Goodin v. Bank of America: the payments were in the court registry the whole time
A Florida couple paid their mortgage through a Chapter 13 plan. Their new servicer never filed the one-page form it needed to collect the money, so $14,530.28 sat in the bankruptcy court registry while the servicer demanded it, threatened foreclosure, and then sued. After a bench trial, a federal judge found violations of the FDCPA and the Florida Consumer Collection Practices Act and in June 2015 announced a $204,000 award, including $100,000 in punitive damages.
A public record, not a client of this firm. Everything on this page comes from the court's findings of fact and conclusions of law cited at the end. Usher Law Group did not represent anyone in this matter, we publish no results of our own, and nothing here predicts the outcome of any other case.
Ronald and Deborah Goodin took out a $168,743 thirty-year mortgage in November 2006. In February 2009, after a business investment went bad, they filed for Chapter 13 bankruptcy. Their plan was simple: they paid into the bankruptcy court registry, and the trustee paid their mortgage and the arrears out of that money.
Then their lender, Taylor Bean & Whitaker, shut down. On August 26, 2009, Bank of America took over servicing the loan. To receive the plan payments, the new servicer had to file a routine transfer of claim in the bankruptcy court. It never did. The Goodins' payments, $14,530.28 in all, stayed in the court registry.
The trustee's office wrote to the bank that it had to file the transfer to be paid. Two bank employees emailed the bank's outside counsel in March and May 2010 asking that it be filed. It still was not. The Goodins finished their plan, began paying the bank directly, and received their discharge on July 6, 2010. As far as the bank's records showed, they were behind.
Thirteen attempts to fix it
The couple tried everything. Mr. Goodin went to a branch to make a payment and was told the loan was with the foreclosure department. They sent a certified letter to the bank's chief executive and got no answer. They called in October and November 2010 and in June, September and November 2011, and submitted an online inquiry. On every call, the court found, they told the bank the money was in the registry and it needed to file a transfer of claim.
In December 2011 a bank auditor reviewed the file and, instead of catching the missing funds, sent the loan to foreclosure review. Four days later, on December 27, 2011, the bank sent a Notice of Intent to Accelerate demanding a payment of $15,903.07 (the amount the bank claimed was past due, not a judgment or award) by February 10, 2012. More demands followed. The couple's attorney then wrote that the bank only needed to file the transfer of claim to receive the missing funds.
On September 17, 2012, Bank of America filed a foreclosure action. The Goodins sued in federal court in January 2013. Days later, the bank filed the transfer of claim, and in March 2013 it dismissed the foreclosure. It collected the $14,530.28 from the registry that September.
All told, the court counted at least fifteen communications from the bank claiming amounts the Goodins did not owe, and at least thirteen contacts from the Goodins, their trustee and their lawyer trying to correct it.
What the law says
The FDCPA forbids a debt collector from falsely representing the amount of a debt (15 U.S.C. § 1692e(2)(A)). The bank argued it was not a debt collector at all. The court disagreed: a servicer is covered if it took over the loan while it was in default, and the Goodins were more than two payments behind when the bank took over. A bankruptcy plan that provides for curing a default does not cure it on the day the plan is confirmed.
The Florida Consumer Collection Practices Act reaches further. It applies to any person collecting a consumer debt and forbids claiming, attempting or threatening to enforce a debt the person knows is not legitimate (Fla. Stat. § 559.72(9)). The bank knew by March 2010 that it needed to claim the registry funds, so it knew it was demanding more than the Goodins owed.
Both laws excuse a bona fide error made despite reasonable procedures (15 U.S.C. § 1692k(c); Fla. Stat. § 559.77(3)). The bank pointed to its eight-step bankruptcy closing audit. The court found the errors were not objectively reasonable, and so not bona fide, given how many times the bank was told.
What the court decided
Judge Timothy J. Corrigan tried the case without a jury in February 2015. He found FDCPA violations in ten monthly statements that overstated the balance, two statements claiming foreclosure fees, six letters demanding more than $15,000 and threatening acceleration or foreclosure, and the foreclosure complaint itself, which sought a deficiency judgment and so was an attempt to collect the debt. Each was also an FCCPA violation.
Goodin v. Bank of America
$1,000 to each spouse in statutory damages under the FDCPA and $1,000 each under the FCCPA; $50,000 to each for emotional distress; and $100,000 in punitive damages under the FCCPA. Attorney's fees were to be decided separately.
Source: Findings of fact and conclusions of law, 114 F. Supp. 3d 1197 (Caselaw Access Project). A public record of someone else's case, not a result of this firm and not a prediction.
The Goodins had asked for $500,000 each in emotional distress damages and $10 million in punitive damages. The court gave far less, but more than in the usual case, because the distress lasted over two and a half years and centered on the fear of losing their home. On punitive damages, it found gross negligence by clear and convincing evidence: bank employees received the couple's complaints and did nothing. "It was as if the Goodins did not exist," the court wrote. The award had to be large enough to get the bank's attention, so these cases do not become a cost of doing business. This page does not report later proceedings.
What it means for you now
In Florida, a lender or servicer collecting its own loan is covered by the FCCPA, even when the federal FDCPA does not apply. The Florida page covers who the statute reaches and its remedies.
- Put it in writing and keep copies. The Goodins' certified letter, call dates and their lawyer's letter were the evidence that defeated the bank's honest-mistake defense.
- Keep every statement. The court counted each wrong statement as a separate violation. Our page on wrong amounts and fees explains the rules.
- After bankruptcy, check the accounts. A discharge or a completed plan should be reflected in what the servicer says you owe and in your credit report. See bankruptcy reporting errors.
- Watch the clocks. Two years under the FCCPA (Fla. Stat. § 559.77(4)); one year under the FDCPA.
The FDCPA and the FCCPA require a company found liable to pay the consumer's reasonable attorney's fees and costs. If you have been sued, including in foreclosure, do not ignore the papers; the answer deadline is short. Read sued by a debt collector. Our New York and New Jersey pages cover the rules there.
The pages this story points to
Florida law
The FCCPA, who it covers, and its two-year deadline.
Read →Wrong amount and fees
When a collector demands more than you owe.
Read →Public verdicts and settlements
Other people's cases, with the amount, the payer and the source.
Read →Sources. Goodin v. Bank of America, N.A., 114 F. Supp. 3d 1197 (M.D. Fla. 2015), No. 3:13-cv-102-J-32JRK, findings of fact and conclusions of law (June 23, 2015), full text (Caselaw Access Project); CourtListener record; Fla. Stat. § 559.72; Fla. Stat. § 559.77.
Common questions
Can a mortgage servicer be a debt collector under the FDCPA?
Sometimes. In Goodin the court held that a servicer is a debt collector under the FDCPA if it took over the loan while the loan was in default, and the Goodins were behind when Bank of America took over. The Florida Consumer Collection Practices Act is broader: it applies to any person collecting a consumer debt, including the original lender or its servicer.
The bank said it was an honest mistake. Why was that not a defense?
Both statutes excuse a violation that was unintentional and resulted from a bona fide error despite procedures reasonably adapted to avoid it. The court found the bank's errors were not objectively reasonable, because the couple, their bankruptcy trustee and their lawyer told the bank what was wrong at least thirteen times and nothing changed.
Can I get damages for stress without seeing a doctor?
In Goodin the court awarded $50,000 to each spouse for emotional distress even though neither saw a doctor, because it found their testimony credible and the distress severe and long-lasting. The opinion also collects many cases where courts awarded little or nothing without medical evidence. The outcome depends on the facts and the proof.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.