Dunavant et al v. Sirote & Permutt, PC
ORDER denying 6 Motion to Dismiss. Signed by Chief Judge William H. Steele on 10/15/2013. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
ANDREW D. DUNAVANT, JR., et al., )
) CIVIL ACTION 13-0268-WS-M
SIROTE AND PERMUTT, P.C.,
This matter is before the Court on the defendant’s motion to dismiss. (Doc.
6). The parties have filed briefs and/or evidentiary materials in support of their
respective positions, (Docs. 7, 12, 13), and the motion is ripe for resolution. After
careful consideration, the Court concludes that the motion is due to be denied.
According to the complaint, (Doc. 1), the plaintiffs executed a mortgage on
a residence. The plaintiffs made their payments, but the lender and/or servicer
refused to accept them and ultimately instituted foreclosure proceedings. The
plaintiffs obtained a state court order enjoining the lender and servicer from
proceeding with any foreclosure action but the defendant law firm thereafter
published notice of foreclosure sale on two occasions.
The complaint asserts two causes of action: (1) for multiple violations of
the Fair Debt Collection Practices Act (“the Act”); and (2) for invasion of privacy.
The defendant argues that its publication of notices of foreclosure sale did not
constitute debt collection activity for purposes of the Act.1 Without a viable
The plaintiffs argue that various letters and notices to them from the defendant
constitute debt collection activity. (Doc. 12 at 12). The complaint mentions the
plaintiffs’ receipt of two letters, one in September 2010 and another in February 2011,
federal claim, the defendant urges the Court not to retain supplemental jurisdiction
over the state claim.2
The complaint alleges violations of 15 U.S.C. §§ 1692b(1), 1692b(5),
1692c(a)(1), 1692c(a)(3), 1692c(b), 1692d, 1692e, 1692e(5), 1692e(7), 1692e(10),
and 1692f. (Doc. 1 at 4-5). Each of these statutes regulates the conduct of any
“debt collector.” This term is defined to mean, in general, one who uses the mails
or any instrumentality of interstate commerce in a business the principal purpose
of which is to collect debts, or who regularly collects or attempts to collect debts
owed another. 15 U.S.C. § 1692a(6). The defendant assumes for purposes of
argument only that it is a debt collector within this statutory definition. (Doc. 7 at
5; Doc. 13 at 1-2).
Just as the Act governs only debt collectors, it governs only “debt
collection activities.” LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1192
(11th Cir. 2010); accord Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d
1211, 1218 n.3 (11th Cir. 2012); id. at 1216 (the complaint must allege that “the
challenged conduct is related to debt collection”). The defendant argues that its
publications of notice of foreclosure sale were only efforts to enforce a security
but it does not attribute them to the defendant and instead indicates they came from
“other collection employees employed by” the lender. (Doc. 1 at 3, 4). Moreover, the
only letter from the defendant that the plaintiffs attach to their brief dates from February
2012. Accordingly, the Court concludes that, absent proper amendment to add one, no
claim based on correspondence from the defendant is part of this lawsuit.
In discussing privacy, the complaint mentions the Act and the Gramm-LeachBliley Act. (Doc. 1 at 6). As it has when faced with similar allegations, “[t]he Court
construes Count Two’s references to the Act and to the Gramm-Leach-Bliley Act as
intended only to point out a federal acknowledgement that debtors have privacy rights,
not as an assertion that a federal cause of action for invasion of privacy exists or is
pressed.” Samuels v. Midland Funding, LLC, 921 F. Supp. 2d 1321, 1334 n. 22 (S.D.
Ala. 2013). Moreover, as the defendant points out, (Doc. 7 at 4 n.2), the complaint
asserts supplemental jurisdiction over “pendent state law claims.” (Doc. 1 at 2).
Accordingly, the Court concludes that, absent proper amendment to add one, no federal
claim for invasion of privacy is part of this lawsuit.
interest and that such efforts do not constitute debt collection activity under the
In Reese, the Eleventh Circuit held that a communication to a debtor that
both demands payment of a debt under a note and gives notice of an intent to
foreclose on a security interest (the mortgage) constitutes debt collection activity
under the Act. 678 F.3d at 1217-18. The Court “d[id] not reach the question of
whether enforcing a security interest is itself debt-collection activity covered by
the statute.” Id. at 1218 n.3.
The plaintiffs invoke Reese, but it does not answer the question presented.3
The published notices of foreclosure sale simply announced that the property
would be sold to the highest bidder due to default and for the purpose of paying
the indebtedness secured by the mortgage. (Doc. 1, Exhibit B). The plaintiffs
identify nothing in the published notices that demanded them to pay the
indebtedness, and it is plain that no such demand was made therein.
In an earlier, unpublished opinion, the Eleventh Circuit answered the
question left open by Reese. According to this opinion, “an enforcer of a security
interest, such as a [mortgage company] foreclosing on mortgages of real property
…. falls outside the ambit of the FDCPA except for the provisions of section
1692f(6).” Warren v. Countrywide Home Loans, Inc., 342 Fed. Appx. 458, 460
(11th Cir. 2009) (bracketed material in original). The Warren Court noted that
Section 1692a(6) defines a debt collector, for purposes of Section 1692f(6), as
including one in the business of enforcing security interests, thereby
“suggest[ing]” that such a person is not a debt collector for purposes of any other
section. “Thus, if a person enforcing a security interest is not a debt collector, it
likewise is reasonable to conclude that enforcement of a security interest through
Nor does Birster v. American Home Mortgage Servicing, Inc., 481 Fed. Appx.
579 (11 Cir. 2012), also invoked by the plaintiffs, since it likewise involved a letter to a
debtor that “both attempt[ed] to enforce a security interest and collect a debt.” Id. at 583
(emphasis in original).
the foreclosure process is not debt collection for purposes of the Act.” Id. The
defendant, unsurprisingly, relies on Warren.
According to the defendant, Warren leaves the matter “settled.” (Doc. 13
at 2). However, “[u]npublished opinions are not controlling authority and are
persuasive only insofar as their legal analysis warrants.” Bonilla v. Baker
Concrete Construction, Inc., 487 F.3d 1340, 1345 n.7 (11th Cir. 2007); accord 11th
Cir. R. 36-2.
In opposition to the defendant’s motion, the plaintiff relies on Glazer v.
Chase Home Finance LLC, 704 F.3d 453 (6th Cir. 2013). In that decision, the
Sixth Circuit “h[e]ld that mortgage foreclosure is debt collection under the Act,”
and that “[l]awyers who meet the general definition of a ‘debt collector’ must
comply with the FDCPA.” Id. at 464. The Glazer Court engaged in an extended
discussion (exceeding five published pages) of the issue, including a lengthy
refutation of the reasoning employed in Warren, and it relied on published
opinions from the Third and Fourth Circuits (as well as the only appellate decision
cited by Warren) in support of its position. Id. at 459-65.
Even though Glazer directly undercuts the persuasive value of Warren and
the five decisions (four of them trial court) on which the Warren Court relied, and
even though Glazer forms the centerpiece of the plaintiff’s opposition to dismissal,
the defendant’s reply brief ignores its existence. (Doc. 13 at 2-3). The Court
declines to perform an independent comparative evaluation of the analysis
presented in these cases, or in any others speaking to the issue, when the
defendant, as movant, has declined to do so itself. The Court has and expresses no
opinion whether, given a full presentation by the parties, it would find the Warren
or the Glazer line of cases more persuasive.
As noted, one in the business of enforcing security interests is a debt
collector for purposes of Section 1692f(6), and the defendant admits it was
enforcing a security interest in publishing the notices of foreclosure sale. The
defendant denies that the plaintiff has asserted a claim under this section, (Doc. 7
at 9), but the complaint asserts violations of “Section 1692f,” (Doc. 1 at 4, 5),
which does not rule out a claim under subsection (6).
The defendant also argues that the plaintiffs “admitted the existence of the
security interest at issue and their default under the mortgage, rendering any claim
under 1692f(6) impossible.” (Doc. 7 at 9). While the complaint acknowledges
that the plaintiffs missed one payment in April 2009, it also states that they
“continued making their regular house payment” and that foreclosure was not
attempted until early 2012. (Doc. 1 at 2, 3). The defendant has not explained how
these allegations negate the plaintiffs’ ability to show that, as of early 2012, it was
not in default as defined by the mortgage (which is not in evidence) and that the
defendant, or the lender and/or servicer, then had “no present right to possession
of the property claimed as collateral through an enforceable security interest.” 15
U.S.C. § 1692f(6)(A).
As noted, the defendant’s attack on the state claim depends on the success
of its challenge to the federal claim. Since the latter fails, the former fails as well.
For the reasons set forth above, the defendant’s motion to dismiss is
DONE and ORDERED this 15th day of October, 2013.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
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