Commercial Banking, Collections, and Bankruptcy

Bankruptcy Ct. erred in denying debtor’s request to hold creditor in contempt of court for seeking to collect on debt in state court proceeding one year after Bankruptcy Ct. had previously discharged said debt. Record showed that debtor had failed to notify either state court or creditor’s law firm that debt had been discharged, although creditor had been notified of said discharge through notice given by Bankruptcy Ct. As such, creditor was guilty of contempt under agency principles for actions taken by its law firm in seeking continued collection efforts, since creditor was aware of discharge order. However, Bankruptcy Ct. could properly deny instant request to hold law firm in contempt of court, since: (1) said law firm lacked knowledge of discharge order; and (2) court could not impute client-creditor’s knowledge of discharge order to law firm. Ct. further observed that Dist. Ct. could take into consideration debtor’s failure to notify either state court or creditor’s law firm of discharge order when determining any damages for debtor.

Dist. Ct. did not err in granting defendant-debt collector’s motion for summary judgment in action by plaintiff-alleged debtor alleging that defendant violated Fair Debt Collection Practices Act (FDCPA) by filing state-court collection action on credit card account without first giving him notice of his right to cure default on said account. Record showed that plaintiff, in state-court action, had denied knowledge of, or any association with, subject credit card account at issue in state-court and instant FDCPA action. As such, Dist. Ct. could properly find that plaintiff could not proceed on his FDCPA action, since he lacked evidence that debt incurred on credit card account was for personal, family or household purposes, and therefore was “consumer debt.” Fact that billing statements showed that most charges were for purchases of less than $50 at places such as gas stations and convenience stores does not require different result, since plaintiff could not explain (due to his alleged lack of knowledge about said account) whether said purchases were for consumer as opposed to business purposes.

Dist. Ct. did not err in granting plaintiff-debtor’s motion for summary judgment in action under Fair Debt Collection Practices Act (FDCPA) against defendant-debt collector, alleging that defendant failed to provide statutorily required disclosures about plaintiff’s debt under section 1692g(a) of FDCPA in defendant’s initial communication with plaintiff or within five days thereafter. While defendant asserted that it had complied with section 1692g(a) when it sent two emails to plaintiff that contained hyperlinks that contained said disclosures, record showed that plaintiff had never opened said emails, and language in said emails did not imply existence of any debt or contained words such as “debt” or “collector,” which was required to meet FDCPA’s definition of “communication.” Moreover, fact that email contained hyperlinks did not require different result, since said emails only provided means to access mandated disclosures.

Dist. Ct. erred in finding that debtor could exempt his contingent future interest in his joint tenancy by the entirety in his marital home under circumstances where debtor’s wife had died prior to completion of debtor’s Chapter 7 bankruptcy petition. Record showed that debtor had listed $1.04 million debt that was secured by judgment lien on his residence, and debtor attempted to exempt his contingent future interest in said tenancy by entirety interest from attachment of said lien under 11 USC section 522(b)(3)(B). While said section could exempt debtor’s tenancy in entirety interest in marital home, it would not exempt his contingent future interest in obtaining fee simple interest in marital home at time his wife died, since Ill. law does not exempt from judgment contingent future interests held by tenants by entirety and only exempts debtor’s tenancy interest from attachment of judgment lien.

Dist. Ct. did not err in granting defendant-manufacturer’s motion for summary judgment in action by plaintiffs-purchasers of recreational vehicle (RV) manufactured by defendant, alleging that defendant breached express and implied warranties issued by defendant on said RV, after RV experienced series of mechanical problems shortly after plaintiffs took possession of RV. Record showed that: (1) RV experienced problems with its slide cable, TV, and DVD, which were initially fixed, but then experienced more problems with said items; (2) RV subsequently experienced problems with its air conditioning unit, main slide and scaling tape; and (3) at some point, plaintiffs asked defendant to buy back RV, but defendant declined and instead promised to repair issues pursuant to its warranty. As such, Dist. Ct. could properly find that plaintiffs failed to show that defendant did not honor its warranties where: (1) although instant RV experienced numerous problems, defendant repaired all mechanical issues brought to its attention during warranty period; and (2) plaintiffs failed to give defendant opportunity to repair mechanical issues that occurred after defendant’s last tender of repaired RV back to plaintiffs. Moreover, because defendant had only two chances to fix certain mechanical problems, plaintiffs could not show under Indiana law that express warranty failed of its essential purpose.