Case No. 6:16-cv-00386-MC 

Bankr. No. 12-64782-fra13 (Bankr. D. Or.) 

Adv. No. 14-06218-fra 

______________________________________________________ 

UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

______________________________________________________ 

In re JONATHON ELDON HUNSAKER and 

CHERYL LYNN HUNSAKER, 

Debtors. 

______________________________________________________ 

JONATHON ELDON HUNSAKER; CHERYL LYNN HUNSAKER 

Plaintiffs-Appellees, 

v. 

UNITED STATES OF AMERICA, 

Defendant-Appellant, 

______________________________________________________ 

ON APPEAL FROM THE JUDGMENT OF UNITED STATES BANKRUPTCY 

COURT FOR THE DISTRICT OF OREGON 

______________________________________________________ 

REPLY BRIEF OF APPELLANT ON REMAND 

______________________________________________________ 

YAEL BORTNICK 

Trial Attorney, Tax Division 

U.S. Department of Justice 

P.O. Box 683 

Washington, D.C. 20044 

202-514-6632 (v) 

202-307-0054 (f) 

Yael.Bortnick@usdoj.gov

BILLY J. WILLIAMS 

United States Attorney 

District of Oregon 

Of Counsel 

Attorney for Appellant 
ii 

TABLE OF CONTENTS 

TABLE OF AUTHORITIES ...................................................................................................... iii

ARGUMENT ................................................................................................................................. 1

A. Dawson was wrongly decided. ....................................................................................... 1

B. The Bankruptcy Court incorrectly held that the circumstances make it obvious 

that a reasonable person would suffer significant harm. ........................................... 1

C. The evidence presented at trial does not support an award of damages for 

emotional distress. .......................................................................................................... 3

1. The “evidence” relied on by Appellees was not presented at trial. ........................... 4 

2. On review of the evidence actually presented at trial, Appellees did not clearly 

establish significant harm. ......................................................................................... 5 

CONCLUSION ............................................................................................................................. 7

 
iii 

TABLE OF AUTHORITIES 

Cases 

In re Baird, 319 B.R. 686 (Bankr. M.D. Ala. 2004) ........................................................................2 

In re Beebe, 435 B.R. 95 (Bankr. N.D.N.Y. 2010) ..........................................................................2 

In re Bourke, 543 B.R. 657 (Bankr. D. Mont. 2015) .......................................................................5 

In re Dawson, 390 F.3d 1139 (9th Cir. 2004) ..................................................................1, 2, 3, 5, 7 

In re Flynn, 185 B.R. 89 (S.D. Ga. 1995) ................................................................................1, 6, 7 

In re Ocasio, 272 B.R. 815 (B.A.P. 1st Cir. 2002) ..........................................................................6 

In re Parker, 279 B.R. 596 (Bankr. S.D. Ala. 2002) ...................................................................2, 3 

In re Van Durden, 2015 WL 3507074 (Bankr. N.D. Cal. June 2, 2015) .........................................5 

In re Voll, 512 B.R. 132 (Bankr. N.D.N.Y. 2014) ...........................................................................2 

Lodge v. Kondaur Ccapital Corp., 750 F.3d 1263 (11th Cir. 2014) ...............................................5 

Matter of Flynn, 169 B.R. 1007 (Bankr. S.D. Ga. 1994) .................................................................7
Reply Brief of Appellant on Remand 1 

ARGUMENT 

A. Dawson was wrongly decided. 

As the United Stated in its Opening Brief, it recognizes that this Court is bound by In re 

Dawson, 390 F.3d 1139 (9th Cir. 2004). Therefore, while the United States restates its argument 

that Dawson was wrongly decided briefly to preserve the possibility that the United States may 

ask the Court of Appeals for en banc consideration to overrule Dawson if the decision below is 

not reversed on one of the additional grounds stated herein, it declines to elaborate on this 

argument. 

B. The Bankruptcy Court incorrectly held that the circumstances make it obvious 

that a reasonable person would suffer significant harm. 

While an individual may establish emotional distress damages in several ways, generally 

corroborating evidence is necessary unless the circumstances make it obvious that a reasonable 

person would suffer significant emotional harm. Dawson, 390 F.3d at 1150 (citing In re Flynn, 

185 B.R. 89 (S.D. Ga. 1995)). In this case, Mr. and Mrs. Hunsaker had no funds or other 

property seized and suffered no collateral consequences that would make emotional distress 

“obvious.” Thus, the Bankruptcy Court erred in holding that mailing four Notices demanding 

payment but without any actual levy, collection, or extraordinary harassment such as repeated 

telephone calls would “obviously” cause a reasonable person to suffer significant harm. 

Appellees’ argument to the contrary is not persuasive. First, Appellees argue that a 

reasonable person would suffer significant harm simply because the Notices “deprived Appellees 

of [the] protection” of the automatic stay. ECF No. 27 at 11. However, if that were the standard, 

literally every violation of the automatic stay would entitle debtors to damages for emotional 

distress. This is clearly not the standard contemplated by Congress, as recognized by the Ninth 
Reply Brief of Appellant on Remand 2 

Circuit in Dawson. 390 F.3d at 1149 (“[N]ot every willful violation merits compensation for 

emotional distress.”). 

Second, Appellees recognize that in similar circumstances—where a creditor has mailed 

one or more collection notices—courts have routinely held that the circumstances do not make it 

obvious that a reasonable person would suffer significant emotional harm. Unable to distinguish 

this line of cases on another ground, Appellees instead ask this Court to impose a heightened 

standard where the stay violation was committed by “an agency of the government.” ECF No. 27 

at 12. However, no court has imposed such a heightened standard on governmental agencies. To 

the contrary, multiple courts have declined to award damages for emotional distress without 

corroborating evidence even where the creditor was a governmental agency, including in 

circumstances where the stay violation involved actual collection activity. See, e.g., In re Voll, 

512 B.R. 132, 140 (Bankr. N.D.N.Y. 2014) (denying debtors damages for emotional distress 

despite finding that the New York State Department of Taxation and Finance willfully violated 

the automatic stay by garnishing debtors’ paychecks). See also In re Beebe, 435 B.R. 95, 97 

(Bankr. N.D.N.Y. 2010) (finding no emotional distress where the United States Small Business 

Administration (“SBA”) willfully violated the automatic stay by sending three notices to debtor 

because debtor’s attorney assured debtor that he would take care of the notice, debtor did not 

seek medical care or treatment, and debtor did not suffer any pecuniary loss as a result of SBA’s 

actions); In re Baird, 319 B.R. 686, 690 (Bankr. M.D. Ala. 2004) (awarding no damages for 

emotional distress despite finding that the IRS willfully violated the automatic stay); In re 

Parker, 279 B.R. 596, 604 (Bankr. S.D. Ala. 2002) (holding that emotional distress allegedly 

caused by the IRS is not compensable without either medical evidence or an actual taking of 

debtor’s property). 
Reply Brief of Appellant on Remand 3 

As the United States demonstrated in its Opening Brief, the appropriate standard under 

Dawson is that damages for emotional distress should not be available for violations of the stay 

unless either there is actual collection activity or threats that rise to a level of serious 

misconduct. Such damages should not be available where the creditor has merely mailed a few 

letters demanding payment and threatening collection if payment is not made—i.e., ordinary and 

rather benign debt collection efforts that likely reflect that the creditor’s employees sending the 

particular notices were unaware of the bankruptcy stay. Appellees did not receive any phone 

calls, personal visits, foreclosure or eviction notions, nor did they have any funds or other 

property seized. It follows that it was not obvious under the circumstances that a reasonable 

person would suffer significant emotional harm. 

As a legal matter, the Court should hold that the circumstances here are not sufficient to 

absolve Mr. and Mrs. Hunsaker of the requirement to present corroborating evidence in order to 

establish significant harm, because there was neither actual collection activity nor egregious 

conduct demanding payment. See Parker, 279 B.R. at 604 (holding that emotional distress is not 

compensable without either physical evidence or an actual taking of debtor’s property). 

C. The evidence presented at trial does not support an award of damages for 

emotional distress. 

Appellees agree with the United States that to be compensable, Mr. and Mrs. Hunsaker 

had the burden to show that their emotional distress was more than fleeting, trivial, or medically 

insignificant, but argue that they met their burden by showing that their distress “meaningfully 

interfered” with their normal life. ECF No. 27 at 13-14. However, the Bankruptcy Court abused 

its discretion in holding that the injuries were “neither trivial nor insubstantial,” and by failing to 

address whether their distress was (1) fleeting or (2) medically insignificant. Because the 

Bankruptcy Court’s opinion did not address these requirements, and because the evidence at trial 
Reply Brief of Appellant on Remand 4 

clearly established that any emotional distress experienced by Mr. and Mrs. Hunsaker was both 

fleeting and medically insignificant, the Court should overturn the award of damages for 

emotional distress. 

1. The “evidence” relied on by Appellees was not presented at trial. 

As an initial matter, the record on appeal contradicts Appellees’ “Statement of the Case.” 

See ECF No. 27 at 5-6. Rather than cite to specific testimony, Appellees cite to a nearly 50-page 

portion of the trial transcript as support for their claims that, as a result of the Notices, (1) Mrs. 

Hunsaker increased her medication intake and had to miss work, (2) Mr. Hunsaker is a diabetic 

whose medication intake also increased, and (3) both Mr. and Mrs. Hunsaker suffered from a 

loss of sleep and loss of appetite. Id. (citing App. 169-217). Similarly, Appellees’ “Argument” 

section relies on a more than 200-page section of the record on appeal for the propositions that 

(1) Mrs. Hunsaker “had to call out of work” and “spent days in bed” due to the Notices, and that 

(2) Mr. Hunsaker provided testimony “related to his increased blood sugar levels” and his “loss 

of sleep.” ECF no. 27 at 16-17 (citing App. 16-217). These allegations are unsupported by the 

trial record. 

In sharp contrast to Appellees’ unsupported allegations, the evidence at trial actually 

established that Mrs. Hunsaker refilled her migraine medication less frequently during the time 

period that Appellees received the Notices than either before or after the Notices were sent. 

(App. 134-36, App. 211-13.) Mrs. Hunsaker also used fewer hours of sick leave and vacation 

time in 2014 (the year that three of the four Notices were received) than she did in previous 

years. (App. 137, 214-15.) Rather than spending “days in bed,” Mrs. Hunsaker testified that after 

a night’s rest, she was able to “keep carrying on” with her normal life. (App. 200.) 
Reply Brief of Appellant on Remand 5 

With respect to Mr. Hunsaker, despite Appellees’ claims to the contrary, there simply 

was no testimony related to his blood sugar levels or loss of sleep. (See App. 240, 249.). The 

only reference to Mr. Hunsaker’s diabetes at trial was in response to a question regarding Mr. 

Hunsaker’s supposed loss of appetite. (App. 196). In answering that question, Mr. Hunsaker 

admitted he could not say whether the Notices had any impact on his diabetes. (Id.) No other 

evidence regarding Mr. Hunsaker’s diabetes was presented at trial. In fact, the only evidence of 

Mr. Hunsaker’s supposed “harm” was his and his wife’s testimony that after reading the notices 

he ground his teeth, his temples would go in and out, and he became upset. Moreover, rather than 

testify to any mental anguish experienced by Mr. Hunsaker, Mrs. Hunsaker testified that “[h]e 

was maintaining his cool” in response to the Notices. (App. 199). Thus, Appellees’ Statement of 

the Case should be disregarded by the Court. 

2. On review of the evidence actually presented at trial, Appellees did not clearly 

establish significant harm. 

Turning to the evidence actually presented at trial, it is apparent that Appellees did not 

meet their burden to clearly establish significant harm. Appellees do not dispute that any harm 

they experienced lasted at most for a day or two and was ameliorated by speaking with their 

attorney. More importantly, Appellees do not dispute that their harm was “medically 

insignificant.” The evidence at trial established that despite having regular doctor’s visits, neither 

Mr. nor Mrs. Hunsaker sought medical care for their emotional distress. Thus, any “harm” they 

experienced is not compensable. See, e.g., Lodge v. Kondaur Ccapital Corp., 750 F.3d 1263, 

1272 (11th Cir. 2014) (debtors could not establish a causal connection between their injuries and 

the stay violation where they failed to provide evidence of doctor’s visits); In re Van Durden, 

2015 WL 3507074, *5 (Bankr. N.D. Cal. June 2, 2015) (holding that debtor did not seek any 

medical help as a result of the stay violations and therefore could not meet the Dawson standard);
Reply Brief of Appellant on Remand 6 

In re Bourke, 543 B.R. 657, 665 (Bankr. D. Mont. 2015) (the fact that debtor did not seek 

medical attention for the additional stress of stay violation was a factor in denying damages). The 

evidence simply does not support Appellees’ claim that Notices meaningfully interfered with 

their normal life in any meaningful way. 

Appellees rely on In re Ocasio, 272 B.R. 815 (B.A.P. 1st Cir. 2002), to argue that their 

testimony should be sufficient to support the damages award. In Ocasio, the creditor approached 

the debtor in person and threatened to collect his outstanding debt “from his face.” 272 B.R. at 

821. Feeling that the creditor was an aggressive person, and knowing that he carried a gun, the 

debtor was afraid. Id. Days after the incident, the debtor was still not feeling well and went to a 

doctor who recommended he take medication for his nerves. Id. The debtor’s account was 

corroborated by his wife’s testimony that he had to seek medical treatment. Id. In view of the 

“unrebutted testimony,” the Bankruptcy Appellate Panel upheld the award of damages. Id. at 

825. Moreover, the Bankruptcy Appellate Panel held that punitive damages were justified, noting 

that “[w]hen one considers the spectrum of stay violations from mailing bills or account 

statements to harassing telephone calls, automobile repossessions and home foreclosures, an 

instance where bodily harm is threatened is, as the bankruptcy court recognized, serious indeed.” 

Id. at 826 (emphasis added). In sharp contrast, the conduct here – passively mailing Notices – is 

at the other end of the spectrum. And more importantly, Appellees’ did not seek medical 

treatment and their testimony regarding their damages was not “unrebutted.” Rather, the United 

States presented evidence at trial in the form of prescription drug records and employment 

records that directly countered Appellees’ description of their supposed harm. 

Similarly, Appellees’ reliance on In re Flynn, 185 B.R. 89, for the proposition that no 

corroborating evidence is necessary is misplaced. In that case, although there was “no mention of 
Reply Brief of Appellant on Remand 7 

corroborating testimony,” (ECF No. 27 at 17), the Bankruptcy Court relied on the fact that “the 

evidence was uncontradicted that [the debtor] was forced to endure the stress of knowing that a 

number of her checks would bounce and dealing with those payees, the emotional trauma of 

having to cancel a planned birthday party for her child, and the humiliation of being unable, 

without considerable difficulty and commotion, to negotiate a check for groceries at her 

neighborhood supermarket.” Matter of Flynn, 169 B.R. 1007, 1023 (Bankr. S.D. Ga. 1994) aff'd 

in part, rev'd in part sub nom. In re Flynn, 185 B.R. 89 (S.D. Ga. 1995) (emphasis added). In 

contrast, in this case, medical evidence in the form of prescription records was introduced which 

directly contradicts Appellees’ claims of emotional distress. 

Mr. and Mrs. Hunsaker failed to establish that any emotional distress they suffered was 

neither fleeting nor medically insignificant, and therefore, they failed to meet their burden to 

prove significant harm under the Dawson standard. 

CONCLUSION 

The Court should reverse the judgment of the Bankruptcy Court and remand with 

instructions to enter judgment in favor of the United States on the merits. 

Respectfully submitted this 19th day of April, 2019. 

RICHARD E. ZUCKERMAN 

Principal Deputy Assistant Attorney General 

/s/ Yael Bortnick 

YAEL BORTNICK 

Trial Attorney, Tax Division 

U.S. Department of Justice 

P.O. Box 683 

Washington, D.C. 20044 

202-514-6632 (v) 

202-307-0054 (f) 

Yael.Bortnick@usdoj.gov 
Reply Brief of Appellant on Remand 8 

CERTIFICATE OF SERVICE 

I hereby certify that on this 19th day of April, 2019, I electronically filed the foregoing document 

with the Clerk of Court using the CM/ECF system, which will send notification of such filing to 

the following: 

Keith D. Karnes; kkarnes@keithkarnes.com 

/s/ Yael Bortnick 

YAEL BORTNICK 

Trial Attorney 

United States Department of Justice, Tax Division