A lengthy and complex legal battle involving bankruptcy debtor Shirley White-Lett and The Bank of New York Mellon (BoNYM) has reached another conclusion, with the Eleventh Circuit Court of Appeals affirming a lower court’s decision. The core issue revolved around a 2022 settlement agreement that the courts found barred White-Lett from pursuing claims related to alleged violations of a prior bankruptcy discharge injunction by loan servicers.
Shirley White-Lett, who represented herself throughout these proceedings (proceeding *pro se*), has been litigating against BoNYM and its related entities regarding a mortgage loan taken out in 2005. Her case history is a labyrinth of adversary proceedings, district court appeals, and reopenings of her initial 2010 Chapter 7 bankruptcy case.
The Road to the Settlement
The legal entanglement stems from White-Lett’s 2010 bankruptcy filing, where she listed Bank of America (the then-servicer) as a secured creditor. Although she indicated an intent to reaffirm the debt, no formal reaffirmation agreement was filed with the court before her discharge in 2011. When the loan servicing later transferred to other companies, including Select Portfolio Services (SPS) and Shellpoint Mortgage Servicing, attempts to collect the mortgage debt began. White-Lett argued these collection efforts violated the bankruptcy court’s discharge injunction—the court order wiping out personal liability for certain debts.
Her litigation efforts have been multifaceted. In earlier proceedings, she sued various parties, challenging the validity of the security deed itself, which was dismissed based on *res judicata* (a matter already judged). She also filed claims under consumer protection laws like FDCPA and RESPA.
Crucially, when her bankruptcy case was reopened in 2020, BoNYM filed a proof of claim for over $886,000. This reopened the door for White-Lett to challenge the claim and pursue relief for alleged discharge injunction violations by the servicers acting as BoNYM’s agents.
The Decisive Settlement Agreement
In December 2022, after several rounds of litigation, White-Lett and BoNYM signed a settlement agreement intended to resolve some, but not all, of their disputes. BoNYM paid White-Lett $18,000. In exchange, White-Lett released BoNYM and its parent company from “all past and present claims” relating to bankruptcy law violations occurring *before January 1, 2017*.
The agreement, governed by Georgia contract law, contained specific carve-outs, meaning certain claims were explicitly *not* released. For instance, she preserved claims arising from a 2017 federal lawsuit (involving FDCPA/RESPA) and claims related to two specific pending district court appeals: one concerning the validity of BoNYM’s proof of claim (Case 1:22-cv-00082) and another concerning the termination of the automatic stay (Case 1:22-cv-03992).
The Third Adversary Proceeding and the Barred Claims
Less than a year after signing the deal, White-Lett filed the “third adversary proceeding,” which is the subject of this current appeal. In this new action, she sought to hold BoNYM liable for alleged violations of the discharge injunction by SPS between November 2013 and December 2016, arguing SPS acted as BoNYM’s agent.
BoNYM moved for summary judgment, asserting the settlement agreement barred these claims. The bankruptcy court agreed, finding the claims fell squarely within the release provision covering bankruptcy violations before January 1, 2017.
White-Lett countered by arguing her claims were saved by the carve-out provision related to the automatic stay appeal (1:22-cv-03992). She contended that by mentioning potential setoffs based on damages she might win in other proceedings during that stay appeal, she put the issue of BoNYM’s liability for SPS’s actions “at issue” in that appeal.
The Eleventh Circuit’s Ruling
The Eleventh Circuit Court of Appeals reviewed the matter *de novo*, treating the bankruptcy court’s grant of summary judgment as a matter of law. The appellate panel affirmed the lower courts, finding the settlement agreement unambiguously barred White-Lett’s claims.
The court focused on two key points:
1. Scope of the Release: The claims in the third adversary proceeding—liability for SPS’s actions between 2013 and 2016—clearly related to bankruptcy law violations occurring before the January 1, 2017 cutoff date specified in the general release.
2. Failure of the Carve-Out: The court rejected White-Lett’s attempt to fit her claims within the carve-out for the automatic stay appeal (1:22-cv-03992). The primary issue in that appeal was simply whether the automatic stay on her property had terminated in 2012. While White-Lett mentioned potential setoffs based on damages from *other* proceedings in a motion filed within that appeal, the court found no evidence that the specific claim—BoNYM’s liability for SPS’s pre-2017 violations—was actually “at issue” or disputed in the automatic stay litigation itself. Furthermore, the court noted that in the first adversary proceeding, White-Lett had specifically refused to substitute BoNYM as a defendant when she sued the parent company for SPS’s actions, weakening her current assertion that BoNYM was already on notice for those specific claims in the context of the prior litigation.
The appellate court also dismissed a late argument raised by White-Lett concerning a lack of consideration for the release, noting that since this argument was raised for the first time on appeal and not in the lower courts, it was forfeited.
Ultimately, the Eleventh Circuit concluded that the settlement agreement was clear, unambiguous under Georgia contract law, and effectively waived White-Lett’s right to pursue the claims detailed in the third adversary proceeding.