De Dios v. International Realty & Investments

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
14 years 10 months ago

Citation:

No. 08-56288 (9th Cir. Apr. 11, 2011)

Tag(s):

9th Circuit

Ruling:

An apartment property manager engaged before a tenant became in default for nonpayment of rent was not a “debt collector” under the federal Fair Debt Collection Practices Act. The act exempts as a debt collector any person collecting “a debt which was not in default at the time it was obtained by such person.” 15 U.S.C. § 1692a(6)(F)(iii).

Procedural context:

The Ninth Circuit affirmed the federal district court’s grant of summary judgment to the property manager because the rent the property manager sought to collect from the tenant was not “in default” when the property manager was first engaged or even later when it sent the tenant a collection letter.

Facts:

In late 2005, the property manager was engaged to manage the apartment complex by a court-appointed receiver for the owner. In July 2006, the tenant sued the owner in state court over a rent increase. The owner and the tenant later stipulated to the amount of the rent increase. On July 1, 2007, the owner directly engaged the property manager to manage the apartments. In July 25, 2007, the property manager sent the tenant a letter stating that accrued rent since August 2006 was due August 15, 2007. The tenant sued the property manager in federal district court, alleging that the property manager violated various FDCPA disclosure obligations. The court held that the property manager obtained the rent debt when it first began to manage the property in late 2005 and that the tenant’s default did not occur until the tenant and the owner settled the state-court action and the tenant did not then pay the agreed rent.

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