By November 12, 2013 0 Comments

Grover v. HomeStreet Bank: Lender Lockout Is Trespass To Land For Which Emotional Distress Damages May Be Recoverable

In Grover v. HomeStreet Bank, et al., the chapter 13 bankruptcy debtor survived a motion to dismiss an adversary proceeding against the lender (Oregon Housing and Community Services) and loan servicer (HomeStreet Bank) to recover damages from an illegal lockout.

After commencing a nonjudicial foreclosure, the lender’s agents allegedly entered plaintiff’s property and locked her out for 50 days. Plaintiff alleged that she suffered emotional distress and other damages as a result and sought judgment in the amount of $50,000.

Defendants moved to dismiss after filing an answer so the court treated the motion as one for judgment on the pleadings. Defendants argued that plaintiff’s claim was not for trespass, which is subject to a 6-year statute of limitations, but for an invasion of privacy, which is subject to a 2-year statute of limitations. If the shorter limitations period applied, plaintiff’s claim was untimely.

The court agreed with plaintiff that the complaint stated a claim for trespass to land. Under Oregon law, a trespass is an intentional or negligent invasion of the possessor’s interest in the exclusive possession of land. Any physical intrusion on land by another necessarily interferes with exclusive possession. Because defendants’ agents entered the property and locked plaintiff out, plaintiff stated a claim for trespass.

Defendants alternatively argued that plaintiff failed to state a trespass claim because the injury alleged was a personal injury and not an injury to property. The defendants pointed to plaintiff’s allegation that she suffered emotional distress rather than physical damage to her property.

The court held that defendants’ argument “confuses damages to compensate for Plaintiff’s injury with the injury itself.” While plaintiff’s damages are for emotional distress, “the right or interest violated remains to Plaintiff’s land and personal property.”

Because plaintiff stated a claim for trespass to which the 6-year statute of limitations applies, Bankruptcy Judge Thomas M. Renn denied defendants’ motion to dismiss.

Read the full opinion here.

Photo © 2013 by ImageAfter.
Posted in: Cases

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