Clark v. Shapiro and Pickett, LLP

Summarized by Weston Eguchi , Willkie Farr & Gallagher LLP
14 years 1 month ago

Citation:

No. 10-15119 (Jan. 11, 2012) [Do Not Publish]

Tag(s):

Ruling:

Affirming district court's grant of summary judgment in favor of Defendants on borrower-Plaintiff's multi-count complaint against her mortgage lender and their attorneys for violations of the Fair Debt Collection Practice Act and other counts. (I) The district court properly granted summary judgment as to all of the claims that were based on the premise that Plaintiff was not in default on her mortgage loan, as the overwhelming evidence in the record was that Plaintiff's mortgage was in arrears. Among other things, Plaintiff's debt to the mortgage lender was conclusively established as a matter of bankruptcy law because, in Plaintiff's prior chapter 13 bankruptcy case, the mortgage lender's proof of claim was not objected to and therefore was deemed allowed upon confirmation of Plaintiff's chapter 13 plan, which was entitled to res judicata effect. (II) Plaintiff also claimed that Defendants violated 15 U.S.C. Sec. 1692g(a) (Fair Debt Collection Practices Act) because they failed to send a validation letter within five days after the initial communication with a consumer in connection with the collection of any debt because Defendant law firm's validation notice was sent more than five (5) days after its initial letter to Plaintiff pursuant to HUD regulation 24 CFR Sec. 203.675 (the "HUD Letter"). The Eleventh Circuit affirmed summary judgment for Defendants on this claim because the HUD Letter was not an "initial communication with a consumer in connection with the collection of any debt" under 15 U.S.C. Sec. 1692g(a) but rather a communication from the counsel of a foreclosing party regarding a foreclosure. (III) Plaintiff's last claim -- that Defendants violated 15 U.S.C. Sec. 1692g(b) by threatening to foreclose and taking steps to foreclose on Plaintiff's mortgage prior to expiration of 30 days from the date of the validation letter -- also failed. Nothing in the Defendants' conduct violated Section 1692g(b), as Defendant-law firm postponed its foreclosure sale in order to verify the debt with Defendant-mortgage lender immediately after Plaintiff's attorney disputed the debt, in accordance with Section 1692g(b).

Procedural context:

Following dismissal of her third chapter 13 bankruptcy case and foreclosure on her mortgage, Plaintiff Annette Clark filed suit against her mortgage lender Wells Fargo Bank N.A. and its attorneys Shapiro & Pickett LLP ("S&P") and Edith Pickett. The Complaint alleged (1) violation of the Fair Debt Collection Practices Act; (2) conversion; (3) breach of contract; (4) fraud; (5) suppression; (6) conspiracy; (7) negligent and wanton hiring, training, supervision and retention; (8) wrongful foreclosure; and (9) injunctive relief. The magistrate judge recommended summary judgment in favor of Defendants on all claims. The district court adopted the magistrate's report and recommendation. The Eleventh Circuit affirms.

Facts:

Plaintiff Annette Clark purchased a home with an FHA mortgage loan with defendant-mortgage lender Wells Fargo Bank NA. Prior to and during her three successive chapter 13 bankruptcy cases, Plaintiff missed a number of payments on her mortgage loan. Although chapter 13 plans were confirmed, each of her three chapter 13 cases were dismissed for failure to make bankruptcy plan payments. After her third case was dismissed, the Defendant-mortgage lender and its Defendant-counsel foreclosed on Plaintiff's mortgage. Plaintiff subsequently filed the instant suit in district court.

Judge(s):

Barkett, Marcus & Anderson

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!