The U.S. Court of Appeals for the Eleventh Circuit has affirmed a lower court’s decision, concluding that a bankruptcy debtor’s claims against The Bank of New York Mellon (BoNYM) were effectively barred by a comprehensive settlement agreement reached two years prior. The ruling marks another chapter in the decade-long, complex litigation history between debtor Shirley White-Lett and BoNYM concerning a mortgage debt originating in 2005.
Shirley White-Lett, who has been representing herself throughout this protracted legal battle, appealed the district court’s order, which upheld the bankruptcy court’s grant of summary judgment in favor of BoNYM. The core issue revolved around whether White-Lett’s third adversary proceeding—alleging that BoNYM was liable for violations of the bankruptcy discharge injunction by its loan servicer, Select Portfolio Services (SPS), between 2013 and 2016—was covered by the sweeping release terms of a December 2022 settlement.
A Decade of Disputes and Bankruptcy
White-Lett initially filed for Chapter 7 bankruptcy in 2010. Although she listed Bank of America (the then-servicer) as a secured creditor and intended to reaffirm the debt, no reaffirmation agreement was ever filed with the court. Consequently, she received a discharge in 2011, which legally discharged her personal liability for the mortgage debt.
However, the relationship remained contentious. Over the following years, various loan servicers, including SPS and Shellpoint Mortgage Servicing, attempted to collect the mortgage. White-Lett argued these collection efforts violated the bankruptcy court’s discharge injunction.
Her litigation history is extensive, involving multiple adversary proceedings in bankruptcy court and appeals reaching the district court. Key to the current appeal is the history surrounding the discharge injunction violation claims.
In her first adversary proceeding, White-Lett sued BoNYM’s parent company, SPS, and Shellpoint, seeking sanctions for alleged violations of the discharge injunction. While the bankruptcy court found that SPS had violated the injunction, it required a trial to determine if SPS knew about the injunction before imposing sanctions. This matter eventually led to a separate appeal concerning SPS’s liability.
In a second adversary proceeding, White-Lett challenged BoNYM’s proof of claim, which stood at over $886,000 after the bankruptcy case was reopened in 2020. She also alleged Bank of America had violated the discharge injunction between 2010 and 2013. The bankruptcy court dismissed some claims but allowed the core discharge injunction claim against BoNYM to proceed.
The Decisive Settlement Agreement
The pivotal event leading to the current appeal was the December 2022 settlement agreement between White-Lett and BoNYM. This agreement was designed to resolve *some*, but not all, of their ongoing disputes across several active cases.
Under the terms, BoNYM paid White-Lett $18,000. In exchange, White-Lett agreed to release BoNYM and its parent company from “all past and present claims” related to violations of bankruptcy law occurring before January 1, 2017.
The agreement, governed by Georgia contract law, contained specific carve-outs, allowing White-Lett to continue pursuing certain claims. Crucially, the claims she *did not* release included those asserted in a 2017 district court action (involving FDCPA and RESPA claims) and any rights or claims at issue in two specific pending district court appeals: one concerning the dismissal of her objection to BoNYM’s proof of claim (Case 1:22-cv-00082) and another concerning the termination of the automatic stay on her property (Case 1:22-cv-03992).
The Third Adversary Proceeding Blocked by Contract
The current appeal stems from White-Lett’s third adversary proceeding, filed after the settlement. In this proceeding, she sued BoNYM alone, seeking contempt and damages based on SPS’s alleged discharge injunction violations between November 2013 and December 2016. She argued that BoNYM was liable because SPS acted as its agent, relying on an earlier bankruptcy court finding that SPS had, in fact, violated the injunction.
BoNYM moved for summary judgment, asserting the settlement agreement barred these claims because the alleged violations occurred before the January 1, 2017 cut-off date referenced in the general release.
The bankruptcy court agreed, finding the settlement terms “clear and unambiguous.” White-Lett countered that her claims fell under the carve-out provision related to the automatic stay appeal (1:22-cv-03992). She argued that by filing a motion for a stay in that appeal—where she mentioned potential setoffs from damages recovered in her other proceedings—she had placed the issue of BoNYM’s liability for SPS’s violations “at issue.”
Both the bankruptcy court and the district court rejected this reading. They noted that the appeal in 1:22-cv-03992 was fundamentally about whether the automatic stay on her real property had terminated. The district court found no substantive connection between that appeal and the specific liability of BoNYM for SPS’s pre-2017 collection activities, as White-Lett had not actually pursued a claim against BoNYM for SPS’s actions in the first or second adversary proceedings.
The Eleventh Circuit’s Affirmation
The Eleventh Circuit reviewed the bankruptcy court’s summary judgment decision *de novo*, applying standard contract interpretation rules under Georgia law.
The appellate panel agreed with the lower courts. The claims in the third adversary proceeding clearly fell within the scope of the general release, covering bankruptcy law violations before January 1, 2017.
The court systematically dismantled the argument that the carve-out saved the claims. The appellate judges found that the arguments White-Lett raised in her motion to stay (in the automatic stay appeal) were about potential setoffs if she won damages in *other* proceedings. However, the court confirmed that White-Lett had never asserted a claim *against BoNYM* for SPS’s 2013-2016 violations in those other proceedings. In the first adversary proceeding, for example, she sued the parent company and refused to substitute BoNYM as the defendant.
Finally, White-Lett attempted a new argument on appeal: that the entire release was unenforceable due to a lack of consideration. The Eleventh Circuit quickly dismissed this, stating that because she failed to raise the issue in the bankruptcy court or the initial district court appeal, she had forfeited the argument.
Finding no error in the lower courts’ interpretation of the unambiguous settlement contract, the Eleventh Circuit affirmed the district court’s order, effectively ending White-Lett’s ability to pursue these specific claims against BoNYM.