Glover v. FDIC

Summarized by Jamie Edmonson , Robinson & Cole LLP
13 years 5 months ago

Citation:

__ F.3d __, 2012 WL 3834666, C.A. 3 (Sept. 5, 2012)

Tag(s):

Ruling:

Affirm ruling of the district court dismissing appellant's claims under the Fair Debt Collection Practices Act ("FDCPA") and Pennsylvania's Fair Credit Extension Uniformity Act ("FCEUA").

Procedural context:

Appeal from the United States District Court for the Western District of Pennsylvania.

Facts:

Mary Glover ("Glover") entered into a mortgage with Washington Mutual Bank ("WaMu") in August, 2002. In 2005, Glover fell behind in her payments, and WaMu initially threatened to foreclose on her home. WaMu agreed to postpone payments on the mortgage until a work-out request was evaluated. That work-out was denied in March, 2006. On April 10, 2006, WaMu filed a Foreclosure Complaint against Glover in the Court of Common Pleas of Allegheny County seeking over $12,000 owing on the mortgage and threatening foreclosure. Glover and WaMu's assignee, Wells Fargo, entered into a Loan Modification Agreement (the "Modification") on January 4, 2008, which Modification stipulated to the amount owing, increased Glover's monthly payment, and extended the repayment by six years. Glover began to make payments under the Modification; however, the Foreclosure Complaint was not discontinued until November 25, 2009. On June 8, 2008, Glover filed a putative class action complaint in the Court of Common Pleas of Allegheny County against WaMu, Wells Fargo, and WaMu's attorneys, the Udren Law Offices, and Mark Udren, alleging violations of FCEUA and FDCPA. The case was removed to the District Court on July 14, 2008, and motions to dismiss were filed by all defendants. The FDIC, as receiver for WaMu, filed a motion for a ninety-day stay for Glover to submit her claims against WaMu to the FDIC's mandatory claims review process, which motion was granted. The FDIC subsequently moved for a further stay pending completion of its process, which was granted over Glover's objections. The FDIC denied Glover's claims against WaMu on September 24, 2009. Glover filed a First Amended Complaint on October 14, 2009, adding a count against the Udren defendants for FDCPA violations arising out of their failure to discontinue the Foreclosure Complaint after Glover had entered into the Modification. The Udren defendants filed a motion to dismiss, which was granted on June 3, 2010. On June 9, 2010, Glover filed a Second Amended Complaint, adding Goldman Sachs as a defendant and restyling the FDCPA claims against the Udren defendants. On October 22, 2010, the Udren Defendants filed a motion to dismiss the complaint, which was granted as to the FDCPA claim, finding that the complaint was not filed within the within the FDCPA's one-year statute of limitation and did not relate back to the original complaint. The FCEUA claims were also dismissed as to the Udren defendants, finding that they were not "debt collectors" under the provisions of FCEUA. Glover appealed. In reviewing Glover's FDCPA claim against the Udren defendants, the Third Circuit found that the amended claim did not relate back to the original Complaint, because the original Complaint did not provide fair notice to the Udren defendants of the subsequently amended claim. The original Complaint accused the Udren defendants of making a debt-collection call and filing the Foreclosure Complaint. The amended complaint, however, alleged that the Udren defendants violated the FDCPA by failing to withdraw the Foreclosure Complaint after Glover had entered into the Modification. While the original Complaint made the allegation against WaMu and Wells Fargo, the Third Circuit held that "factual overlap alone is not enough" for relation back. The Third Circuit also rejected Glover's arguments with respect to the statute of limitations and held that the Glover's claim arose on the date the Modification was entered into and the representation that she had not paid her debt became false, which was January 4, 2008. In holding the claim as time barred, the Court also analyzed the mandatory exhaustion requirement under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (the "FIRREA"). FIRREA requires that all administrative remedies must be exhausted, i.e., submitting a claim to the receiver, in order to obtain jurisdiction in federal court. Glover argued that the District Court lacked jurisdiction over the matter while the FDIC was reviewing her claims and that the one-year limitations period should be extended. The Court, in citing to Marquis v. FDIC, 965 F.2d 1148 (1st Cir. 1992), determined that the District Court retained jurisdiction over the litigation, since WaMu failed after the claim was filed in federal court. FIRREA's jurisdictional bar would only come into play if a receiver was appointed before the filing of the case. Finally, the Third Circuit agreed with the District Court that Glover's claim against the Udren defendants under the FCEUA was unfounded, because the Udren defendants were not "debt collectors" under the definition provided in the FCEUA.

Judge(s):

FISHER and GREENBERG (Circuit Judges), and OLIVER (District Judge, sitting by designation).

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