Steed v. GSRAN-Z LLC

IEE

wae: Oe”

oF ae Bs

A im nf

Siar ae

IT IS ORDERED as set forth below: ij

Date: March 31, 2020 ‘WA

Jeffery W. Cavender

U.S. Bankruptcy Court Judge

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

IN RE: CASE NO. 18-69488-JWC

ELLERY MYRON STEED, CHAPTER 13

Debtor.

‘-ELLERYSTEED, |"

Plaintiff,

V. ADVERSARY PROCEEDING

GSRAN-Z, LLC, and INVESTA NO. 19-5201-IWC

SERVICES, LLC,

Defendants.

MEMORANDUM OPINION AND ORDER

This matter is before the Court on several motions filed by the parties in the above-

captioned adversary proceeding: 1) Plaintiff's Motion for Partial Summary Judgment Against

GSRAN-Z, LLC, and Investa Services, LLC (Doc. No. 14) (“Plaintiff's Motion for Summary

Judgment”) filed by Plaintiff Ellery Steed (“Plaintiff’ or “Debtor’); 2) Defendants GSRAN-Z, LLC

and Investa Services, LLC’s Motion for Summary Judgment and Brief in Support Thereof (Doc.

No. 28) (“Defendants’ Motion for Summary Judgment”) filed by GSRAN-Z, LLC (“GSRAN-Z”)

and Investa Services, LLC (“Investa,” and together with GSRAN-Z, “Defendants”); 3) Plaintiff’s

Request for Oral Hearing and Argument on Plaintiff’s Motion for Summary Judgment and

Defendants’ Motion for Summary Judgment (Doc. No. 31) (the “Request for Oral Argument”);

and 4) Defendants’ Motion to Strike Plaintiff’s Reply to Defendants’ Response to His Motion for

Summary Judgment (Doc. No. 35) (the “Motion to Strike”).

The adversary proceeding arises out of the Chapter 13 bankruptcy case filed by Plaintiff

on November 19, 2018, Case No. 18-69488-jwc (the “Bankruptcy Case”). Plaintiff filed this

adversary proceeding against Defendants on April 30, 2019, seeking damages for alleged

violations of the automatic stay under 11 U.S.C. § 362(a)1 and related alleged violations of the

Fair Debt Collection Practices Act (the “FDCPA”) and state law negligence claims.

Plaintiff filed his Motion for Summary Judgment on August 29, 2019, seeking summary

judgment against Defendants in the amount of $24,000 for economic damages, $100,000 for

mental anguish and distress, and $250,000 for punitive damages for Defendants’ alleged violations

of the automatic stay. Plaintiff has not moved for summary judgment on his FDCPA and state law

negligence claims. Plaintiff filed a Statement of Undisputed Material Facts in Support of Partial

Summary Judgment (Doc. No. 15) attaching various exhibits (“Plaintiff’s Statement of Facts”).

On October 21, 2019, Defendants filed their Motion for Summary Judgment seeking

judgment in their favor on all counts and a Statement of Undisputed Material Facts in Support of

Defendants’ Motion for Summary Judgment and in Response to Plaintiff’s Motion for Partial

1 All statutory references are to the Bankruptcy Code (11 U.S.C. § 101 et seq.) unless otherwise specified.

Summary Judgment (Doc. No. 29) (“Defendants’ Statement of Facts”).2 The same day,

Defendants also filed a Joint Response in Opposition to Plaintiff’s Motion for Summary Judgment

(Doc. No. 30) (the “Joint Response”) and Response to Plaintiff’s Statement of Undisputed Material

Facts in Support of Partial Summary Judgment (“Defendants’ Counterstatement”).

On October 30, 2019, Plaintiff filed his Reply to Defendants’ Response to His Motion for

Summary Judgment and Plaintiff’s Response to Defendants’ Motion for Summary Judgment (Doc.

No. 32) (the “Reply”). Defendants’ filed their Joint Reply to Plaintiff’s Response to Defendants’

Motion for Summary Judgment on November 13, 2019 (Doc. No. 37).

Plaintiff filed his Request for Oral Argument on the motions for summary judgment on

October 30, 2019 (Doc. No. 31). Defendants’ filed a response in opposition to the Request for

Oral Argument on November 4, 2019 (Doc. No. 33).

Defendants filed the Motion to Strike on November 6, 2019, requesting that Plaintiff’s

Reply be stricken because it exceeds the 15-page limit prescribed by BLR 7007-1(e). Plaintiff

filed his Response to Defendants’ Motion to Strike on November 12, 2019, asserting that because

he combined his Reply in support of Plaintiff’s Motion for Summary Judgment with his response

to Defendants’ Motion for Summary Judgment and utilized only 25 pages for both briefs, the

Motion to Strike should be denied.

For the reasons set forth below, the Request for Oral Argument and Motion to Strike will

be denied and both Motions for Summary Judgment will be granted in part and denied in part.

Plaintiff’s Motion for Summary Judgment will be granted as to liability against Investa on his

claims for willful violation of the automatic stay, denied as to liability against GSRAN-Z, and

2 Defendants also filed on October 21, 2019 a “Notice of Filing Original Transcript of Ellery Steed,” which purports

to attach the deposition transcript of Plaintiff along with certain exhibits. The Notice of Filing filed on the Court’s

docket, however, does not include any transcript or exhibits.

denied as to damages against both Defendants. Defendants’ Motion for Summary Judgment will

be granted as to the FDCPA claims and denied as to all other issues.

I. JURISDICTION

The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334.3 Determination of

whether a creditor has violated the automatic stay is a core matter pursuant to 28 U.S.C. §

157(b)(2)(A). Venue is proper pursuant to 28 U.S.C. § 1409.

II. PROCEDURAL MATTERS

The Court first considers the procedural motions, i.e., the Request for Oral Argument and

the Motion to Strike. BLR 7056(c) provides that “[a] motion for summary judgment will be

decided without a hearing unless the Bankruptcy Court directs otherwise.” Plaintiff argues that a

hearing is needed “in part to prevent inherent prejudice” from exhibits attached by Defendants in

support of their Motion for Summary Judgment and opposition to Plaintiff’s Motion for Summary

Judgment. Plaintiff states that “because Plaintiff’s briefing is completed as to both motions, the

only opportunity for clarification . . . is through oral argument.” Plaintiff, however, filed his Reply

after Defendants filed their Motion for Summary Judgment, Joint Response, Statement of Facts,

and exhibits. Plaintiff had the opportunity to address any exhibits filed by Defendants at the time

he filed his Reply and indeed raised various objections to exhibits attached to Defendants’ papers.

The Court is not aware of any exhibits filed by Defendants after Plaintiff’s Reply. Further, the

Court has not considered any exhibits Defendants failed to attach to their pleadings. Defendants

oppose the Request for Oral Argument, and the Court does not believe oral argument will assist it

3 Although the Court dismissed Plaintiff’s underlying Bankruptcy Case on December 6, 2019, Defendants have not

moved to dismiss this adversary proceeding or requested that the Court abstain. In any event, as this case asserts

claims for willful violations of the automatic stay under § 362(k), the Court finds it appropriate to retain jurisdiction

in this adversary proceeding. See In re Healthcare Real Estate Ptr’s., LLC v. Summit Healthcare Reit, Inc. (In re

Healthcare Real Estate Ptr’s., LLC ), 941 F.3d 64 (3d. Cir. 2019); Johnson v. Smith (In re Smith), 575 F.3d 1079,

1083 (10th Cir. 2009); and Davis v. Courington (In re Davis), 177 B.R. 907, 911 (9th Cir. B.A.P. 1997).

in ruling on the pending motions for summary judgment. The Court will deny the Request for

Oral Argument.

As to the Motion to Strike, the Reply is submitted as a combined response and reply to the

two pending motions for summary judgment. BLR 7007-1 allows up to 25 pages for responses,

and the Reply is 25 pages in length. The Court declines to parse the Reply to determine whether

the parts of it submitted in reply to the Joint Response exceed the 15-page limit prescribed by BLR

7007-1(e). In any event, BLR 7007-1(h) provides that the effect of non-compliance is that the

Court, “in its discretion, may decline to consider any motion or brief that fails to conform to the

requirements of these Rules.” The Court will consider the Reply as filed and deny the Motion to

Strike.

The Court next turns to the competing motions for summary judgment.

III. SUMMARY JUDGMENT

A. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure (the “Federal Rules”) applies to this

adversary proceeding. Fed. R. Bankr. P. 7056. Summary judgment is proper only if “the movant

shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(a); see also Hairston v. Gainesville Sun Publ’g Co., 9 F.3d

913, 918-19 (11th Cir. 1993).

A fact is material if it might affect the outcome of a proceeding under the governing

substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (U.S. 1986). A dispute of

fact is genuine “if the evidence is such that a reasonable jury [or finder of fact] could return a

verdict for the nonmoving party.” Id.

At the summary judgment stage of a proceeding, the Court’s function is not to determine

the truth of the matter by weighing the evidence, but rather to determine if there is a genuine issue

for trial. Id. When making this determination, the Court must view the evidence in the light most

favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Rosen

v. Biscayne Yacht & Country Club, Inc., 766 F.2d 482, 484 (11th Cir. 1985). “All reasonable

doubts and inferences should be resolved in favor of the opponent.” Amey, Inc. v. Gulf Abstract

& Title, Inc., 758 F.2d 1486, 1502 (11th Cir. 1985).

The moving party bears the burden of establishing the right to summary judgment. Clark

v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); Clark v. Union Mut. Life Ins. Co., 692

F.2d 1370, 1372 (11th Cir. 1982). The moving party must identify those evidentiary materials

listed in Federal Rule 56(c) that establish the absence of a genuine issue of material fact. Celotex

Corp. v. Catrett, 477 U.S. 317, 323-24 (1986); see also Fed. R. Civ. P. 56(e).

Once the moving party makes a prima facie showing that it is entitled to judgment as a

matter of law, the nonmoving party must go beyond the pleadings and demonstrate that there is a

material issue of fact that precludes summary judgment. Celotex, 477 U.S. at 324; Martin v.

Commercial Union Ins. Co., 935 F.2d 235, 238 (11th Cir. 1991). “[A] party opposing a properly

supported motion for summary judgment may not rest upon the mere allegations or denials of his

pleading, but must set forth specific facts showing that there is a genuine issue for trial.” Anderson,

477 U.S. at 248 (citations omitted).

B. Findings of Fact

The Court finds the following material facts to be undisputed for purposes of both motions

for summary judgment:

Investa, on behalf of clients such as GSRAN-Z, purchases and services thousands of writs

of fieri facias (“fi. fa(s).”) issued by the Fulton County Tax Commissioner for unpaid ad valorem

taxes and solid waste bills on real property located within Fulton County, Georgia. Investa’s

portfolio includes several fi. fas. issued on real property located at 1517 North Ave. N.W., Atlanta,

Georgia (the “Property”) for unpaid taxes and solid waste bills for the years 2011-2018. Plaintiff

owns the Property.

Plaintiff filed his Bankruptcy Case on November 19, 2018, scheduling both Investa and

GSRAN-Z as creditors. Investa, for GSRAN-Z, filed proof of claim 1-1 and proof of claim 2-1 in

the Bankruptcy Case on January 22, 2019 (the “Proofs of Claims”) asserting secured claims

pursuant to each fi. fa. issued on the Property and purchased by Investa. The notice address listed

on the Proofs of Claims is INVESTA SERVICES FOR GSRAN-Z, LLC, 1266 West Paces Ferry

Rd., Box 517, Atlanta, GA 30327.

On February 13, 2019, the Bankruptcy Case was dismissed by order of the Court

(Bankruptcy Case Doc. No. 29) (the “Dismissal Order”). On February 27, 2019, while the

Bankruptcy Case was still dismissed, Investa directed the Fulton County Sheriff to levy on each

fi. fa.

On March 14, 2019, the Court entered an order vacating its previous order dismissing the

Bankruptcy Case (Bankruptcy Case Doc. No. 34) (the “Reinstatement Order”). On March 16,

2019, the Clerk of the Court filed a certificate of service certifying that the Reinstatement Order

was served on, among others, the following recipients at the indicated addresses:

GSRAN-Z Servicing Acct.

P.O. Box 71275

Philadelphia, PA 19176-6275

INVESTA SERVICES FOR GSRAN-Z, LLC,

1266 WEST PACES FERRY RD, BOX 517,

ATLANTA, GA 30327-2306

Investa Services, LLC

1266 West Paces Ferry Road #517

Atlanta, GA 30327-2306

Investa Services, LLC

1737 Ellsworth Industrial Blvd, Building G

Atlanta, GA 30318-3737

(Bankruptcy Case Doc. No. 36). Investa and GSRAN-Z actually received the Reinstatement Order

via mail at some point, though the exact date each entity received the Reinstatement Order is not

clear from the record before the Court.

On April 11, 2019, the Fulton County Sheriff posted a notice dated April 8, 2019 at the

Property, which gave notice that the Property would be sold at an auction to be held June 4, 2019

for unpaid taxes (the “First Notice”). Plaintiff called the Fulton County Sheriff’s Department to

explain that the automatic stay applied to the Property but was instructed to contact “Ms. King” at

Investa’s office, was given Ms. King’s number, and advised that Ms. King had to give the

instruction to the Sheriff to stop the collection efforts and to remove the Property from the

scheduled sale.4 Plaintiff attempted to contact Ms. King but was not able to reach her for several

days. Plaintiff talked with Ms. King on April 16, 20195 and explained that the Bankruptcy Case

prevented any collection efforts. Ms. King indicated that the Bankruptcy Case had been dismissed,

4 The facts in this sentence, the rest of this paragraph, and the following paragraph are taken from Plaintiff’s

Statement of Facts, ¶¶ 11 - 17, which cite to the Declaration of Ellery Steed attached to the Statement of Facts.

Defendants do not dispute these paragraphs of Plaintiff’s Statement of Facts or challenge their admissibility.

Defendants’ only objection to these statements (and many others) is that they are not material to Plaintiff’s claims.

The Court disagrees that these facts are not material and considers them undisputed for purposes of the Summary

Judgment Motions.

5 Defendants agree that Plaintiff had a phone conversation with Ms. King on April 16, 2019, though Defendants

deny any knowledge of the contents of the conversation. Again, however, Defendants do not refute Plaintiff’s

Statement of Facts regarding the substance of this conversation and again argue only that the substance of the call is

irrelevant. As shown by the analysis below, the Court disagrees that the substance of the call is irrelevant.

and Plaintiff explained that it had been reinstated.

On April 23, 2019, Plaintiff found two additional delinquency notices sent from the Fulton

County Sheriff’s Department at the Property (the “Second Notices”). Both notices were dated

April 19, 2019, were addressed to RESIDENT/TENANT/OCCUPANT, and gave notice to

Plaintiff that the Property would be advertised for sale if the unpaid taxes were not paid within 20

days. Plaintiff again called the Sheriff’s Department but was again instructed that the Sheriff’s

Department had not received instruction from Investa to halt collection efforts.

A tax foreclosure sale on the Property scheduled for June 4, 2019 was advertised in the

Daily Report during the month of May, 2019 (the “May Advertisement”).

While it is not clear from the record when the tax foreclosure was finally canceled or who

took steps to cancel it, the scheduled foreclosure sale did not take place as Plaintiff still owns the

Property. Other than the First Notice, Second Notices, and May Advertisement, Plaintiff has

neither alleged nor provided any evidence of additional collection efforts by Defendants that

allegedly violated the automatic stay.

C. Plaintiff’s Motion for Summary Judgment

Plaintiff argues that he is entitled to summary judgment on his claim for willful violation

of the automatic stay against both Defendants for their failure to stop the First Notice, Second

Notices, and May Advertisement and that he is entitled to damages totaling $374,000. Defendants

argue that Plaintiff has not established that they violated the automatic stay at all and that, even if

they did, Plaintiff has not established any damages.

To establish a willful violation of the automatic stay, Plaintiff must show a stay violation

occurred and that Defendants “(1) knew the automatic stay was invoked and (2) intended the

actions which violated the stay.” Jove Eng’g, Inc. v. I.R.S., 92 F.3d 1539, 1555 (11th Cir. 1996).

“The defendant must have actual notice of the stay for the violation to be willful.” Roche v. Pep

Boys, Inc. (In re Roche), 361 B.R. 615, 622 (Bankr. N.D. Ga. 2005). “[P]roof of the defendant's

intent to violate the stay is not required, only the defendant's intent to act must be shown. This

intent to act can be shown where the defendant, after notice, fails to affirmatively halt actions that

will violate the stay.” Id. “[O]nce the moving party makes a prima facie showing that the court

order was violated, the burden of production shifts to the alleged contemnor to show a present

inability to comply that goes beyond a mere assertion of inability.” Jove, 92 F.3d at 1556.

1. Defendants Did Not Willfully Violate the Stay by Initiating the Foreclosure

Process

One thing clear in this case is that initiation of the foreclosure process by Investa on

February 27, 2019 was not a willful violation of the automatic stay. The automatic stay terminated

as to both the Debtor and the Property upon entry of the Dismissal Order on February 13, 2019.

See 11 U.S.C. § 362(c)(1) and (2) (terminating the stay as to property of estate when such property

is no longer property of the estate and as to all other acts upon dismissal of a case); 11 U.S.C. §

349 (dismissal of a bankruptcy case revests property of the estate in the entity in which such

property was vested immediately before the commencement of the case). When Investa initiated

the foreclosure process on February 27, no stay was in effect as to the Property or Debtor. Investa

therefore could not have committed a willful violation of the automatic stay by initiating the

foreclosure process at a time when the stay was not in effect.

2. The Notices and May Advertisement Violated the Automatic Stay

It also is clear that stay violations occurred after reinstatement of Plaintiff’s Bankruptcy

Case. Section 362(a) “operates as a stay, applicable to all entities, of—. . . (4) any act to create,

perfect, or enforce any lien against property of the estate….” Though the automatic stay

terminated upon entry of the Dismissal Order, it was reinstated upon entry of the Reinstatement

Order. See MERS, Inc. v. Parks (In re Parks), No. 04-41299-MGD, 2005 WL 6491918, *2 (Bankr.

N.D. Ga. Feb. 4, 2005) (“When a case is dismissed, the automatic stay is terminated and when a

case is reinstated, the automatic stay is also reinstated.”). If nothing else, the posting of the First

Notice at the Property, the mailing of the Second Notices, and the May Advertisement were all

acts to enforce a lien against the Property, which was property of Plaintiff’s bankruptcy estate

when such acts occurred. The tacking of the First Notice, the mailing of the Second Notices, and

the May Advertisement each violated the automatic stay.

3. Investa Had a Duty to Stop the Foreclosure Process

Having determined that the posting of the First Notice, the mailing of the Second Notices,

and the May Advertisement each violated the stay, the Court next addresses Defendants’ main

arguments in both the Joint Response and Defendants’ Motion for Summary Judgment that they

did not perform any act in violation of the automatic stay because it was the Sheriff, not

Defendants, that tacked the First Notice, mailed the Second Notices, and effected the May

Advertisement. Any alleged violation of the automatic stay, Defendants’ argue, was done by the

Sheriff and not Defendants. Defendants further argue that Plaintiff has not established any fact

showing that Defendants had a duty to stop the foreclosure process once it was initiated and even

go so far as to argue that it was Plaintiff’s duty to enforce the automatic stay by providing a copy

of the Reinstatement Order to the Sheriff. Plaintiff responds that Defendants did have an obligation

to stop the foreclosure process. The Court easily agrees with Plaintiff on this point, at least with

respect to Investa.

Defendants’ position—that they had no obligation to stop the Sheriff from proceeding with

the foreclosure action—finds no support in case law or the principles underlying the purpose of

the automatic stay, and Defendants do not cite a single authority supporting their position. On the

contrary, the only authority cited by Defendants relative to this point supports Plaintiff’s position.

See Mitchell Constr. Co. v. Smith (In re Smith), 180 B.R. 311, 319 (Bankr. N.D. Ga. 1995) (“When

a creditor receives such actual notice, the burden is then on the creditor to assure that the automatic

stay is not violated or, if it has been violated prior to receipt of actual notice, the burden is on the

creditor to reverse any such action taken in violation of the stay.”). Numerous cases confirm that

the automatic stay imposes an affirmative duty on creditors to stop collection actions they have

initiated, even if third parties carry out the violative acts. See, e.g, In re Caffey, 384 Fed. Appx.

882, 886 (11th Cir. 2010) (unpublished) (doubting creditor’s legal position that she had no

affirmative duty to delay a contempt order and arrest warrant against debtor because contempt

order was issued prior to debtor’s bankruptcy case); In re Valentine, Case No. 19-40593-705, Adv.

No. 19-04022-705, 2020 WL 424570, *21 (E.D. Mo. Jan. 27, 2020) (“A creditor, who has put a

collection effort into motion must affirmatively act to stop, stay, or hold the collection effort in

abeyance or risk incurring liability once a bankruptcy commences.”); In re Banks, 253 B.R. 25, 30

(Bankr. E.D. Mi. 2000) (“many courts have emphasized the obligation incumbent upon creditors

to take the necessary steps to halt or reverse any pending State Court actions or other collection

efforts commenced prior to the filing of a bankruptcy petition, including garnishment of wages,

repossession of an automobile, foreclosure of a mortgage or a judgment lien and, thereby,

maintain, or restore, the status quo as it existed at the time of the filing of the bankruptcy petition.”).

To the extent any evidence is needed to establish Defendants’ duty in this case, the Court

finds the undisputed evidence that Investa, as servicer for GSRAN-Z, initiated the foreclosure

process satisfies Plaintiff’s burden of establishing Investa’s duty to stop the foreclosure process

once it learned of the Reinstatement Order. Investa did not violate the stay by initiating the

foreclosure process, but it did violate the stay if it failed to take action to stop the foreclosure

process after becoming aware of the Reinstatement Order. While the record is clear that Investa

had a duty to stop the foreclosure process as the party that initiated it, the record is not clear if

GSRAN-Z also had a duty to stop the foreclosure process or if it can be held responsible for the

actions of Investa. The only thing clear in the record is that Investa was the “servicer” for GSRAN-

Z, but beyond that general description, the relationship between Defendants is not developed in

the motions, briefs, or statements of fact and evidence before the Court. Neither party includes

any discussion in their briefs regarding the liability of GSRAN-Z specifically, whether such

liability would be independent of Investa’s liability, or whether such liability would arise from the

principles of agency or similar doctrines. Because it is not clear in the record whether GSRAN-Z

had a duty to stop the foreclosure because of the actions of Investa or whether GSRAN-Z can be

held responsible for the actions of Investa, the Court will deny Plaintiff’s Motion for Summary

Judgment against GSRAN-Z.

The Court wholly rejects Defendants’ arguments that Plaintiff had the burden of stopping

the foreclosure sale by providing the Sheriff with a copy of the Reinstatement Order. The law is

clear that debtors are not charged with a duty to enforce the automatic stay or ensure a creditor’s

compliance. See, e.g., Jove, 92 F.3d at 1558 (“This attempt to burden debtors with policing

[creditor]’s misconduct is a complete derogation of the law. . . . [W]hether [debtor] could have

remedied the violations with a phone call . . . is irrelevant in determining whether [creditor] is in

contempt for violating the automatic stay.”). In any event, the only evidence before the Court,

which again is undisputed except as to relevance, shows that Plaintiff did try to stop the foreclosure

proceeding by calling the Sheriff and Investa.

Having established that Investa had a duty to stop the foreclosure process after the

Reinstatement Order, the only conclusion to be drawn from the evidence before the Court is that

Investa did nothing to stop the First Notice, the Second Notices, and the May Advertisement as

each of those things in fact occurred, and Investa neither argues nor offers any evidence that it

tried to stop the violative acts or was somehow prevented from taking action to stop the violative

acts. Investa relies completely on the misplaced argument that it had no duty to act. Given the

lack of evidence showing Investa took, or was prevented from taking, any action to stop the

violative acts, the Court concludes that Investa’s failure to stop the First Notice, Second Notices,

and the May Advertisement was each an intentional act if it had actual knowledge of the

Reinstatement Order in enough to time to stop each act.

i. Defendants Are Presumed to Have Had Actual Knowledge of the Stay

Defendants acknowledge they received a copy of the Reinstatement Order via mail, though

they have not acknowledged when they in fact received such notice. The evidence, however, is

clear that the Clerk of Court served a copy of the Reinstatement Order on Defendants no later than

March 16, 2019. Defendants do not dispute that the addresses served were correct or contend that

they did not receive the Reinstatement Order until after the violative acts.6 “There is a presumption

that a letter that is properly addressed and placed in the mail will be delivered to the addressee in

a timely manner.” In re Hobbs, 141 B.R. 466, 468 (Bankr. N.D. Ga. 1992) (citations omitted).

Although “this presumption is rebuttable[,] [t]he presumption may be rebutted by the production

of evidence which ‘... would support a finding of the non-existence of the presumed fact....’ The

majority of courts that have considered the presumption of receipt have held that a mere denial of

receipt is insufficient to rebut the presumption.” Id. Not only have Defendants not produced any

evidence to support a finding that they did not receive the Reinstatement Order before the First

Notice, they do not even deny it. The Reinstatement Order was mailed to Defendants at their

6 GSRAN-Z acknowledged that it received the Reinstatement Order “through” Investa. Again, whether GSRAN-Z’s

knowledge of the Reinstatement Order created a duty for it to stop the foreclosure process initiated by Investa is

unclear from the record and not developed by either party in the pending motions.

proper addresses on March 16, 2019. With the unrebutted presumption that it was delivered timely,

the only conclusion to be drawn from the evidence before the Court is that Defendants had actual

notice of the Reinstatement Order far in advance of the First Notice. Accordingly, the Court finds

Defendants had actual knowledge of the Reinstatement Order well before the First Notice.

ii. Investa Willfully Violated the Automatic Stay by Failing to Stop the First

Notice, Second Notices, and May Advertisement

Because Investa had actual knowledge of the Reinstatement Order long before the First

Notice, Second Notices, and May Advertisements, and because it took no apparent action to stop

such acts, the Court finds Investa willfully violated the automatic stay by failing to stop the First

Notice, Second Notices, and May Advertisements.

4. Questions of Material Fact Remain as to Damages

It is Plaintiff’s burden to establish damages. E.g., Mantiplay v. Horne (In re Horne), 876

F.3d 1076, 1083 (11th Cir. 2017). Plaintiff requests three categories of damages: (1) $24,000

resulting from the termination of a lease between Debtor and an individual named Jean Deverze

(the “Lease’); (2) emotional distress damages of $100,000; and (3) punitive damages of $250,000.

The Court addresses each in turn.

i. Damages for Lease Termination

Plaintiff argues that he is entitled to summary judgment in the amount of $24,000 because

the First and Second Notices caused Deverze to terminate the Lease. In support of his damage

claim, Plaintiff submits his own affidavit, an affidavit of Deverze, and copies of the purported

Lease attached to each affidavit. In sum, the affidavits state that Deverze terminated the Lease

after he discovered the First Notice and Second Notices at the Property for fear that he would be

evicted following a foreclosure. Plaintiff argues he is entitled to all lost rent under the Lease

following Deverze’s termination, which amounts to 32 months of $750 rent payments.

Plaintiff’s own evidence, however, raises a number of factual inconsistencies regarding the

Lease. For instance, both copies of the Lease attached in Plaintiff’s exhibits show a monthly rent

payment of $7.50 and a security deposit of $5.00. Plaintiff’s affidavit and the Deverze affidavit

state the lease payment was $750, but neither addresses whether the Lease contained a typo and

whether the deposit amount was correct. Plaintiff has presented no evidence of payments or other

documentation to support $750 rental payments. Plaintiff points to his bankruptcy schedules in

his Reply to confirm that $750 is the correct amount. Plaintiff indeed filed a bankruptcy schedule

on November 19, 2018, showing $750 per month in rental income and another document that same

day indicating that his income “is or will be from a rental unit.” See Bankruptcy Case Doc. No. 1

p. 44 and Doc. No. 5. The Deverze affidavit, however, states that he and Plaintiff agreed on a

Lease in mid-December 2018, a month after Plaintiff filed his schedules. Plaintiff also states that

he forwarded the Lease to the chapter 13 trustee in his Bankruptcy Case well before he filed claims

in this case, but nothing in the record indicates when Plaintiff provided the Lease to the chapter 13

trustee except the unverified statement in Doc. No. 80 in the Bankruptcy Case that the chapter 13

trustee requested proof of income in January or February of 2019. While Plaintiff did file an email

from the chapter 13 trustee’s office dated August 15, 2019 that purports to attach a copy of the

Lease, the lease is not attached to the filed document, and the email does not state when the chapter

13 trustee received the Lease. See Bankruptcy Case Doc. No. 80, p. 18.

Other inconsistencies regarding the Lease and the timeline of events appear in the record.

The Complaint states the Lease was for five years instead of three. Plaintiff seeks rent for May of

2019 as part of his damages, but Deverze remained in the Property until the end of May (though

Plaintiff states Deverze did not pay after April). Plaintiff’s affidavit states that Mr. Deverze

confronted him on or about May 1, 2020 to inform him that he would be moving out by the end of

May, 2019, but Plaintiff filed the Complaint on April 30, 2019 and alleged that Mr. Deverze had

already informed him of his intention to move out at that time. Small inconsistencies add up, and

Plaintiff can clear up any doubts regarding the Lease at trial, including why Plaintiff should be

entitled to all future payments on the Lease with no present value discount.7

ii. Emotional Distress Damages

Plaintiff requests emotional distress damages in the amount of $100,000. Eleventh Circuit

precedent establishes that “emotional distress damages fall within the broad term of ‘actual

damages’ in § 362(k),” but cautions “that not every willful violation of the stay merits

compensation for emotional distress and that a standard governing such claims is necessary.”

Lodge v. Kondaur Capital Corp., 750 F.3d 1263, 1271 (11th Cir. 2014). “[A]t a minimum, to

recover ‘actual’ damages for emotional distress under § 362(k), a plaintiff must (1) suffer

7 Plaintiff submitted the affidavit of Nathan Ohuche to demonstrate Plaintiff’s inability to rent the Property at any

time during the remainder of the three-year Lease term. While it is not necessary to consider the merits of the

Ohuche affidavit at this time given other issues discussed above, Defendants object to the Ohuche affidavit as an

inadmissible expert report because Mr. Ohuche has not been qualified as an expert, and Plaintiff did not disclose

him as an expert. Defendants do not provide any evidence that Plaintiff never disclosed Mr. Ohuche as an expert

(unsupported statements in a motion are not evidence), but the Court agrees that Mr. Ohuche’s affidavit does not

establish that he is qualified as an expert on the matters set forth in the affidavit. See Fed. R. Ev. 702 (“A witness

who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an

opinion or otherwise . . .”). The Ohuche Affidavit provides only the following regarding his qualifications:

For just over a decade I have operated my real estate sales and investment company, City Condo Homes,

LLC, a Georgia corporation. I am involved in residential and commercial real estate leasing as well. I

have worked with a number of other companies and real estate investors in developing, financing, selling

and leasing single family residences and apartments and condominiums in and around the metro Atlanta

area as well as commercial spaces. I have acquired considerable experience and expertise in the area

during my career and participation in the real estate industry.

The only thing that is certain from this statement is that Mr. Ohuche has operated “a real estate sales and investment

company” for just over a decade. It is unclear what that company does or how it relates to the issues relevant in this

case. The rest of the statements are vague and generalized references to other experience but contain no reference to

any specific periods of time, companies worked for, transactions in which Mr. Ohuche has participated, or any

specific expertise in analyzing residential leasing trends or data. Mr. Ohuche may very well be qualified, but the

affidavit does not establish his qualification as an expert. Further, the Ohuche affidavit relies on several charts and

photographs contained therein that are illegible due to poor copy quality, and the Court does not find much of the

affidavit particularly helpful as a result. Plaintiff, however, may be able to establish and present Mr. Ohuche as an

expert at trial, subject to any objections that may be raised by Defendants regarding admissibility, including whether

he was properly disclosed as an expert.

significant emotional distress, (2) clearly establish the significant emotional distress, and (3)

demonstrate a causal connection between that significant emotional distress and the violation of

the automatic stay. Id. Plaintiff fails to satisfy at least the second prong of this test for purposes

of his Motion for Summary Judgment.

Plaintiff fails to provide any corroborating evidence to support his emotional distress

claims, such as medical evidence or non-expert testimony from family members, friends, or co-

workers. See Dawson v. Washington Mutual Bank, F.A. (In re Dawson), 390 F.3d 1139, 1149-50

(9th Cir. 2004) (cited favorably by the Eleventh Circuit in Lodge). Instead, Plaintiff relies solely

on his own affidavit, which normally does not clearly establish significant emotional distress. See

Lodge, 750 F.3d at 1272 (upholding summary judgment in favor of defendant where plaintiffs

failed to provide any corroborating evidence in support of emotional damages and relied solely on

plaintiffs’ affidavits). “Corroborating evidence may not be necessary to prove emotional distress

where the violator engaged in egregious conduct and significant emotional distress is readily

apparent,” id., but the record before the Court on summary judgment does not establish that a

reasonable finder of fact could not return a verdict in favor of Defendants on this point. No matter

how vigorously Plaintiff argues that Defendants’ conduct is egregious, the unique circumstances

of this case—a dismissal followed by a reinstatement with a foreclosure process initiated in

between and conducted by a third party—could lead a reasonable finder of fact to determine, after

weighing all evidence at trial, that Defendants’ conduct was not egregious even though a willful

violation of the stay occurred. Further, whether Plaintiff has suffered significant emotional distress

that is “readily apparent” is better left for a determination after weighing all evidence at trial, when

the finder of fact will have the opportunity to hear live testimony from Plaintiff and possibly others

instead of relying on the impassive pixels of an electronically filed affidavit.

In any event, there is no basis in the record on which the Court could conclude that

$100,000 is an appropriate measure of damages for Plaintiff’s emotional distress. Plaintiff gives

nothing in the way of evidence or argument to decipher how he arrived at that number, and any

damage amount ultimately awarded is better left to the finder of fact after weighing all the evidence

at trial.

iii. Punitive Damages

Punitive damages are available under § 362(k), but only in “appropriate circumstances.”

“The imposition of punitive damages for a violation of the automatic stay is appropriate when the

violator acts in an egregious intentional manner” or “where a violator’s acts are egregious,

malicious, or accompanied by bad faith.” In re Roche, 361 B.R. at 624 (citations omitted). When

determining whether punitive damages are appropriate, “[c]ourts rely on a variation of the

following factors: (1) the nature of the defendant's conduct; (2) the nature and extent of the harm

to the plaintiff; (3) the defendant's ability to pay; (4) the motives of the defendant; and (5) any

provocation by the debtor.” Id. Given the other factual issues discussed above, whether punitive

damages are appropriate in this case will be left for the finder of fact at trial after weighing all the

evidence.

In sum, the Court will grant Plaintiff’s Motion for Summary Judgment in part and deny it

in part. Summary judgment will be granted on Plaintiff’s claims for willful violation of the stay

against Investa but denied on Plaintiff’s claims for willful violation of the stay against GSRAN-Z.

Summary Judgment will be denied on all issues related to damages, which are reserved for trial.

D. Defendant’s Motion for Summary Judgment

Defendants move for summary judgment on all three claims asserted in the Complaint: (1)

willful violation of the stay, (2) violations of the FDCPA, and (3) state law negligence claims. The

Court addresses each claim in turn.

1. Defendants Are Not Entitled to Summary Judgment on the Stay Violation

Claims

In the Defendants’ Motion for Summary Judgment, Defendants rely primarily on the

position that they committed no stay violation because it was the Sheriff that tacked the First

Notice, mailed the Second Notices, and caused the May Advertisement. As discussed above, this

position lacks merit and is rejected by the Court. Investa had a duty to stop the foreclosure process

once it became aware of the Reinstatement Order, and the evidence is clear it failed to stop the

First Notice, Second Notices, and May Advertisement simply because each act in fact occurred.

Further, neither Defendant presented any evidence relative to when they became aware of the

Reinstatement Order or that they ever took any action to stop the foreclosure process. By failing

to address these issues, the Court has found that Investa willfully violated the stay by failing to

stop the First Notice, Second Notices, and May Advertisement. The Court further finds the

evidence in the record is sufficient to create a factual issue regarding GSRAN-Z’s own duty to

stop the foreclosure process and/or its liability through Investa.8 Defendants are not entitled to

summary judgment on the basis that that they took no action in violation of the automatic stay.

Defendants further argue that even if they willfully violated the stay, Plaintiff has not met

his burden of establishing any damages, challenging Plaintiff’s entitlement to all three categories

of damages: Lease damages, emotional distress damages, and punitive damages.

For the Lease, Defendants make three primary arguments: (1) that the Lease itself shows

payments of $7.50 per month instead of $750; (2) that Plaintiff is not entitled to all future rents

8 For instance, did Investa’s role as “servicer” for GSRAN-Z create a principal/agent relationship? Or did GSRAN-

Z have knowledge of the foreclosure process that created an independent duty to stop it? Defendants do not argue

that GSRAN-Z is not liable for the acts of Investa or that it had no duty to stop the foreclosure process because it

was initiated by Investa, as opposed to its arguments that neither Defendant is responsible for the acts of the Sheriff.

owed under the Lease; and (3) that any damages are the result of Plaintiff allowing Deverze to

terminate the Lease instead of Defendants’ actions.

To the first point, it is true the Lease shows payments in the amount of $7.50 instead of

$750, and Plaintiff has provided no supporting evidence to show Deverze actually paid $750 per

month instead of $7.50, but the affidavits of both Plaintiff and Deverze state the monthly payments

were for $750, and a reasonable finder of fact could infer $7.50 was a typo.9 This is a clear issue

of fact that should be addressed at trial and not on summary judgment.

To the second point, even without considering the Ohuche affidavit, Plaintiff has submitted

enough evidence through his affidavit to establish an issue of fact as to whether he will be able to

rent the Property again and for the same monthly payments. Plaintiff’s affidavit states that he

unsuccessfully tried to re-let the Property and offered some detail on his efforts and obstacles in

re-letting the Property. This is another clear issue of fact to be addressed at trial.

To the third point, whether Deverze had a contractual right to terminate the Lease does not

foreclose Plaintiff from establishing that Deverze in fact terminated the Lease as a result of the

stay violations and that he is entitled to damages as a result. Assuming Plaintiff even has viable

claims against Deverze, it is possible that collection efforts against Deverze would be fruitless.

Whether Plaintiff should have allowed Deverze to terminate the Lease without taking some action

to collect may go to the quantum of damages, but it does not foreclose entitlement to damages.

This is another clear issue of fact to be addressed at trial.

In short, Plaintiff has submitted sufficient evidence to create a factual issue of damages

related to the Lease. The Court makes no findings relative to the Lease and reserves all issues for

trial.

9 Plaintiff gets the benefit of this inference for purposes of Defendants’ Motion for Summary Judgment, but

Defendants get the benefit of an opposite inference for purposes of Plaintiff’s Motion for Summary Judgment.

As to emotional distress damages, although Plaintiff has not submitted any corroborating

evidence regarding his emotional distress, Defendants’ apparent failure to take any action to stop

the foreclosure process could lead a reasonable finder of fact to make a determination that

Defendants’ conduct was egregious after weighing all the evidence, and Plaintiff’s affidavit is

sufficient to at least create an issue for trial regarding emotional distress damages. The Court

makes no findings relative to emotional distress damages and reserves all issues for trial.

As to punitive damages, whether Defendants’ conduct in this case was egregious enough

to warrant punitive damages will be left for the finder of fact at trial, and the Court makes no

findings relative to punitive damages, reserving all issues for trial.

Even though significant factual issues remain regarding all three categories of damages as

discussed above, Plaintiff has nonetheless produced enough evidence for each category to proceed

to trial. Defendants are not entitled to summary judgment on damages.

2. Defendants Are Entitled to Summary Judgment on the FDCPA Claims

Defendants argue they are entitled to summary judgment on Plaintiff’s FDCPA claims

because, among other reasons, the ad valorem taxes and solid waste fees are not “debts” under the

FDCPA. Defendants cite to Beggs v. Rossi, 145 F.3d 511, 512 (2d. Cir. 1998) and Boyd v. J.E.

Roberts Co. Inc., 765 F.3d 123, 126 (2d. Cir. 2014) for the proposition that ad valorem taxes and

mandatory water and sewer charges against property are not “debts” under the FDCPA because

they involve no “transaction” as that term is understood in the FDCPA. “Rather, the relationship

between plaintiffs and the City with respect to such charges is akin to ‘taxpayer and taxing

authority,’ and ‘does not encompass that type of pro tanto exchange which the statutory definition

envisages.’” Boyd, 765 F.3d at 126 (citing Beggs, 145 F.3d at 512). Plaintiff failed to respond to

Defendants’ motion on the FDCPA claims, and the Court agrees that the taxes and fees are not

debts as contemplated by the FDCPA. See Williams v. Jenkins County Tax Comm’r, Civil Action

No. 1:11-CV-3089-CAP-JSA, 2012 WL 13009222 (N.D. Ga. Dec. 21, 2012) (approved and

adopted by Williams v. Jenkins County Tax Comm’r, Civil Action No. 1:11-CV-3089-CAP, 2013

WL 12246580 (N.D. Ga. March 12, 2013) (finding county ad valorem real property taxes are not

debts under the FDCPA). The Defendants’ Motion for Summary Judgment will be granted on the

FDCPA claims.

3. Defendants Are Not Entitled to Summary Judgment on the State Law

Negligence Claims

Plaintiff’s Complaint includes a claim for state law negligence against Defendants for

breaching their duty not to take collection efforts against Plaintiff while he was a debtor in

bankruptcy. Plaintiff alleges Defendants committed negligence per se by violating § 362(a) and

that he is entitled to damages for his economic losses and mental and emotional distress. The

negligence claim is derivative, dependent, and duplicative of Plaintiff’s willful stay violation claim

because the basis of the claim is that Defendants violated the automatic stay. Likewise,

Defendants’ arguments on the negligence claim are duplicative of their arguments on the willful

stay violation claim—i.e., that Defendants had no duty to stop the foreclosure process and that the

Sheriff, not Defendants, committed the stay violations. The Court rejects Defendants’ arguments

for purposes of the negligence claims for the same reasons it rejected them for the willful stay

violation claims. Whether Plaintiff may assert any claims or damages based on state law

negligence claims that would not be subsumed or preempted by the willful stay violation claims is

unclear, but the Court discerns no basis in Defendants’ motion to dismiss the state law negligence

claims other than the misplaced arguments that they had no duty to stop the foreclosure and

committed no stay violation. The Court will, therefore, deny Defendants’ Motion for Summary

Judgment on the negligence claims.

IV. CONCLUSION

Investa had a duty to stop the First Notice, Second Notices, and May Advertisement once

it had actual knowledge of the Reinstatement Order. Plaintiff has established that Investa willfully

violated the automatic stay by failing to stop the First Notice, Second Notices, and May

Advertisement, and Defendants offer no evidence to the contrary. Whether GSRAN-Z also had a

duty to stop the foreclosure or whether it may be held liable through Investa is reserved for trial.

The Court makes no findings relative to any damages asserted by Plaintiff, and all issues related

to damages are reserved for trial. Defendants are entitled to summary judgment on the FDCPA

claims but not the claims for willful violation of the stay or state law negligence claims. Therefor

it is hereby,

ORDERED that Plaintiff’s Motion for Summary Judgment is GRANTED IN PART and

DENIED IN PART. Plaintiff is entitled to summary judgment that Investa willfully violated the

automatic stay. Plaintiff is not entitled to summary judgment that GSRAN-Z willfully violated

the automatic stay. Plaintiff is not entitled to summary judgment for any damages.

IT IS FURTHER ORDERED that Defendants’ Motion for Summary Judgment is

GRANTED in part and DENIED in part. Defendants are entitled to summary judgment on the

Second Claim for Violation of the FDCPA but are not entitled to summary judgment on the First

Claim for Willful Violation of the Automatic Stay or the Third Claim for Negligence.

IT IS FURTHER ORDERED that the Motion to Strike and the Request for Oral

Argument are hereby DENIED.

By separate order the Court will schedule a telephonic status conference to discuss pre-trial

matters for all issues remaining to be tried.

The Clerk of Court is directed to serve a copy of this order on Plaintiff, Defendants,

Defendants’ Counsel, and the Chapter 13 Trustee.

END OF DOCUMENT