Jackson v. Carrington Mortgage Services, LLC

Filing 36

ORDER denying 31 Motion for Summary Judgment. Signed by Judge Cecilia M. Altonaga on 9/29/2017. (ps1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 17-60516-CIV-ALTONAGA/O’Sullivan
JACOB JACKSON,
Plaintiff,
v.
CARRINGTON MORTGAGE
SERVICES, LLC,
Defendant.
_____________________________/
ORDER
THIS CAUSE came before the Court on Defendant, Carrington Mortgage Services,
LLC’s Second Renewed Motion for Summary Judgment (“Motion”) [ECF No. 31], submitted
contemporaneously with its Statement of Undisputed Material Facts (“SMF”) [ECF No. 32] on
August 21, 2017. Plaintiff, Jacob Jackson, submitted a Memorandum of Law in Opposition
(“Response”) [ECF No. 33] and Response to Carrington’s Purported Statement of Undisputed
Material Facts (“SMF Response”) and additional Plaintiff Statement of Material Facts (“Plaintiff
SMF”) [ECF No. 34], to which Defendant filed a Reply [ECF No. 35]. The Court has carefully
considered the briefing and attached exhibits, the record and applicable law.
I. BACKGROUND
On February 10, 2017, Plaintiff filed a two-count Complaint [ECF No. 1-2] in state court
against Defendant for money damages based on alleged violations of the Federal Debt Collection
Practices Act (“FDCPA”). Defendant removed the case on March 13, 2017. (See Notice of
Removal [ECF No. 1]). Plaintiff’s first count alleges Defendant attempted to collect late fees on
Plaintiff’s mortgage loan without a legal basis and by using false and deceptive means, in

CASE NO. 17-60516-CIV-ALTONAGA/O’Sullivan
violation of 15 U.S.C. section 1692e. (See Compl. ¶¶ 16–24). The second count alleges
Defendant falsely represented Defendant was entitled to recover late fees, in violation of 15
U.S.C. section 1692f(1). (See id. ¶¶ 25–32).
In November 2004, Plaintiff executed a $147,343.00 promissory note to secure a
mortgage on his property in Broward County, Florida. (See SMF ¶¶ 1–2 (citation omitted)).
Paragraph 4 of the note requires Plaintiff to make monthly payments of principal and interest in
the amount of $919.23 on the first day of every month through December 1, 2034 — or until the
loan is paid off in full. (See id. (citing SMF, Ex. 1, Certified Copy of Note and Mortgage [ECF
No. 32-1] ¶ 4). Paragraph 6(A) of the note authorizes a four percent late charge if full payment
is not received by the 15th of the month. (See id. (citation omitted)). In the event of a default on
Plaintiff’s monthly payments, the note authorizes acceleration of the full outstanding loan
balance. (See id. (citation omitted)). Paragraph 10 of the note allows Plaintiff the ability to
reinstate the mortgage loan after acceleration by paying the amount required to bring the account
current. (See id. ¶ 2 (citation omitted)).
Plaintiff defaulted on his mortgage loan, and the mortgage loan was accelerated some
time prior to September 2016. (See id. ¶ 3 (citation omitted)). Defendant sent a written
communication to Plaintiff dated September 22, 2017, which listed two late fee charges of
$36.76 from July 17, 2016 and August 17, 2016. (See id. ¶ 4 (citation omitted); SMF Resp. ¶ 4
(citing Compl., Ex. A, Mortgage Statement [ECF No. 1-2] 9)). The communication stated,
“[y]ou are late on your mortgage payments. Failure to bring you[r] loan current may result in
fees and foreclosure – the loss of your home.”

(Pl. SMF ¶ 4 (alterations added; citation

omitted)). Plaintiff filed the Complaint following receipt of this written communication, alleging

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Defendant violated the FDCPA by improperly attempting to collect late fees after Plaintiff
defaulted on his mortgage. (See generally Compl.)
On April 10, 2017, Defendant filed a Motion for Summary Judgment [ECF No. 13] and
Statement of Material Facts [ECF No. 14]. That same day, the Court entered an Order [ECF
No. 20] denying the Motion without prejudice in order to allow time for discovery. Defendant
filed a Renewed Motion for Summary Judgment [ECF No. 22] and Statement of Facts [ECF No.
23] on May 24, 2017. The Court denied the Renewed Motion without prejudice on June 2, 2017,
to be refiled once Plaintiff furnished outstanding discovery. (See Order [ECF No. 25]). On
August 21, 2017, after the close of the discovery period, Defendant filed this Motion with its
SMF.
II. LEGAL STANDARD
Summary judgment may only be rendered if the pleadings, the discovery and disclosure
materials on file, and any affidavits show “there 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. 56(a), (c). An issue of
fact is “material” if it might affect the outcome of the case under the governing law. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). It is “genuine” if the evidence could
lead a reasonable jury to find for the non-moving party. See id.; see also Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
At summary judgement, the moving party bears the initial burden of identifying “those
portions of the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any which it believes demonstrate the absence of a genuine issue
of material fact.” Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (alterations, internal quotation marks, other

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citation omitted)). If “the moving party fails to demonstrate the absence of a genuine issue of
material fact, the motion should be denied.” Kernel Records Oy v. Mosley, 694 F.3d 1294, 1300
(11th Cir. 2012) (citations omitted).
III. ANALYSIS
Plaintiff seeks relief under two provisions of Title 15 of the United States Code: sections
1692e and 1692f. Section 1692e generally prohibits debt collectors from using “any false,
deceptive, or misleading representation . . . in connection with the collection of any debt.” 15
U.S.C. § 1692e (alteration added). In Count I, Plaintiff points to two subsections in section
1692e Defendant allegedly violated: 1692e(2)(A), which prohibits “[t]he false representation of .
. . the character, amount, or legal status of any debt[,]” 15 U.S.C. § 1692e(2)(A) (alterations
added); and 1692e(10), which prohibits “[t]he use of any false representation or deceptive means
to collect or attempt to collect any debt or to obtain information concerning a consumer,” id.
§ 1692e(10) (alteration added); (see also Compl. ¶¶ 16–24). In Count II, Plaintiff alleges a
violation of section 1692f(1), which prohibits “the collection of any amount . . . unless such
amount is expressly authorized by the agreement creating the debt or permitted by law.” 15
U.S.C. § 1692f(1) (alteration added); (see also Compl. ¶¶ 25–32).
To state a claim under the FDCPA, Plaintiff must show: (1) he has been the target of
collection activity arising from a consumer debt; (2) Defendant is a debt collector; (3) the
challenged conduct is related to debt collection; and (4) Defendant has engaged in an act or
omission prohibited by the FDCPA. See Bohringer v. Bayview Loan Servicing, LLC, 141 F.
Supp. 3d 1229, 1234 (S.D. Fla. 2015); see also Reese v. Ellis, Painter, Ratterree & Adams, LLP,
678 F.3d 1211, 1216 (11th Cir. 2012).

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1. Debt Collector
The FDCPA defines a “debt collector” as “any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which is the collection
of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or
due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Defendant does not
challenge Plaintiff’s assertion Carrington acted as a “debt collector” under the definition of the
FDCPA. (See generally Mot.). Furthermore, the Statement of Material Facts contains sufficient
undisputed facts to determine Carrington acted as a “debt collector.” (See generally SMF).
2. Collection Activity
A debt collector must be engaged in activity “in connection with the collection of any
debt” in order to be liable for a violation under the FDCPA. 15 U.S.C. § 1692e. “[T]he Eleventh
Circuit has not established a bright-line rule” as to what qualifies as “‘in connection with the
collection of any debt.’” Dyer v. Select Portfolio Servicing, Inc., 108 F. Supp. 3d 1278, 1280
(M.D. Fla. 2015) (alteration added). However, the Eleventh Circuit recently provided some
guidance relevant to this case in Pinson v. Albertelli Law Partners LLC, 618 F. App’x 551, 553–
54 (11th Cir. 2015), when it found two letters lacking an express demand for payment were
nevertheless issued in connection with the collection of a debt because the demands were
implicit.
Defendant asserts its September 22, 2016 communication to Plaintiff is not considered
debt collection activity because it is required to send mortgage statements to Plaintiff under the
Federal Truth in Lending Act (“TILA”). (See Mot. 4-5); see also 12 C.F.R. § 1026.41(a)(2).
In Pinson, the Eleventh Circuit stated “[a]

That point takes the Defendant only so far.

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communication can have more than one purpose, for example, providing information to a debtor
as well [as] collecting a debt.” Pinson, 618 F. App’x. at 553 (alterations added; citations
omitted). Cf. Antoine v. Carrington Mortg. Servs., LLC, No. 17-cv-61216, 2017 WL 3404389, at
*2 (S.D. Fla. Aug. 8, 2017) (finding plaintiff failed to state a claim under the FDCPA because
monthly statements sent pursuant to federal law did not constitute debt collection) (citations
omitted).
The Antoine decision, involving Plaintiff’s counsel and relied on here by the same
Defendant Carrington (see Mot. 1; Reply 4–5), is distinguishable from this case in two important
respects. First, the Antoine court noted the contract between the mortgagee and mortgagor in
that case specifically permitted the inclusion of debt collection language. Antoine, 2017 WL
3404389 at *2. Second, the Antoine court relied upon Brown v. Select Portfolio Servicing, Inc.,
No. 16-62999-CIV, 2017 WL 1157253, at *2 (S.D. Fla. Mar. 24, 2017).

The mortgage

statements at issue in Brown did not “contain[] more than the content mandated by TILA” or
“‘debt collection language,’” id. at *3–4 (alteration added), which is not the case here.
Defendant provides as an exhibit to the present Motion a sample monthly statement form
the same Consumer Financial Protection Bureau bulletin considered by the court in Brown. (See
Sample Form of Periodic Statement with Delinquency Box [ECF No. 31-1]); Brown, 2017 WL
1157253, at *2. While Defendant claims “the statement is nearly verbatim identical in content
and form” to the bulletin (Mot. 4), the September 22 communication makes one significant
change – it adds a Payment Coupon to the form. (See Mortgage Statement). Plaintiff argues the
Payment Coupon, along with the listing of two $36.76 late fees, a total amount due of
$108,444.92, and a delinquency notice, make it plausible for “the least sophisticated consumer
[to] believe this was an attempt to collect a debt.” (Resp. 3, 5 (alteration added)); see also

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LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1194 (11th Cir. 2010) (holding a
communication to collect a debt should be viewed from the lens of the least sophisticated
consumer, not the offending party’s intent).
The fact periodic account statements are required under the TILA is not dispositive of
whether Defendant’s activity is related to debt collection. Consequently, there remains a factual
dispute as to whether the September 22 communication from Carrington also constituted activity
“in connection with the collection of any debt.” 15 U.S.C. § 1692e.
3.

Activity Prohibited by the FDCPA

While the parties do not explicitly recognize a factual dispute in the briefing, there are
remaining genuine issues of material fact. The parties present competing versions of the facts as
they relate to interpretation of Plaintiff’s promissory note.
As described, Count I alleges Defendant sought to recover late fees despite lacking the
legal basis to do so, in violation of 15 U.S.C. section 1692e(2)(A). Plaintiff further alleges
Defendant used false and deceptive means to collect a debt, in violation of section 1692e(10).
The allegations hinge on whether the attempt to collect a debt was a false representation of the
“character, amount or legal status” of the debt. Id. § 1692e(2)(A).
The parties disagree whether the promissory note allows Defendant to generate and
collect late fees after acceleration.

Plaintiff interprets the promissory note as preventing

Defendant from charging or collecting late fees after acceleration of the loan, regardless of
whether it is in the context of reinstatement. (See Resp. 3–4). Defendant construes the note as
permitting post-acceleration fees be charged and collected for purposes of reinstatement, stating
“[a]cceleration is ignored for purposes of this calculation.” (Mot. 7 (alteration added)).

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This difference in interpretation is a genuine issue of material fact. Interpretation of the
promissory note’s language calls into question the accuracy of the amount of fees and total debt
owed by Plaintiff for purposes of reinstatement, which impacts whether the September 22
communication was a false representation of the amount owed. This issue is not adequately
briefed.
Similar issues of material fact prevent entry of summary judgment on the second count,
in which Plaintiff alleges Defendant sought to collect fees it was not expressly authorized by
contract or law to collect, in violation of 15 U.S.C. section 1692f(1). If the promissory note is
interpreted as giving Defendant the contractual right to collect late fees after acceleration, the
attempt to collect would not violate the FDCPA. See Patel v. Seterus, Inc., 14-cv-1585-Orl41GJK, 2015 WL 13547010, at*4 (M.D. Fla. Jun. 19, 2015) (finding the defendant had a legal
right to include late fees in monthly mortgage statements without violating the FDCPA). But the
parties disagree whether the promissory note expressly authorizes Defendant to charge and
collect late fees after the loan’s acceleration, even if only for purposes of reinstatement.
Furthermore, if Defendant did not have the right to charge the fees in question, the ”amount
owed” in the communication may have exceeded what Defendant was permitted by law to
collect.
In sum, a review of the briefing and record reveals genuine issues of material fact
foreclosing entry of summary judgment. Accordingly, it is
ORDERED AND ADJUDGED that the Renewed Motion for Summary Judgment [ECF
No. 31] is DENIED.

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CASE NO. 17-60516-CIV-ALTONAGA/O’Sullivan
DONE AND ORDERED in Miami, Florida this 29th day of September, 2017.

_________________________________
CECILIA M. ALTONAGA
UNITED STATES DISTRICT JUDGE
cc:

counsel of record

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