DEBTOR’S MOTION FOR ORDER OF CONTEMPT AND JUDGMENT AGAINST
SETERUS, INC. - Page 1
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
Michael Fuller, Oregon Bar No. 09357
Special Counsel for Debtor
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF OREGON
In re
Evan Page Bowers
April Ann Bowers,
Debtors.
Case No. 09-65924-fra13
DEBTOR’S MOTION FOR ORDER OF
CONTEMPT AND JUDGMENT
AGAINST SETERUS, INC.
MOTION
Pursuant to 11 U.S.C. §§ 105 and 524, and this Court’s inherent power, Evan Bowers
(“debtor”) moves for an order of contempt and judgment against Seterus, Inc. (“Seterus”)
because Seterus refuses to correct the false credit information it furnished about debtor’s
mortgage debt after bankruptcy, in willful violation of the discharge order.
Debtor supports this motion with the attached memorandum, declaration, and exhibits.
Debtor respectfully moves for an order and judgment as follows:
A. IT IS ORDERED that Seterus, Inc. is held in contempt of the discharge injunction;
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SETERUS, INC. - Page 2
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
B. IT IS ORDERED AND ADJUDGED that Seterus, Inc. must reimburse debtor for the
reasonable attorney fees and costs he incurred prosecuting Seterus, Inc. and remedying its
contempt in this matter;
C. IT IS ORDERED AND ADJUDGED that Seterus, Inc. must pay debtor compensatory
damages of not more than $75,000.00;
D. IT IS ORDERED AND ADJUDGED that Seterus, Inc. must pay debtor coercive
sanctions or serious punitive damages in an amount to be determined by the Court,
provided that Seterus, Inc. is afforded an opportunity to reduce or avoid the sanction.
Debtor also moves for any other equitable relief that this Court may determine is fair and
just.
DATED: July 24, 2015
RESPECTFULLY FILED,
/s/ Michael Fuller
Michael Fuller, Oregon Bar No. 09357
Special Counsel for Debtor
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
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DEBTOR’S MOTION FOR ORDER OF CONTEMPT AND JUDGMENT AGAINST
SETERUS, INC. - Page 3
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
CERTIFICATE OF SERVICE
I certify that on the date below I caused this document and all attachments to be delivered
to the following persons by USPS first class regular and certified mail, return receipt requested,
postage pre-paid:
Seterus, Inc.
c/o R.A. CT Corporation System
388 State St. Ste 420
Salem, Oregon 97301
DATED: July 24, 2015
/s/ Michael Fuller
Michael Fuller, Oregon Bar No. 09357
Special Counsel for Debtor
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
Case 09-65924-fra13 Doc 51 Filed 07/24/15
MEMORANDUM IN SUPPORT OF DEBTOR’S MOTION FOR ORDER OF
CONTEMPT AND JUDGMENT AGAINST SETERUS, INC. - Page 1
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
Michael Fuller, Oregon Bar No. 09357
Special Counsel for Debtor
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF OREGON
In re
Evan Page Bowers
April Ann Bowers,
Debtors.
Case No. 09-65924-fra13
MEMORANDUM IN SUPPORT OF
DEBTOR’S MOTION FOR ORDER OF
CONTEMPT AND JUDGMENT
AGAINST SETERUS, INC.
FACTUAL BACKGROUND
Debtor and his family moved out and surrendered their former residence during their
chapter 13 bankruptcy. [Bowers Decl. ¶ 8] On March 21, 2013, debtor’s mortgage debt was
discharged by order of this Court. On February 18, 2015, the real property securing debtor’s
mortgage debt was sold to Fannie Mae at a foreclosure sale. [Ex. 1]
In March 2015, debtor was shocked to discover that he and his wife were unable to
finance a new home because Seterus continued to report false derogatory information about his
discharged mortgage debt after bankruptcy. [Ex. 3]
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OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
In April 2015, debtor spoke with Seterus and wrote it a letter notifying it of the discharge
order. [Ex. 5] Debtor specifically asked Seterus to correct the false information it had furnished
to the credit reporting agencies about him. [Id.]
In a response letter dated May 21, 2015, Seterus conceded knowledge of the discharge
order and foreclosure sale. [Ex. 7] However, Seterus refused, and continues to refuse to correct
the false derogatory information it furnished to the credit reporting agencies about debtor after
bankruptcy. [Id.; Ex. 13]
According to a June 2, 2015 letter from debtor’s loan officer, Seterus’ false credit
reporting after bankruptcy is the sole reason debtor does not qualify to finance a new home. [Ex.
9] Debtor and his family must now live in the garage of a relative while they wait for Seterus to
remedy its discharge violation. [Bowers Decl. ¶ 11]
Seterus has refused multiple verbal and written requests from debtor and his loan officer
to fix its false credit reporting. [Ex. 5; Ex. 9]
Seterus has also ignored several requests from debtor’s counsel to resolve this matter
outside of Court. [Ex. 12; Ex. 13]
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MEMORANDUM IN SUPPORT OF DEBTOR’S MOTION FOR ORDER OF
CONTEMPT AND JUDGMENT AGAINST SETERUS, INC. - Page 3
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
POINTS AND AUTHORITIES
A. Authority to Enforce the Discharge Order
Section 105 of Title 11 empowers bankruptcy courts to issue orders and judgments as
necessary to enforce section 524’s discharge order provisions.
Bankruptcy courts also possess inherent powers to sanction wrongful practices, so long as
the sanctions don’t contravene express Code provisions. Law v. Siegel, 134 S. Ct. 1188, 1194
(2014); In re Wallace, BAP No. NV-13-1518-JuHlPa (9th Cir. BAP Sept. 18, 2014).
B. Conduct Prohibited by the Discharge Order
Section 524 provides for a broad injunction to ensure debtors receive a fresh start. Alan
N. Resnick & Henry J. Sommer, 4 Collier on Bankruptcy ¶524.02[2] (16th ed. 2012).
The injunction prohibits the frequently unreported tactic of “trap hunting”. Puller v.
Credit Collections USA, Inc. (In re Puller), 2007 Bankr. LEXIS 2017, 22-23 (Bankr. N.D. W.
Va. June 20, 2007) (a creditor violates the discharge injunction by “trap hunting” when it refuses
to timely update false credit reporting in hopes a debtor may voluntarily pay discharged debt);
see also Torres v. Chase Bank USA, N.A. (In re Torres), 367 B.R. 478, 2007 Bankr. LEXIS 1478
(Bankr. S.D.N.Y. 2007).
C. Enforcement of the Discharge Order
In the Ninth Circuit, consumers must enforce discharge orders by filing motions for
contempt. Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 506-07 (9th Cir. 2002); Barrientos v.
Wells Fargo Bank, 633 F.3d 1186, 1191 (9th Cir. 2011); Fed. R. Bnkr. P. 9020.
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OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
D. Elements of Contempt
Contempt requires proof a creditor (1) had knowledge of a bankruptcy court order and (2)
intended conduct that violated the order. ZiLOG, Inc. v. Corning, 450 F.3d 996, 1007 (9th Cir.
2006).
E. Legal Standard for Contempt
To recover compensatory sanctions against a creditor, a violation must be proved with
clear and convincing evidence. Renwick v. Bennett, (In re Bennett), 298 F.3d 1059, 1069 (9th
Cir. 2002).
Creditors are generally entitled to an evidentiary hearing as to whether they received
actual notice of a court order. Yen v. Pedroche (In re Pedroche), B.A.P. No. NC-13-1618-
JuKuPa (B.A.P. 9th Cir. Nov. 10, 2014).
F. Sanctions for Contempt
Willful violations of court orders entitle aggrieved debtors to compensatory sanctions
including actual damages, punitive damages, and reimbursed fees and costs. Espinosa v. United
Student Aid Funds, 553 F.3d 1193, 1205, n.7 (9th Cir. 2008) (opinion by Chief Judge Kozinski,
citing 2 Collier Bankruptcy Manual (3d rev. ed.) ¶ 524.02[2][c]).
1. Compensation for emotional harm
A debtor is entitled to recover compensation for emotional harm resulting from a
violation, even in the absence of any economic loss. In re Feldmeier, 335 B.R. 807, 813-814
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OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
(Bankr. D. Or. 2005) (awarding emotional harm damages under section 524 without any
economic loss); In re Culpepper, 481 B.R. at 655 (same).
2. Compensation for expenses
Civil contempt compensation includes an award of reasonable attorney’s fees incurred
during the entirety of the contempt proceedings – even those incurred after the violation is
remedied. In re Segal, BAP No. CC-14-1175-KuPaTa, pg. 19 (9th Cir. BAP Jan. 29, 2015); In re
Culpepper, 2013 Bankr. LEXIS 541, 2013 WL 501662 (Bankr. D. Or. Feb. 11, 2013)
(compensating debtor $38,370.50 fees and costs through trial where mortgage servicer’s refusal
to admit liability necessitated a full evidentiary hearing).
3. Remedial sanctions and punitive damages
Bankruptcy courts maintain inherent authority to deter future violations through mild
sanctions. Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1197 (9th Cir. 2003).
The Ninth Circuit BAP has held that serious coercive sanctions are available only if the
contemnor is afforded some opportunity to reduce or avoid the sanction. In re Segal at pg. 18.
ARGUMENT
This Court should hold Seterus in contempt of the discharge order because clear and
convincing evidence shows (1) Seterus acknowledges its receipt of the discharge order, (2) the
discharge order is unambiguous and is familiar to Seterus, and (3) Seterus’ refusal to correct its
false credit reporting of discharged debt constituted a willful violation of this Court’s discharge
order.
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MEMORANDUM IN SUPPORT OF DEBTOR’S MOTION FOR ORDER OF
CONTEMPT AND JUDGMENT AGAINST SETERUS, INC. - Page 6
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
CONCLUSION
For the reasons given above, debtor respectfully requests this Court enter an order of
contempt and judgment against Seterus.
DATED: July 24, 2015
/s/ Michael Fuller
Michael Fuller, Oregon Bar No. 09357
Special Counsel for Debtor
OlsenDaines, P.C.
US Bancorp Tower
111 SW 5th Ave., 31st Fl.
Portland, Oregon 97204
Direct 503-201-4570
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04/20/2015
Seterus
P.O. Box 2008
Grand Rapids, MI 49501-2008
Evan Bowers
P.O. Box 5121
Central Point, OR 97502
(541)821-5979
Email: [email protected]
Re: Loan # 10142483
To Whom It May Concern,
I recently applied for a new home loan and the credit report is showing a balance owed to
Seterus. I took this loan through a chapter 13 bankruptcy and was discharged on 3/21/2013.
The case # for the bankruptcy is 09-65924-fra13. The balance showing is $347,990 and needs
to be zero since this was taken through bankruptcy. I need you to please zero the balance and
email or mail me a receipt showing that the balance is zero.
I spoke with someone from your facility on 4/9/2015 and requested this receipt to be sent and
have had no response. I am writing this letter to request again a zeroed balance receipt on this
old loan. If I do not receive this receipt I will be having my bankruptcy attorney Lars Olsen
getting in touch with you to resolve this matter!
Your prompt attention to this matter would greatly be appreciated.
Thank you,
Evan Bowers
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