Thomas Lovegrove v. Ocwen Home Loans Servicing
UNPUBLISHED AUTHORED OPINION filed. Originating case number: 7:14-cv-00329-MFU-RSB Copies to all parties and the district court/agency. .. [15-2158]
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UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
THOMAS W. LOVEGROVE,
Plaintiff – Appellant,
OCWEN HOME LOANS SERVICING, L.L.C.,
Defendant – Appellee.
Appeal from the United States District Court for the Western
District of Virginia, at Roanoke. Michael F. Urbanski, District
October 27, 2016
Before SHEDD and
December 20, 2016
Affirmed by unpublished opinion. Judge Shedd wrote the opinion,
in which Judge Keenan and Senior Judge Davis joined.
ARGUED: Gary M. Bowman, Roanoke, Virginia, for Appellant. Brett
Corchiarino, GOODELL, DEVRIES, LEECH & DANN, LLP, Baltimore,
Maryland; Brian J. Slipakoff, DUANE MORRIS LLP, Philadelphia,
Pennsylvania, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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SHEDD, Circuit Judge:
received a Chapter 7 bankruptcy discharge of that debt in 2011.
Collection Practices Act (FDCPA) and the Fair Credit Reporting
Act (FCRA) by attempting to collect his mortgage debt after it
had been discharged in bankruptcy and by falsely reporting to
consumer reporting agencies (“CRAs”) that the debt was still
Ocwen moved for summary judgment, and the district court
granted the motion.
The district court held that the FDCPA
claims fail because there was no attempt by Ocwen to collect a
Bankruptcy Code, and that Ocwen had no duty under the FCRA until
For the reasons stated below, we affirm.
The following material facts are not in dispute.
$1,239,000.00 in favor of Bank of America and secured by a deed
of trust on a home at Smith Mountain Lake in Moneta, Virginia.
Lovegrove defaulted on the loan in April 2009 but continues to
live at the property.
Lovegrove filed for Chapter 7 bankruptcy
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obligation to Bank of America under the promissory note.
Lovegrove’s mortgage. 1
On October 5, 2012, Ocwen sent a letter
to Lovegrove with an accounting of the debt, which had been
discharged but not paid.
The letter provides for a procedure to
disclaimer, in bold italicized font:
This communication is from a debt collector attempting
to collect a debt; any information obtained will be
used for that purpose.
However, if the debt is in
active bankruptcy or has been discharged through
bankruptcy, this communication is not intended as and
does not constitute an attempt to collect a debt.
On the same day, Ocwen sent another letter detailing
disclaimer but without the emboldened typeface.
Ocwen then began sending monthly account statements.
principal balance, the next payment due date, a payment coupon,
and the total amount due.
Under a section entitled “Important
Messages,” the account statements provide the following:
If you are currently in bankruptcy or if you have
filed for bankruptcy since obtaining this loan, please
There is an ongoing dispute as to who actually owns the
However, that dispute does not affect our analysis.
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read the bankruptcy information provided on the back
of this statement.
Our records indicate that your loan is in foreclosure.
Accordingly, this statement may be for informational
purposes only. . . .
The “Important Bankruptcy Information” section on the
back of the statements reads:
If you or your account are subject to pending
bankruptcy or the obligation referenced in this
statement has been discharged in bankruptcy, this
statement is for informational purposes only and is
not an attempt to collect a debt.
If you have any
questions regarding this statement, or do not want
Ocwen to send you monthly statements in the future,
please contact us . . .
The only other communication Ocwen sent to Lovegrove
was an escrow account disclosure statement mailed in July 2014.
October 5, 2012 letters.
See J.A. 158-63.
Additionally, from October 2012 through May 31, 2013, Ocwen
improperly reported to CRAs that Lovegrove still owed on the
From November 2012 to April 2014,
Lovegrove wrote multiple letters to Ocwen requesting that Ocwen
“stop collection [and] reporting debt to the credit bureau’s
See J.A. 166.
In June 2014, Lovegrove wrote to the
three major CRAs 2 that Ocwen was misreporting a discharged debt.
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notification from Experian, and on that same day, Ocwen sent a
notice to “all consumer reporting agencies to which it reports
removing any reporting as to  Lovegrove’s discharged mortgage
In June 2014, Lovegrove filed this action in the Western
District of Virginia alleging that Ocwen violated the FDCPA by
attempting to collect a debt that was discharged in bankruptcy
Ocwen violated the FCRA by misreporting the status of the debt.
Following discovery, the district court granted Ocwen’s motion
for summary judgment as to both claims.
held that Ocwen was not attempting to collect a debt within the
precluded by the Bankruptcy Code.
The court also determined
that Lovegrove could not maintain a cause of action under the
FCRA or the FDCPA related to Ocwen’s misreporting of the debt.
Lovegrove timely appealed.
judgment to Ocwen.
We review de novo. Lee Graham Shopping Ctr.,
LLC v. Estate of Kirsch, 777 F.3d 678, 681 (4th Cir. 2015).
Summary judgment is appropriate if “the movant shows that there
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is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
Fed. R. Civ. P.
dismissing his FDCPA and FCRA claims.
We address each in turn.
(prohibiting false, deceptive, or misleading representations “in
attempt to collect any debt”).
whether a communication constitutes an attempt to collect a debt
is a ‘commonsense inquiry’ that evaluates the ‘nature of the
parties' relationship,’ the ‘[objective] purpose and context of
the communication [ ],’ and whether the communication includes a
demand for payment.”
In re Dubois, 834 F.3d 522, 527 (4th Cir.
2016) (citing Gburek v. Litton Loan Servicing LP, 614 F.3d 380,
The parties do not dispute that Ocwen is a debt collector
and that Lovegrove is a consumer as defined by the FDCPA.
385 (7th Cir. 2010)). 4
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Applying this commonsense inquiry, we
hold that Ocwen’s communications do not constitute an attempt to
collect a debt.
only, were non-threatening in nature, and contained clear and
For instance, the two October 5, 2012 letters
and the July 5, 2014 letter state: “... [I]f the debt . . . has
been discharged through bankruptcy, this communication is not
intended as and does not constitute an attempt to collect a
statement has been discharged in bankruptcy, this statement is
In granting summary judgment, the district court applied
the least sophisticated consumer test in determining whether
Ocwen’s activities constituted an attempt to collect a debt.
However, the district court did not have the benefit of this
Court’s In re Dubois opinion when it reached its decision.
believe that the “commonsense inquiry” described in In re Dubois
is the proper standard in this case.
Nevertheless, even under
the least sophisticated consumer standard, Lovegrove’s FDCPA
claims would fail for the reasons stated by the district court.
We note there is an argument that sophisticated and high-dollar
loan arrangements should not be analyzed under the least
consumers should not get the benefit of the lenient standard
when they are part of a complex relationship or situation that
may be confusing to less sophisticated individuals.
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for informational purposes only and is not an attempt to collect
In a financial arrangement such as this, courts presume “a
basic level of understanding and willingness to read with care.”
United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 136 (4th
Thus, Lovegrove is deemed to have the knowledge of
these straightforward disclaimers.
Armed with that knowledge
attempting to collect a debt from him. 5
As noted by the district court:
This is not a case where a creditor harassed the
debtor or tried to pressure the debtor into making
payments through multiple phone calls or threats. Nor
is this a case where the debtor signed a modification
agreement or turned over the deed to the property and
the creditor continued to demand payment.
Additionally, as explained by the district court, the
communications were not sent for the “animating purpose” of
obtaining payment and most do not contain a demand for payment.
J.A. 279-83; see In re Dubois, 834 F.3d at 527.
communications that could possibly be viewed as a demand for
payment are the monthly account statements.
See J.A. 48-49.
Even though the monthly statements generally request payments,
we believe that the disclaimer is sufficient to provide notice
that, for customers in bankruptcy, Ocwen was providing an
updated account summary and not demanding payment.
v. Bank of Am., N.A., 114 F.Supp.3d 1197, 1206 (M.D. Fla. 2015)
(“A regular bank statement sent only for informational purposes
is . . . not an action in connection with the collection of a
Again, Lovegrove is presumed to have read the
statements with care.
See Nat’l Fin. Servs., Inc., 98 F.3d at
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J.A. 282-83. Rather, this is a case where a debtor, who has been
discharged in bankruptcy but continues to live in a milliondollar home, received documents that contain clear disclaimers
indicating that they are not an attempt to collect a debt. 6
Accordingly, under a “commonsense inquiry,” Lovegrove has
were sent in connection with the collection of a debt.
reason, we affirm the grant of summary judgment on the FDCPA
Because we find that Ocwen’s communications are not an
attempt to collect a debt and the FDCPA is not implicated, it is
not necessary to determine whether the Bankruptcy Code precludes
the FDCPA under these facts.
Foreclosure proceedings against Lovegrove are still
possible because foreclosure is an in rem action that survives a
bankruptcy discharge. Johnson v. Home State Bank, 501 U.S. 78,
The FDCPA does not completely prohibit debt
collectors from communicating with or seeking payment from a
communications, if they are in connection with the collection of
a debt, must simply comply with the FDCPA, for example, they
must not be false, deceptive, or misleading.
Ocwen’s actions could be described as a sharp business
practice. Oral Argument at 26:35, Lovegrove v. Ocwen Home Loans
Nevertheless, the specific facts and circumstances
of this case simply remove Ocwen’s communications from the realm
of debt collection activity.
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We next address Lovegrove’s claim that Ocwen violated the
providing inaccurate information “relating to a consumer to any
consumer reporting agency if the person knows or has reasonable
cause to believe that the information is inaccurate.”
The Act also requires those who “regularly
and in the ordinary course of business furnish information to
one or more consumer reporting agencies” to correct and update
private right of action under § 1681s-2(a).
Id. § 1681s-2(c),
(d); Saunders v. Branch Banking & Trust Co., 526 F.3d 142, 149
(4th Cir. 2008).
A private right of action does exist under 15 U.S.C. §
1681s-2(b), which requires a “creditor who has been notified by
a [CRA] that a consumer has disputed information furnished by
that creditor” to investigate the dispute, “‘report the results
of the investigation to the consumer reporting agency,’” and, if
investigation to the other CRAs.
Johnson v. MBNA Am. Bank, NA,
357 F.3d 426, 429-30 (4th Cir. 2004) (quoting 15 U.S.C. § 1681s2(b)).
The district court found that Ocwen complied with this
The undisputed facts
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support the conclusion that Ocwen complied with § 1681s-2(b)
when Ocwen immediately corrected the credit reporting error once
notified by a CRA of the dispute.
Lovegrove also attempts to repackage his FCRA claims as
violations of the FDCPA.
We have reviewed these claims and
conclude that they fail for the reasons stated by the district
material fact to establish this cause of action, under either
For this reason, we affirm the grant of summary
judgment on the FCRA claim and any related FDCPA claim.
For the foregoing reasons, the judgment of the district
court is affirmed.
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