Court Opinion

ID: 9398237
Source: CourtListenerOpinion
Date Created: 2023-05-30 17:01:56.454284+00
Date Added: 2024-06-11T17:19:31.765769
License: Public Domain

USCA11 Case: 22-11800   Document: 12-1    Date Filed: 05/30/2023   Page: 1 of 8

                                                [DO NOT PUBLISH]
                                 In the
                United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                              No. 22-11800
                         Non-Argument Calendar
                         ____________________

       In re: ELLERY MYRON STEED,
                                                              Debtor.
       ___________________________________________________
       ELLERY STEED,
                                                   Plaintiﬀ-Appellant,
       versus
       GSRAN-Z, LLC,
       INVESTA SERVICES, LLC,

                                               Defendants-Appellees.

                         ____________________
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       2                        Opinion of the Court                     22-11800

                   Appeal from the United States District Court
                      for the Northern District of Georgia
                      D.C. Docket No. 1:21-cv-02085-MLB,
                           Bkcy No. 1:18-bk-69488-JWC
                            ____________________

       Before WILSON, LUCK, and TJOFLAT, Circuit Judges.
       PER CURIAM:
             Ellery Myron Steed, proceeding pro se, appeals the District
       Court’s dismissal of his appeal from the U.S. Bankruptcy Court for
       the Northern District of Georgia. This case arises out of the pro-
       posed tax sale of Steed’s property initiated by Investa, on behalf of
       GSRAN-Z, and the subsequent loss of rental income by Steed.
       Steed initiated an adversary proceeding against Investa and
       GSRAN-Z for willfully violating the automatic stay. 1 He sought
       $24,000 in actual damages, $100,000 in damages for substantial
       mental anguish and distress, and $250,000 in damages.
             The bankruptcy court partially granted Steed’s motion for
       summary judgment, finding that Investa willfully violated the au-
       tomatic stay; all issues relating to damages were reserved for trial.

       1 The adversary proceeding arises out of the Chapter 13 bankruptcy case Steed

       filed on November 19, 2018. He listed both Investa and GSRAN-Z as creditors.
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       22-11800               Opinion of the Court                         3

       After trial, the bankruptcy court entered judgment in favor of Steed
       and awarded him actual damages in the amount of $2,250. 2
             Steed moved the bankruptcy court to vacate, reconsider, or
       modify its order, and also moved for a new trial. The bankruptcy
       court denied those requests. Steed then appealed to the District
       Court. The District Court affirmed the bankruptcy court’s opin-
       ion.
               On appeal, Steed first argues that the bankruptcy court erred
       in its calculation of his actual damages and in finding that he failed
       to mitigate his damages. Second, Steed argues that the bankruptcy
       court erred in finding that he failed to establish damages for emo-
       tional distress. Third, he argues that the bankruptcy court erred in
       denying punitive damages.
                                         I.
              As the second court of review, we examine the order of the
       bankruptcy court independently, reviewing the bankruptcy court’s
       legal determinations de novo and its factual findings for clear error.
       In re Fisher Island Invs., Inc., 778 F.3d 1172, 1189 (11th Cir. 2015).
       Neither we nor the District Court are authorized to make inde-
       pendent factual findings; that is the function of the bankruptcy
       court. In re Sublett, 895 F.2d 1381, 1383 (11th Cir. 1990). A factual
       finding is clearly erroneous “if the reviewing court examines the
       evidence and is left with the definite and firm conviction that a

       2The bankruptcy court also entered judgment in favor of GSRAN-Z on all
       counts. Steed does not address this ruling on appeal.
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       4                      Opinion of the Court                 22-11800

       mistake has been made.” In re Stanford, 17 F.4th 116, 121 (11th Cir.
       2021) (internal quotation marks and citation omitted).
               Filing a bankruptcy petition automatically stays all eﬀorts
       outside of bankruptcy to enforce a lien against a debtor’s property
       or to collect debts from a debtor who is under the protection of
       the bankruptcy court. 11 U.S.C. § 362(a)(4), (6). Unless the action
       comes under an exception in 11 U.S.C. § 362(b) or a party receives
       relief from the stay under 11 U.S.C. § 362(d), the stay generally re-
       mains in eﬀect until the bankruptcy court disposes of the case.
       11 U.S.C. § 362(c).
              If a creditor disregards its obligations to stay its collection
       eﬀorts, the debtor has a remedy: An individual injured by any will-
       ful violation of a stay shall recover actual damages, including costs
       and attorneys’ fees. 11 U.S.C. § 362(k). Unlike general, special, and
       compensatory damages, “actual damages” has no consistent legal
       interpretation. In re Horne, 876 F.3d 1076, 1080–81 (11th Cir. 2017).
       Bankruptcy courts within this Circuit have required that actual
       damages be proven with reasonable certainty and mere specula-
       tion, guess, or conjecture will not suﬃce. In re Castillo, 456 B.R.
       719, 725 (Bankr. N.D. Ga. 2011). The debtor has the burden of
       proving damages from an automatic stay violation by a preponder-
       ance of the evidence. In re Horne, 876 F.3d at 1083.
              The bankruptcy court granted Steed summary judgment on
       the issue of whether Investa willfully violated the automatic stay,
       leaving only the issue of damages for trial. It did not err in
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       22-11800              Opinion of the Court                        5

       determining actual damages of $2,250 because its findings of fact
       were supported by the record and not clearly erroneous.
              Before the bankruptcy court, Steed asserted that he had
       leased the property in question to a tenant for three years, with a
       monthly rent of $750 per month. According to Steed, Investa’s
       willful violations of the automatic stay caused the tenant to termi-
       nate the lease at the end of April 2019, which in turn caused him to
       lose the 32 months of rent remaining on the lease, or $24,000. Ap-
       pellees questioned whether the lease existed at all, and argued the
       Steed had a duty to mitigate his damages but failed to do so by al-
       lowing his tenant to cancel the lease and by failing to re-let the
       apartment.
              The bankruptcy court found that Steed had established by a
       preponderance of the evidence that he had a month-to-month lease
       with the tenant for $750 per month, but that he failed to establish
       that the written lease governed the terms of the agreement. The
       bankruptcy court awarded Steed three months of rent, or $2,250,
       in actual damages because it found that the tenant would reasona-
       bly have stayed until July, “but anything beyond that point” was
       “too speculative given the parties’ loose relationship with any for-
       mal terms and the dubious nature of the testimony and evidence
       of [the tenant’s] use of the apartment.”
              Steed argues that in determining that the written lease did
       not govern the terms of the agreement, and that there was not a
       three-year lease, the bankruptcy court made findings of fact that
       were clearly erroneous and contrary to the record. But we cannot
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       6                         Opinion of the Court                     22-11800

       say the bankruptcy court’s factual findings leave us with a definite
       conviction that a mistake has been made.
                The bankruptcy court found that there were inconsistencies
       between the lease and the parties’ statements. First, both Steed and
       the tenant claimed they agreed to a three-year lease with a monthly
       rent of $750, but the written lease showed a rent of $7.50 per month
       and the complaint alleged a five-year lease. The tenant described
       the apartment as “great” and testified that he slept there “about”
       every night for five months, but could not remember if it had run-
       ning water. The property did not contain a refrigerator or a work-
       ing stove, contrary to the terms of the written lease. The written
       lease required the tenant to pay all utilities other than water, but
       no utilities were put in his name, and he testified that he did not
       pay any utilities. The bankruptcy court concluded that, while there
       was evidence of some lease arrangement between Steed and the
       tenant, “[o]ne thing clear is the written lease was an empty formal-
       ity to which neither [the tenant] nor [Steed] paid any regard.”
       Given the factual inconsistencies in the record, it was not clearly
       erroneous for the bankruptcy court to find a month-to-month
       lease. 3

       3 The bankruptcy court further held that even if Steed had shown by a prepon-

       derance of the evidence that he and the tenant had a three-year lease, Steed
       would still not be entitled to 32 months of damages because he failed to miti-
       gate his damages. Steed argues that this was in error. Because we hold that
       the bankruptcy court did not err in finding a month-to-month lease, we de-
       cline to address this argument.
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       22-11800                Opinion of the Court                           7

                                          II.
              Emotional distress damages fall within the broad term of
       “actual damages” in § 362(k). Lodge, 750 F.3d at 1271. At a mini-
       mum, 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) demon-
       strate a causal connection between that significant emotional dis-
       tress and the violation of the automatic stay. Id. Fleeting or trivial
       anxiety or distress is not significant emotional distress, and gener-
       alized evidence, without any additional, specific detail, does not
       show significant emotional distress. Id. at 1271–72. Corroborating
       evidence may not be necessary to prove emotional distress where
       the violator engaged in egregious conduct and significant emo-
       tional distress is readily apparent. Id. at 1272.
             The bankruptcy court did not err in finding that Steed was
       not entitled to damages for emotional distress because while the
       Appellees’ conduct was willful, it was not egregious. Importantly,
       Investa was not actively trying to get around the automatic stay.
       When Investa initiated the levy process against Steed, his bank-
       ruptcy case had been dismissed—Investa could not have known the
       case would be reinstated at the time it initiated the levy process.
              Because Investa’s conduct was not egregious, Steed needed
       to provide corroborating evidence to clearly establish both that he
       suffered significant emotional distress and that there was a causal
       connection between that distress and violation of the automatic
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       8                      Opinion of the Court                 22-11800

       stay. He failed to meet that standard, relying solely on his own
       testimony.
                                        III.
              Under 11 U.S.C. § 362(k), actual damages recovered by a
       debtor when a creditor disregards its obligations to stay its collec-
       tion eﬀorts can, in appropriate circumstances, include punitive
       damages. 11 U.S.C. § 362(k). Punitive sanctions are appropriate
       when a party acts with reckless or callous disregard for the law or
       rights of others. In re McLean, 794 F.3d 1313, 1325 (11th Cir. 2015).
              Here, the bankruptcy court did not err in denying Steed pu-
       nitive damages because Steed failed to show that the Appellees
       acted with reckless or callous disregard for the law or rights of oth-
       ers. Accordingly, we affirm.
             AFFIRMED.