8/6/2019 Judge Declares Actions of BofA Egregious

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A judge recently hit Bank of America (BAC) with $126,000 in damages, $63,000 of them punitive,for contempt of court. How did BofA express its contempt for the legal system this time (asopposedto robo-signing)? By "flagrantly ignoring the terms of a [court] order".

Michael and Dolores Kirkbride filed for bankruptcy, and as part of the process, signed a consentorder with Countrywide Home Loans to let it foreclose on two properties in exchange for releasing theKirkbrides from the mortgage debt. That order was made effective October 27, 2008 -- andCountrywide started violating it three days later. U.S. Bankruptcy Judge J. Rich Leonard found itparticularly frustrating [that Countrywide] actively negotiated the terms of the consentorder with the debtors, signed the order, and later, through the its agents, repeatedly actedas if the order did not exist and made it nearly impossible for the debtors to bring theorder to [its] attention.As of the time of publishing, BofA had not responded to a call for comment.

What did Countrywide -- and later, BofA -- do that so frustrated the judge? From October 30,2008through May, 2010, the bank called the Kirkbrides over 400 times demanding payment of thesettled

debt, of which they answered at least 100. Each of those calls took 30 to 40 minutes and involvedthetypical customer service pleasure of "being put on hold and repeating the same information tomoresenior personnel."

In addition, Countrywide and BofA sent the Kirkbrides over 20 letters demanding payment, and --because the bank didn't foreclose on one of the properties until February, 2010 and still hasn'tforeclosed on the other -- caused the Kirkbrides to run up tax bills and homeowner associationdues.Since the local government and homeowners association went after the Kirkbrides to collect, thebank's failure to foreclose "embarrassed and humiliated" the Kirkbrides. Finally, unlike all theother 

creditors that the Kirkbrides dealt with in their bankruptcy, BofA refused to report their debt assettledto the credit bureaus. As a result, the Kirkbrides' credit reports have had a large and misleadingblackmark for two years.

On January 5, 2010, the Kirkbrides got BofA to acknowledge that it had received a letter fromthemcontaining the consent order, and the bank promised it would respond within 20 business days.Butthe harassment continued, and no response was forthcoming. Only when the Kirkbride's attorneyasked the judge to sanction BofA in May did the harassment stop.

To compensate the Kirkbrides, the judge ordered BofA to pay them $200 for each call theKirkbridesanswered and spoke with BofA; $50 for each call they skipped; $2000 for the wrongful writtendemands; and $10,000 for causing the tax and homeowner association bills and related problems--$63,000 in all. Turning to punitive damages, the judge noted that the standard for "punitivedamagesfor violation of an order ... requires a demonstration of 'egregious conduct,' 'malevolent intent,' or 'clear disregard of the bankruptcy laws.'"

8/6/2019 Judge Declares Actions of BofA Egregious

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He then explained it was: "appallingly clear to the court that Countrywide and Bank of America, as successor-in-interest,flagrantly disregarded the court's order and discharge injunction. The creditor harassed the debtors with phone calls and repeatedly dismissed the debtors' attempts toresolve the situation in the face of a clearly worded order barring further collection onthese debts. It is beyond egregious that after almost two years of facing such harassmenton their own, the debtors finally caught the attention of Bank of America only when theyretained counsel and filed this motion."

With this new court order in hand, the Kirkbrides seem assured of a happy Thanksgiving. I can'timagine BofA "flagrantly" disregarding this one.