Wingate v. BlueChip Financial Settlement
Bankruptcy Case No. 15-35033-KLP
Adversary Proceeding No.17-04453-KLP
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
IF YOU OBTAINED A LOAN FROM BLUECHIP FINANCIAL
AND AMERICAN INFOSOURCE, L.P., ON BEHALF OF BLUECHIP, FILED A CLAIM IN YOUR BANKRUPTCY CASE IN THE EASTERN DISTRICT OF VIRGINIA THAT WAS PENDING AS OF JUNE 13, 2017, YOU MAY BE ENTITLED TO LOAN FORGIVENESS AND A CASH PAYMENT FROM A CLASS ACTION SETTLEMENT.
A Settlement has been proposed in a class action lawsuit (“Lawsuit”) brought under federal law against BlueChip Financial d/b/a Spotloan, Inc. (“BlueChip”) and American InfoSource, L.P. (“American InfoSource”) (together, the “Defendants”) on behalf of all individuals that obtained a loan from BlueChip and upon such loan American InfoSource filed a proof of claim in those individuals’ chapter 13 bankruptcy case that was open and pending as of June 13, 2017 before the United States Bankruptcy Court for the Eastern District of Virginia (the “Class Members”).
In the Lawsuit, it was alleged that American InfoSource, on behalf of BlueChip, filed proofs of claim in certain chapter 13 bankruptcy cases pending before the Bankruptcy Court in the Eastern District of Virginia and that the filing of those proofs of claim violated the Fair Debt Collection Practices Act and violated Federal Rule of Bankruptcy Procedure 3001.
Under the proposed Settlement, Defendants will pay a total of $70,000 into a Fund, which will be allocated to compensate Class Members under the Settlement. Defendants will also return to chapter 13 trustees payments they have received from the bankruptcy estates of Class Members whose bankruptcy cases are still open. Defendants further agree to not collect on or enforce the unpaid loans of the Class Members upon which the proofs of claim were filed. Also, Defendants will pay the actual costs associated with issuing the class notices. In exchange, the Class Members will release the Defendants from any claims or liability under any state, federal, or other law arising out of the acts alleged in the Lawsuit.
The details of this Settlement are set forth in detail below.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT
|IF YOU DO NOTHING||You will remain a member of the Settlement Class and be eligible for benefits, including any cash payments. However, you give up rights to ever sue the Defendants about the legal claims in this Lawsuit, or any legal claims that could have been brought in the Lawsuit, including claims based on loans obtained from BlueChip.|
|IF YOU EXCLUDE YOURSELF||You can opt out of the Settlement and you will not be eligible for any benefits, including any cash payments that you may be eligible for. This is the only option that allows you to be part of another lawsuit against the Defendants involving the claims in this Lawsuit or any legal claims that could have been brought in the Lawsuit, including claims based on loans obtained from BlueChip.|
|IF YOU OBJECT||If you do not exclude yourself, you may write to the Court about why you don’t like the Settlement.|
Frequently Asked Questions:
1. What is this lawsuit about?
Dori Danyelle Wingate (the “Plaintiff”) claims that Defendants improperly failed to disclose that interest was included in the proof of claim amount when American InfoSource filed proofs of claim in various chapter 13 bankruptcy cases on account of loans issued by BlueChip. The Plaintiff alleges that American InfoSource violated the Federal Fair Debt Collection Practices Act and BlueChip violated Federal Rule of Bankruptcy Procedure 3001.
Although Defendants admit that they filed proofs of claim in the Bankruptcy Court that inaccurately stated no interest was included in the claim amount and that failed to attach the contract underlying the claim, Defendants deny liability on Plaintiff’s claims. Defendants assert numerous defenses, including that any issues with respect to the proofs of claim that were filed in the bankruptcy cases were nullities because the Defendants promptly withdrew or amended the proofs of claim once these issues arose. Defendants also assert that Plaintiff and Class Members waived the ability to sue in court, and that the Plaintiff’s claims are barred because the Bankruptcy Court lacks subject matter jurisdiction.
2. How do I know if I am affected by the settlement?
You are a member of the Settlement Class and affected by the Settlement if you obtained a loan from BlueChip, and filed a chapter 13 bankruptcy in the Bankruptcy Court for the Eastern District of Virginia that was open and pending as of June 13, 2017, and American InfoSource filed a proof of claim in that bankruptcy for a BlueChip loan.
If you fall within the Settlement Class definition above, you will be a Class Member unless you exclude yourself from the Settlement Class.
3. What does the settlement provide to class members?
Defendants will take certain steps that will pay Class Members and benefit Class Members.
- Defendants will adjust to zero the balance of any unpaid loans of the Class Members on which American InfoSource filed a proof of claim in a Class Member’s bankruptcy case. If Defendants had received payment on those proofs of claim by a chapter 13 trustee, Defendants will return those funds directly to the applicable chapter 13 trustee if the bankruptcy case is still open.
- Defendants will pay $70,000 into a Fund, which will be used to make payments to Class Members. If the Court approves the Settlement and if you qualify, a check for your portion of the Fund will be mailed to you automatically and without you having to do anything. Each Class Member shall be entitled to, at the least, a minimum distribution of $50.00, plus an additional refund of a portion of any payments made on the loan prior to filing for bankruptcy. Class Members will receive a notice, indicating the minimum payment they will receive.
- Class Members who do not opt out agree to release the Defendants from any liability the Defendants may have under the Fair Debt Collection Practices Act, the Bankruptcy Rules, and any other federal, state, tribal, or other law related to any issues that could have been raised in the Lawsuit.
4. What do I have to do to receive my payment?
Nothing. A check will be mailed automatically approximately 60 days after the Court grants final approval of the Settlement and any appeals are resolved. The check will be mailed to the same address as this Notice, so please update your address if you move. You can send a change of address to Lauren Friend McKelvey, Odin, Feldman & Pittleman P.C., 1775 Wiehle Avenue, Suite 400, Reston, Virginia 20190, and include “Wingate v. BlueChip Financial Settlement”, your full name, and your new address.
5. What am I giving up to get a benefit and stay in the settlement class?
Unless you exclude yourself, you are a member of the Settlement Class. You are giving up the right to sue or continue to sue, or be part of any other lawsuit against the Released Parties concerning the proofs of claim filed by American InfoSource on behalf of BlueChip or the loans issued by BlueChip. The Released Parties include Defendants as well as any entities affiliated with Defendants; those entities include Defendant’s past, present, and future parents, subsidiaries, divisions, affiliates, holding companies, divisions, unincorporated business units, joint ventures, companies with direct or indirect interests in loans issued by Defendants, business partners, predecessors, and successors in interests. The Released Parties also include all of Defendants’ and Defendants’ Affiliates’ employees, assigns, attorneys, accountants, agents, representatives, officials, associates, trustees, suppliers, resellers, vendors, service providers, insurers, indemnitors, officers, directors, and shareholders.
Staying in the Settlement Class means that you will have the right to all of the benefits, including the minimum cash payment in exchange for releasing all claims against the Released Parties arising out of or relating in any way to the facts and omissions at issue in the Lawsuit, the proofs of claim filed by American InfoSource on behalf of BlueChip, and your BlueChip loans, regardless of whether such claim is known or unknown. Staying in the Settlement Class also means that all of the Court’s orders will apply to you and legally bind you.
6. How do I exclude myself from participation in the settlement?
To opt out, you must send an “Exclusion Request” by mail, stating that you want to be excluded from “Wingate v. BlueChip FinancialSettlement”. You must include your name, address, and telephone number. You must also include words to the following effect: “I request to be excluded from the class settlement in this case,” and sign your letter. You must mail your Exclusion Request such that it is postmarked on or before May 14, 2018 to Lauren Friend McKelvey, Odin, Feldman & Pittleman, P.C., 1775 Wiehle Avenue, Suite 400, Reston, Virginia.
7. How do I tell the court that I do not like the settlement?
If you are a Class Member, you can object to the Settlement if you do not think any part of the Settlement is fair, reasonable, or adequate. You can and should explain the detailed reasons why you think that the Court should not approve the Settlement, if this is the case. The Court and Class Counsel will consider your views carefully. To object, you must send a letter stating that you object to the Settlement in In re Wingate, Case No. 15-35033-KLP to:
|COURT||CLASS COUNSEL||DEFENDANT’S COUNSEL|
|Clerk of the Court
U.S. Bankruptcy Court
701 East Broad Street,
Richmond, VA 23219
|Mark C. Leffler
Boleman Law Firm, P.C.
P.O. Box 11588
Richmond, VA 23230-1588
|Lauren Friend McKelvey
ODIN, FELDMAN &
1775 Wiehle Avenue,
Reston, Virginia 20190
All objections must include: (i) the name of the Wingate Bankruptcy Case (In re Wingate); (ii) the objector’s name, address and telephone number; (iii) a statement confirming that he or she is a Class Member; (iv) any factual basis and legal grounds for the objection to the Settlement; and (v) a list of any prior cases in which the objector or the objector’s counsel have objected to a class settlement. Counsel representing an objecting Class Member must enter an appearance in the Bankruptcy Case No. 15-35033-KLP.
Objections must be postmarked no later than May 14, 2018.
8. What is the difference between objecting and excluding?
Objecting is simply telling the Court that you do not like something about the Settlement. You can object only if you remain in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class. If you exclude yourself, you have no basis to object to this Settlement because the case no longer affects you.
9. When and where will the court decide whether to approve the settlement?
The Court will hold a hearing to decide whether to approve the Settlement. You may attend the hearing and you may ask to speak, but you do not have to.
The Court will hold a Final Fairness Hearing on July 19, 2018 at 11:00 AM in the courtroom of Judge Keith L. Phillips of the United States Bankruptcy Court for the Eastern District of Virginia, 701 East Broad Street, Richmond, VA 23219. At this hearing, the Court will consider whether the Settlement is fair, reasonable, and adequate.
10. Do I have a lawyer in the case?
Yes. The Plaintiff retained Thomas Domonoske of Consumer Litigation Associates, P.C., 763 J. Clyde Morris Blvd., 1A, Newport News, VA 23601; Mark C. Leffler of the Boleman Law Firm, P.C., P.O. Box 11588, Richmond, VA 23230; and Dale W. Pittman of The Law Office of Dale W. Pittman, P.C., 112-A W. Tabb St., Petersburg, VA, 23803, to represent you and the rest of the Settlement Class. In connection with the preliminary approval of the Settlement, the Court appointed these attorneys to represent you and other members of the Settlement Class. Together, the attorneys are called “Class Counsel.” These lawyers will not separately charge you for their work on the case. If you want to be represented by your own lawyer, you may hire one at your own expense.
11. How will the lawyers be paid?
Class Counsel will ask the Court for an award of attorneys’ fees and expenses of $96,500. These funds will be paid by the Defendants pursuant to the Settlement Agreement. The attorneys’ fee award is based on the reasonable hours incurred by Class Counsel because the two claims are fee-shifting claims. Under fee-shifting claims, Plaintiffs may request that Defendants pay those attorneys’ fees in addition to any recovery for the Class Members. The Court must approve the fee award before it is paid.
Class Counsel will also ask the Court to approve a $3,000 payment to Dori Danyelle Wingate, the Named Plaintiff. The Named Plaintiff made substantial contributions in the prosecution of this Lawsuit for the benefit of the Settlement Class. The Court must approve the fee award before it is paid.
The Court will ultimately decide how much Class Counsel and the Named Plaintiff will be paid. Any of these amounts approved by the Court will not change the recovery to Class Members.
12. How do I get more information?
This Notice summarizes the proposed Settlement. More details are in the Settlement Agreement. You can get a copy of the Settlement Agreement and other relevant case-related documents by visiting https://www.ofplaw.com/virginiaclaimsettlement/, or by writing or calling Class Counsel at the address and telephone numbers below:
|Thomas Domonoske Esq.
763 J. Clyde Morris Blvd,
Newport News, VA 23610
|Mark C. Leffler
Boleman Law Firm, P.C.
P.O. Box 11588
Richmond, VA 23230
|Dale W. Pittman
The Law Office of Dale W. Pittman, P.C.
112-A W. Tabb Street
Petersburg, VA 23803
DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR THE LITIGATION TO THE CLERK OF THE COURT, THE JUDGE, THE DEFENDANTS OR THE DEFENDANTS’ COUNSEL.
THEY ARE NOT PERMITTED TO ANSWER YOUR QUESTIONS.
DOCUMENT 1 CLASS ACTION COMPLAINT
DOCUMENT 1-1 EXHIBIT 1 TO COMPLAINT
DOCUMENT 1-2 EXHIBIT 2 TO COMPLAINT
DOCUMENT 1-3 EXHIBIT 3 TO COMPLAINT
DOCUMENT 1-4 EXHIBIT 4 TO COMPLAINT
DOCUMENT 1-5 EXHIBIT 5 TO COMPLAINT
DOCUMENT 1-6 EXHIBIT 6 TO COMPLAINT
DOCUMENT 16 MOTION TO DISMISS COMPLAINT
DOCUMENT 19 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
DOCUMENT 20 ANSWER TO COMPLAINT
DOCUMENT 24 PLAINTIFF’S OPPOSITION TO ARBITRATION MOTION
DOCUMENT 25 PLAINTIFF’S OPPOSITION TO DISMISSAL MOTION
DOCUMENT 27 CONSENT MOTION TO ORDER JUDICIAL MEDIATION
DOCUMENT 58 MOTION FOR PRELIMINARY APPROVAL
DOCUMENT 58-1 NOTICE OF HEARING ON MOTION FOR PRELIMINARY APPROVAL
DOCUMENT 58-2 EXHIBIT A SETTLEMENT AGREEMENT
DOCUMENT 58-3 EXHIBIT C DECL. OF PITTMAN
DOCUMENT 58-4 EXHIBIT C DECL. OF DOMONOSKE
DOCUMENT 58-5 EXHIBIT D DECL. OF LEFFLER
DOCUMENT 58-6 EXHIBIT E OF DECL. OF KENNEDY
DOCUMENT 64 ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT
MOTION TO LIMIT PARTIES RECEIVING NOTICE AND TO SHORTEN THE NOTICE PERIOD
DOCUMENT 69 ORDER GRANTING MOTION TO LIMIT AND SHORTEN NOTICE
DOCUMENT 70 MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT
DOCUMENT 70-1 NOTICE OF MOTION FOR FINAL APPROVAL
DOCUMENT 70-2 ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT (UNENDORSED)
DOCUMENT 70-3 FINAL ORDER AND JUDGMENT DISMISSING ADVERSARY PROCEEDING WITH PREJUDICE
DOCUMENT 70-4 DECLARATION OF LAUREN FRIEND MCKELVEY
DOCUMENT 70-5 SUPPLEMENTAL DECLARATION LETTER OF MARK LEFFLER
DOCUMENT 70-6 DECLARATION OF THOMAS D. DOMONOSKE
DOCUMENT 70-7 SUPPLEMENTAL DECLARATION OF DALE W. PITTMAN
DOCUMENT 72 AMENDED NOTICE OF MOTION FOR FINAL APPROVAL
DOCUMENT 75 ORDER GRANTING MOTION FOR FINAL APPROVAL
ADVERSARY DOCUMENT 53 ORDER DISMISSING ADVERSARY PROCEEDING