Birster v. American Home Mortgage Servicing, Inc.

Citation:
Case No. 11-13574 (11th Cir. July 18, 2012) (per curiam) (unpublished)
Tag(s):
Ruling:
An entity that regularly attempts to collect debts can be a "debt collector" beyond section 1692f(6) of the Fair Debt Collection Practices Act even ehwne the entity is also enforcing a security interest in collateral securing the debt.
Procedural context:
The Eleventh Circuit reviewed a grant of partial summary judgment by the District Court in favor of Defendant American Home Mortgage Servicing, Inc. and against Plaintiffs Mr. and Mrs. Brister on their complaint alleging violations of the Fair Debt Collection Practices Act. The Eleventh Circuir reversed and remanded for further proceedings finding the outcome of the case was controlled by a reported decision issued after the District Court had ruled.
Facts:
The Bristers refnanced their home and subsequently twice entered into a loan modification agreement but ceased making mortgage payments. The loan documents provided that any missed payments placed the loan in default. Approximately two months after the cessation of mortgage payments American Home Mortgage Servicing, Inc. (AHMSI) begand servicing the loan. Subsequently, AHMSI notified the Bristers that the loan was in default and that it would proceed with foreclosure unless the default was cured within thirty days; the letter contained the standard FDCPA notice that it was an attempt to collect a debt. Subseqeuently, the trustee for the lender initiated foreclosure proceedings but AHMSI was not a party thereto. The Bristers alleged that, despite advising AHMSI that they had counsel and that communications should proceed through counsel AHMI began a series of harrassing the Bristers by phone and in person at the Bristers' house. The Bristers filed suit in Florida state court which was removed to the District Court. The District Court, relying on an unpublished Eleventh Circuit decision (Warren v. Countrywide Home Loans, Inc., 342 Fed. App/x 458 (11th Cir. 2009)), concluded that the alleged conduct related to enforcement of a secutiry interest rendering the FDCPA inapplicable with the exception of section 1692f(6) but there was no basis for the claim. Consequently, since the remaining claims were state law claims the District Court remanded the rest of the suit to state court. Subsequent to the District Court's ruling the Eleventh Circuit issued an opinion in Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211 (11th Cir. 2012) holding that the fact that correspondence/documents relating to enforcement of a security interest did not prevent them from also relating to collection of a debt within the meaning of section 1692e of the FDCPA. Consequently, the Eleventh Circuit held that Reese controlled the Bristers' case and that under Reese AHMSI might be liable under the FDCPA beyond section 1692f(6) even though it was also enforcing a security interest. In so holding, the Eleventh Circuit noted that the Bristers still had to establish on remand that AHMSI was a "debt collector" and the District Court would have to determine that issue as well as reassess whether the Bristers met their pleading burden regarding their claim of a violation of section 1692f(6).
Judge(s):
Circuit Judges Marcus and Black, and District Judge Wm. Terrell Hodges, U.S. District Court for the Middle District of Florida, sitting by designation

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