Published On: April 18, 2017

Bank of America Hit with $45 Million in Punitive Damages for Bankruptcy Stay Violations

In re: Sundquist v. Bank of America, NA | Bank of America Hit with $45 Million in Punitive Damages for Stay Violations

In re: ERIK SUNDQUIST and RENÉE SUNDQUIST, Debtors SUNDQUIST v. BANK OF AMERICA, N.A.; RECONTRUST COMPANY, N.A.; BAC HOME LOANS SERVICING, LP, Defendants, United States Bankruptcy Court for the Eastern District of California,March 23, 2017, Adv. Pro. No. 14-02278, Case No. 10-35624-B-13J

In an article published by the National Consumer Bankruptcy Rights Center outlines the completely irresponsible and illegal actions of Bank of America.  The homeowners, like thousands before them, followed their bank’s direction to default on their home loan so they could qualify for a loan modification.  B of A constantly lost paperwork, denied modification with no reason, starting and stopping foreclosures, ignoring the automatic stay when filing for bankruptcy, along with many other outrageous actions.

“The mirage of promised mortgage modification lured the plaintiff debtors into a kafkaesque nightmare of stay-violating foreclosure and unlawful detainer,” for which the court ordered over $1 million dollars in actual damages plus a significant punitive damage award. Sundquist v. Bank of America, No. 10-35624, Adv. Proc. No. 14-2278 (Bankr. E.D. Cal. March 23, 2017).

Bank of America willfully violated the automatic stay by:

among other things, foreclosing on the Sundquist residence, prosecuting an unlawful detainer action, forcing them to move, secretly rescinding the foreclosure, failing to protect the residence from looting, refusing to pay for Sundquist property lost, and subjecting the Sundquists to a mortgage modification charade. Pursuant to § 362(k)(1), Bank of America is liable for all damages incurred between the initial violation of the automatic stay and the time the stay violation is fully remedied (which remedy comes in this decision and accompanying judgment).

Bank of America sent thugs to stake out the residence and intimidate the family

The Sundquists filed for chapter 13 bankruptcy under threat of imminent foreclosure. After foreclosing in violation of the stay, Bank of America sent thugs to stake out the residence and intimidate the family, and gave them a three-day notice of eviction causing the Sundquists and their children to find temporary housing. Upon learning that they were no longer the owners of the home, the Sundquists voluntarily dismissed their bankruptcy case thereby ending the automatic stay. Meanwhile, and without the Sundquists’s knowledge, Bank of America rescinded the foreclosure and returned title of the home to them. When they later returned to the house they found that major appliances had been removed. In keeping with its conduct throughout, Bank of America attempted to collect mortgage payments for the months the Sundquists had been without their home.

Bank of America found to willfully cause extreme emotional distress

The court found Bank of America’s conduct to be willful and intentional and that it resulted in “emotional distress, lost income, apparent heart attack, suicide attempt, and post-traumatic stress disorder, for all of which Bank of America disclaim[ed] responsibility.”

Awarded $1 million in actual damages and $45 million in punitive damages

the court ordered that a portion of the punitive damages be directed to seven entities: the National Consumer Bankruptcy Rights Center, the National Consumer Law Center and five University of California Law Schools.

The decision is likely to be appealed.

By |Published On: April 18th, 2017|Last Updated: October 17th, 2022|

Share this article

About the Author: Diane Drain

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Google Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Yelp Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Avvo Reviews
Avvo - Rate your Lawyer. Get Free Legal Advice.
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Alignable Reviews
Law Office of D.L. Drain, P.A., Arizona Bankruptcy Lawyer - Better Business Bureau
5 / 5

“You folks are the BEST OF THE BEST in Arizona.” M.H.

You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.

5 / 5

“My only regret is that I didn’t find Diane sooner.” K.H.

I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.

5 / 5

“Filing for bankruptcy can be a stressful life event” R.A.

Filing for bankruptcy can be a stressful life event, and selecting the right attorney can add to this stress. Diane and Jay were a pleasure to work with, and it is obvious that they are passionate about helping people get their life back on track. I would highly recommend them if you need a bankruptcy attorney.

Related Posts

  • Published On: July 24, 2022

    Want to avoid dishonest debt collectors?  Watch this video from FTC’s Consumer Advice By Joseph Ferrari,July 22, 2022 (reprint from FTC, Consumer Alerts) During Military Consumer Month 2022, the FTC [...]

  • Published On: July 20, 2022

    BEWARE OF THE SECRET COSTS OF USING ‘BUY NOW PAY LATER’!! What You May Not Know About These Services Services like “buy now pay later” now account for $100 [...]

  • Published On: June 13, 2022

    Diane Drain received the 2022 Preeminent Award and Gold Client Champion Award from Martindale-Hubbell. The 2022 AV Preeminent award is given to an "elite group of attorneys who have been rated highly by their peers [...]

  • Published On: April 16, 2022

    ARIZONA IS ONE OF 2 STATES THAT WILL TAKE YOUR TAX REFUND IF THIS HAPPENS.  SHOULD THE LAW CHANGE? By RUSS WILES, Arizona Republic (reprinted for educational purposes only) Tens of millions of Americans [...]

My intention is to put you back in control of your life
Start with $0 down*. We provide affordable payment plans.

FREE CONSULTATION