UNITED STATES DISTRICT COURT FOR THE

SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

LAURIE B. JOHNS and JOSHUA R. )

JOHNS, individually and on behalf of a )

class of persons similarly situated, )

)

Plaintiffs, )

)

v. ) Civil Action No. 14-0254-KD-C

)

WELLS FARGO BANK, N.A., )

)

Defendant. )

ORDER 

This action is before the Court on defendant Wells Fargo Bank N.A.’s motion for 

judgment on the pleadings and memorandum of law in support (which the Court has converted 

to a motion for summary judgment), plaintiffs Laurie and Joshua Johns’ response, Wells 

Fargo’s reply, and the parties’ supplemental briefs on motion for summary judgment (docs. 49,

50, 70, 73, 76, 78-80). 

On December 16, 2015, a hearing was held on the motion. Upon consideration, and for 

the reasons set forth herein and on the record, Wells Fargo’s motion for summary judgment is 

GRANTED. 

The action is also before the Court on the Plaintiffs’ objection and motion to exclude

evidence submitted by Wells Fargo in support of its reply brief (doc. 81) and the Johns’ motion 

to strike certain exhibits submitted by Wells Fargo with its answer (doc. 53). Upon 

consideration, and for the reasons set forth herein, these motions are DENIED. 

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I. Factual and procedural background

In 2004, the Johns executed a mortgage, secured by their home, to Pinnacle Financial 

Corporation. The loan was a “VA loan” that was insured by Government National Mortgage 

Association (Ginnie Mae). Initially, Pinnacle serviced the loan. In February 2005, servicing was 

transferred to Washington Mutual. In October 2005, the Johns filed a Chapter 13 bankruptcy. 

At that time, they had failed to make several mortgage payments. According to the terms of the 

loan, payment was due on the 1st day of each month (doc. 72-2, p. 1, Loan (“3. Payments. (A) I 

will make my monthly payment on the 1st day of each month . . .”). The loan also required a 

late charge for payments not received “by the end of 15 calendar days after the date it is due.” 

(Id., p. 2) As to default, the loan provided as follows: “(B) If I do not pay the full amount of 

each monthly payment on the date it is due, I will be in default.” (Id.). 

Washington Mutual filed a motion for relief from the bankruptcy stay in order to 

proceed with foreclosure. On November 1, 2006, the Bankruptcy Court entered a conditional

order to deny the motion and added the post-petition arrearage to Washington Mutual’s claim. 

The Johns remitted their payment on November 13, 2006 (doc. 50, p. 3). 

During the bankruptcy, the Federal Deposit Insurance Corporation placed Washington 

Mutual in receivership and the loan servicing was transferred to Well Fargo. According to the 

Johns, the transfer of servicing occurred on or about December 1, 2006, and at that time their 

loan was in default.

1 Wells Fargo agrees that servicing of the loan was transferred on December 

 1 In their amended complaint, the Johns alleged that the servicing of their loan was 

transferred on or about February 16, 2007 (doc. 46, p. 3-4). However, in their response to the 

motion for judgment on the pleadings, the Johns offer in their “Statement of Undisputed Facts”, 

that the servicing was transferred on or about December 1, 2006 (doc. 73, p. 2).

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1, 2006.

2 Wells Fargo denies that the loan was in default or considered to be in default at time 

of the servicing transfer (doc. 48, p. 4). 

On October 30, 2009, the loan and mortgage were transferred to Wells Fargo from

Ginnie Mae (doc. 79-2). At that point, the mortgage and loan remained a VA loan but was 

owned and serviced by Wells Fargo (doc. 48-4, p. 29-30). 

The Johns were discharged from bankruptcy on February 10, 2011. Shortly before the 

discharge, a dispute arose between the Johns and Wells Fargo as to the status of the mortgage. 

Wells Fargo foreclosed on the Johns’ residence on March 2, 2011 and purchased the property at 

the foreclosure sale (doc. 79-1, p. 3; doc. 79-4, Foreclosure Deed). A deficiency balance 

remained (doc. 70 at 8).

Later, on April 13, 2011, Wells Fargo conveyed the property to the Secretary of 

Veterans Affairs (doc. 79-1, p. 3; doc. 79-5, Special Warranty Deed). There is no evidence that 

the deficiency balance was assigned to the VA. VRM, as agent for the Secretary of Veterans 

Affairs filed an eviction action in the Circuit Court of Baldwin County, Alabama. 

The Johns filed a counterclaim against VRM and a third-party complaint against Wells 

Fargo. The case was settled and a release agreement was executed on October 10, 2013. The 

terms of the settlement required the Johns to vacate the property by November 23, 2013 (doc. 

70 at 9) Also, Wells Fargo and the VA agreed not to collect on the deficiency balance (See

Exh. 1 to hearing; minute entry dated December 16, 2016).

In late October 2013, the VA conveyed the property back to Wells Fargo (doc. 80-1, 

Quit Claim Deed). In January, February and March 2014, Wells Fargo sent a statement to the 

 2 Wells Fargo cites the Welcome Letter dated November 25, 2006: “As of December 1, 

2006, Washington Mutual will transfer the servicing of your mortgage loan to Wells Fargo 

Home Mortgage, a division of Wells Fargo Bank, N.A. . . .” (Doc. 48, Exhibit 1).

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Johns that stated, “Your loan has been referred to foreclosure . . .” and set out a payment 

summary, balance summary, and year to date summary (doc. 79-6, Exhibit E to the Johns’ 

response). Wells Fargo sent the final settlement check to the Johns’ attorney in April 2014. 

In June 2014, the Johns filed their putative class action complaint in this Court against 

Well Fargo. The Johns alleged that Wells Fargo is a “debt collector” as defined in 15 U.S.C. § 

1692a(6) of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. and that it violated 

the provisions in the Act by, inter alia, using false and deceptive means to collect the debt. 

Wells Fargo filed a motion to dismiss arguing that it was not a “debt collector” and 

therefore the FDCPA did not apply. Alternatively, Wells Fargo argued that the Johns failed to 

state a claim under 15 U.S.C. § 1692e(10) or 15 U.S.C. § 1692e(11). Magistrate Judge William 

E. Cassady entered a report and recommendation finding that the Johns sufficiently pled that 

Wells Fargo was a “debt collector” because they alleged that servicing of their loan was 

transferred from Washington Mutual to Wells Fargo while their loan was “in default or 

considered to be in default”; and thus, Wells Fargo did not come within the exclusion from 

“debt collector” identified in 15 U.S.C. § 1692a(6)(F)(iii). Judge Cassady also found that the 

Johns sufficiently plead a claim for using false representations or deceptive means to collect the 

debt. See 15 U.S.C. § 1692e(10). However, Judge Cassady found that the Johns failed to state a 

claim for Wells Fargo’s alleged failure to make certain disclosures in the initial communication 

and all subsequent communications as required by the FDCPA. See 15 U.S.C. § 1692e(11). 

Judge Cassady recommended dismissal without prejudice as to this claim and noted that the 

Johns could amend their complaint.

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The Court adopted the report and recommendation.

3 Thereafter, the Johns filed their 

amended complaint to better allege their claim under § 1629e(11) and to add factual allegation 

in support of their claim that Wells Fargo was a debt collector as defined in the Act. In Count 

One they allege that Wells Fargo violated § 1692e(2) by failing to comply with the requirement 

that a debt collector not make certain false representations; violated § 1692e(5) by threatening 

to take action that cannot legally be taken; violated § 1692e(10) by attempting to obtain 

information by false or deceptive means; and violated §1592e(11) by failing to comply with the 

disclosure requirements (doc. 46, p. 5-6). In support, the Johns allege that Wells Fargo sent 

three “past due payment demands” on January 16, 2014, February 18, 2014, and March 17, 

2014. (Id.). In Count Two, the Johns move the Court to certify a class action composed of 

persons who have been subjected to this collection activity by Wells Fargo. 

Wells Fargo then filed a motion for judgment on the pleadings. However, before the 

Court ruled on the motion, the Court of Appeals for the Eleventh Circuit decided Davidson v. 

Capital One Bank (USA) NA, 797 F. 3d 1309 (11th Cir. 2015). In Davidson the Court

determined that the status of the loan when acquired as either “in default” or “not in default”, 

does not control the decision as to whether a bank was a “debt collector” as that term is defined 

in the FDCPA. Rather, to be a “debt collector” a bank must either regularly collect or attempt 

to collect debts owed or due to another or its principal business must be collection of debts. Id. 

at 1314-1316.

This Court converted Wells Fargo’s motion for judgment as a matter of law into a 

motion for summary judgment. The parties were given the opportunity to provide additional 

 3 This order amends prior determinations to the extent that such determinations were in 

error in the adopted report and recommendation. 

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briefing on the issue of whether Wells Fargo was a “debt collector” in view of the decision in 

Davidson. The converted motion for summary judgment and additional briefing are now before 

the Court. 

II. Conclusions of Law

A. Standard of Review

“The court shall grant summary judgment if the movant shows that 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) (Dec. 2010). Wells Fargo, as the party seeking summary judgment bears “the 

initial burden to show the district court, by reference to materials on file, that there are no 

genuine issues of material fact that should be decided at trial.” Clark v. Coats & Clark, Inc., 929 

F.2d 604, 608 (11th Cir. 1991). The party seeking summary judgment “always bears the initial 

responsibility of informing the district court of the basis for its motion, and 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.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 

323, 106 S. Ct. 2548, 2553 (1986)). In deciding whether Wells Fargo has met its initial burden, 

the Court must review the record and draw all reasonable inferences therefrom in a light most 

favorable to the Johns, as the non-moving parties. See Whatley v. CNA Ins. Co., 189 F.3d 1310, 

1313 (11th Cir. 1999). 

Once Wells Fargo has satisfied this responsibility, the burden shifts to the Johns, as the 

non-movants, to show the existence of a genuine issue of material fact that would preclude 

summary judgment. See Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 

587 (1986). “In reviewing whether the [Johns have met their] burden, the court must stop short 

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of weighing the evidence and making credibility determination of the truth of the matter. 

Instead, the evidence of the non-movant is to be believed, and all justifiable inferences are to be 

drawn in his favor.” Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 999 (11th Cir. 1992) 

(citing Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S. Ct. 2505 (1986) ((bracketed text 

added). However, Wells Fargo would be entitled to summary judgment if the Johns fail “to 

make a sufficient showing on an essential element of [their] case with respect to which [they 

have] the burden of proof.’” In re Walker, 48 F. 3d 1161, 1163 (11th Cir. 1995) (quoting 

Celotex Corp., 477 U.S. at 323, 106 S. Ct. at 2552) (bracketed text added). Overall, the court 

must “resolve all issues of material fact in favor of the [Johns], and then determine the legal 

question of whether [Wells Fargo] is entitled to judgment as a matter of law under that version

of the facts.” McDowell v. Brown, 392 F.3d 1283, 1288 (11th Cir. 2004) (citing Durruthy v. 

Pastor, 351 F.3d 1080, 1084 (11th Cir. 2003)) (bracketed text added). 

However, the mere existence of any factual dispute will not automatically necessitate 

denial of a motion for summary judgment; rather, only factual disputes that are material 

preclude entry of summary judgment. Lofton v. Secretary of Dept. of Children and Family 

Services, 358 F.3d 804, 809 (11th Cir. 2004). “An issue of fact is material if it is a legal 

element of the claim under the applicable substantive law which might affect the outcome of the 

case. It is genuine if the record taken as a whole could lead a rational trier of fact to find for the 

nonmoving party.” Reeves v. C.H. Robinson Worldwide, Inc., 594 F.3d 798, 807 (11th Cir. 

2010) (citation omitted). 

B. Analysis 

1. The Johns’ motion to strike (doc. 53) 

The Johns move to strike certain exhibits to Wells Fargo’s answer (doc. 53, motion; doc. 

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48, answer). Specifically, they move to strike an excerpt from Amber Nichole Ott’s deposition 

taken July 2013 in BAC, as Servicing Agent v. Johns, Civil Action No. 11-901339 (Circuit 

Court of Baldwin County, Alabama) on basis that she inaccurately testified that the due date for 

the Johns’ monthly payment was the 13th day of each month (doc. 48-2, p. 118). The Johns 

assert that their due date was the 1st day of each month. 

The Johns also move to strike Deposition Exhibit 5, the Proof of Claim that was filed by 

Washington Mutual in the Johns’ bankruptcy, because it is incomplete. They argue that Exhibit 

5 did not include a copy of their note and mortgage. The Johns also move to strike Deposition 

Exhibit 8, their Payment History, because it was illegible. Overall, the Johns argue that these 

exhibits should be stricken because they are “incomplete, inaccurate, illegible, and confusing” 

(doc. 53, p. 4). In support, the Johns submit a complete copy of the Proof of Claim and a 

legible copy of the Payment History. The Johns assert that these are relevant because they show 

that the payment due date was 1st of each month. 

Wells Fargo responds that the Johns have failed to argue the elements of a Rule 12(f) 

motion to strike – that the exhibits are “redundant, immaterial, impertinent or scandalous 

matter” (doc. 67, p. 3). Wells Fargo argues that these exhibits are relevant to the issues before 

the Court and that allowing the exhibits and deposition excerpt will not prejudice the Johns

because they again deposed Ott in 2015 and had the opportunity to seek further testimony on 

any inaccurate or confusing statements in the first deposition in 2013. 

Rule 12(f) provides that “[t]he court may strike from a pleading ... any redundant, 

immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). “The purpose of a motion 

to strike is to clean up the pleadings, streamline litigation, and avoid unnecessary forays into 

immaterial matter.” Principal Bank v. First American Mortgage, Inc., 2014 WL 1268546, at *1 

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(M.D. Fla. Mar. 27, 2014) (internal citations, quotation marks, and brackets omitted). 

The Johns do not argue that the exhibits are “redundant, immaterial, impertinent, or 

scandalous matter.” Fed. R. Civ. P. 12(f). They do assert that the exhibits are “incomplete, 

inaccurate, illegible and confusing” (doc. 53, p. 4). However, the Johns’ act of placing 

complete and legible exhibits in the record resolves any perceived incompleteness or illegibility. 

And the accuracy of the monthly due date as plead by Wells Fargo is actually a question of fact 

that is not resolved by striking exhibits that do not comport with the Johns’ version of the facts. 

Also, the Johns do not offer any argument as to how the exhibits they seek to strike are 

confusing, but instead argue that the exhibits do not support their position that the monthly due 

date was the 1st of the month. 

Generally, the “court will not exercise its discretion under the rule to strike a pleading 

unless the matter sought to be omitted has no possible relationship to the controversy, may 

confuse the issues, or otherwise prejudice a party.” Principal Bank, 2014 WL 1268546 at *1. 

After consideration of the parties’ arguments, the Court is unable to find that the excerpts from 

Ott’s deposition and Deposition Exhibits 8 and 5 are unrelated to the controversy, confusing, or 

prejudicial to the Johns. Accordingly, the motion to strike is DENIED. Principal Bank, 2014 

WL 1268546 at *1 (“Because striking a portion of a pleading is a drastic remedy and because it 

often is sought by the movant simply as a dilatory tactic, motions under Rule 12(f) are viewed 

with disfavor and are infrequently granted.”). 

2. The Johns’ objection and motion to exclude evidence (doc. 81) 

The Johns argue that certain arguments and evidence are not properly before the Court 

because they were offered for the first time in Wells Fargo’s reply. For the reasons set forth 

herein, the objection is OVERRULED and the motion to exclude is DENIED. 

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In the summary judgment brief, Wells Fargo states that it was “undisputed” that it 

“owned the debt at the time it allegedly sent collection letters to the Johnses in early 2014” and 

therefore, it was not collecting a debt due to another (doc. 78, p. 7). Wells Fargo also argues 

that the Johns failed to present evidence on an essential element of their FDCPA claim; that 

Wells Fargo did not own the loan (Id. at 7-8). 

In response, the Johns assert that Wells Fargo offered no evidence that it did own the 

loan in early 2014. In support, the Johns point out that in July 2013, Ott, Wells Fargo’s 30(b)(6) 

representative, testified that when Wells Fargo conveyed the property to the VA in April 2011, 

the loan was transferred back to Ginnie Mae. The Johns assert that at that point, Wells Fargo no 

longer owned the debt and therefore, was servicing the debt of another (doc. 79, p. 3-4, 8-9). 

They argue that “[t]here is at least a factual question here regarding the ownership of the debt at 

issue when the subject collection action was taken” in early 2014 (doc. 79, p. 8).

In reply, Wells Fargo argues that it regained ownership of the property in October 2013, 

and continued to own the property in 2014. In support, Wells Fargo provides a copy of the Quit 

Claim Deed from the VA to Wells Fargo (doc. 80; doc. 80-1, Exhibit A). Wells Fargo also 

argues that Ott’s July 2013 testimony failed to establish that it did not own the loan in January 

2014, pointing out that the VA transferred the property back to Wells Fargo in October 2013, 

two months after the deposition. Wells Fargo also offers Ott’s June 1, 2015 deposition 

testimony as further evidence that it owned the loan (doc. 80-1, Exhibit B, Deposition page 53 -

“I’m not sure why we made the business decision to purchase the loan”). 

The Johns object to Wells Fargo’s evidentiary support for it’s argument in the reply that 

it owned the loan when the alleged collection letters were sent in 2014 and move the Court to 

exclude this evidence, i.e., the Quitclaim Deed, because it was not produced in discovery. The 

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Johns also argue that the Court should not allow new evidence or argument submitted with a 

reply because it is too late for them to respond (doc. 81). 

Wells Fargo responds that the Quitclaim Deed was submitted to rebut the argument that 

it presented no evidence that it owned the loan and mortgage at the time the three statements 

were sent, and was not a new argument raised for the first time in a reply. Wells Fargo also 

argues that since the Johns carry the burden of proof, it was their obligation to provide evidence 

that Wells Fargo did not own the loan (doc. 82).

The issue of ownership became more relevant after the decision in Davidson. Prior to 

that time, the default status of the loan at time of acquisition was given controlling weight. 

Thus, the parties’ initial briefing focused on the default status of the loan. Although Wells 

Fargo did not produce the Quitclaim Deed, it did admit, as requested by the Johns, that it owned 

and serviced the loan and mortgage (doc. 82-1, Wells Fargo’s response to Plaintiffs’ First 

Request for Admissions, dated April 10, 2015, at ¶ 4: “Wells Fargo admits that it was the owner 

and servicer of the subject debt owed by Plaintiffs.”). Discovery did not close until September 

1, 2015 (doc. 33) and the Johns could have sought production of the evidence Wells Fargo 

relied on to show proof of ownership of the debt. The Court finds no merit to the request to 

strike rebuttal evidence. 

The Johns also argue that Wells Fargo presented Ott’s June 1, 2015 testimony “out of 

context” and assert that on page 53 of her deposition, she was “answering a question about the 

October 30, 2009, transfer of the loan to Wells Fargo”, and not about a second transfer in 

October 2013. The Johns cite to deposition pages 28 and 29, where Ott does testify about

obtaining ownership of the loan on October 30, 2009 from Ginnie Mae, and then cite to page 

53, as if Ott continues to testify about the same transaction (doc. 81-1, Exhibit A). From this, 

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the Johns argue that Ott’s testimony is not evidence that Wells Fargo owned the loan in 2014 

(doc. 81, p. 2)

The Court agrees that Ott testified about the October 30, 2009 purchase at pages 28 and 

29,4 but the Court is without any information as to the testimony given on pages 30 to 52, such 

that the Court cannot determine whether the testimony on page 53 was also about the October 

30, 2009 purchase rather than any reacquisition of the loan in October 2013 (doc. 80-2, p. 2). 

Thus, because the evidence is inconclusive, the objection is MOOT. 

The Johns also argue that Wells Fargo violated S.D. Ala. CivLR 56(a) by not obtaining 

leave of court before filing evidence, the Quitclaim Deed, with its reply. They assert that the 

Rule requires that all evidence must be submitted with the motion for summary judgment, and 

therefore, by submitting the Quitclaim Deed with the reply without court order of approval, 

Wells Fargo has violated the Rule, and the evidence should be excluded. The Rule states in 

relevant part as follows: 

(a) Movant’s Supporting Materials. The movant must file a brief that includes: 

(1) all facts relied upon, each supported by a specific, pinpoint citation to the 

record; and (2) argument supported by legal authority as appropriate. The 

movant must also file all evidence relied upon. . . . No other supporting 

documents may be filed absent Court order.

Civil L.R. 56(a). The Johns rely upon the last sentence – “No other supporting documents may 

be filed absent Court order” (Id.). 

This is a strained interpretation of the Local Rule, which would functionally impair the 

 4

 “Q. - - does [the Milestone] indicate when Wells Fargo obtained ownership of the 

loan” . . . A. That was on October 30th, 2009” (doc. 81-1, p. 3) (bracketed text added). The 

Milestone is a list of transfers of the servicing of the Johns’ loan and the ownership up to March 

1, 2011, the foreclosure (doc. 79-2, Exhibit 11 to Ott’s July 2013 deposition; “Transfer 

Beneficial Rights” from Ginnie Mae to Wells Fargo). 

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purpose of a reply – to rebut the response. Moreover, the Court has allowed evidence with a 

reply brief where the evidence was in rebuttal to the response and not in support of a new 

ground for relief. Alkhatib v. Steadman, 2011 WL 5553775, *6 (S.D. Ala. Nov. 15, 2011) (“As 

a matter of course, the Court will accept and consider evidentiary materials submitted in support 

of a movant's reply arguments where, as here, those arguments and supporting materials are 

related and responsive to the non-movant's opposition brief and do not support new grounds for 

relief.”). Accordingly, the Court finds no merit to this argument. 

3. Wells Fargo’s motion for summary judgment

The FDCPA was enacted “to eliminate abusive debt collection practices by debt 

collectors, to insure that those debt collectors who refrain from using abusive debt collection 

practices are not competitively disadvantaged, and to promote consistent State action to protect 

consumers against debt collection abuses.” 15 U.S.C. § 1692(e). The FDCPA prohibits a “debt 

collector” from using a “false, deceptive, or misleading representation or means in connection 

with the collection of any debt.” 15 U.S.C. § 1692e. 

To succeed on an FDCPA claim, the Johns must prove (1) that they have been the object 

of collection activity arising from a consumer debt; (2) that Wells Fargo is a debt collector as 

defined by the FDCPA; and (3) that Wells Fargo has engaged in an act or omission prohibited 

by the FDCPA. Alvarado v. Credit Protection Ass'n, L.P., 2015 WL 1815863, at *3 (M.D. Fla. 

Apr. 22, 2015); See Reese v. Ellis, Painter, Ratterre & Adams, LLC, 678 F.3d 1211, 1216 (11th 

Cir. 2012). 

In relevant part, the FDCPA defines “debt collector” as follows: 

(6) The term “debt collector” means 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. 

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15 U.S.C. § 1692a(6). 

A. Whether Wells Fargo’s principal purpose is debt collection

Addressing the first definition, Wells Fargo argues that it is not a “debt collector” 

because its principal business purpose is not debt collection. Wells Fargo argues that it 

performs a number of other services – banking, insurance, investment, mortgage, and consumer 

and commercial finance. Wells Fargo also argues that loan servicing encompasses more than 

debt collection and includes activities such as handling incoming payments and outgoing 

disbursements, maintaining the notes, maintaining the records, communications with the 

borrowers, and handling modification requests. In support, Wells Fargo provides the July 31, 

2015 Form 110-Q, S.E.C. filing to show that its principal business purpose is not debt 

collection. 

The Johns did not respond to this argument.5 Despite this, the Court must still determine 

whether summary judgment could be granted as to the first part of the definition. Since Wells 

Fargo has presented sufficient evidence to show that there is no genuine issue of fact that the 

collection of debts is not the principal purpose of its business, the Court finds that Wells Fargo 

does not come within the first definition of “debt collector” in the FDCPA. See Davidson, 797 

F. 3d at 1317(“The amended complaint provides a basis from which we can plausibly infer that 

some part of Capital One’s business is debt collection, but it fails to provide any basis from 

which we could plausibly infer that the ‘principal purpose’ of Capital One’s business is debt 

collection.”) (Italics in original); see also Schlegel v. Wells Fargo Bank, N.A., 720 F.3d 1204, 

 5 The Johns appear to rely solely on the second definition of debt collector. Doc. 79 at 8 

(“Wells Fargo is a debt collector because it regularly collects debts of another....”)

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1208-09 (9th Cir. 2013) (dismissing the FDCPA claim because the plaintiffs alleged facts 

sufficient to establish that debt collection is some part of Wells Fargo’s business but not that it 

was principal purpose).

B. Whether Wells Fargo regularly collects debts owed or due to another

The Johns argue that Wells Fargo comes within the second definition because it operates 

a mortgage loan servicing business and regularly collects the debts of others. Relying upon the 

Wells Fargo Annual Report, the Johns argue that the majority of loans that Wells Fargo services 

were serviced for other entities and that only a small percent was composed of loans owned by 

Wells Fargo. From the Johns’ evidence, a reasonable inference can be raised that regularly 

collecting debts owed to others is at least some part of Wells Fargo’s regular activity of loan 

servicing.

6

C. Whether Wells Fargo debt collection activity is excluded

However, the inquiry does not end with the determination that Wells Fargo regularly 

collects debts owed to others, as there are six situations in which an entity that regularly collects 

debt of another will not be considered to be a debt collector. The most applicable appears to be 

15 U.S.C. § 1692a(6)(A): when a creditor is collecting its own debt.7 

 6 At least one other court has found that Wells Fargo is subject to the FDCPA because it 

regularly collects debts of another. See Oppong v. First Union Mortg. Corp., 215 Fed.Appx. 

114, 119 (3rd Cir. 2007) (finding that “the District Court was correct to conclude that Wells 

Fargo is a debt collector under the FDCPA because it ‘regularly’ collects debts owed to 

another”, even though the proportion of mortgage debt collection was small in comparison to 

Wells Fargo’s other business purposes).

7 The term “creditor” is defined to exclude an entity “to whom a debt is owed”, but who 

received the debt while it was in default, “solely for the purpose of facilitating collection of 

such debt for another.” 15 U.S.C. § 1692(4) The Johns have not alleged that transfer of the 

debt to Wells Fargo was for the sole purpose of Wells Fargo collecting the debt for another. 

Instead, the Johns argue only that the debt was in default when it was transferred. 

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Wells Fargo argues that it is entitled to summary judgment because there is no dispute of 

fact that it owned the loan at the time it is alleged to have sent the alleged collection letters to 

the Johns in early 2014, and therefore, was not collecting a loan or debt due to another.

The Johns respond that summary judgment should be denied because there is a dispute 

of fact as to whether Wells Fargo owned the loan at that time. The Johns argue that based upon 

the July 2013 deposition testimony of Wells Fargo’s corporate representative Ott, the loan was 

transferred to the VA by Special Warranty Deed in 2011, and therefore, despite Wells Fargo’s 

unsupported allegations that it owns the debt, it was actually servicing the loan for the VA and 

Ginnie Mae at the time it sent the alleged collection letters in 2014. 

In reply, Wells Fargo provides a copy of a Quitclaim Deed dated October 2013, whereby 

the VA conveyed the Johns’ property back to Wells Fargo. However, as fleshed out at the 

hearing, who owns the property is not the issue. The issue is who owns the debt. 

Under Alabama law, once a property is foreclosed the mortgage is extinguished, on the 

date of the foreclosure sale, to the amount of the purchase price. Davis v. Huntsville Prod. 

Credit Ass’n, 481 So.2d 1103, 1105-1106 (Ala. 1985). Thus, the only debt that remained as of 

March 2, 2011, was an unsecured deficiency balance. This deficiency balance would not travel 

with the previous collateral (the property) because a deficiency balance by definition is 

unsecured. 

There is no evidence in the record that Wells Fargo ever assigned the deficiency balance.

Although Ott stated the loan and property were transferred to Ginnie Mae in April 2011, this is 

insufficient to sustain the Johns’ burden to show that the deficiency balance was assigned to 

Ginnie Mae and not owned by Wells Fargo. 

Thus, because Wells Fargo owned the debt and was collecting its own debt, it is exempt 

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as a “creditor” under 15 U.S.C. § 1692a(6)(A). Jenkins v. Sec. Sav. Bank of Michigan, 28 F.3d 

113, *4 (10th Cir. 1994) (“The Bank Defendant and its officers and employees are clearly 

exempted from the terms of the Act as, respectively, a creditor and officers and employees of 

the creditor collecting a debt in the name of the creditor. 15 U.S.C. § 1692a(6)(A).”)

(unpublished opinion); Gowing v. Royal Bank of Canada, 100 F.3d 962, *1 (9th Cir. 1996)

(“The Act exempts from its definition of debt collectors, “any officer or employee of a creditor 

while, in the name of the creditor, collecting debts for such creditor.” 15 U.S.C. § 1692a(6)(A). 

Because Royal Bank was collecting a debt on its own behalf, it was not a debt collector for the 

purposes of the FDCPA, even though in this instance it was an assignee of the original 

creditor.”) (unpublished opinion).

III. Conclusion.

Upon consideration, and for the reasons set forth herein, the Court finds that Defendant 

Wells Fargo is entitled to judgment as a matter of law as to the Johns’ claims. See McDowell v. 

Brown, 392 F.3d 1283, 1288 (11th Cir. 2004) (having resolved all issues of material fact in 

favor of the non-movant, the court must “then determine the legal question of whether the 

[movant] is entitled to judgment as a matter of law under that version of the facts.”) (citation 

omitted). Accordingly, Wells Fargo’s motion for summary judgment is GRANTED.

Judgment shall be entered by separate document as provided in Rule 58 of the Federal 

Rules of Civil Procedure. 

DONE and ORDERED this the 17th day of December 2015.

s/ Kristi K. DuBose 

KRISTI K. DuBOSE

UNITED STATES DISTRICT JUDGE

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