Bostwick v. SN Servicing Corporation

Background

The court held a final pretrial conference on December 1, 2023, and issued an order under Federal Rule of Civil Procedure 16(e). The only remaining claim was the plaintiffs’ claim that the defendants engaged in abusive debt-collection practices in violation of California’s Rosenthal Act. The court stated that disputed factual issues had prevented summary judgment.

The order scheduled a two-day bench trial to begin December 18, 2023. It also established procedures for presenting exhibits, deposition testimony, witnesses, objections, trial time, and the order of proof. The parties were required to provide certain notices before and during trial. The court also said it would contact Judge Westmore about a possible further settlement conference and would continue the trial if necessary to accommodate it.

Rulings on Motions in Limine

The defendants joined in one another’s motions in limine, which are requests to decide before trial whether particular evidence may be presented.

- SN’s Motion in Limine 1: The court granted the unopposed motion to exclude evidence of emotional-distress damages. - SN’s Motion in Limine 2: The court reserved the hearsay issue, meaning it would consider hearsay objections during trial. - Seterus’s Motion in Limine 1: The court denied the motion to exclude the plaintiffs’ witnesses. The witnesses appeared on the plaintiffs’ timely witness list. - Seterus’s Motion in Limine 2: The court denied the motion to exclude evidence that the defendants claimed had not been disclosed. The court said evidence on the exhibit list would not be excluded on that ground, while genuinely new evidence could not be admitted; other objections remained available. - Seterus’s Motion in Limine 3: The court granted the motion to exclude credit-related and AMI Staging lost-profit damages.

Reasons for Excluding the AMI Staging Damages Evidence

The court gave two independent reasons for granting Seterus’s third motion. First, it found that the plaintiffs’ spreadsheet did not satisfy Federal Rule of Civil Procedure 26’s requirement that a party disclose a computation of each category of claimed damages. The court explained that merely producing documents or figures supporting a damages claim is not enough; the disclosing party must provide an analysis showing how the damages were calculated. Under Rule 37, evidence that was required to be disclosed but was not properly disclosed may be excluded unless the failure was substantially justified or harmless.

Second, the court held that the plaintiffs could not recover damages suffered by their business, AMI Staging, under the damages theory presented. The court stated that the Rosenthal Act allows actual damages sustained by the debtor and that recoverable damages may include personal humiliation, embarrassment, mental anguish, or emotional distress. It concluded that secondary losses to a business owned by the plaintiffs were not damages sustained by the plaintiffs as debtors, because a business entity is legally distinct from its owners.

The court also noted that the plaintiffs’ initial disclosure was $100,000, which would at least limit available damages to that amount if a viable damages theory existed. The order did not decide liability on the Rosenthal Act claim or enter judgment after trial.