Tag: sanctions

E.D.N.C.: Collins v. First Financial Services- Sanctions for Failure to Comply with Discovery Orders


Ms. Collins, representing herself pro se, in an action alleging multiple claims arising from a mortgage lending scheme by the defendants failed to comply with multiple orders regarding discovery. Upon the motions of the defendants, the district court (lamenting that no attorneys from the Pro Bono Panel had stepped up to assist Ms. Collins) applied the four-part test from Belk v. Charlotte-Mecklenburg Bd. of Educ., 269 F.3d 305, 348 (4th Cir. 2001) to determine what sanctions to impose:

1) whether the non-complying party acted in bad faith;
(2) the amount of prejudice that noncompliance caused the adversary;
(3) the need for deterrence of the particular sort of non-compliance; and
(4) whether less drastic sanctions would have been effective.… Read More

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4th Circuit: RDLG, L.L.C. v. Leonard- Default Judgment as Sanction


RDLG filed suit against Leonard alleging a pattern of fraudulent activity. Attorneys Lankford and Neyhart entered appearances for Leonard and were still attorneys-of-record when the district court set a pre-trial conference for October 3, 2012. On September 30, 2012, Lankford and Neyhart filed a motion seeking to both continue the October 3rd hearing and also to withdraw as counsel, due to both a lack of communication and payment from Leonard. Lankford had waited to file such motion because Leonard had indicated that he intended to file bankruptcy on September 28th, which would have precluded the October 3rd hearing. Lankford also indicated that she would be in Puerto Rico on October 3rd.… Read More

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Bankr. M.D.N.C.: In re Cooper- Debtor must Exhaust Administrative Remedies with the IRS Prior Receiving Damages for a Violation of the Automatic Stay


The Debtor brought a motion for sanctions for violation of the automatic stay under 11 U.S.C. § 362 against the IRS for continuing to garnish wages after repeated notice of the bankruptcy. The IRS responded and the bankruptcy court agreed  that the Debtor had failed to exhaust his administrative remedies with the IRS and that 26 U.S.C. § 7433(d) (1) provides that “[a] judgment for damages shall not be awarded under subsection (b) unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service.”


The attached two memos from the IRS explain that the Debtor must,  pursuant to Treas.… Read More

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EDNC: In re Adams- Discharge Violation by Mortgage Servicer following Completion of a Chapter 13 Plan


The Debtors filed a Chapter 13 bankruptcy in 2004, which they successfully completed and received a discharge in 2008.  Shortly before the entry of their discharge, the Bankruptcy Court granted a motion to declare their mortgage, serviced by Ocwen, to be current.  Thereafter, the Debtors attempted to refinance their mortgage, but were refused because Ocwen provided an inaccurate payoff statement and loan history.  After being notified, Ocwen persisted in failing to rectify the error and the Debtors reopened their bankruptcy, seeking to have Ocwen held in contempt.

The bankruptcy court ultimately found Ocwen in contempt, ordered $2,500.00 in compensatory damages, $2,250.00 in attorneys’ fees, lowered the mortgage interest rate to 6% and set the principal balance owed at $65,373.12. … Read More

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