The Bend Bulletin | By Sheila Miller | November 30, 2012
A Portland bankruptcy judge found Wells Fargo Bank in contempt and ordered it to pay a Bend couple $4,000 for calling them more than 100 times in an attempt to collect on a home loan that was discharged in bankruptcy.
In an opinion filed Nov. 5, U.S. Bankruptcy Judge Randall Dunn found Wells Fargo Bank in contempt of bankruptcy proceedings, ruling the bank knew it wasn’t to contact them about the loan but did so anyway.
David and Linda Culpepper filed for bankruptcy in October 2009. The bankruptcy was discharged in February 2010. Wachovia, now Wells Fargo, held the first mortgage on the Culpeppers’ home in Northwest Bend. When the bankruptcy was discharged, an order was issued telling the bank to stop collections and to stop contacting the Culpeppers.
The couple moved from their home in 2010, but beginning in January 2011 the bank called the Culpeppers nearly every day, sometimes twice a day.
In the calls, Dunn wrote, Wells Fargo representatives told Culpepper the house was in foreclosure and asked whether she’d be interested in fixing the problem. When she spoke to them, Culpepper told bank representatives she considered the calls harassing and wanted them to stop. Representatives told her in order for the calls to stop, she needed to fax a cease-and-desist letter.
That letter was never faxed, Dunn wrote, but the Culpeppers’ attorney did send a letter telling Wells Fargo to stop calling, providing it with the bankruptcy discharge order and warning that if the calls didn’t stop the Culpeppers would seek contempt sanctions.
The calls stopped Jan. 12, after the Culpeppers filed a contempt motion.
Wells Fargo argued the bank didn’t violate bankruptcy law because bank representatives never demanded payment during the phone calls. It also argued the bank had a duty to keep Culpepper up to date on the foreclosure and discuss a loan modification with her.
In his opinion, Dunn wrote that Culpepper had “opened the door to further communications with Wells Fargo” when she filed loan modification applications with the bank during the bankruptcy. But he wrote the history and volume of calls was important.
In testimony, a bank representative said the calls were to tell people in foreclosure about options to get them back on the right track.
But, Dunn pointed out in his opinion, Wells Fargo wanted to get Culpepper to keep trying to modify her loan. If she did that, Dunn wrote, the bank would be able to “revive all, or at least a portion, of her discharged debt to the bank.”
In the calls, Culpepper told the bank representatives she didn’t want a loan modification and wanted the calls to stop.
Dunn found that Wells Fargo knew not to contact Culpepper but continued to call her to try to get her to “reinstate all (or) some of a discharged debt.”
Dunn ruled that Culpepper did not deserve punitive damages, but ordered Wells Fargo to pay her $4,000 for emotional distress. That’s $1,000 for each of the transcribed calls. He also ruled she should receive attorney’s fees and costs.
“… The calls did not stop, and there is a fundamental problem with a program of calls where intelligent, knowledgeable Wells Fargo employees cannot take the responsibility to cause such calls to stop in the face of clear communications from a former customer that she has no interest in further pursuing a loan modification and wants the calls to cease,” Dunn wrote.
The Culpeppers’ attorney, Michael Fuller of Portland, said money was not the point.
“It just says if you press on long enough, and you take it before a judge, justice will be served,” Fuller said. “The clients wanted, at the end of the day, to acknowledge that they’d been treated wrongly and unfairly. They got a money award, but that wasn’t the whole point of this.”
