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Randolph Sellers, et all v. Rushmore Loan Management Services

Case Type:
Consumer
Case Status:
Reversed and Remanded
Citation:
3:15-cv-01106-TJC-PDB (11th Circuit, Oct 29,2019) Published
Tag(s):
Ruling:
District court abused its discretion when determining that the preclusion/preemptive defense, that the Bankruptcy Code preempts the FDCPA and FCCPA, asserted by the loan servicer raised an individualized issue which would preclude class certification.
Procedural context:
On appeal from the district court after the district court denied class certification finding that the preemptive defense raised by the loan servicer created individualized issues rather than issues that would be common to the class. Remanded with instruction to the district court to determine whether, in light of the conclusion that the defense raised by the servicer created a common issue rather than an individualized issue, certification should be granted as to the FDCPA and FCCPA claims.
Facts:
After the debtors filed for bankruptcy protection under Chapter 7, they received their discharges. Despite the discharge being entered the servicer continued to send monthly statements showing amounts due and owing. The debtors sued, seeking class certification, and alleging violations of the Fair Debt Collection Practices Act ("FDCPA") and the Florida Consumer Collection Practices Act ("FCCPA"). Among the allegations were that the servicer made false, deceptive and misleading representations when it sent mortgage statements and attempted to collect on the mortgages. The servicer raised the defense that the Bankruptcy Code precluded and/or preempted the FDCPA and the FCCPA and thus the only remedy for the debtors was to reopen their bankruptcy cases and seek civil contempt. The district court denied class certification finding that the question of "whether the Bankruptcy Code precluded and/or preempted the FDCPA and FCCPA" presented an individualized rather than a common issue for certification purposes. The district court disagreed finding that such a defense is not individualized but rather common to all potential class members. The court further cautioned that it expressed no opinion as to whether the defense was meritorious or not and noted that there was a split of authority on the issues and that the court had not previously decided the issue.
Judge(s):
Wilson, J. Pryor, and Thapar

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