District Court Rules for WFB in Mwangi – Violation of Automatic Stay Case

The District Court has sided with WFB in the class action brought against Wells Fargo Bank in the Mwangi case.  Mwangi is the case where the 9th Circuit BAP ruled that WFB violated the automatic stay by freezing the funds automatically in every bankruptcy case.  The BAP sent it back to Judge Markell for a ruling on damages and Judge Markell ruled after an evidentiary hearing that there were none.  The debtor and their very energetic attorney filed a class action suit against WFB but now the district court has affirmed the bankruptcy court’s dismissal of the case.  A copy of the opinion is here – Mwangi.   My understanding is that WFB continues to freeze the account in every bankruptcy filing.  If that is not the case, I would love to know.  I still warn every client to get their money out of WFB before filing lest it be frozen.  I have to say however that the few times I have had to go to trustees to get the funds unfrozen, it has been handled pretty quickly.

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