553 B.R. 448
Bankr. M.D. Ala.2016Background
- Debtor Angela Campbell filed Chapter 13 on Nov. 12, 2015 and listed student loan debt; case confirmed and estate property remained property of the estate.
- Dennis Scott Carruthers (a California attorney) and an employee, "Brian Bell," contacted Campbell in Jan.–Feb. 2016 to collect the student loan debt after learning she was in bankruptcy.
- Bell coerced Campbell into giving debit card information, and Carruthers’s office withdrew $50 on Jan. 21 and $50 on Feb. 15, causing overdraft fees and requiring a payday loan to cover the account.
- Campbell sued for willful violation of the automatic stay and FDCPA violations; Carruthers was served, failed to answer, and default was entered.
- At a damages hearing Defendants did not appear; the court found willful stay violations and multiple FDCPA violations and entered judgment for Campbell.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether withdrawing funds from debtor's bank account violated the automatic stay | Campbell: withdrawals were acts to exercise control over estate property and to collect prepetition debt | Carruthers: (no answer/appearance) impliedly no contest; no factual defense presented | Court: Withdrawals violated §§362(a)(3) and (6); violation was willful because agent knew of bankruptcy and withdrawals continued after suit |
| Whether Carruthers is a "debt collector" subject to the FDCPA and engaged in prohibited collection practices | Campbell: Carruthers regularly collects debts for others; agent misrepresented status and threatened garnishment to coerce payment | Carruthers: (no answer) no contest asserted | Court: Carruthers is a debt collector; actions violated §§1692e and 1692f (misrepresenting attorney status, threats, deceptive means) |
| Whether Campbell proved emotional distress damages | Campbell: seeks $5,000 for distress, lost sleep, anxiety | Carruthers: (no answer) no rebuttal | Court: Emotional distress not proven under Lodge standard (no medical treatment or missed work); award denied |
| Appropriate damages (actual, statutory, attorney's fees, punitive) | Campbell: seeks recovery of withdrawals, overdraft fees, attorney fees, statutory FDCPA damages, punitive damages | Carruthers: (no answer) no mitigation offered | Court: Awarded $54,550 total — $800 actual (withdrawals + overdrafts), $3,250 attorney fees (so far), $1,000 FDCPA statutory damages, $50,000 punitive damages for egregious, willful conduct |
Key Cases Cited
- Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (2015) (Article III consent/waiver principle for non-Article III adjudicators)
- Jove Eng’g, Inc. v. I.R.S., 92 F.3d 1539 (11th Cir. 1996) (willfulness for §362 requires knowledge of stay and intentional violative act)
- LeBlanc v. Unifund CCR Partners, 601 F.3d 1185 (11th Cir. 2010) (least‑sophisticated-consumer standard for FDCPA claims)
- Lodge v. Kondaur Capital Corp., 750 F.3d 1263 (11th Cir. 2014) (standard for proving emotional‑distress damages from stay violations)
- Green Point Credit, LLC v. McLean, 794 F.3d 1313 (11th Cir. 2015) (applying Lodge standard to injunction contexts)
- Vaughn v. Cent. Miss. Credit Corp., 542 B.R. 589 (Bankr. M.D. Ala. 2015) (awarding damages for stay violation, including recovery for lost use of funds and fees)