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Occupy Bank of America?

posted by Adam Levitin

Who knew that Mitt Romney had outflanked Obama on the left? Well, it took Nixon to go to China, but I expect we'll see a lot of backpedaling here. 

It's a bit troublesome, though, that a Harvard Law grad like Romney would believe that small claims court would possibly be the venue for resolving a wrongful foreclosure. Leaving aside jurisdictional issues, small claims courts are basically debt collection courts:  they're used by debt collectors, not by homeowners who can't afford legal counsel and are seeking injunctive relief. It explains a lot about the state of our legal system if the Romneys of the world honestly believe that small claims court is a the way middle class folks can receive justice. 


I think you are mischaracterizing the issue. He would not be suing to enjoin foreclosure: “So this guy has been paying his mortgage every month. . . . And he’s got all his paperwork in. But Bank of America keeps telling him they are going to foreclose, even though he’s paid and can prove he has paid. . . . Do you have some kind of harassment statute in this state that he can file small claim action against them?'"

The guy wants BOA off his back. That's a suit for an injunction. He might also be able to get damages, but probably can't prevail under the FDCPA, as courts tend to (incorrectly) exclude servicers from the FDCPA's definition of debt collector.

Like Adam, I don't have a consumer practice. But I'm not sure if an injunction is necessary. Even in small claims, a lawyer must show up for a corporation. If some BoA lawyer is told to show up, s/he might examine the files, and decide s/he has better uses of time than cooling his/her heels all day outside a grungy small claims courtroom, waiting to lose the case. This might result in an angry call to the appropriate corporate functionary, telling said functionary to fix the problem.

Also, do small claims courts provide collateral estoppel? (Like I said, I don't do consumer law.) It's not as good as an injunction, but could be mighty useful if future litigation is needed.

No--small claims court does _not_ usually require a party to be represented by counsel. That's why debt collectors like small claims court--they can send a paralegal or a college kid and get a default judgment in most cases. Far, far cheaper than pursuing a judgment in a court of general jurisdiction.

Still, there is the nuisance factor of suing in any court, and perhaps that gets to a settlement. But I doubt it.

I'm a pro tem small claims judge. They aren't courts of record, so 1) there is no res judicata, and 2) there is no record of testimony to establish collateral estoppel.

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