Kenneth Lodge v. Kondaur Capital Corporation
750 F.3d 1263
| 11th Cir. | 2014Background
- Lodges obtained a $156,800 loan secured by a mortgage in 2000; First Franklin held the note and deed of trust.
- Kenneth Lodge filed Chapter 13 in 2005, triggering automatic stays under 11 U.S.C. § 362(a)(4), (a)(6).
- In 2008, McCalla (for Home Loan Services) moved for relief from stay; later Kondaur acquired the note and security deed; motions were not ruled on by the bankruptcy court.
- In 2009, Kondaur/McCalla filed a foreclosure referral and a Notice of Sale, published March 12, 2009, which was canceled the same day; Lodges did not see the Notice then.
- By April 7, 2009, Lodges learned foreclosure would not occur; Lodge 13 discharge occurred January 28, 2010; stay remained in effect through 2010 due to no ruling on stay relief motions.
- Lodges sued in 2010 alleging (i) automatic stay violation and (ii) FDCPA violation based on the Notice of Sale publication.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether emotional distress is recoverable under § 362(k). | Lodges contend emotional distress falls within 'actual damages'. | Defendants contend not all emotional distress is compensable and require specific proof. | Emotional distress can constitute actual damages, but Lodges failed to prove significant distress or causal link. |
| What evidentiary standard governs emotional distress under § 362(k). | Lodges argue statutory text supports emotional distress as actual damages. | Defendants rely on limited, non-specific evidence and lack of financial injury. | Adopt the Dawson three-part test: significant emotional distress, clearly established, and causal connection to stay violation. |
| Whether the FDCPA claim survives given evidence about debt-collector status. | Lodges rely on defendants' websites and a GA notice document to show debt-collector status. | District court properly declined to rely on websites due to evidentiary rules and local LR 56.1; GA document was inadmissible. | District court affirmed; Lodges failed to prove debt-collector status under FDCPA; websites/documents not properly admissible or noticed. |
Key Cases Cited
- Fleet Mortgage Group, Inc. v. Kaneb, 196 F.3d 265 (1st Cir. 1999) (emotional damages may be 'actual damages' under § 362(h) / 362(k))
- Aiello v. Providian Financial Corp., 239 F.3d 878 (7th Cir. 2001) (emotional damages not necessarily authorized absent financial loss)
- Young v. Repine (In re Repine), 536 F.3d 512 (5th Cir. 2008) (emotional injury not compensable unless linked to financial injury; requires specificity)
- Dawson v. Washington Mutual Bank, F.A., 390 F.3d 1139 (9th Cir. 2004) (adopts three-part test for emotional distress under § 362(k))