Michael and Dolores Kirkbride filed for bankruptcy, and as part of the process, signed a consent order with Countrywide Home Loans to let it foreclose on two properties in exchange for releasing the Kirkbrides from the mortgage debt. That order was made effective October 27, 2008 -- and Countrywide started violating it three days later. U.S. Bankruptcy Judge J. Rich Leonard found it
As of the time of publishing, BofA had not responded to a call for comment.particularly frustrating [that Countrywide] actively negotiated the terms of the consent order with the debtors, signed the order, and later, through the its agents, repeatedly acted as if the order did not exist and made it nearly impossible for the debtors to bring the order to [its] attention.
What did Countrywide -- and later, BofA -- do that so frustrated the judge? From October 30, 2008 through May, 2010, the bank called the Kirkbrides over 400 times demanding payment of the settled debt, of which they answered at least 100. Each of those calls took 30 to 40 minutes and involved the typical customer service pleasure of "being put on hold and repeating the same information to more senior 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't foreclosed on the other -- caused the Kirkbrides to run up tax bills and homeowner association dues. Since the local government and homeowners association went after the Kirkbrides to collect, the bank's failure to foreclose "embarrassed and humiliated" the Kirkbrides. Finally, unlike all the other creditors that the Kirkbrides dealt with in their bankruptcy, BofA refused to report their debt as settled to the credit bureaus. As a result, the Kirkbrides' credit reports have had a large and misleading black mark for two years.
On January 5, 2010, the Kirkbrides got BofA to acknowledge that it had received a letter from them containing the consent order, and the bank promised it would respond within 20 business days. But the harassment continued, and no response was forthcoming. Only when the Kirkbride's attorney asked 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 the Kirkbrides answered and spoke with BofA; $50 for each call they skipped; $2000 for the wrongful written demands; 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 "punitive damages for violation of an order ... requires a demonstration of 'egregious conduct,' 'malevolent intent,' or 'clear disregard of the bankruptcy laws.'" He then explained it was:
With this new court order in hand, the Kirkbrides seem assured of a happy Thanksgiving. I can't imagine BofA "flagrantly" disregarding this one.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 to resolve the situation in the face of a clearly worded order barring further collection on these debts. It is beyond egregious that after almost two years of facing such harassment on their own, the debtors finally caught the attention of Bank of America only when they retained counsel and filed this motion.