Bank of America to Pay $6 Million to Bankrupt Couple Evicted From Home
August 17 2017 - 4:23PM
Dow Jones News
By Katy Stech
Bank of America Corp. has agreed to pay more than $6 million to
a California couple whom a federal judge said had been harassed and
illegally foreclosed upon by the bank's mortgage unit, ending an
eight-year-long dispute.
The proposed settlement between the bank and Erik and Renee
Sundquist would enable them "to end a long personal and legal
nightmare that has impacted every facet of their and their sons'
lives," according to court papers the couple filed to request that
their 2014 lawsuit against the bank be dropped.
The deal calls for Bank of America to pay a fraction of the fine
of more than $46 million ordered by Judge Christopher Klein in
March. In his ruling, the judge said the bank's mortgage
modification process and mistaken foreclosure on the Sundquists'
home in Lincoln, Calif., left them in "a state of battle-fatigued
demoralization."
The exact amount that the bank will pay the Sundquists is
confidential, according to documents filed Tuesday in U.S.
Bankruptcy Court in Sacramento. The earlier order called for the
bank to pay the couple nearly $6.1 million in damages.
The couple had stopped making mortgage payments in March 2009
after Bank of America officials said they wouldn't consider loan
modifications for customers who were current on payments. In the
following years, their roughly 20 loan-modification requests were
"routinely either lost or declared insufficient, or incomplete or
stale or in need of resubmission or denied without comprehensible
explanation," the judge's ruling said.
The couple filed for bankruptcy in June 2010. Filings halt
foreclosure sales, but the judge said the bank still improperly
took over the home and gave them a three-day eviction notice. The
couple moved out, and Ms. Sundquist was hospitalized with
stress-related symptoms of a heart attack several weeks later.
Bank of America officials eventually reversed the sale. The
couple moved back in several months later and received a $20,000
fine from their homeowner association for dead landscaping, the
ruling said.
The 107-page court opinion included excerpts from Renee
Sundquist's journal that documented harassing visits from
bank-related officials and Mr. Sundquist's suicide attempt after
the couple discussed their frustrations over the house.
The request this week to drop the lawsuit still needs approval
from Judge Klein, who agreed to discuss the settlement at a Sept.
12 hearing.
"Their physical and emotional health deteriorates each day they
are forced to endure the uncertainty of an outcome that will enable
them to repair their lives and the lives of their children," their
lawyer wrote in the request. "They do not have the ability to
participate in further litigation and appeals without grave costs
to their health and quality of life."
The settlement would enable the bank to avoid paying a
court-ordered $40 million donation to five law schools associated
with the University of California system and two consumer advocacy
nonprofits, the National Consumer Law Center and the National
Consumer Bankruptcy Rights Center. It's not clear whether the
groups will receive any money from the confidential settlement.
A Bank of America spokesman declined to comment Thursday.
Lawyers who represented the law schools and the nonprofits in the
case did not respond to requests for comment.
At the time of the ruling, legal experts praised Judge Klein's
mandatory donation, saying it could help other judges who struggle
with how to issue a damages award large enough to make a corporate
giant stop bad behavior but not to overcompensate plaintiffs.
Outsize legal awards can often trigger an appeal for excessive
damages.
In the ruling, Judge Klein said the fine was meant to be large
enough that it wouldn't "be laughed off in the boardroom as petty
cash or 'chump change.'"
In Tuesday's request, the Sundquists said they "support the
court's message to the bank" but worried about what could happen to
the damages amount during the appeals process.
"They also recognize that the court's intentions could backfire
if an appellate court reduced the financial cost of the bank's stay
violations, " their lawyer said in court papers.
Write to Katy Stech at katherine.stech@wsj.com
(END) Dow Jones Newswires
August 17, 2017 16:08 ET (20:08 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Bank of America (NYSE:BAC)
Historical Stock Chart
From Aug 2024 to Sep 2024
Bank of America (NYSE:BAC)
Historical Stock Chart
From Sep 2023 to Sep 2024