Which debts are discharged in bankruptcy, and which are not? The complaint for this class action alleges that country club fees, even though linked to the person’s community of residence, are discharged—and that Toll Bros., Inc. cannot continue to dun people for them after bankruptcy.
The Toll Golf Country Club Membership Class is all consumers who (a) bought a membership in a country club owned and operated by Toll Golf, (b) were subsequently granted a discharge of the contract under 11 USC § 727, and (c) were thereafter sent a collection letter by Toll Brothers (by e-mail or regular mail) in substantially the same form as the letter that is Exhibit A in this case, trying to collect country club membership fees.
Toll Bros., Inc. builds communities centered around golf courses and country clubs. A separate entity, Toll Golf & Country Club, owns the golf courses and country clubs. When a person buys a home in one of these communities, the declaration of covenants requires the homeowners to buy a country club membership.
Payments are made to the Golf & Country Club entity, not to Toll Bros. However, Toll Bros. collects the country club fees.
After the 2008 financial crisis, the complaint says, many of the Toll Bros. homeowners had to file for Chapter 7 bankruptcy. One of them is Phillip Kurilchik, the plaintiff in this case.
Kurilchik bought his home in 2006. He paid a $2,600 membership fee to Belmont Country Club, which is owned and operated by Toll Golf & Country Club. Thereafter, he paid a monthly fee of only about $100. The country club offers access to its restaurant, tennis court, golf course, swimming pool, and other amenities.
Toll Bros. sends out the monthly statements and collects the money for the country club.
Kurilchik filed for bankruptcy in January 2013. In May of that year, he was granted a Chapter 7 discharge. The complaint alleges that any money owed for the country club should have been discharged in the bankruptcy.
The complaint says that the only exception to debt discharged in his bankruptcy would have been homeowners’ association assessment fees. This is to protect homeowners’ associations from being taken advantage of by individuals who file for bankruptcy but continue to enjoy the benefits provided by the homeowners’ association. Still, Toll Bros. is trying to collect around $10,000 in owed country club fees from Kurilchik.
Because Toll Bros. is not the country club, the complaint considers it a third-party debt collector and brings suit under the Fair Debt Collection Practices Act (FDCPA).