National City Bank Dismisses Lawsuit and Pays Attorney’s Fees

08 Sep National City Bank Dismisses Lawsuit and Pays Attorney’s Fees

I haven’t received the check yet, but, I can say that I recently settled an Adversary Proceeding with National City Bank.  The quick settlement terms are that National City Bank will dismiss its four count dischargeability complaint seeking re-payment of $307,198.90 and pay attorney’s fees to counsel for the Debtor (me) for defending the matter, without the necessity of a fee hearing.

You may recall the In Re Hill decision, which came out of the United States Bankruptcy Court, Northern District of California, AP 07-4106 (Filed 5-23-2008), wherein the Court concluded that the debtors did make a false representation concerning their financial condition, but the Bank failed to prove that they reasonable relied on the debtor’s false representations and therefore the debt was dischargeable.  I think this Adversary Proceeding was a little more interesting. 

This AP was substantially similar, some of the facts were better and some were worse.  Count I against the debtor was standard 523(a)(2)(A), alleging the debtor engaged in false pretenses, made false representations and committed actual fraud on her application for a line of credit.  At first blush, this Count concerned the debtor and myself.

Count II was standard 523(a)(2)(B), alleging that the Debtor secured financing through a written statement  that was materially false, and here is the kicker, that National City relied on to its detriment.  (The best part of this case was that the application that was attached to the complaint as an exhibit was actually signed and dated at the closing).

Count III alleged a 523(a)(2)(C) violation by stating that the Debtor used the Home Equity Line of Credit (HELOC) to purchase luxury items and goods and services which were not needed for her support.  This Count was dead on arrival from the beginning.

Court IV alleged a 523(a)(6) violation because the debtor allegedly inflicted a wilful and malicious injury upon the bank.  Again, this Count was dead on arrival, or at least we weren’t stressed out about it.

I’m not sure how much the loss in the Hill case had to do with National City’s decisions to walk away from this one, but I’m sure it didn’t hurt.  I will give more details in future posts

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Carmen Dellutri is a proud member of the Florida Bar, and he is a Board Certified Consumer Bankruptcy Attorney, Certified by the American Board of Certification. He practices in the areas of Consumer Bankruptcy and Plaintiff's Personal Injury. He is the principal attorney at The Dellutri Law Group, P.A. The firm supports many charitable and civic causes by donating time and much needed capital to our community. Mr. Dellutri and the other attorneys in the firm routinely speak to students of all ages about various legal and societal issues.

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