September 18, 2015
Yesterday, a case was brought to our attention which was issued in 2004 but which applies to current litigation. A Federal appeals court upheld awards of compensatory damages, attorneys’ fees, and a $6 million dollar punitive damage award against EMC Mortgage Corporation arising out of its actions in breaking into the homeowners’ residence without their consent and posting a sign in the window that the property was “secured” and not for sale or rent. This conduct occurred during foreclosure litigation, and at the time, EMC did not have any title to the property or judgment or any other rights of possession.
EMC also, with knowledge that the homeowners were represented by counsel, repeatedly directly contacted the homeowners, who then moved to amend their complaint to include claims alleging intentional wrongful actions against EMC and seeking punitive damages for violations of the Fair Debt Collection Practices Act (FDCPA).
Even though the homeowners were living in an apartment when the wrongful conduct occurred, the arbitrator found that EMC’s conduct was “reprehensible and outrageous and in total disregard” of the homeowners’ legal rights, and awarded $6 million in punitive damages against EMC for violations of the FDCPA, 15 USC sec. 1692. The United States Court of Appeals for the 8th Circuit affirmed all awards. Stark v. Sandberg and EMC et al., 381 F.3d 793 (8th Cir. 2004).
Mr. Barnes has applied this holding to a current case in North Florida where the foreclosing party not only broke into the homeowner’s property and changed the locks, but also stole certain items and destroyed others. A Motion to amend the Answer to add additional affirmative defenses and a Counterclaim for damages including punitive damages has been filed today.
We have been advised by homeowners that “banks” and servicers have wrongfully entered property (which is in the midst of foreclosure litigation or a challenge to the foreclosure) under the guise of “securing” it when the “bank” or servicer has no rights of possession to the property. The Stark opinion provides that significant damage claims can be asserted against those “banks” and servicers for this type of conduct.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com