Miller v. District of Columbia et al

1 	There is no return of service demonstrating that the
summons and complaint were served on the other defendant, Lynn C.
French, who is alleged to have served as Administrator of the
D.C. Homestead Program. 	Accordingly, I will treat the District
as the sole defendant at this juncture.
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
GREEN MILLER, JR.,
Debtor.
____________________________
GREEN MILLER, JR.,
Plaintiff,
v.
DISTRICT OF COLUMBIA, et
al.,
Defendants.
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Case No. 96-00431
(Chapter 11)
Adversary Proceeding No.
08-10028
Not for publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION RE DISTRICT OF
COLUMBIA’S SUPPLEMENTAL MOTION FOR SUMMARY JUDGMENT
This decision addresses the District of Columbia’s
Supplemental Motion for Summary Judgment. 1 	Pursuant to an
earlier Memorandum Decision, the only claims against the District
The document below is hereby signed.
Signed: August 11, 2010.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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for violation of the automatic stay that remain are Miller’s
claim for lost rents from his Belmont Properties for the time
that the District held title to the Belmont Properties and his
claim for stress and mental anguish.
The earlier Memorandum Decision addressed the background of
this proceeding, but I will repeat here the more relevant facts.
Prior to the commencement of Miller’s bankruptcy case, the
District conducted tax sales of the Belmont Properties, and the
statutory redemption period expired in January 1996. 	On April 2,
1996, Miller commenced his bankruptcy case, activating the
protection of the automatic stay of 11 U.S.C. § 362(a).
Thereafter, on June 7, 1996, the District sent Miller notice of
impending transfer of the Belmont Properties to occur on July 7,
1996, if the properties were not redeemed by that time. 	Miller
failed to redeem, and the mayor deeded the Belmont Properties to
its Homestead Housing Preservation Program (“HHPP”) on August 8,
1996. 	On September 20, 1996, the District filed a suit to quiet
title on the Belmont Properties in the District of Columbia
Superior Court. 	Upon becoming aware of Miller’s pending
bankruptcy case, however, the Superior Court dismissed the quiet
title proceeding. 	The District neglected, however, to set aside
the conveyance of title to itself. 	Miller’s plan under chapter
11 of the Bankruptcy Code was confirmed on October 1, 1997, with
an effective date of October 11, 1997, and a Consummation Date (a
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defined term in the plan) of no later than January 29, 1998. 	It
provided in Article IV that if, “within six months after
consummation,” i.e., by no later than six months after January
29, 1998, which would be the end of July 1998, Miller did not
sell the Belmont Properties or obtain the consent of the District
of Columbia to convey the Belmont Properties to a non-profit
group, he was required to “abandon all claims to the lots and
consent to the relief sought in the District of Columbia Superior
Court proceeding.” 	This was reinforced by a consent order
entered on July 29, 1998, which provided that:
Debtor will consent to judgment in any quiet title
action brought by the District of Columbia on pre-
petition and post petition real property taxes owed on
[the Belmont Properties] in the event the debtor is
unable to pay off the real property taxes on said lots
as promised in the confirmed plan[.]
In August 1998, Miller became aware that the District had
transferred title to the Belmont Properties to HHPP. 	Then, on
June 11, 2002, the District quitclaimed the properties back to
Miller. 	On March 26, 2004, Miller entered into a contract for
the sale of the Belmont Properties for $2.1 million and
ultimately consummated the sale.
In the earlier Memorandum Decision, I ruled that Miller’s
financial inability to develop the properties precluded his
obtaining damages for being unable to develop the properties when
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they were titled in the name of an instrumentality of the
District, but I ruled that this did not demonstrate that he could
not rent the properties as, say, a parking lot, an opportunity
which could have been impaired because he did not hold title to
the properties. 	In addition, Miller’s claim for emotional
damages remained an open issue.
I
With regard to Miller’s assertion that he is entitled to
damages for lost rent during the time the District held title to
the Belmont Properties, raw land at all relevant times, I will
grant summary judgment.
Miller contends that he could not rent the properties
because title was in the District of Columbia, but Miller’s
intent at all times was to develop the property. 	There is no
evidence that during the two years (from August 1996 to August
1998) in which he was unaware of the title to the property being
in the District of Columbia, he attempted to rent the property .
The speculative possibility that, after learning of the title
problem, Miller might have attempted to rent the property if
there were no title problem is negated by the lack of evidence
that he attempted to rent the property before he knew of the
title problem and by his testifying that at all times his intent
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2 Moreover, by the time he learned of the title problem he
was required by his confirmed plan to abandon any claims to the
Belmont Properties, and renting the properties would have been
inconsistent with that obligation (at least until the D.C. taxes
were fully paid).
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was to develop the property. 2
In any event, Miller had a duty to mitigate his damages, and
could easily have sought relief from this court if the District’s
holding title to the Belmont Properties was causing him harm.
The District points to this court’s earlier observation that:
It 	bears 	noting 	that 	actions 	in 	violation 	of 	the
automatic 	stay 	are 	void. 	See 	In 	re 	Henneghan, 	No.
03-01216, 2009 WL 2855835, at 3 (Bankr. D.D.C. June 15,
2009). 	Even 	if 	the 	void 	title 	of 	the 	District 	were 	a
cloud on Miller’s title, he could easily have obtained a
judgment 	from 	this 	court 	decreeing 	that 	the 	District’s
title was void. 	Any damages incurred in pursuing such a
decree 	would 	have 	been 	minimal. 	A 	debtor 	cannot 	claim
huge damages for violation of the automatic stay when the
debtor 	failed 	to 	take 	steps 	to 	mitigate 	those 	damages.
See 	In 	re 	GeneSys, 	273 	B.R. 	290, 	296 	(Bankr. 	D.D.C.
2001).
December 3, 2009 Memorandum Decision at 8, n.4. 	Miller responds,
in effect, that the District was already violating the automatic
stay, and thus Miller was reasonable in not seeking an order from
this court that the District might similarly disregard. 	In full,
he argues:
The problem with that suggestion [that Green could have
moved 	in 	this 	court 	for 	a 	decree 	that 	the 	District’s
title 	was 	void] 	is 	that 	the 	District 	was 	already
violating 	an 	order 	of 	the 	Bankruptcy 	Court 	when 	it
attempted 	to 	take 	plaintiff’s 	property. 	A 	reasonable
juror could conclude that the plaintiff was wise to take
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the 	District 	on 	in 	the 	Superior 	Court 	where 	an 	order
could be obtained that the District could not ignore as
opposed to going back to the Bankruptcy Court for another
order 	for 	the 	District 	to 	ignore. 	The 	question 	of
whether 	or 	not 	the 	plaintiff 	failed 	to 	mitigate 	his
damages is clearly an issue for the trier of fact.
Miller’s argument does not demonstrate a genuine issue regarding
a material fact.
Miller has remained strangely silent as to what he attempted
to do when he learned in August 1998 that the property was titled
in the District of Columbia. 	His intent was to develop the
property, and until he had a realistic prospect of obtaining
financing, clearing up the title problem would not have been a
pressing matter. 	Miller had no notion of renting the property.
Damages based on the conjecture that he might have rented the
property if title had been in his name are inappropriate. 	See
Archer v. Macomb County Bank, 853 F.2d 497 (6th Cir. 1988).
If, indeed, Miller was really interested in renting the
property, he had a ready way of clearing title at no expense to
himself. 	He could have filed a motion seeking to hold the
District in civil contempt for failing to release its void title
to the property and seeking to declare its title void. 	Failing
to pursue that course was unreasonable. 	In such a proceeding, he
could have employed counsel whose attorney’s fees would have been
recoverable from the District as a compensatory contempt
sanction. 	Accordingly, Miller has failed to demonstrate that he
was damaged by reason of the District’s holding title to the
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properties. 	He is not entitled to recover attorney’s fees that
theoretically would have been incurred in a civil contempt
proceeding if he had brought one prior to the District’s having
voluntarily released its void title.
II
Miller also seeks emotional distress damages. 	Courts are
split on whether emotional distress damages may be awarded for
violations of the automatic stay under 11 U.S.C § 362(k). 	In re
Dawson, 390 F.3d 1139, 1148 (9th Cir. 2004); Aiello v. Providian
Financial Corp., 239 F.3d 876 (7th Cir. 2001). 	Section 362(k)
specifies that an individual shall recover “actual damages.”
After an extensive survey of the law and independent analysis,
the Ninth Circuit held in In re Dawson that emotional distress
damages are cognizable under § 362(k). 	390 F.2d at 1148. 	The
Seventh Circuit, on the other hand, more leery of emotional
distress claims, allows such claims only if the individual has
also suffered financial injury. 	Aiello, 239 F.3d at 880. 	The
Ninth Circuit recognized the danger of false emotional distress
damages as well, but instead of bluntly limiting recovery of such
claims by tying them to financial injury, it established a high
standard for such claims. In re Dawson, 390 F.2d at 1148-49.
This court finds the Ninth Circuit’s approach to emotional
distress damages for an automatic stay violation well reasoned,
and thus it adopts its standard.
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An individual is only entitled to damages for emotional
distress under § 362(k) if she (1) suffered significant emotional
harm, (2) clearly establishes the significant harm, and (3)
demonstrates a causal connection between that significant
emotional harm and the violation of the automatic stay (as
distinct, for instance, from the anxiety and pressures inherent
in the bankruptcy process). 	Id. 	Fleeting or trivial anxiety, or
medically inconsequential distress is not significant harm and
thus not compensable. 	Id. at 1149.
An individual may show clear significant emotional harms in
a variety of ways. 	The best and most credible way is to offer
medical evidence, for otherwise it is hard to distinguish between
true and frivolous claims. 	Id. 	Although, medical evidence is
often the best, non-expert testimony may also be used, and in
certain rare instances, significant emotional distress may be
readily apparent without corroborating evidence. 	Id. at 1150.
Courts are not persuaded, however, by a party’s self-serving
claims. 	The court in In re Robinson, 228 B.R. 75 (Bankr.
E.D.N.Y. 1998), denied a claim for emotional distress damages
when the plaintiff provided no affidavit or other evidence
“describing the distress or any consequences of such distress,”
but rather provided only “unsworn and generalized assertions that
debtor was ‘concerned,’ ‘upset,’ and needed reassurances to calm
her fears.” Id. at 85. If the plaintiff adequately demonstrates
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3 By July of 1998, prior to Miller’s learning in August 1998
that title was in the District of Columbia, Miller was obligated
under the terms of his confirmed plan to consent to any quiet
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he suffered significant harm, he must then show that this harm
was distinctly caused by the violation of the stay. 	In re
Dawson, 390 F.3d at 1150.
In his opposition to the District’s supplemental motion for
summary judgment, Miller claims that he had “no obligation to
‘prove’ his damages or any aspect of his case at this stage of
litigation.” 	To the contrary, Miller did have an obligation to
“set forth specific facts showing that there is a genuine issue
for trial.” 	Anderson v. Liberty Lobby, 477 U.S. 242, 250 (1986).
Furthermore, summary judgment should be granted when the
“nonmoving party has failed to make a sufficient showing on an
essential element of her case with respect to which she has the
burden of proof.” 	Celotex Corp. v. Catrett, 477 U.S. 317, 324
(1986). 	Miller has the burden of proof at trial on his emotional
damages claim.
The District points out that Miller has presented no
specific facts demonstrating that he has suffered significant
harm, nor that any significant harm was caused by the District’s
violation of the automatic stay, and, thus, has failed to support
an essential element of his claim. 	It is also unreasonable to
assume, without further evidence, that the mere fact of learning
the District had title would cause significant emotional harm. 3
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title relief the District of Columbia sought on the property if
Miller failed to pay his tax obligations. 	See also Consent Order
of July 29, 1998.
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Thus, the District is entitled to summary judgment unless Miller
has provided adequate affidavits and other evidence of his claim
demonstrating that there is a sufficient basis for his emotional
damages claim.
At this juncture, the facts of record via affidavit and
admissions and otherwise do not demonstrate that emotional
damages are recoverable under the standard of In re Dawson.
During discovery, Miller provided no evidence, medical or
otherwise, sufficient to support his emotional damages claim. 	In
response to the District’s supplemental motion for summary
judgment he has provided no affidavits or other evidence in
support of his claim. 	The only support for his emotional damages
claim comes from his answers to two interrogatories. 	In its
interrogatories sent to Miller on April 30, 2009, the District
asked:
19. State in detail the damages that you suffered “as a
direct result of Defendants taking title” to the Belmont
Properties.
20. Describe in detail “the economic loss, humiliation,
embarrassment, physical and emotional distress and mental
anguish” 	that 	you 	have 	suffered 	as 	a 	result 	of 	actions
taken by defendant.
Miller responded:
19. 	Plaintiff 	was 	unable 	to 	develop 	the 	property 	and
realize the profit from that development.
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20. 	See 19 above. 	Additionally, Plaintiff was reduced
to 	begging 	defendant 	to 	give 	him 	back 	that 	which 	was
legally his. 	Stress of knowing Plaintiff cannot perfect
his Reorganization Plan with the Belmont Properties.
The District asked Miller for a detailed account of his
damages and he replied with general assertions. 	In his response
to the District’s interrogatory, Miller claims that learning he
did not hold title caused him stress because he could not perfect
his reorganization plan. 	This claim is negated for two reasons.
First, by the time Miller learned of the title being in the
District of Columbia, his confirmed plan required him to abandon
all claims to the Belmont properties and to consent to quiet
title relief in favor of the District in any quiet title action
the District brought. 	See also Consent Order of July 29, 1998.
Miller could not have been significantly harmed by realizing he
did not hold title to property that he would be required to
relinquish anyway if the District elected to pursue a quiet title
action. 	Second, even if developing the properties as part of his
reorganization was Miller’s objective, this court established in
its memorandum decision of December 3, 2009, that the title issue
was not the reason the defendant could not develop the property.
Thus any emotional distress over not being able to develop the
properties cannot be attributed to the District’s holding title.
While Miller says he was “reduced to begging” the District
to give back his property, this statement does not rise to the
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level of significant emotional distress on its own. 	Moreover,
Miller had a duty to mitigate his damages: 	Miller could easily
have avoided begging the District by seeking relief in this
court.
The District has shown there is no evidence to support any
claim for emotional damages under the In re Dawson test, and
Miller has failed to rebut this showing with any evidence
whatsoever. 	This absolute lack of evidence supporting a claim
for emotional distress damages makes summary judgment appropriate
in this instance.
III
Pursuant to the foregoing, it is
ORDERED that the District’s motion for summary judgment is
GRANTED with respect to both Miller’s lost rent claim and
Miller’s claim for emotional distress damages.
[Signed and dated above.]
Copies to: All counsel of record.
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