The ruling by the Eleventh Circuit Court of Appeals in Richard Hunstein v. Preferred Collection and Management Services, Inc. raises significant concerns for debt collectors who use vendors for mailing and other types of services that require the sharing of information relating to consumer debts. By ruling that such arrangements can violate the prohibition on sharing information about consumer debts with third parties under section 1692c(b) of the Fair Debt Collection Practices Act ("FDCPA"), the panel’s decision has forced many debt collectors to rethink existing business ...
On February 11, 2020, the United States Circuit Court of Appeal for the Eleventh Circuit issued its opinion in Anderman v. JP Morgan Chase Bank, N.A., Case No. 19-13734 regarding the applicability of the federal Fair Debt Collection Practices Act (“FDCPA”) to certain conduct in judicial foreclosure actions. In Anderman, the plaintiffs alleged on behalf of themselves and a class of similarly situated individuals that JPMorgan Chase and its counsel violated the FDCPA by allegedly seeking to collect a debt against the potential heirs of deceased borrowers by naming them in ...
A .pdf copy of the Glasser opinion can be found here.
The Telephone Consumer Protection Act (“TCPA” or the “Act”) has limited telephone calls that can be placed using certain automated equipment since 1991. However, since passage of the Act there has been considerable debate about the type of automated equipment subject to the Act’s restrictions. The TCPA specifically restricts the use of any “automated telephone dialing system” ("ATDS"). The statute defines ATDS as “equipment which has the capacity—(A) to store or produce telephone numbers to be called using a ...
In Carol Tims v. LGE Community Credit Union, the Eleventh Circuit Court of Appeals held that a credit union’s account agreement with one of its customers was ambiguous about which account balance calculation the bank would use in assessing overdraft fees on the customer’s account, which exposed the credit union to potential liability under the Electronic Fund Transfer Act.
The matter came to the Court on appeal after the trial judge dismissed the consumer’s complaint. The Court first addressed the history of overdraft fees, highlighting the rise of Electronic Fund Transfer ...
In Roth v. Nationstar Mortgage, LLC, the Eleventh Circuit Court of Appeal addressed a recurring issue involving whether or not sending monthly mortgage statements regarding a discharged mortgage debt violates the discharge injunctions prohibition on collecting discharged debt, found at 11 U.S.C. 524.
The facts of the case are not at all uncommon. Roth filed a Chapter 13 petition that provided secured creditors would retain their liens. Nationstar serviced a mortgage that was treated in this manner by the plan. Roth completed her Chapter 13 plan and received a discharge, of which ...
In Salcedo v. Hanna, 17-14077, the Eleventh Circuit Court of Appeals rejected a consumer’s allegations that his receipt of a single text message was sufficient to maintain a claim under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227 et al. Salcedo filed suit as representative of a putative class consisting of former clients of attorney Alex Hanna. The class was composed of individuals who allegedly received unsolicited text messages from Mr. Hanna and his law firm over a four-year period. Specifically, Salcedo alleged that he received one multimedia text ...
In Davis v. Oasis Legal Fin. Operating Co., LLC, 18-10526, 2019 WL 4051592 (11th Cir. Aug. 28, 2019), the U.S. Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) affirmed a decision in the U.S. District Court for the Southern District of Georgia (“District Court”) that denied the defendant payday loan lenders’ motions to dismiss and motion to strike class allegations. The plaintiffs, a class of borrowers, sued the defendant lenders, three entities operating as “Oasis Legal Finance,” in Georgia for violating the state’s usury laws. The Eleventh ...
For many of the claims asserted under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692-1692p (the "FDCPA"), courts are required to apply the "least sophisticated consumer" standard in evaluating the claim, an "objective" test that assesses the alleged violation from the perspective of the hypothetical "least sophisticated consumer." See Landeros v. Pinnacle Recovery, Inc., 692 F. App'x 608, 612-13 (11th Cir. 2017); see also Leonard v. Zwicker & Assocs., P.C., 713 F. App'x 879, 881-82 (11th Cir. 2017). But as the Eleventh Circuit again made clear earlier this month in Lait ...
In Pedro v. Equifax, Inc., --- F.3d ---, 2017 WL 3623926 (11th Cir. 2017), the Eleventh Circuit held that it was not objectively unreasonable for TransUnion, LLC to interpret section 1681e(b) of the Fair Credit Report Act ("FCRA") to allow it report an account belonging to an authorized user.
Kathleen Pedro filed a putative class action alleging that TransUnion willfully violated section 1681e(b), which requires consumer reporting agencies to "follow reasonable procedures to assure maximum possible accuracy," when it reported her parents' credit card account for which she was an ...
On March 1, 2016, the Eleventh Circuit Court of Appeal held that the assignee of a loan cannot be liable for the failure to provide a payoff statement as required by the Truth in Lending Act, 15 USC 1639g. The case is Evanto v. Federal National Mortgage Association, No. 15-11450 and it has wide reaching implications for all legal post-origination TILA compliance issues. The case revolves around what many consumer advocates argue is a loophole in the TILA statute. The TILA statue requires creditors and assignees alike to provide a payoff statement within seven days of the borrower's ...
In Castellanos v. Midland Funding, LLC, 15-CV-559 (M.D. Fla. Jan. 4, 2016) the United States District Judge John Steele joined with several of his Middle District of Florida colleagues and held that the Bankruptcy Code preempts the FDCPA with respect to filing time-barred proofs of claim. In Crawford v. LVNV Funding, LLC, the Eleventh Circuit held that filing a time-barred proof of claim in bankruptcy court violated the FDCPA. 758 F.3d 1254, 1262 (11th Cir. 2014) cert. denied, 135 S. Ct. 1844 (2015). To the contrary, the Bankruptcy Code permits creditors to file proofs of claim without ...
On November 23, 2015, in the first appellate decision of its kind, the District Court for the Southern District of Florida affirmed a bankruptcy court order to compel chapter 7 debtors to surrender real property by directing the debtors to cease all foreclosure defense. The decision in Failla v. Citibank, N.A. (In re Failla), case no. 15-80328, marks the first decision from a federal appellate court to address the question of whether a bankruptcy court may enter an order directing a debtor to cease defending a mortgage foreclosure suit pending in state court. On December 19, 2014, Judge ...
It would be difficult to identify a federal circuit court of appeals that has released a larger number of influential consumer finance decisions in the last year than the Eleventh Circuit. And last week, the court continued its recent consumer finance trend. Before Friday's landmark FDCPA decision in Davidson v. Capital One (covered in a separate blog post), the court again waded into the turbulent waters of the TCPA. On Thursday, the Eleventh Circuit issued its decision in Murphy v. DCI Biologicals Orlando, LLC, --- F.3d ---, No. 14-10414 (11th Cir. Aug. 20, 2015), in which another ...
In Davidson v. Capital One Bank (USA), N.A., a case closely followed by the financial services industry and handled by Burr & Forman, LLP, the Eleventh Circuit held that an entity collecting a debt that was acquired after default, and which the entity now owns, is not a "debt collector" under the Fair Debt Collection Practices Act ("FDCPA") unless the principal purpose of the entity's business is the collection of debts or the entity regularly collects debts owed to others. In so holding, the Eleventh Circuit broke from the large majority of courts (including the Third, Seventh, and ...
In Haynes v. McCalla Raymer, LLC, No. 14-14036, __ F. 3d __, 2015 WL 4188459 (11th Cir. July 13, 2015), the Eleventh Circuit Court of Appeals affirmed the Northern District of Georgia's grant of summary judgment in favor of Bank of America, N.A. ("BANA") on the mortgagors' wrongful foreclosure claim. The court held that the mortgagors lacked standing to challenge any alleged deficiencies in the assignment of the security deed from MERS to BANA and that the borrowers' own default, rather than any alleged defect in the foreclosure notice, led to the foreclosure. With respect to the ...
On Tuesday, the Eleventh Circuit Court of Appeals expanded the scope of conduct that is actionable under the Fair Debt Collection Practices Act ("FDCPA") to include communications directed to a debtor's attorney. However, the Court also said that such communications may not be actionable under a "least sophisticated consumer" standard and that a plaintiff may have to hurdle a higher bar to establish a violation. In Miljkovic v. Shafritz and Dinkin, P.A., et al., No. 8:14-cv-00635-VMC-TBM, 2015 WL 3956570 (11th Cir. 2015), the plaintiff debtor brought suit against debt ...
On June 1, 2015, the United States Supreme Court issued its decision in Bank of America, N.A. v. Caulkett, in which all nine Justices joined in an opinion that reversed an Eleventh Circuit ruling that chapter 7 debtors may "strip off" wholly unsecured junior liens. The Caulkett opinion largely relies upon the Supreme Court's prior decision in Dewsnup v. Timm, 502 U.S. 410 (1992), in which the Court held that a chapter 7 debtor may not "strip down" liens where the value of the property partially secures the underlying claim. The Eleventh Circuit previously recognized but distinguished ...
John Chiles and Zach Miller were recently published in the American Bar Association's The Business Lawyer (Vol. 70, No. 2) with an article titled TCPA Litigation Developments: Inconsistent Federal Court Decisions Headline a Hectic Year. The article highlights important decisions issued by U.S. federal courts addressing the Telephone Consumer Protection Act ("TCPA") during 2014. Of particular importance is the Eleventh Circuit's opinion on revocation of consent and the meaning of "called party" in Osorio v. State Farm Bank, F.S.B., 746 F.3d 1242 (11th Cir. 2014). Other topics ...
Following the Eleventh Circuit's decision last year in Crawford v. LVNV Funding, LLC, the filing of a proof of claim on a time-barred debt in a bankruptcy case pending in the Eleventh Circuit's jurisdiction violates the Fair Debt Collection Practices Act, 15 U.S.C. § § 1692-1692p ("FDCPA"). But as the U.S. Bankruptcy Court for the Northern District of Alabama recently made clear in Gurganus v. Recovery Management Systems Corp. (In re Gurganus), No. 7:14-ap-70054-BGC, 2015 WL 65089 (Bankr. N.D. Ala. Jan. 5, 2015), before debtors start hauling creditors into court for something ...
Imagine your company or client was sued for an alleged violation of the Florida Consumer Collections Practices Act ("FCCPA"). The plaintiff has an outstanding debt that is greater than the damages sought in the FCCPA action. Consequently, you want to know if you can counterclaim to setoff (or "offset") the damages sought in the FCCPA lawsuit from the underlying debt. Though the Eleventh Circuit does not provide steadfast answers, it sheds some light on the topic, albeit in a bankruptcy context. In Brook v. Chase Bank USA, N.A., 566 F. App'x 787 (11th Cir. 2014), the Eleventh Circuit ...
The Eleventh Circuit Court of Appeals recently held that unaccepted Federal Rule of Civil Procedure 68 offers of judgment to the named plaintiffs that, if accepted, would have provided all relief that plaintiffs sought, neither moots the individual plaintiff's claims or the putative class action. Thus, the strategy to make an offer of judgment to render the case moot and prevent class certification may no longer be viable strategy in the Eleventh Circuit. In Stein v. Buccaneers Limited Partnership, --- F.3d ---, 2014 WL 6734819 (11th Cir. 2014), six named plaintiffs filed suit ...
In May 2013, a ruling from the U.S. District Court for the Southern District of Florida caused great concern among creditors and debt collectors by taking an unprecedented stance against the supremacy of orders issued by the Federal Communications Commission ("FCC") regarding the Telephone Consumer Protect Act ("TCPA"). In Mais v. Gulf Coast Collection Bureau, Inc., 944 F. Supp. 2d 1226 (S.D. Fla. 2013), Judge Robert N. Scola, Jr. granted partial summary judgment on the plaintiff's TCPA claims against the defendant, Gulf Coast, which had obtained the plaintiff's cell phone ...
In Osorio v. State Farm Bank, F.S.B., No. 13-10951 (11th Cir. Mar. 28, 2014), the United States Court of Appeals for the Eleventh Circuit reversed and remanded a Florida district court's grant of defendant's motion for summary judgment on plaintiff's Telephone Consumer Protection Act ("TCPA") claim. Specifically, Plaintiff Fredy Osorio brought suit against State Farm Bank under 47 U.S.C. § 227, which "provides a damages remedy for cellular-phone subscribers who receive autodialed phone calls without having given prior express consent to receive such calls." Id. The Eleventh ...
In Osorio v. State Farm Bank, F.S.B., No. 13-10951 (11th Cir. Mar. 28, 2014), the United States Court of Appeals for the Eleventh Circuit reversed and remanded a Florida district court's grant of defendant's motion for summary judgment on plaintiff's Telephone Consumer Protection Act ("TCPA") claim. Specifically, Plaintiff Fredy Osorio brought suit against State Farm Bank under 47 U.S.C. § 227, which "provides a damages remedy for cellular-phone subscribers who receive autodialed phone calls without having given prior express consent to receive such calls." Id. The Eleventh ...
The U.S. Court of Appeals for the Eleventh Circuit recently upheld a lower court's denial of a bank's motion to compel arbitration of a dispute between the bank and a depositor concerning alleged excessive overdraft fees. To reach its decision in Dasher v. RBC Bank (USA), Case No. 13-10257 (11th Cir. Feb. 10, 2014), the Eleventh Circuit largely relied on basic state contract law. Prior to the lawsuit, the bank entered into an account agreement with the depositor which contained a broad arbitration clause. The account agreement contained a termination clause which provided that ...
The Eleventh Circuit Court of Appeals held in Faire Feaz v. Wells Fargo Bank, N.A., et al., No. 13-10230 (11th Cir. Feb. 10, 2014), that a lender may require a borrower who has a federally-insured mortgage to obtain more flood insurance than the amount required under federal law. Feaz had obtained a mortgage loan that was guaranteed by the Federal Housing Administration ("FHA"). Feaz's mortgage contained the following covenant, which is required by federal law for all FHA-guaranteed mortgages:
Fire, Flood and Other Hazard Insurance. Borrower shall insure all improvements on the ...
In Reed v. Chase Home Finance, LLC, --- F.3d ----, 2013 WL 3868079 (11th Cir. 2013), the Eleventh Circuit Court of Appeals evaluated one of the more recent additions to the Truth in Lending Act ("TILA"), 15 U.S.C. 1641(g), which requires a loan servicer to provide written notice of an assignment to the obligor. In Reed, the Plaintiff's claimed that Chase violated 1641(g) by failing to inform them that Chase had been assigned an interest in the Plaintiff's mortgage by virtue of an assignment of mortgage. However, the Eleventh Circuit affirmed the summary judgment entered in favor of ...