Wednesday, February 2, 2011

The Tort of Outrage - in attempting to collect a debt - 9th Circuit - 1-31-11

In an unpublished decision entered on January 31, 2011, the 9th Circuit briefly discussed the Tort of Outrage under Washington law as it applied to a Bankruptcy Case.  The Court stated that the elements of such tort are (1) extreme and outrageous conduct; (2) intentional or reckless infliction of emotional distress, and (3) actual result of the plaintiff of severe emotional distress.  Fortunately, the Court did not analyze such factors but did state that the Trial court could find that the defendant's conduct was "beyond all possible bounds of decency...atrocious and utterly intolerable in a civilized community".  

One has to wonder what actually occurred in this case!?!  The only indication is that the defendant was the trust deed holder on real property owned by the debtor and demanded excessive fees prior to a discontinuance of the foreclosure sale.  The Court affirmed the case except for an attorney fee provision contained within the Deed of Trust Act (i.e., the statute permitted the recovery of fees based upon a determination that such fees were excessive, but the "tort" action fell under the American Rule in that the prevailing party in a tort action is not entitled to an award of attorneys' fees.  However, the Court permitted fees but the primary action was based upon the tort action and such fees would have to be reduced to establish what fees were actually incurred under the Deed of Trust Act)

1-31-11 - Jared v.Keahey