NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _______________
No. 21-1232 _______________
In re: SUSAN M. BOLTZ-RUBINSTEIN, Debtor SUSAN M. BOLTZ-RUBINSTEIN, Appellant v.
BANK OF AMERICA, N.A.; NATIONAL RESIDENTIAL ASSETS CORP., as servicer _______________
On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2:19-cv-04628) District Judge: Honorable Eduardo C. Robreno _______________
Submitted Under Third Circuit L.A.R. 34.1(a) on January 13, 2022.
Before: AMBRO, BIBAS, and ROTH, Circuit Judges
(Filed: February 14, 2022) _______________
OPINION* _______________
* This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding precedent. BIBAS, Circuit Judge.
Bankruptcy automatically stays debt collection, giving bankruptcy judges time to work
out repayment plans. But they can make exceptions to the stay, letting particular creditors
try to recover their debt while proceedings are pending.
A bankruptcy judge did that here. The bankruptcy filing triggered the automatic stay,
but the judge exempted a creditor. After that, the creditor’s agent resumed trying to collect
a debt. Now the debtor claims that the supposed agent was not in fact an agent of the cred-
itor and thus not exempt from the stay. But she is wrong: the evidence shows that it was an
agent, so the creditor was free to use it. Besides, any violation of the stay caused no harm.
So we will affirm.
I. BACKGROUND
Susan Boltz-Rubinstein got a home mortgage from Bank of America. But after falling
behind on her payments, she filed for a Chapter 13 consumer bankruptcy. Her filing trig-
gered the automatic stay, stopping creditors from collecting her debts. 11 U.S.C. § 362. Yet
the Bank kept mailing her about the delinquent loan. She sued the Bank, claiming that these
letters violated the automatic stay. Id. § 362(k).
But the Bank has a good excuse. It could keep trying to collect the debt, it argues,
because it was exempt from the stay. To understand that argument, we must look at the
nuts and bolts of its mortgage business.
A. Bank of America’s mortgage business
To get cash up front from its mortgages, the Bank had signed a forward-flow agreement
with Bank of New York Mellon. Under that deal, Bank of America would extend and
2 service mortgage loans, contacting borrowers and collecting payments. For its part, Mellon
paid the Bank an upfront fee in return for an income stream from the mortgage payments.
If borrowers defaulted on their mortgages, the Bank would handle foreclosure. Then,
right before starting a foreclosure, it would assign a defaulting mortgage to Mellon’s sub-
sidiary, the National Residential Assets Corporation. That let Mellon recoup its investment:
as soon as the foreclosure was done, Mellon (through National) would take title to the
foreclosed property.
But when foreclosure proceedings dragged on, mortgages would stay on National’s
books longer than expected. That happened to Boltz-Rubinstein. When she declared bank-
ruptcy, National took title to her mortgage. To recover the property, National moved for
and got an exemption from the automatic bankruptcy stay.
That brings us up to speed. After the bankruptcy judge granted relief from the stay, the
Bank sent the disputed letters to Boltz-Rubinstein. She sued, and the Bank claimed that it
was exempt from the stay.
B. Bank of America’s effort to foreclose on Boltz-Rubinstein’s home
Now the heart of the dispute: Everyone agrees that National had an exemption from the
stay. But they disagree about whether the Bank did too.
The bankruptcy judge ruled for the Bank, finding that it was also exempt as National’s
loan-servicing agent. Even if it were not, the judge reasoned, the letters did not cause Boltz-
Rubinstein any harm. The District Court affirmed, agreeing that the Bank was exempt as
National’s agent.
3 The bankruptcy court had jurisdiction under 28 U.S.C. § 157(b)(1), the District Court
reviewed under § 158(a), and we review under §§ 158(d) & 1291. We examine the bank-
ruptcy court’s factual findings for clear error. In re Cohn, 54 F.3d 1108, 1113 (3d Cir.
1995). And we review both its conclusions of law and the District Court’s order de novo. Id.
II. THE BANK WAS EXEMPT FROM THE AUTOMATIC STAY
If the Bank was National’s agent, it was exempt from the stay. The District Court held
that it was because the Bank serviced loans for National. Boltz-Rubinstein attacks that
holding three ways, but each shot misses.
A. The bankruptcy judge’s agency analysis was sound
Boltz-Rubinstein charges the bankruptcy judge with both misstating the agency-law
rule and lacking enough evidence to apply it. But the judge got both points right.
1. The judge applied the right rule. Boltz-Rubinstein says the judge overlooked the
“touchstone” of agency: the principal’s right to control the agent. Appellant’s Br. 31–32;
Restatement (Second) of Agency § 14 (1958). Not so. The judge asked whether the Bank
was “subject to the principal’s control.” App. 44. So he analyzed whether National “per-
mitted and expected” the Bank to service its mortgages. App. 45–47.
Boltz-Rubinstein says that is the wrong question. National is a holding company with-
out staff that “doesn’t really do anything,” so it could never control the Bank. Appellant’s
Br. 36 (quoting App. 465). Yet what matters is not exercising control but the right to con-
trol. Restatement (Third) of Agency § 1.01 cmt. c (2006). And that was the bankruptcy
judge’s focus here. Besides, holding companies are often principals and routinely depend
on their agents for day-to-day operations. See Appellees’ Br. 32.
4 2. The evidence supported finding agency. Boltz-Rubinstein also questions the factual
support for the judge’s agency finding. But he relied on enough evidence, though it was
complex.
To find agency, courts may reasonably rely on “a definite course of dealing” and other
“attending circumstances.” Yezbak v. Croce, 88 A.2d 80, 82 (Pa. 1952) (internal quotation
marks omitted). That is what the bankruptcy judge did. He found that National’s then-
president, Ann Golio, testified “knowledgeabl[y] and credibl[y]” that the Bank was Na-
tional’s agent. App. 35. We defer to that credibility finding unless it was irrational. In re
Graves, 33 F.3d 242, 246, 251 (3d Cir. 1994); Interfaith Cmty. Org. v. Honeywell Int’l,
Inc., 399 F.3d 248, 254 (3d Cir. 2005). Because it was not, we defer.
True, Golio’s testimony was “somewhat contradictory.” App. 35–36. But that was only
because National’s relationship with the Bank worked differently in practice from how it
was designed. By design, the Bank would assign delinquent mortgages to National so Na-
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _______________
No. 21-1232 _______________
In re: SUSAN M. BOLTZ-RUBINSTEIN, Debtor SUSAN M. BOLTZ-RUBINSTEIN, Appellant v.
BANK OF AMERICA, N.A.; NATIONAL RESIDENTIAL ASSETS CORP., as servicer _______________
On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. No. 2:19-cv-04628) District Judge: Honorable Eduardo C. Robreno _______________
Submitted Under Third Circuit L.A.R. 34.1(a) on January 13, 2022.
Before: AMBRO, BIBAS, and ROTH, Circuit Judges
(Filed: February 14, 2022) _______________
OPINION* _______________
* This disposition is not an opinion of the full Court and, under I.O.P. 5.7, is not binding precedent. BIBAS, Circuit Judge.
Bankruptcy automatically stays debt collection, giving bankruptcy judges time to work
out repayment plans. But they can make exceptions to the stay, letting particular creditors
try to recover their debt while proceedings are pending.
A bankruptcy judge did that here. The bankruptcy filing triggered the automatic stay,
but the judge exempted a creditor. After that, the creditor’s agent resumed trying to collect
a debt. Now the debtor claims that the supposed agent was not in fact an agent of the cred-
itor and thus not exempt from the stay. But she is wrong: the evidence shows that it was an
agent, so the creditor was free to use it. Besides, any violation of the stay caused no harm.
So we will affirm.
I. BACKGROUND
Susan Boltz-Rubinstein got a home mortgage from Bank of America. But after falling
behind on her payments, she filed for a Chapter 13 consumer bankruptcy. Her filing trig-
gered the automatic stay, stopping creditors from collecting her debts. 11 U.S.C. § 362. Yet
the Bank kept mailing her about the delinquent loan. She sued the Bank, claiming that these
letters violated the automatic stay. Id. § 362(k).
But the Bank has a good excuse. It could keep trying to collect the debt, it argues,
because it was exempt from the stay. To understand that argument, we must look at the
nuts and bolts of its mortgage business.
A. Bank of America’s mortgage business
To get cash up front from its mortgages, the Bank had signed a forward-flow agreement
with Bank of New York Mellon. Under that deal, Bank of America would extend and
2 service mortgage loans, contacting borrowers and collecting payments. For its part, Mellon
paid the Bank an upfront fee in return for an income stream from the mortgage payments.
If borrowers defaulted on their mortgages, the Bank would handle foreclosure. Then,
right before starting a foreclosure, it would assign a defaulting mortgage to Mellon’s sub-
sidiary, the National Residential Assets Corporation. That let Mellon recoup its investment:
as soon as the foreclosure was done, Mellon (through National) would take title to the
foreclosed property.
But when foreclosure proceedings dragged on, mortgages would stay on National’s
books longer than expected. That happened to Boltz-Rubinstein. When she declared bank-
ruptcy, National took title to her mortgage. To recover the property, National moved for
and got an exemption from the automatic bankruptcy stay.
That brings us up to speed. After the bankruptcy judge granted relief from the stay, the
Bank sent the disputed letters to Boltz-Rubinstein. She sued, and the Bank claimed that it
was exempt from the stay.
B. Bank of America’s effort to foreclose on Boltz-Rubinstein’s home
Now the heart of the dispute: Everyone agrees that National had an exemption from the
stay. But they disagree about whether the Bank did too.
The bankruptcy judge ruled for the Bank, finding that it was also exempt as National’s
loan-servicing agent. Even if it were not, the judge reasoned, the letters did not cause Boltz-
Rubinstein any harm. The District Court affirmed, agreeing that the Bank was exempt as
National’s agent.
3 The bankruptcy court had jurisdiction under 28 U.S.C. § 157(b)(1), the District Court
reviewed under § 158(a), and we review under §§ 158(d) & 1291. We examine the bank-
ruptcy court’s factual findings for clear error. In re Cohn, 54 F.3d 1108, 1113 (3d Cir.
1995). And we review both its conclusions of law and the District Court’s order de novo. Id.
II. THE BANK WAS EXEMPT FROM THE AUTOMATIC STAY
If the Bank was National’s agent, it was exempt from the stay. The District Court held
that it was because the Bank serviced loans for National. Boltz-Rubinstein attacks that
holding three ways, but each shot misses.
A. The bankruptcy judge’s agency analysis was sound
Boltz-Rubinstein charges the bankruptcy judge with both misstating the agency-law
rule and lacking enough evidence to apply it. But the judge got both points right.
1. The judge applied the right rule. Boltz-Rubinstein says the judge overlooked the
“touchstone” of agency: the principal’s right to control the agent. Appellant’s Br. 31–32;
Restatement (Second) of Agency § 14 (1958). Not so. The judge asked whether the Bank
was “subject to the principal’s control.” App. 44. So he analyzed whether National “per-
mitted and expected” the Bank to service its mortgages. App. 45–47.
Boltz-Rubinstein says that is the wrong question. National is a holding company with-
out staff that “doesn’t really do anything,” so it could never control the Bank. Appellant’s
Br. 36 (quoting App. 465). Yet what matters is not exercising control but the right to con-
trol. Restatement (Third) of Agency § 1.01 cmt. c (2006). And that was the bankruptcy
judge’s focus here. Besides, holding companies are often principals and routinely depend
on their agents for day-to-day operations. See Appellees’ Br. 32.
4 2. The evidence supported finding agency. Boltz-Rubinstein also questions the factual
support for the judge’s agency finding. But he relied on enough evidence, though it was
complex.
To find agency, courts may reasonably rely on “a definite course of dealing” and other
“attending circumstances.” Yezbak v. Croce, 88 A.2d 80, 82 (Pa. 1952) (internal quotation
marks omitted). That is what the bankruptcy judge did. He found that National’s then-
president, Ann Golio, testified “knowledgeabl[y] and credibl[y]” that the Bank was Na-
tional’s agent. App. 35. We defer to that credibility finding unless it was irrational. In re
Graves, 33 F.3d 242, 246, 251 (3d Cir. 1994); Interfaith Cmty. Org. v. Honeywell Int’l,
Inc., 399 F.3d 248, 254 (3d Cir. 2005). Because it was not, we defer.
True, Golio’s testimony was “somewhat contradictory.” App. 35–36. But that was only
because National’s relationship with the Bank worked differently in practice from how it
was designed. By design, the Bank would assign delinquent mortgages to National so Na-
tional could gain title after a speedy foreclosure. The Bank’s obligation to service mort-
gages was supposed to end then. But in practice, if foreclosure was delayed and the mort-
gages stayed on National’s books, the Bank would keep servicing them for National as its
agent.
Though unconventional, this practice was a “definite course of dealing, undertaken by
the [Bank] and accepted by [National].” Yezbak, 88 A.2d at 82. As Golio testified, National
and the Bank did business this way at least fifty times, and National never once objected.
Indeed, in other court proceedings, National presented the Bank as its loan servicer. Golio’s
5 uncontradicted testimony sufficiently supports the bankruptcy judge’s finding of an agency
relationship.
B. The District Court found no new facts, and any error would be harmless
Boltz-Rubinstein also argues that the District Court mischaracterized the record, inject-
ing its own factual findings. As she points out, if the District Court had to mischaracterize
the record in order to affirm, we should be concerned. Universal Minerals Inc. v. C.A.
Hughes & Co., 669 F.2d 98, 102 (3d Cir. 1981). But the District Court did not mischarac-
terize the record. And even if it had, it affirmed the bankruptcy court’s supportable factual
findings.
Boltz-Rubinstein points to two supposed mischaracterizations. First, the District Court
said, “[National] recorded the assigned mortgage from [the Bank] on January 10, 2011.”
App. 15 n.6. She says this gets the details wrong. But the parties stipulated to those details,
and the record includes that mortgage assignment.
Second, before that assignment, the Bank retained the mortgage. The court character-
ized this retention as “intended to be in a custodial capacity only.” App. 19 n.9. Boltz-
Rubinstein counters that only the “records and documents” of the mortgage would be kept
custodially. Appellant’s Br. 27 (quoting App. 113) (emphasis omitted). But that is no con-
tradiction. Mellon beneficially owned the mortgage, receiving the stream of mortgage pay-
ments, while the Bank held title to the mortgage instrument and acted as loan servicer. And
Golio testified to this effect.
Even if the District Court had misstated anything, that error would have been harmless.
The court did not substitute its views for those of the factfinder but affirmed the bankruptcy
6 decision. We look through the District Court’s opinion to review the bankruptcy judge’s
factual findings. Because Boltz-Rubinstein identifies no error in those factual findings,
there is no reason to reverse.
III. IN ANY EVENT, BOLTZ-RUBINSTEIN SUFFERED NO DAMAGES
What is more, Boltz-Rubinstein cannot show that any violation of the stay harmed her.
To recover damages, she “must be ‘injured’ by the stay violation.” In re Aleckna, 13 F.4th
337, 346 (3d Cir. 2021) (emphasis added); 11 U.S.C. § 362(k)(1). Yet she was not. The
only “actual damages” she sustained (lost wages) were inflicted long after the stay ended,
during foreclosure litigation in 2018. But by then her bankruptcy had been discharged,
ending the stay. Thus, her lost wages were not “actual damage[ ]” caused by the foreclosure
letters sent two years earlier. Cf. In re Aleckna, 13 F.4th at 346 (dictum contemplating
recovery for litigation-related costs “when they are incurred to enjoin further violations of
the stay” (emphasis added, internal quotation marks omitted)).
*****
Boltz-Rubinstein loses twice over: Bank of America was National’s loan-servicing
agent, and the stay violation did not harm her. So we will affirm.