Collections company stuck in payment quagmire

Charlotte Dawley filed criminal charges Dec. 22 in Greene County against The Bank of Missouri.

bCharlotte and Mike Dawley had an award-winning collections business.

In 2007, their Hammer Collections LLC startup was named among the area’s Best Places to Work by Springfield Business Journal. Later that year, the company was an SBJ Economic Impact Awards finalist. In its first year, the firm had collected about $2 million for clients and had 18 employees.

The Dawleys started their business in 2006 in Springfield when they relocated from Pass Christian, Miss., following Hurricane Katrina.

It all went downhill fast, beginning in November 2009, when The Bank of Missouri found the Dawleys defaulted on a roughly $1 million loan through the U.S. Small Business Administration.

“At the time, we were very successful and were being recognized a lot in the paper,” Charlotte Dawley said, adding they had never missed a payment on the loan taken out to build their 8,700-square-foot office building east of the West Bypass and Battlefield Road intersection. “We were even recognized by the SBA. We were asked to come to Jefferson City. That’s where we were honored by the Missouri House of Representatives and the Missouri Senate for our economic impact. And we had come from the hurricane, so it was a real phoenix rises from the ashes story.”

These days, the Dawleys, the defunct Hammer Collections and the entity they established as the landowner for their commercial property are mired in a six-year legal battle that has culminated in the past month in additional court decisions against them and in criminal charges they’ve levied against The Bank of Missouri.  

They’ve long ago returned to Mississippi. The business shuttered in February 2010, and Mike is a residential builder, picking up work where he can. Careers in collections are no longer an option for the couple with collections’ judgments against them.

“The irony hasn’t escaped us,” Mike Dawley said.

Foreclosure and judgments
The Dawleys claim their downward business spiral was triggered when they decided to move a key business account out of The Bank of Missouri in late 2009. At the time, they were moving back to Mississippi to run company operations from there. According to the couple, Hammer Collections always had employees working through a second collections office in Louisiana. However, they were not able to convince enough employees to come to Springfield, so they wanted to move their business account.

They say the bank quickly froze their other accounts and declared their SBA-backed development loan to be in default. Bank officials then moved to foreclose on the property at 3880 W. Battlefield Road.

The Dawleys supplied SBJ a letter from Bank of Missouri dated Nov. 20, 2009, that showed the default occurred Nov. 10. Their payment, which they did not make because of the frozen accounts, had a due date of Nov. 16.

According to the couple, bank officials claimed in court proceedings related to the foreclosure the Dawleys missed their Nov. 16 payment. Almost two years later, in the civil case of The Bank of Missouri v. South Creek Properties, the Greene County Circuit Court determined the foreclosure sale of the Dawleys’ property was valid.

In its 2012 decision in favor of the bank, Judge Jason Brown ruled the Nov. 10, 2009, foreclosure notice was unenforceable, but ultimately the Dawleys had defaulted on their loan. He said they weren’t entitled to a grace period for missed payment because “the business had been shut down; the equipment, furniture and phone system removed; the property was for sale; and the principals were in the process of relocating – most or all of which occurred without prior notice to or discussion with [the] plaintiff.”

The Dawleys say the business was not closed at the time of foreclosure, and they understand the new property owners – Treadwell Enterprises Inc. – still have some of their old office equipment.

In September, the judge sustained the Dawleys’ motion to vacate the 2012 judgment in part, as the ruling related to damages to the Dawleys.

At the heart of the Dawleys’ case is an SBA move to purchase the loan in July 2010. The SBA then charged off the loan in December 2011, sending it to the Treasury Department for collections. Because of this, the Dawleys believe they owe the government, not the bank, and have since made payments to the Treasury. However, on Dec. 3, 2015, the court ruled any payments by the SBA to the bank “would not serve as a credit against or reduction of the amounts owed to (The Bank of Missouri).”

At a Dec. 29 hearing before Brown, Mike Dawley argued for reconsideration of the Dec. 3 ruling and presented evidence they are participating in a federal program to pay back their debt.

“They are not the party of interest,” Mike Dawley told the judge, speaking of The Bank of Missouri. “You didn’t know all the facts. The judgment should be voided.”

In their request for a rehearing, the Dawleys provided documentation to the court the SBA has certified the debt in the form of a Nov. 20 letter from the Treasury.

“The Nov. 20 letter we got was the first time that any government-agency letter we had gotten clearly stated our debt was nontax Treasury debt,” Mike Dawley said.

Springfield attorney Raymond Plaster, representing the bank, said at the hearing the Dawleys’ arguments amounted to extraneous attacks on the judgment.

“This has been briefed to death,” Plaster said, adding the couple was rehashing old arguments, and there was only one debt. “What happens between the SBA and the bank is between us all.”

Plaster declined a request for an interview, saying “the docket and judgment speak for themselves.”

On Jan. 4, Brown denied the Dawleys’ rehearing request. They plan to appeal.

Criminal charges
On Dec. 22, Charlotte Dawley filed formal complaints with the Greene County Sheriff’s Office claiming fraud, felony theft and perjury against Bank of Missouri for efforts to collect money.   

The filing claims the foreclosure proceedings started against the Dawleys’ West Battlefield Road property without cause. In addition, she said the value of the property, $674,820, was to be credited to her account and paid to her creditor. In the filing, Dawley discredited statements by bank employees under oath and to the federal government regarding the value of the property.

For now, the Dawleys owe both the bank and federal government, and those combined totals exceed the original loan.  

“The federal government says, ‘We don’t care what’s going on in the Missouri courts. You can’t use that at all.’ They are blinded to what’s going on here in Missouri,” Charlotte Dawley said.

According to Barbara Caldwell, a spokeswoman for the SBA’s district office in Kansas City, the SBA guarantees a portion of the loans they back, and both the bank and SBA may pursue repayment.

After the Dawleys’ civil motion was denied this month, bank representative Plaster said by email, “As for the criminal allegations, it is my understanding the department where the complaint was filed has determined that it has found no allegation warranting further investigation.”

Lt. Curtis Hunt, who is overseeing the criminal filing for the Sheriff’s Department, could not be reached for comment by press time.