Harris v. Liberty Community Management, Inc.

Summarized by Melissa Youngman , Melissa A. Youngman, P.A.
13 years 2 months ago

Citation:

Harris v. Liberty Communication Management, Inc., Case No.: 11-14362 (11th Cir. Dec. 19, 2012)(unpublished)

Tag(s):

Ruling:

A property management company, employed by a Homeowners Association to collect past due assessments, is not a 'debt collector' subject to the Fair Debt Collection Practices Act ("FDCPA"), and did not violate Georgia's Fair Business Practices Act ("GFBPA") by terminating water services for plaintiffs' failure to pay past due assessments.

Procedural context:

Appeal from the United States District Court for the Northern District of Georgia granting summary judgment in favor of defendant, holding that defendant is not a 'debt collector' subject to the FDCPA, and that it did not violate the GFBPA for terminating plaintiffs' water services for failure to pay past due assessments.

Facts:

Several homeowners filed complaint against Liberty Community Management, Inc. ("Liberty"), a property management company that does work for more than 100 homeowners associations in the Atlanta metropolitan area, for alleged violations of the FDCPA and the GFBPA. Pursuant to a management agreement with the Little Suwannee Point Homeowners Association, Liberty was employed to, among other things, collect past due assessments from homeowners. In August of 2009, Liberty sent out letters to 19 homeowners who owed more than $750 in past due assessments, warning that water services would be disconnected if they failed to pay their overdue assessments. Each of the plaintiffs had their water service suspended because they failed to pay. As a result, plaintiffs filed an action in federal court against Liberty alleging various violations of the FDCPA and the GFBPA for threatening to terminate, and then terminating water services. The district court granted summary judgment in favor of Liberty, holding that Liberty was not a ‘debt collector’ subject to the FDPCA and that it did not violate the GFPBA. Specifically, the court found that the exemption set forth in 15 U.S.C. §1692a(6)(F)(i) applied, “because the collection of overdue assessments was ‘incidental to a bona fide fiduciary obligation,” and that Liberty not violate the GFBPA by threatening to terminate, or terminating, the plaintiffs’ water service,” because such actions are not defined as unfair or deceptive under the GFBPA. Section 1692a(6)(F)(i) of the FDCPA specifically exempts from its definition of a ‘debt collector,’ any persons or entities “collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity is incidental bona fide fiduciary obligation.” The Circuit Court found that Liberty was acting as the agent to the association, and as such, a “confidential [fiduciary] relationship” existed under Section 23-2-58 of the Georgia Statutes. In addition, the Circuit Court held that because Liberty did much more for the association than just collect overdue assessments pursuant to the management agreement, any actions it took to collect the assessments were merely incidental to its bona fide fiduciary obligations to the association. Accordingly, the Circuit Court upheld the district court’s finding that Liberty was not a ‘debt collector’ subject to the FDCPA. The Court further held that Liberty’s actions did not violate the GFBPA as a matter of law. Specifically, the GFBPA outlines 34 prohibited practices that are considered to be unfair or deceptive. The Court upheld the district court’s finding that Liberty’s actions did not resemble any of the 34 practices outlined in the statute.

Judge(s):

Tjoflat, Carnes, and Jordan

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