Bank is Sanctioned for Rule 3001 Violation

Posted by NCBRC - March 11, 2013

A bankruptcy court in Colorado sanctioned FirstBank for failure to comply with the itemization requirements of Rule 3001. In re Jimenez, No. 12-26282 (Bankr. Colo. Feb. 1, 2013). There, the Bank submitted a proof of claim for $12,095.67 in attorney fees related to pre-petition delinquencies and three aborted foreclosure actions. Upon debtor’s objection to the proof of claim the court found that the Bank had not complied with Rule 3001(c)(2)(A) which requires that a creditor submit an itemized statement of interest, fees, expenses, and charges with a claim. In examining the Bank’s claim, it became clear that only $7,868.90 of the total claim was attributable to attorney fees and the rest of the claim was for appraisal costs and other unspecified fees.

The court found that the failure to comply with Rule 3001 had two consequences: 1) the Bank could not benefit from the prima facie evidence of correctness the claim would have enjoyed had it been properly itemized, and 2) the Bank was subject to sanctions under Rule 3001(c)(2)(D). As to the first issue, the court found that the evidence presented at the hearing with respect to the reasonableness of the attorney fees was sufficient to support the Bank’s claim for the $7,868.90 attributable to actual fees.

Turning to the issue of appropriate sanctions, the court was persuaded that the Bank’s failure to comply with the rule was not willful. Nonetheless the court found that, under the rules, the debtor had a right to be informed as to the specific fees and charges being levied against her. Therefore, under Rule 3001(c)(2)(D)(i), the court disallowed the appraisal costs and other unitemized fees included in the proof of claim leaving only the established attorney fees and properly itemized late charges. Additionally, pursuant to Rule 3001(c)(2)(D)(ii), the court charged the Bank with responsibility for the debtor’s attorney fees in connection with the objection to the proof of claim and prohibited the Bank from passing its own fees relating to the claim on to the debtor.

Jimenez opinion

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One Comment

  • MRIAM LOZADA
    Posted April 29, 2015 at 2:15 am | Permalink

    interested in issues with mortgage POC’s

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