Lodge v. Kondaur Capital Corporation

13-10919; D.C. Docket No. 1:10-cv-00736-WCO (May 8, 2014)
The Court of Appeals for the 11th Circuit affirmed the district court's orders granting summary judgment in favor of Defendants. The Circuit Court held that emotional distress damages fall within the broad term of "actual damages" in § 362(k) of the Bankruptcy Code and that, in order to recover "actual" damages for emotional distress under § 362(k), a plaintiff must (1) suffer significant emotional distress, (2) clearly establish the significant emotional distress, and (3) demonstrate a causal connection between that significant emotional distress and the violation of the automatic stay. The Circuit Court found that Plaintiffs did not establish a causal connection between their injuries and the violation of the automatic stay. The Circuit Court also held the district court did not abuse its discretion in declining to take judicial notice of contents of Defendants' websites and a document from the "Georgia Press Association Public Notice Website" because Plaintiffs did not supply the district court with necessary information, such as screen shots or website addresses.
Procedural context:
Plaintiffs filed their complaint against Defendants claiming that they violated (1) the automatic stay in Plaintiff's Chapter 13 bankruptcy case, and (2) the Fair Debt Collection Practices Act ("FDCPA"). The U.S. District Court for the Northern District of Georgia granted Defendants' motions for summary judgment on both claims. Plaintiffs appealed.
Plaintiff obtained a loan secured by real property. Plaintiffs signed a promissory note and executed a secuirty deed giving the lender a security interest in the property. Approximately 5 years later, Plaintiff filed for Chapter 13 bankruptcy relief. During the pendancy of the bankruptcy case, the mortgage was assigned to Defendant Kondaur Capital Corporation ("Kondaur"). Without first obtaining an order modifying the auomatic bankruptcy stay, Defendant McCalla Raymer ("McCalla") submitted a "Notice of Sale" for publication on behalf of Defendant Kondaur so that Kondaur could exercise its rights under the security deed. The Notice of Sale was publised for 1 day before McCalla cancelled the publication. Plaintiffs acknowledged that they never saw the Notice of Sale. Plaintiffs received letters from law firms advising Plaintiffs that they were "about to be foreclosed." Plaintiffs realized that the foreclosure sale had been cancelled, and it never occurred. Plaintiff subsequently completed his Chapter 13 plan and received a discharge. Plaintiffs filed suit against McCalla and Kondaur, claiming that McCalla and Kondaur violated the automatic bankruptcy stay and sought actual damages under § 362(k) of the U.S. Bankruptcy Code for their emotional distress. Plaintiffs also claimed that McCalla and Kondaur were "debt collections" under the FDCPA, pointing to Defendants' websites and a document from the "Georgia Press Association Public Notice Website." With regard to the stay violation claim, the district court determined that the emotional distress injuries set forth in Plaintiffs' affidavits were too generalized and sepculative. With regard to the FDCPA claim, the district court declined to take judicial notice of Defendants' websites and the document from the Georgia Press Association Public Notice Website because they were presented for the first time in Plaintiffs' reply brief, Plaintiffs failed to support it with citations to evidence in the record, and Plaintiffs did not present it in their "Statement of Material Facts Not In Dispute."
Hull, Black and Walter

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