstances might have changed and she might wish to retain ownership of the Property. Thus, some contact by Nationstar with Debtor until Nationstar exercises its in rem foreclosure rights is appropriate.
Although it was no doubt frustrating to Debtor that, shortly after she settled the claims in the First Sanctions Motion, she received yet another Informational Statement from Nationstar, she can hardly have thought that Nationstar was trying to collect the discharged debt.
For the foregoing reasons, the Court finds that the Informational Statement does not amount to an attempt to collect a debt in violation of the discharge injunction imposed by § 524.
Accordingly, it is
The Clerk's Office is directed to serve a copy of this Order on interested parties via CM/ECF.