Opinion ID: 6221503
Heading Depth: 1
Heading Rank: 2

Heading: the bank was exempt from the automatic stay

Text: If the Bank was National’s agent, it was exempt from the stay. The District Court held that it was because the Bank serviced loans for National. Boltz-Rubinstein attacks that holding three ways, but each shot misses. A. The bankruptcy judge’s agency analysis was sound Boltz-Rubinstein charges the bankruptcy judge with both misstating the agency-law rule and lacking enough evidence to apply it. But the judge got both points right. 1. The judge applied the right rule. Boltz-Rubinstein says the judge overlooked the “touchstone” of agency: the principal’s right to control the agent. Appellant’s Br. 31–32; Restatement (Second) of Agency § 14 (1958). Not so. The judge asked whether the Bank was “subject to the principal’s control.” App. 44. So he analyzed whether National “permitted and expected” the Bank to service its mortgages. App. 45–47. Boltz-Rubinstein says that is the wrong question. National is a holding company without staff that “doesn’t really do anything,” so it could never control the Bank. Appellant’s Br. 36 (quoting App. 465). Yet what matters is not exercising control but the right to control. Restatement (Third) of Agency § 1.01 cmt. c (2006). And that was the bankruptcy judge’s focus here. Besides, holding companies are often principals and routinely depend on their agents for day-to-day operations. See Appellees’ Br. 32. 4 2. The evidence supported finding agency. Boltz-Rubinstein also questions the factual support for the judge’s agency finding. But he relied on enough evidence, though it was complex. To find agency, courts may reasonably rely on “a definite course of dealing” and other “attending circumstances.” Yezbak v. Croce, 88 A.2d 80, 82 (Pa. 1952) (internal quotation marks omitted). That is what the bankruptcy judge did. He found that National’s then- president, Ann Golio, testified “knowledgeabl[y] and credibl[y]” that the Bank was National’s agent. App. 35. We defer to that credibility finding unless it was irrational. In re Graves, 33 F.3d 242, 246, 251 (3d Cir. 1994); Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 399 F.3d 248, 254 (3d Cir. 2005). Because it was not, we defer. True, Golio’s testimony was “somewhat contradictory.” App. 35–36. But that was only because National’s relationship with the Bank worked differently in practice from how it was designed. By design, the Bank would assign delinquent mortgages to National so National could gain title after a speedy foreclosure. The Bank’s obligation to service mortgages was supposed to end then. But in practice, if foreclosure was delayed and the mortgages stayed on National’s books, the Bank would keep servicing them for National as its agent. Though unconventional, this practice was a “definite course of dealing, undertaken by the [Bank] and accepted by [National].” Yezbak, 88 A.2d at 82. As Golio testified, National and the Bank did business this way at least fifty times, and National never once objected. Indeed, in other court proceedings, National presented the Bank as its loan servicer. Golio’s 5 uncontradicted testimony sufficiently supports the bankruptcy judge’s finding of an agency relationship. B. The District Court found no new facts, and any error would be harmless Boltz-Rubinstein also argues that the District Court mischaracterized the record, injecting its own factual findings. As she points out, if the District Court had to mischaracterize the record in order to affirm, we should be concerned. Universal Minerals Inc. v. C.A. Hughes & Co., 669 F.2d 98, 102 (3d Cir. 1981). But the District Court did not mischaracterize the record. And even if it had, it affirmed the bankruptcy court’s supportable factual findings. Boltz-Rubinstein points to two supposed mischaracterizations. First, the District Court said, “[National] recorded the assigned mortgage from [the Bank] on January 10, 2011.” App. 15 n.6. She says this gets the details wrong. But the parties stipulated to those details, and the record includes that mortgage assignment. Second, before that assignment, the Bank retained the mortgage. The court characterized this retention as “intended to be in a custodial capacity only.” App. 19 n.9. BoltzRubinstein counters that only the “records and documents” of the mortgage would be kept custodially. Appellant’s Br. 27 (quoting App. 113) (emphasis omitted). But that is no contradiction. Mellon beneficially owned the mortgage, receiving the stream of mortgage payments, while the Bank held title to the mortgage instrument and acted as loan servicer. And Golio testified to this effect. Even if the District Court had misstated anything, that error would have been harmless. The court did not substitute its views for those of the factfinder but affirmed the bankruptcy 6 decision. We look through the District Court’s opinion to review the bankruptcy judge’s factual findings. Because Boltz-Rubinstein identifies no error in those factual findings, there is no reason to reverse. III. IN ANY EVENT, BOLTZ-RUBINSTEIN SUFFERED NO DAMAGES What is more, Boltz-Rubinstein cannot show that any violation of the stay harmed her. To recover damages, she “must be ‘injured’ by the stay violation.” In re Aleckna, 13 F.4th 337, 346 (3d Cir. 2021) (emphasis added); 11 U.S.C. § 362(k)(1). Yet she was not. The only “actual damages” she sustained (lost wages) were inflicted long after the stay ended, during foreclosure litigation in 2018. But by then her bankruptcy had been discharged, ending the stay. Thus, her lost wages were not “actual damage[ ]” caused by the foreclosure letters sent two years earlier. Cf. In re Aleckna, 13 F.4th at 346 (dictum contemplating recovery for litigation-related costs “when they are incurred to enjoin further violations of the stay” (emphasis added, internal quotation marks omitted)).