Excellent decision denying in part the Motion to Dismiss in our case Sanchez v. Servis One

Excellent decision denying in part the Motion to Dismiss in our case Sanchez v. Servis One.

As Hon. Jeffrey T. Miller, United States District Judge explains -

“As to whether the communications sent to Plaintiffs violated the automatic stay, while an automatic stay does not prohibit all types of communication, the types of communications alleged here are precisely the kind the stay provisions were intended to prevent. Morgan Guar. Trust Co. of New York, 804 F.2d at 1491. The SAC alleges that after being notified of the filing of Plaintiffs' bankruptcy petition on August 28, 2012, being afforded the opportunity to file a proof of claim, and following the entry of the automatic stay, RCS sent two loss mitigation letters, eight delinquency letters, and a Notice of Default. (SAC ¶¶ 25-29, 40, 118, 119, 120, 121, 130, 131.) Once the Bankruptcy Plan was filed on September 11, 2012, it is also alleged RCS sent Plaintiffs a monthly billing statement on September 12, 2012 showing past due amounts, unpaid late charges and a breach fee. (Id. at ¶ 121.) Further, the SAC alleges that RCS sent a letter stating it was resuming collections and sent at least twenty-three collection notices to Plaintiffs while the automatic stay was in place. (Id. at ¶¶123, 132.) After the debt was transferred from RCS to BSI, it is alleged that, between January 2014 and October 2017, knowing of the bankruptcy stay, BSI sent monthly billing statements to Plaintiffs that included unpaid late charges, past due amounts and other fees and included the statement "you must pay this amount to bring your loan current." (Id. at ¶ 124, 138.). The SAC also alleges that during the same period BSI sent at least twenty-nine collection notices. (Id. at ¶ 139.) Moreover, it alleges that both Defendants acted intentionally and with knowledge of the stay. (Id. at ¶¶ 130, 134, 137, 137, 138).

Accepting these factual allegations as true and construing them in the light most favorable to Plaintiffs, the court finds that to the extent Plaintiffs' claims are premised on the communications Defendants sent to Plaintiffs, they have stated a cognizable claim for willful violation of 11.U.S.C. § 362(a). See In re Pace, 67 F.3d 187, 191 (9th Cir. 1995) (a willful violation requires that the "defendant knew of the automatic stay and that the defendant's actions which violated the stay were intentional. Whether the party believes in good faith that it had a right to the property is not relevant to whether the act was 'willful' or whether compensation should be awarded." (quoting Pinkstaff v. United States, 974 F.2d 113, 115 (9th Cir. 1992))).”

ORDER ON DEFENDANT RESIDENTIAL CREDIT SOLUTION INC.'S MOTION TO DISMISS THE SECOND AMENDED COMPLAINT

Sanchez v. Servis One

United States District Court for the Southern District of California June 4, 2019, Decided; June 4, 2019, Filed Case No.: 18cv586 JM(JMA), 2019 U.S. Dist. LEXIS 94622, *22-*23

Don’t let creditors get away with continued collections during your bankruptcy. You deserve the “breathing space” which the automatic stay is intended to provide.


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