Franklin Credit Management Corp. v. Cook

551 B.R. 613, 2016 U.S. Dist. LEXIS 10447, 2016 WL 344971
CourtDistrict Court, M.D. Tennessee
DecidedJanuary 27, 2016
DocketNo. 1:15-cv-00043
StatusPublished
Cited by4 cases

This text of 551 B.R. 613 (Franklin Credit Management Corp. v. Cook) is published on Counsel Stack Legal Research, covering District Court, M.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Franklin Credit Management Corp. v. Cook, 551 B.R. 613, 2016 U.S. Dist. LEXIS 10447, 2016 WL 344971 (M.D. Tenn. 2016).

Opinion

[616]*616MEMORANDUM

WILLIAM J. HAYNES, JR. Senior United States District Judge

Appellants, Franklin Credit Management Corporation (“Franklin Credit”), Defendants in an adversary proceeding before the Honorable Marian F. Harrison, Bankruptcy Judge, filed this action. This appeal arises out of the third adversary proceeding by Plaintiff-Appellees Jeffrey Brent Cook and Lori Ann Cook (“the Cooks”) against Franklin Credit, and presents three issues: (1) whether the Bankruptcy Judge erred in finding Franklin Credit to be in civil contempt and awarding the Cooks actual damages, attorneys’ fees, and punitive damages; (2) whether the Bankruptcy Judge erred in denying Franklin Credit’s motion for costs; and (3) whether the Bankruptcy Judge erred in denying Franklin Credit’s motion to reconsider. (Docket Entry No. 7 at 9). For the reasons set forth below, the Court concludes that the Orders of the Bankruptcy Judge should be affirmed.

A. Factual Background and Procedural History

On December 31, 2001, the Cooks filed a voluntary Chapter 13 petition. (Docket Entry No. 3-24 at 1). On July 10, 2006, the Cooks were discharged as debtors. Id. On August 24, 2009, the Cooks filed the first adversary proceeding against Franklin Credit, (Docket Entry No. 3-25 at 1), alleging that Franklin Credit sent several notices to the Cooks after they were discharged as debtors informing the Cooks that their mortgage was not current and that the Cooks were facing foreclosure if they did not pay past due amounts in a short window of time, (Docket Entry No. 3-2 at 4, ¶9). On March 30, 2010, the parties settled this adversary proceeding by a Confidential Settlement Agreement and Release (“Settlement Agreement”). (Docket Entry No. 3-3).

On November 22, 2010, the Cooks filed a second adversary proceeding against Franklin Credit, (Docket Entry No. 3-26 at 1), alleging that Franklin Credit contravened the Settlement Agreement by charging the Cooks’ mortgage account with legal fees related to the first adversary proceeding, (Docket Entry No. 3-2 at 5, 112). On May 9, 2011, the parties resolved this adversary proceeding by an Agreed Order. (Docket Entry No. 3-4). The Agreed Order provides, in relevant

1. IT IS ORDERED THAT THE DEFENDANT will forgive 100% of the Plaintiffs’ current UPB, that is $4,264.19.
* # *
[617]*6174. IT IS ORDERED THAT THE DEFENDANT will release the lien on the plaintiffs’ property.
5. IT IS ORDERED THAT THE DEFENDANT will correct any inaccurate or erroneous records on the plaintiffs’ credit report.
* * *
7. IT IS FURTHER ORDERED AND AGREED THAT THE PLAINTIFFS will in consideration of the compromise and settlement herein set forth ... release and forever discharge “Franklin”... of and from any and all past and present claims, demands, obligations, actions, causes of action, rights, damages, costs, expenses and compensation of any nature whatsoever, known or unknown, whether based in tort, contract or any other theory of recovery, and whether for compensatory or punitive damages that the “Plaintiffs” at any heretofore have had, owned or held or that the “Plaintiffs” now have, own or hold or that relates to, is based upon, all relates to adversarial case number 1:10-00643 A-MH-18 [the second adversary proceeding] and could have been alleged in said adversarial proceeding.
8. IT IS FURTHER ORDERED AND AGREED THAT THE PLAIN-. TIFFS, to the extent any claims arise in connection with entering into, the negotiation of, and/or performing under this agreed order, “Plaintiffs” hereby agree to waive and release those claims, including but not limited to, claims arising under Real Estate Settlement and Procedures Act (RESPA), Truth in Lending Act (TILA), Equal Credit Opportunity Act (ECOA), Fair Credit for the Act (FCRA), Fair Debt Collection Practices Act (FDCPA), or Home Ownership and Equity Protection (HOEPA), Consumer Protection Act and/or any state lending laws and regulations in consideration for the execution of this agreed order as they would relate to this adversary proceeding.

(Docket Entry No. 3-4 at 1-2).

On May 16, 2013; the Cooks filed a third adversary proceeding against Franklin Credit. (Docket Entry No. 3-2 at 2). The Cooks alleged that Franklin Credit “should be held in contempt and sanctions awarded for violating both the confidential settlement agreement and the agreed order.” (Docket Entry No. 3-2 at 6, ¶21). Specifically, the Cooks alleged that Franklin Credit was “reporting a balance to all of the bureaus ....” Id. at 7, ¶ 22.

On October 10, 2013, Franklin Credit filed a motion for judgment on the pleadings, (Docket Entry N. 3), arguing that the Cooks’ credit reports contradicted their complaint, that the Cooks failed to plead properly a claim for relief, and that the Cooks’ complaint was barred by the Agreed Order and the doctrine of laches. (Docket Entry N. 2).

On December 10, 2013, both Franklin Credit (Docket Entry No. 3-14) and the Cooks (Docket Entry No. 3-23) filed motions for summary judgment. The Cooks argued that the Bankruptcy Judge should find Franklin Credit in contempt under 11 U.S.C. § 524 because Franklin Credit knew about the Settlement Agreement and Agreed Order and violated those agreements multiple times. (Docket Entry No. 3-34 at 3-4). The Cooks also argued that sanctions were appropriate because Franklin Credit’s violations were willful. Id. at 5. Meanwhile, Franklin Credit repeated their arguments that the Cooks’ credit reports contradicted their complaint, and that the Cooks’ complaint was barred by the Agreed Order and the doctrine of laches. [618]*618(Docket Entry No, 3-17 at 8-13). Franklin Credit also argued that they did not cause the Cooks’ asserted damages, and that the Agreed Order subsumed the Settlement Agreement. Id at 7-8, 11-12. On January 14, 2014, the Bankruptcy Judge held a hearing on the parties’ cross-motions for summary judgment and denied both motions. (Docket Entry No. 3-62 at 1).

On July 25, 2014, Franklin Credit filed three motions for judgment on the pleadings. First, Franklin Credit moved that any claims based on the Settlement Agreement should be dismissed because the subsequent Agreed Order released Franklin Credit from any claims under the Settlement Agreement. (Docket Entry No. 3-48). Next, Franklin Credit moved that the Agreed Order is unenforceable because it contains a provision expressly waiving any claims by the Cooks arising in connection with performance under the Agreed Order. (Docket Entry No. 3-51). Finally, Franklin Credit moved that they did not violate the Agreed Order because Franklin Credit corrected the Cooks’ credit report. (Docket Entry No. 3-54).

On September 12, 2014, the Bankruptcy Judge denied Franklin Credit’s three motions for judgment on the pleadings filed on July 25, 2014. (Docket Entry No. 3-62). The Bankruptcy Judge determined that these three motions could be addressed by reviewing the pleadings and listening to the January 14, 2014, hearing on the parties’ cross-motions for summary judgment. Id. at 1. The Bankruptcy Judge noted that Franklin Credit “has not shown how its motions for judgment on the pleadings are different from the relief sought on summary judgment, nor has the defendant provided any reason to change the Court’s previous decision.” Id.

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Cite This Page — Counsel Stack

Bluebook (online)
551 B.R. 613, 2016 U.S. Dist. LEXIS 10447, 2016 WL 344971, Counsel Stack Legal Research, https://law.counselstack.com/opinion/franklin-credit-management-corp-v-cook-tnmd-2016.