Court Opinion

ID: 2777937
Source: CourtListenerOpinion
Date Created: 2015-02-09 20:01:05.117846+00
Date Added: 2024-06-11T11:28:07.162175
License: Public Domain

Case: 14-13314    Date Filed: 02/09/2015   Page: 1 of 15

                                                          [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT
                        ________________________

                              No. 14-13314
                          Non-Argument Calendar
                        ________________________

                   D.C. Docket No. 1:13-cv-00268-WS-M

ANDREW D. DUNAVANT, JR.,
MARY DUNAVANT,

                                                           Plaintiffs-Appellants,

                                   versus

SIROTE & PERMUTT, P.C.,

                                                            Defendant-Appellee.

                        ________________________

                 Appeal from the United States District Court
                    for the Southern District of Alabama
                        ________________________

                             (February 9, 2015)

Before MARCUS, MARTIN, and BLACK, Circuit Judges.

PER CURIAM:

     Andrew D. Dunavant, Jr., and Mary Dunavant (the Dunavants) appeal the
              Case: 14-13314    Date Filed: 02/09/2015    Page: 2 of 15

district court’s partial denial of their motion for summary judgment and its grant of

the defendant’s motion for summary judgment. The Dunavants allege that the

defendant, Sirote & Permutt, P.C. (Sirote), unlawfully published two notices of

foreclosure sale for the Dunavants’ property after a state court enjoined the

foreclosure action. On appeal, the Dunavants first argue that the district court

incorrectly dismissed their claim under Section 1692e(5) of the Fair Debt

Collection Practices Act (FDCPA) for failure to show that Sirote’s publication of

the foreclosure notices amounted to the collection of a debt. Second, the

Dunavants argue that the district court erred by dismissing their claim under

Section 1692f(6) of the FDCPA as barred under the doctrine of res judicata. Third,

the Dunavants argue that the district court improperly dismissed their state-law

claim. After careful consideration, we affirm.

                                          I.

      This case arises out of a dispute over a security interest on real estate owned

by the Dunavants. After GMAC Mortgage, LLC (GMAC)—the Dunavants’

mortgage servicer—scheduled a foreclosure sale on their property, the Dunavants

filed a civil action in Alabama state court to prevent the sale. The court granted the

request in part, enjoining GMAC “from proceeding with any foreclosure action on

the subject property during the pendency of this litigation.” In March 2013, the

Dunavants amended their state-court complaint against GMAC alleging, among

                                          2
              Case: 14-13314     Date Filed: 02/09/2015   Page: 3 of 15

other things, tortious interference because it “violated the Court’s injunction order

and published foreclosure notices in the Foley Onlooker newspapers on April 17 &

May 18, 2012.” According to the Dunavants, these notices caused a third party to

pull out of a deal to buy the property. GMAC moved for summary judgment, and

the state court, without opinion, granted GMAC’s motion “on all claims except for

the permanent injunction claims” and dismissed them with prejudice.

      The Dunavants then filed suit in federal court alleging that GMAC’s

counsel, Sirote, violated several provisions of the FDCPA and committed invasion

of privacy when Sirote published the notices of foreclosure sale. Among other

things, the FDCPA portion of the suit included allegations that: Sirote violated

FDCPA Section 1692e—which forbids debt collectors from using “any false,

deceptive, or misleading representation or means in connection with the collection

of any debt,” 15 U.S.C. § 1692e; and FDCPA Section 1692f—which prohibits debt

collectors from using unfair or unconscionable means to collect or attempt to

collect any debt, 15 U.S.C. § 1692f. The district court granted Sirote’s motion for

judgment on the pleadings on all aspects of the FDCPA claim except for the

Section 1692f(6) claim, and allowed the Section 1692f and state law invasion-of-

privacy claims to proceed. Then on summary judgment, the district court denied

the Dunavants’ motion for reconsideration of its dismissal of the Section 1692e(5)

claim; held that res judicata barred the Section 1692f(6) claim; and dismissed the

                                          3
              Case: 14-13314     Date Filed: 02/09/2015     Page: 4 of 15

remaining state law claim without prejudice because it no longer had supplemental

jurisdiction. The Dunavants timely appeal that order here.

                                           II.

      The Dunavants first appeal the district court’s denial of relief under Section

1692e(5) of the FDCPA. “[I]n order to state a plausible FDCPA claim under

§ 1692e, a plaintiff must allege . . . that the challenged conduct is related to debt

collection.” Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216

(11th Cir. 2012). In its grant of Sirote’s motion for judgment on the pleadings, the

district court “dismissed the plaintiffs’ FDCPA claims . . . because it found that the

defendant’s act of publishing foreclosure notices amounted only to the

enforcement of a security interest and not the collection of a debt.” This was

because “the published notices on which plaintiffs’ claims are based did not

demand payment of the underlying debt.” The Dunavants did not appeal that

ruling. Instead, several months later, the Dunavants moved for summary judgment

on the Section 1692e(5) claim that the district court had already dismissed.

Although the Dunavants did not even “acknowledge[] that their claim ha[d] been

dismissed or request[] alteration of that ruling,” the district court charitably

construed their argument as a motion for reconsideration.

      “We review the denial of a motion for reconsideration for an abuse of

discretion.” Richardson v. Johnson, 598 F.3d 734, 740 (11th Cir. 2010) (per

                                           4
               Case: 14-13314       Date Filed: 02/09/2015      Page: 5 of 15

curiam). A motion for reconsideration may not be used merely to “relitigate old

matters, raise argument or present evidence that could have been raised prior to the

entry of judgment.” Id. (quoting Michael Linet, Inc. v. Vill. of Wellington, 408
F.3d 757, 763 (11th Cir. 2005)) (internal quotation marks omitted). Typically, the

only grounds for granting a motion for reconsideration are “newly-discovered

evidence or manifest errors of law or fact.” In re Kellogg, 197 F.3d 1116, 1119

(11th Cir. 1999) (applying Bankruptcy Rule 9023, and noting that the rule

incorporates by reference Rule 59 of the Federal Rules of Civil Procedure).

       The district court’s refusal to reconsider its decision regarding debt

collection was not an abuse of discretion. The district court relied in part on our

unpublished 1 decision in Warren v. Countrywide Home Loans, Inc., 342 F. App’x

458 (11th Cir. 2009) (per curiam), for the proposition “that 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).” Id. at 460 (alteration and omission in original) (internal

quotation marks omitted). The Dunavants argue that we overruled Warren in

another unpublished case, Birster v. Am. Home Mortg. Serv., Inc., 481 F. App’x.

579, 582 (11th Cir. 2012) (per curiam). But one panel opinion cannot overrule

another. See Smith v. GTE Corp., 236 F.3d 1292, 1303 (11th Cir. 2001). In any

1
 “Unpublished opinions are not considered binding precedent, but they may be cited as
persuasive authority.” 11th Cir. R. 36-2.
                                              5
                Case: 14-13314        Date Filed: 02/09/2015       Page: 6 of 15

event, these two panel opinions are not in conflict. In Birster, we merely noted that

“an entity can both enforce a security interest and collect a debt.” Id. at 583. The

Birster panel also decided that the defendant in that case “both attempt[ed] to

enforce a security interest and collect a debt,” and therefore held that the defendant

“may be liable under the FDCPA beyond § 1692f(6) even though it was also

enforcing a security interest.” Id. (second emphasis added).2 Here, by contrast, the

district court held that “publishing foreclosure notices amounted only to the

enforcement of a security interest and not the collection of a debt.” Thus, although

unpublished decisions are only persuasive authority, see Bonilla v. Baker Concrete

Constr., Inc., 487 F.3d 1340, 1345 n.7 (11th Cir. 2007), the district court did not

abuse its discretion in refusing to reconsider its decision to dismiss the Dunavant’s

Section 1692e(5) claim based on our unpublished decision in Warren.3

       2
         This decision mirrored our reasoning in Reese, in which we held that for the related
Section 1692e of the FDCPA, “[t]he fact that [a] letter and documents relate to the enforcement
of a security interest does not prevent them from also relating to the collection of a debt within
the meaning of § 1692e.” 678 F.3d at 1217 (emphasis added). Reese expressly “d[id] not decide
whether a party enforcing a security interest without demanding payment on the underlying debt
is attempting to collect a debt within the meaning of § 1692e.” Id. at 1218 n.3.
       3
         The Dunavants also argue that the district court’s decision is contrary to our decision in
Caceres v. McCalla Raymer, LLC, 755 F.3d 1299 (11th Cir. 2014). It is not. In that case, we
held that a particular letter was “a communication in connection with the collection of a debt”
because it stated that it was “for the purpose of collecting a debt,” was addressed “Dear Property
Owner,” referred to “collection efforts,” and “state[d] the amount of the debt and indicate[d] that
it must be paid in certified funds.” Id. at 1303. The notices of foreclosure sale at issue here were
published in a newspaper to inform the public about the status of the foreclosure sale, were not
addressed to the debtors, and included no information relating to the collection of payments from
them.
                                                 6
              Case: 14-13314     Date Filed: 02/09/2015    Page: 7 of 15

                                          III.

      The Dunavants next challenge the district court’s grant of Sirote’s motion

for summary judgment on their Section 1692f(6) claim as barred under the doctrine

of res judicata. “We review de novo the district court’s grant of a motion for

summary judgment, considering all of the evidence and the inferences it may yield

in the light most favorable to the nonmoving party.” Ellis v. England, 432 F.3d
1321, 1325 (11th Cir. 2005) (per curiam). We “apply the res judicata principles of

the law of the state whose decision is set up as a bar to further litigation.” Kizzire

v. Baptist Health Sys., Inc., 441 F.3d 1306, 1308 (11th Cir. 2006) (internal

quotation marks omitted). “Under Alabama law, the essential elements of res

judicata are (1) a prior judgment on the merits, (2) rendered by a court of

competent jurisdiction, (3) with substantial identity of the parties, and (4) with the

same cause of action presented in both actions.” Green v. Jefferson Cnty.

Comm’n, 563 F.3d 1243, 1252 (11th Cir. 2009) (quoting Equity Res. Mgmt., Inc.

v. Vinson, 723 So. 2d 634, 636 (Ala. 1998)) (internal quotation marks omitted).

Since the first two prongs are not at issue, we address whether the district court

correctly held that Sirote met its burden of proving the identity-of-parties element

and the same-cause-of-action element with respect to the FDCPA claim. We

conclude that it did.

                                           7
                Case: 14-13314    Date Filed: 02/09/2015     Page: 8 of 15

                                            A.

       Alabama’s res judicata doctrine requires that the “parties be identical,

sometimes referred to as the mutuality of estoppel requirement.” Stewart v.

Brinley, 902 So. 2d 1, 10 (Ala. 2004) (citation omitted). “An exception is made to

this requirement for parties in privity with a party to the prior action.” Id. (citation

omitted). Thus, “[a] person may be bound by a judgment even though not a party

to a suit if one of the parties to the suit is so closely aligned with his interests as to

be his virtual representative.” Gonzalez, LLC v. DiVincenti, 844 So. 2d 1196,

1203 (Ala. 2002) (citation omitted). Or, said another way, the old and new parties

must “share th[e] same interest in the subject matter of the dispute.” Greene v.

Jefferson Cnty. Comm’n, 13 So. 3d 901, 912 (Ala. 2008). For instance, in

Gonzalez, the Alabama Supreme Court held that although the new defendants were

not named in the original action, “they were . . . contractors hired by the

[defendants] named in that [first] action.” 844 So. 2d at 1203 Because the original

defendants “had to defend the inspection work of their contractor, and [because]

the interests of [the contractors] were adequately represented in the original case,”

the defendants in the two actions were substantially identical for purposes of res

judicata. Id.

       Here, the Dunavants sued GMAC in state court for publishing foreclosure

notices, and later sued GMAC’s lawyers, Sirote, in federal court for the same

                                             8
              Case: 14-13314      Date Filed: 02/09/2015    Page: 9 of 15

publication. Like in Gonzalez, the district court noted that Sirote, “by the

plaintiffs’ own insistence, . . . was agent to GMAC’s principal when it published

the foreclosure notices.” And “the plaintiffs do not allege that the past and present

defendant engaged in different conduct; on the contrary, they allege that both are

liable for the exact same conduct—[Sirote] as the actor and GMAC as the actor’s

principal.” Moreover, as Sirote notes on appeal, it “had an interest in the outcome

of the litigation between GMAC and the Dunavants” because it “desired a good

result for its own reputation and for the sake of its client.” GMAC was therefore

“so closely aligned with [Sirote’s] interests as to be [its] virtual representative.”

Gonzalez, 844 So. 2d at 1203 (citation omitted).

      The Dunavants argue that the district court misconstrued the basis for the

state court’s summary dismissal of the Dunavant’s claim, suggesting that there is a

“very real possibility the state court determined that Sirote was the party solely

responsible for the foreclosure notices being published in violation of the

injunction.” They cite to Lee L. Saad Construction Co. v. DPF Architects, P.C.,

851 So. 2d 507 (Ala. 2002), in which the Alabama Supreme Court held that a

plaintiff could not rely on the doctrine of collateral estoppel because an arbitrator

did not “actually decide[]” a claim when it issued summary decisions without

explanation. Id. at 520–21.

      However, Saad applied the collateral estoppel doctrine, not res judicata law,

                                            9
             Case: 14-13314     Date Filed: 02/09/2015    Page: 10 of 15

and the two doctrines are different. While res judicata precludes the litigation of

claims “that could have been adjudicated” in the previous action, Ex parte LCS

Inc., 12 So. 3d 55, 57 (Ala. 2008) (emphasis added), collateral estoppel precludes

only the re-litigation of issues that already have been adjudicated in a previous

action, see id. To show that the same issue has already been adjudicated, collateral

estoppel requires that the issue has been “actually litigated,” “necessary to the prior

judgment,” and “identical to the issue litigated in the present action.” Walker v.

City of Huntsville, 62 So. 3d 474, 487 (Ala. 2010) (quotation marks omitted). The

third prong of res judicata requires none of these elements, but rather requires only

that two parties “share th[e] same interest in the subject matter of the dispute.”

Greene, 13 So. 3d at 912. In short, cases that apply the collateral estoppel doctrine

requiring a particular basis for a prior adjudication of an issue do not apply in the

res judicata context. Nowhere in Alabama’s res judicata law does there exist a

requirement that another court expressly absolve the former defendant of liability

with findings of fact and conclusions of law. The only requirement is that a prior

party be “so closely aligned with [a new party’s] interests as to be his virtual

representative,” Gonzalez, 844 So. 2d at 1203 (citation omitted), and that the new

and old parties “share th[e] same interest in the subject matter of the dispute,”

Greene, 13 So. 3d at 912.

      Similarly, the Alabama Court of Civil Appeals has held that res judicata

                                          10
              Case: 14-13314      Date Filed: 02/09/2015    Page: 11 of 15

“bar[s] a plaintiff from prosecuting a lawsuit against an employee when the same

plaintiff already has suffered an adverse judgment on the merits in an action

against the employer for the acts of the employee, provided that the prior judgment

for the employer was not based on grounds personal to the employer.” Thompson

v. SouthTrust Bank, 961 So. 2d 876, 885 (Ala. Civ. App. 2007) (emphasis added).

Analogizing to the lawyer-client relationship here, the Dunavants argue that Sirote

must therefore prove that the prior judgment for GMAC was not based on grounds

personal to GMAC. However, the district court determined that this proviso from

Thompson was “inconsistent with Alabama law concerning the third element of res

judicata,” and therefore found “ample indication the Alabama Supreme Court

would reject it.” We agree. Although decisions of the Alabama Supreme Court

require only that the past and current defendants share the same interest in the

subject matter of a dispute, see Greene, 13 So. 2d at 912, the Thompson proviso, in

the district court’s words, “appears to require . . . an identity of interest in

particular defenses to the litigation, something far beyond the governing standard.”

Beyond that, and as the district court notes, the Thompson court heavily—and

incorrectly—relied on the Alabama Supreme Court’s decision in Griffin v.

Bozeman, 173 So. 857 (1937), which addressed the separate doctrine of collateral

estoppel. Therefore, we conclude that the Alabama Supreme Court would require

only that Sirote show the existence of an identity of interest in the subject matter of

                                            11
             Case: 14-13314     Date Filed: 02/09/2015    Page: 12 of 15

the litigation. See State Farm Mut. Auto. Ins. Co. v. Duckworth, 648 F.3d 1216,

1224 (11th Cir. 2011) (noting that we consider state intermediate court rulings

“provided that there is no indication that the [state] Supreme Court would reject

them”). Because Sirote was GMAC’s counsel, and because both suits involve the

exact same conduct, Sirote has adequately proven the identity-of-parties element.

                                          B.

      Turning to the same-cause-of-action requirement, under Alabama law, “the

principal test for comparing causes of action . . . is whether the primary right and

duty or wrong are the same in each action.” Chapman Nursing Home, Inc. v.

McDonald, 985 So. 2d 914, 921 (Ala. 2007) (emphasis omitted) (citation omitted).

“Res judicata applies not only to the exact legal theories advanced in the prior case,

but to all legal theories and claims arising out of the same nucleus of operative

facts.” Id. (emphasis omitted) (citation omitted). “As a result, two causes of

action are the same for res judicata purposes when the same evidence is applicable

to both actions.” Id. (citation omitted). Said another way:

      If a claim, which arises out of a single wrongful act or dispute, is
      brought to a final conclusion on the merits, then all other claims
      arising out of that same wrongful act or dispute are barred, even if
      those claims are based on different legal theories or seek a different
      form of damages, unless the evidence necessary to establish the
      elements of the alternative theories varies materially from the
      evidence necessary for a recovery in the first action.
Vinson, 723 So. 2d at 638 (emphasis added).

                                          12
              Case: 14-13314     Date Filed: 02/09/2015     Page: 13 of 15

      Here, the district court correctly found that this standard was met. The

primary wrong in both the suit against GMAC and the suit against Sirote is the

publication of the foreclosure notices. Also, both the tortious-interference claim

against GMAC and the FDCPA claim against Sirote arise out of the same nucleus

of operative facts. And the evidence needed to prove each claim does not

materially vary. In both cases, the district court notes that the Dunavants would

have to show “(1) that GMAC (through [Sirote]) published foreclosure notices; (2)

that this was done on particular dates in a particular publication; (3) that, on those

dates, an injunction was in place; (4) that the publication of the foreclosure notices

violated the terms of the injunction; and (5) that the publication caused a purchaser

to back out of his contract.” In short, there is little question that “substantially the

same evidence supports” the Dunavants’ claims against GMAC and Sirote. Geer

Bros., Inc. v. Crump, 349 So. 2d 577, 580 (Ala. 1977) (emphasis added).

      The Dunavants argue that they are not required to bring an after-acquired

federal claim in ongoing state court litigation. They mistakenly rely on another

unpublished case, Moore v. Pak, 402 F. App’x 491 (11th Cir. 2010) (per curiam),

for the proposition that “the doctrine of res judicata does not punish a plaintiff for

exercising the option not to supplement the pleadings with an after-acquired

claim.” Id. at 494 (quoting Pleming v. Universal–Rundle Corp., 142 F.3d 1354,

1357 (11th Cir. 1998)). But the actual rule we have enunciated is that “for res

                                           13
              Case: 14-13314      Date Filed: 02/09/2015     Page: 14 of 15

judicata purposes, claims that could have been brought are claims in existence at

the time the original complaint is filed or claims actually asserted by supplemental

pleadings or otherwise in the earlier action.” Manning v. City of Auburn, 953 F.2d
1355, 1360 (11th Cir. 1992) (footnote omitted) (emphasis added) (internal

quotation marks omitted). Here, the Dunavants actually asserted after-acquired

claims in a supplemental pleading against GMAC. Nonetheless, at that time, they

chose not to assert an FDCPA claim against Sirote for the very same publication of

foreclosure notices. The Dunavants have cited no case for the proposition that they

may now file federal claims against Sirote based on the same nucleus of operative

facts that governed their earlier amended claims against GMAC in state court. The

district court correctly found that Sirote proved the same-cause-of-action element.

We therefore affirm the district court’s dismissal of the Dunavant’s Section

1692f(6) claim as barred under the doctrine of res judicata.

                                            IV.

       Finally, we affirm the district court’s dismissal of the Dunavant’s state-law

invasion-of-privacy claim for lack of jurisdiction. “The decision to exercise

supplemental jurisdiction over pend[e]nt state claims rests within the discretion of

the district court.” Raney v. Allstate Ins. Co., 370 F.3d 1086, 1083–89 (11th Cir.

2004) (per curiam). “The district courts may decline to exercise supplemental

jurisdiction over a claim . . . if . . . the district court has dismissed all claims over

                                            14
               Case: 14-13314   Date Filed: 02/09/2015   Page: 15 of 15

which it has original jurisdiction.” 28 U.S.C. § 1367(c). Because the district court

properly dismissed the Dunavant’s claims under the FDCPA, see supra Parts II &

III, it did not abuse its discretion when it dismissed the Dunavant’s state law claim.

See Raney, 370 F.3d at 1089 (“We have encouraged district courts to dismiss any

remaining state claims when, as here, the federal claims have been dismissed prior

to trial.”).

       AFFIRMED.

                                          15