Opinion
Case No. 8:13-bk-14728-RCT
12-30-2016
In re Robert C. Fohrmeister, Debtor.
Chapter 13 ORDER AWARDING DEBTOR NOMINAL DAMAGES FOR WILLFUL VIOLATION OF THE AUTOMATIC STAY
On December 6, 2016, the court conducted a trial on the Motion For Sanctions Against Daniel M. Hertzog, Jr. for Violation of a Court Order (the "Motion") (Doc. 107), filed by Debtor Robert C. Fohrmeister. The Motion seeks damages under 11 U.S.C. § 362(k) for willful violations of the automatic stay. On summary judgment, the court previously found that Mr. Hertzog violated the stay by mailing two default notices on December 9, 2013. (Doc. 142). The only remaining issue is whether Mr. Fohrmeister suffered damages as a result of these notices.
At trial, documentary evidence was offered by both parties. (Doc. 153). Mr. Fohrmeister, appearing pro se, offered narrative testimony and was cross-examined by counsel for Mr. Hertzog. No other testimony was offered.
Mr. Fohrmeister claims his actual damages are (i) approximately $6,000 in funds paid to Mr. Hertzog that remain unaccounted for (the "Unaccounted Funds"), and (ii) rents lost and utility payments he was obligated to pay (the "Lost Rents") after his tenant moved away as a result of eviction proceedings commenced by Mr. Hertzog on behalf of MHC Hillcrest LLC d/b/a Hillcrest Mobile Home Park ("Hillcrest") (Hertzog's Ex. 8, p. 1). The Lost Rents are for January 2014 until October 2015, the time Mr. Fohrmeister's second mobile home lay vacant as he struggled to locate a new tenant.
BACKGROUND
Mr. Fohrmeister filed his chapter 13 case on November 4, 2013. (Doc. 1). But his case was dismissed on November 27, 2013, when he failed to file all of the required documentation. (Doc. 15). The order dismissing his case expressly extended the automatic stay for 14 days—until December 11, 2013.
Mr. Hertzog does not dispute that he received the dismissal order with the 14-day extension of the automatic stay. Nevertheless, on December 9, 2013, while the stay remained in place, Mr. Hertzog sent statutory notices of nonpayment to Mr. Fohrmeister for his two mobile home lots (the "Default Notices"). (Doc. 125, Exs. 1 and 2). Thereafter, Mr. Hertzog began eviction proceedings against Mr. Fohrmeister for both lots.
The eviction complaint for Lot 1011, which is Mr. Fohrmeister's residence, was served on him on January 16, 2014 (the "Lot 1011 Complaint"). (Hertzog's Ex. 8, pp. 31-45). The day after the Lot 1011 Complaint was served, Mr. Fohrmeister's tenant, Teresa Dial, moved away. According to Mr. Fohrmeister, Ms. Dial moved because she was served with the Lot 1011 Complaint. She informed him: "I've had it. I'm gone." Mr. Fohrmeister was not able to find a new tenant until October 2015.
On January 21, 2014, the court conditionally granted Mr. Fohrmeister's request to reinstate his chapter 13 case. (Doc. 27). Mr. Fohrmeister complied with the conditions of reinstatement, and his chapter 13 was officially reinstated on January 31, 2014. (Doc. 39). As a result of the reinstatement, the automatic stay was reimposed. Thereafter, neither Mr. Hertzog nor Hillcrest pursued the state court eviction proceedings.
Beyond the Default Notices, the court finds no other willful violations of the automatic stay.
DISCUSSION
Section 362(k)(1) provides that "an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages." "[A]ctual damages are real, substantial and just damages, or the amount awarded to a complainant in compensation for his actual and real loss or injury . . . ." Credit Nation Lending Servs., LLC v. Nettles, 489 B.R. 239, 247 (N.D. Ala. 2013) (citations and internal quotation omitted).
It is Mr. Fohrmeister's burden to prove his damages were incurred as a result of the stay violations. See In re Garner, No. 09-81998, 2010 WL 890406, at *4 (Bankr. M.D.N.C. Mar. 9, 2010) ("An individual seeking damages has the burden of establishing by a preponderance of the evidence that (1) the action taken was in violation of the automatic stay, (2) the violation was willful, and (3) the violation caused actual damages."); In re Zajni, 403 B.R. 891, 895 (Bankr. M.D. Fla. 2008).
1. Unaccounted Funds
Mr. Fohrmeister conceded at trial that the Unaccounted Funds, which consist of a series of rent checks sent to Mr. Hertzog's office during a period when Hillcrest was not accepting rent payments, were unrelated to the Default Notices. Indeed, Mr. Fohrmeister's primary goal is to determine what happened to the checks for the Unaccounted Funds, which he asserts were cashed but never applied to his account.
The Unaccounted Funds may prove a partial defense in state court eviction proceedings; however, they are not actual damages for the stay violations.
2. Lost Rents
It is undisputed that Mr. Fohrmeister had no rental income from his second mobile home for some twenty (20) months following Ms. Dial's departure in January 2014. During this time, Mr. Fohrmeister also had to pay approximately $125 per month to maintain utility service for the property. (Creditor's Ex. 8, p. 2). Mr. Fohrmeister explained that when the property was rented, he required the tenant to pay those sums in addition to the monthly rent.
Although Mr. Fohrmeister established the amount of the Lost Rents, he did not prove that the Lost Rents were incurred as the result of the Default Notices. To the contrary, Mr. Fohrmeister testified that Ms. Dial vacated his mobile home when she was served with the Lot 1011 Complaint on January 17, 2014. By that time, the automatic stay was no longer in effect. And no evidence was presented to prove that the Default Notices were ever sent to or received by Ms. Dial.
Accordingly, the court finds that the Lost Rents are not actual damages for the stay violations.
3. Nominal Damages
Although Mr. Fohrmeister has not established "actual" damages, the court cannot simply overlook Mr. Hertzog's willful violation of the stay and the invasion of Mr. Fohrmeister's right to be free from collection activity. See Grine v. Chambers (In re Grine), 439 B.R. 461, 470 (Bankr. N.D. Ohio 2010)(citing Midlantic Nat'l Bank v. N.J. Dep't of Envtl. Protection, 474 U.S. 494, 503 (1986)); In re Garner, 2010 WL 890406, at *2 (discussing the purposes of the automatic stay). To preserve the integrity of the automatic stay, nominal damages and attorneys' fees may be awarded when a debtor is unable to prove actual damages under section 362(k). See, e.g., In re Garner, 2010 WL 890406, at *4 (awarding nominal damages and attorney fees); In re Withrow, 93 B.R. 436, 439 (Bankr. W.D.N.C. 1988) (awarding $100 in nominal damages and attorney fees).
Mr. Fohrmeister is representing himself. So he has no attorney fees, and he offered no evidence of any legal costs. Nevertheless, the court finds that nominal damages of $200, $100 per Default Notice, are appropriate under the facts of this case. See Headrick v. Ga. Dep't of Revenue (In re Headrick), 285 B.R. 540, 550 (Bankr. S.D. Ga. 2001) (awarding debtors $200 in nominal damages resulting from violation of the stay); In re Withrow, 93 B.R. at 439; see also In re Diaz, 452 B.R. 257, 276 (Bankr. M.D. Fla. 2009) (awarding nominal damages of $500.00), rev'd on other grounds, 647 F.3d 1073 (11th Cir. 2011).
Accordingly, it is ORDERED:
1. By sending the Default Notices, with notice that the automatic stay had been extended for 14 days, Mr. Hertzog willfully violated the stay imposed by 11 U.S.C. § 362.
2. Mr. Fohrmeister failed to prove that the Unaccounted Funds and Lost Rents resulted from the Default Notices.
3. Mr. Fohrmeister shall recover nominal damages of $200.00, calculated at $100 per Default Notice, from Mr. Hertzog for his willful violation of the stay. Mr. Hertzog shall pay the sum of $200.00 to Mr. Fohrmeister, whose address is 2346 Druid Road E Lot 1011, Clearwater, FL 33764, within twenty (20) days of entry of this Order.
ORDERED.
Dated: December 30, 2016
/s/_________
Roberta A. Colton
United States Bankruptcy Judge The clerk is directed to serve a copy of this order on interested parties who are not registered CM/ECF users.