28 Oct Jones Versus Wells Fargo Addresses The Rights Of Debtors In Bankruptcy Part Five
In Part Four of this discussion of the Jones v. Wells Fargo case, the Bankruptcy Court’s ruling on actual damages was covered.
The Court then turned its attention to a determination of to what extent the actions of Wells Fargo justified the imposition of sanctions.
The Court noted that the sanctions that might be assessed included the imposition of a monetary fine, reimbursement of fees and costs to debtor’s counsel, punitive damages, and other relief as the court may direct in order to enforce its orders, but that sanctions are not designed to compensate an aggrieved parties for damages sustained as a result of wrongful conduct, nor are they a substitute for legal proceedings between litigants on the merits of their complaints.
Judge Magner found that in addition to an award of actual damages, sanctions should be imposed forthe creditor’sviolation of the automatic stay.
The sanction imposed upon Wells Fargo in this case was an award of $67,202.45 in attorney’s fees and costs incurred in connection with this matter.
The Court then turned to whetherthe creditorshould be assessed punitive damages, and if so, the nature of the punitive damages.
Noting the fact that its’ conduct was willful, and further noting thatit is a sophisticated lender familiar with the bankruptcy code, the Court found that punitive damages were justified.
However, Judge Magnerdecided that the imposition of monetary sanctions would not deter Wells Fargo from future objectionable conduct, and decided instead to accept an offer by itto revise its practices in connection with all loans administered in the Eastern District of Louisiana. The Court believed it to be more productive and effective to acceptthis offer to modify its practices.
As further assurance that it would implement the changes it had offered, the required changes were to be made an order of the Court.
This, the Court reasoned, would allow the Court to monitor Wells Fargo’s practices and supply the means to address any future violations.
In the last part of this article we will discussed some of the legal issues left answered by Jones.
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