O. Max Gardner III has been counsel
of record in a number of successful
class actions filed before the
United States Bankruptcy Court for the
Western District of North Carolina.
Most of these cases involved the
unlawful actions of mortgage
lenders and motor vehicle creditors in adding
improper legal fees and other
charges to sworn proofs of claim filed in
Chapter 13 bankruptcy cases.
For example, in Smith v. The Money
Store the Court held that the preparation
and filing of a proof of claim
was not a legal service and therefore absent
extraordinary circumstances a
creditor would never be entitled to such a fee
in a consumer bankruptcy case.
The court therefore struck the fee and
ordered The Money Store to amend
all claims in any pending Chapter 13 cases.
This decision had a national
impact on the practice of charging debtors for
the creditor filing proof of
its debt with the court.
In Phelps v. Key Bank, the court
found that the creditor had violated the
automatic stay of the Bankruptcy
Code by including a "hidden legal fee" in a
deficiency claim after the creditor
sold the vehicle at public sale. In
addition to imposing monetary
sanctions, the court ordered the Bank to amend
every proof of claim in any pending
Chapter 13 case in the Western District
of North Carolina.
In a class action filed against
Daimler-Chrysler Corporation, the court
found that the imposition of
a flat fee of $290.00 in every Chapter 13 case
without notice and court approval
violated the bankruptcy laws.
Daimler-Chrysler was therefore
ordered to amend all of its claims in pending
Chapter 13 cases and to refund
any payments received on these improper
claims. |
