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Bankrupt Wins Damages For Bank’s Foreclosure Proceeding

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Kenneth A. Kaneb, like many northern retirees, spent his winters in Florida. Although he lived alone after his wife’s death, he owned the family home in Massachusetts and a second home, a condominium, in Florida.

In 1993, at the age of eighty five, Mr. Kaneb found that he had insufficient assets and income to maintain his two-state retirement lifestyle. He filed for bankruptcy in Massachusetts, negotiated the sale of his home in that state and paid off secured creditors, and moved to his Florida condominium.

Once a bankruptcy proceeding is initiated, all legal actions against the bankrupt are suspended automatically by bankruptcy court rules. While it is possible to get the court’s permission to proceed against the bankrupt in individual cases, that permission is not easily gained. The automatic stay of proceedings applies even to the holder of the mortgage on the bankrupt’s real estate, so Mr. Kaneb’s actions stopped the mortgage-holder on his Florida property from foreclosing, at least temporarily.

Shawmut Bank was the original mortgagee of Mr. Kaneb’s Florida condominium, and they argued that the bankruptcy stay should be lifted so that they could initiate foreclosure proceedings. The bankruptcy judge refused to lift the stay, and so Shawmut forwarded the collection file to a Florida attorney’s office to initiate negotiations with Mr. Kaneb and his lawyer.

Shawmut’s Florida attorney did not understand that the bankruptcy court had refused to lift the stay. A copy of the court order which Shawmut had hoped to get signed was included in the file, and the attorney assumed that the original had been signed. She filed a foreclosure action, and published notice of the foreclosure in the local newspapers.

Although Mr. Kaneb’s attorney promptly persuaded the bank’s counsel that the foreclosure was improper, no actions were taken to dismiss the proceeding for six weeks. During that time, neighbors learned of the pending bankruptcy, partly because of a huge volume of “colorful” mail offering to help him work out his financial problems. Mr. Kaneb’s condominium was part of a close-knit gated community, but after news of his difficulties became widespread he stopped receiving invitations to social gatherings and his neighbors began to avoid him.

Mr. Kaneb brought legal action against Shawmut (and its successor, Fleet Mortgage Group) for its violation of the federal bankruptcy stay. After a trial, the bankruptcy court awarded him over $18,000 in legal fees and court costs, plus $25,000 for emotional distress.

The First Circuit Court of Appeals reviewed the case. The court pointed out that “emotional damages” qualify as actual damages, and upheld Mr. Kaneb’s award. Fleet Mortgage Group v. Kaneb, November 8, 1999.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

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Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.