Court Opinion

ID: 9900977
Source: CourtListenerOpinion
Date Created: 2023-11-20 22:00:56.229307+00
Date Added: 2024-06-11T09:21:23.532259
License: Public Domain

USCA11 Case: 23-11826     Document: 30-1        Date Filed: 11/20/2023   Page: 1 of 11

                                                       [DO NOT PUBLISH]
                                     In the
                 United States Court of Appeals
                          For the Eleventh Circuit

                            ____________________

                                  No. 23-11826
                            Non-Argument Calendar
                            ____________________

        DENNIS DELIA,
                                                          Plaintiﬀ-Appellant,
        versus
        DITECH FINANCIAL, LLC, et al.,

                                                                Defendants,

        NEWREZ, LLC,
        d.b.a. Shellpoint Mortgage Servicing,

                                                        Defendant-Appellee.
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        2                      Opinion of the Court                  23-11826

                             ____________________

                   Appeal from the United States District Court
                         for the Middle District of Florida
                    D.C. Docket No. 6:21-cv-00842-WWB-DCI
                             ____________________

        Before ROSENBAUM, NEWSOM, and GRANT, Circuit Judges.
        PER CURIAM:
                Dennis Delia alleges that the servicer of his mortgage loan,
        Newrez, LLC, doing business as Shellpoint Mortgage Servicing
        (“Shellpoint”), violated the Fair Debt Collection Practices Act
        (“FDCPA”), see 15 U.S.C. §§ 1692–1692p, when it introduced evi-
        dence in a state foreclosure lawsuit that misrepresented “the char-
        acter, amount, or legal status” of his debts, see id. § 1692e. The dis-
        trict court found that this litigation conduct was simply a continu-
        ation of the foreclosure case, so it was not independently actionable
        under the FDCPA. As a result, the court determined that Delia’s
        complaint was time barred because it was not filed within one year
        of the initiation of the foreclosure action. See id. § 1692k(d). After
        careful review, we affirm.
                                          I.
                In June 2005, Delia executed a promissory note and mort-
        gage upon refinancing the purchase of his home. In 2006, a prior
        foreclosure action was brought. Ditech Financial LLC began ser-
        vicing the loan in 2013, while litigation remained ongoing. Ditech
        later settled that action with Delia and agreed to pay his attorney’s
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        23-11826               Opinion of the Court                         3

        fees. Not long after, Delia sued Ditech under the FDCPA, alleging
        that Ditech was attempting to collect from him the attorney’s fees
        it had paid to Delia’s counsel by intentionally mislabeling the fees
        as “corporate advance fees” in its billing statements. That case set-
        tled as well.
               In June 2019, Ditech sent Delia a notice of default, advising
        that he was in default for failure to make any payments since 2012.
        The notice stated that Ditech would bring a foreclosure action un-
        less Delia timely cured the default of $241,205.15, which included
        an “Escrow Advance Balance” of $65,421.84. This notice of default
        was required under paragraph 22 of the mortgage as a condition
        precedent to bringing a foreclosure suit.
                 Delia did not cure the default as demanded, so Ditech filed
        another foreclosure action in state court in August 2019. Mean-
        while, in December 2019, Ditech transferred servicing of Delia’s
        mortgage loan to Shellpoint, which substituted for Ditech as plain-
        tiff in the foreclosure case.
               The foreclosure complaint sought recovery of $198,194.20
        in principal, plus unspecified amounts of interest, attorney’s fees,
        escrow advances (for taxes and insurance), and other expenses. In
        December 2019, Delia answered the complaint and asserted affirm-
        ative defenses, including that the notice of default vastly overstated
        the escrow deficiency. Delia alleged that the notice of default im-
        properly double-billed escrow and included various non-escrow
        items in escrow, including “attorney’s fees and costs incurred in
        prior litigation between the parties.” For instance, the answer
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        4                      Opinion of the Court                 23-11826

        noted that Ditech’s corporate representative had testified in a No-
        vember 2019 deposition that the escrow balance in the notice of
        default included foreclosure attorney’s fees and court costs of
        $20,477.57.
               In October 2020, in the foreclosure case, Shellpoint submit-
        ted an affidavit from its designated representative, Justin Mitchell,
        which was supported by a “Web History” for Delia’s account and
        the notice of default. Mitchell asserted in the affidavit that the Es-
        crow Advance Balance in the notice of default “consist[ed] entirely
        of taxes and insurance,” and did not include any attorney’s fees.
        That was inaccurate, however, as Mitchell later admitted at a dep-
        osition in March 2021. In particular, Mitchell admitted that the es-
        crow balance reflected in the notice of default and web history both
        double-billed for taxes and insurance and mislabeled attorney’s fees
        and other non-escrow items as escrow.
                                         II.
               In May 2021, while Shellpoint’s foreclosure case was pend-
        ing, Delia sued Shellpoint in federal district court under the FDCPA
        based on its representative’s affidavit and deposition testimony. Af-
        ter multiple amendments, Delia filed the operative third amended
        complaint in August 2022, alleging two counts under the FDCPA.
        Count I alleged that the affidavit misrepresented the character,
        amount, or legal status of the debt, in violation of 15 U.S.C. §
        1692e(2), through double-billing and the inclusion of attorney’s
        fees and other non-escrow costs. Count II asserted a similar claim
        in relation to the deposition testimony.
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        23-11826                Opinion of the Court                           5

               Shellpoint moved to dismiss on several grounds, including
        that Delia lacked standing and that his claims were barred by the
        applicable statute of limitations. Both parties submitted records
        from the underlying state case.
               The district court granted the motion to dismiss in part and
        dismissed the action. While the court found that Delia had stand-
        ing based on his allegations of emotional distress, it agreed with
        Shellpoint that his “claims are barred by the statute of limitations.”
        The court reasoned that the representations in Mitchell’s affidavit
        and deposition testimony were made in furtherance of the foreclo-
        sure action, “rather than constituting a new and separate debt col-
        lection activity.” As a result, according to the court, the limitations
        period was measured from initiation of the foreclosure action. The
        court rejected Delia’s argument that the statute of limitations did
        not begin to run until he learned that Shellpoint was misrepresent-
        ing the escrow deficiency, stating that the FDCPA does not contain
        a “discovery rule” for limitations purposes. Delia appeals.
                                          III.
               We review de novo an order granting a motion to dismiss on
        statute-of-limitations grounds, accepting the allegations in the
        complaint as true and construing all reasonable inferences in the
        plaintiff’s favor. La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845
        (11th Cir. 2004).
                                          IV.
               Congress enacted the FDCPA “to eliminate abusive debt
        collection practices by debt collectors[.]” 15 U.S.C. § 1692(e). To
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        6                      Opinion of the Court                  23-11826

        accomplish that goal, the FDCPA “impos[es] affirmative require-
        ments on debt collectors and prohibit[s] a range of debt-collection
        practices.” Rotkiske v. Klemm, 589 U.S. __, 140 S. Ct. 355, 358 (2019).
                Among other things, the FDCPA broadly prohibits a debt
        collector from using “any false, deceptive, or misleading represen-
        tations or means in connection with the collection of any debt.” 15
        U.S.C. § 1692e. Conduct constituting a violation includes “[t]he
        false representation of . . . the character, amount, or legal status of
        any debt.” Id. §1692e(2).
                An action to enforce the FDCPA must be filed “within one
        year from the date on which the violation occurs.” 15 U.S.C.
        § 1692k(d); Maloy v. Phillips, 64 F.3d 607, 608 (11th Cir. 1995). “That
        language unambiguously sets the date of the violation as the event
        that starts the one-year limitations period.” Rotkiske, 140 S. Ct. at
        360. So “absent the application of an equitable doctrine, the statute
        of limitations in § 1692k(d) begins to run on the date on which the
        alleged FDCPA violation occurs, not the date on which the viola-
        tion is discovered.” Id. at 358.
                Delia identifies the FDCPA violation at issue as the Mitchell
        affidavit and supporting documentation in October 2020. That af-
        fidavit, according to Delia, falsely stated that the Escrow Advance
        Balance in the notice of default “consist[ed] entirely of taxes and
        insurance,” and did not include any attorney’s fees, thereby mis-
        representing “the character, amount, or legal status of any debt”
        under § 1692e(2). While Delia also relies on Mitchell’s subsequent
        deposition testimony in March 2021, he claims that the deposition
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        23-11826                Opinion of the Court                           7

        simply “reveal[ed]” the falsity of the affidavit and its supporting
        documentation, not that the testimony itself was false. Because
        there is no “discovery rule” generally applicable in FDCPA cases,
        the date Delia discovered the alleged violation does not matter for
        the statute of limitations. See Rotkiske, 140 S. Ct. at 358.
               Thus, the limitations issue hinges on whether the introduc-
        tion of the Mitchell affidavit in October 2020 constitutes the occur-
        rence of an FDCPA violation. If so, Delia’s complaint, filed within
        one year of the affidavit, is timely. And if not, then not.
                                           A.
                We have not previously addressed in a published opinion
        what actions trigger the statute of limitations for an FDCPA claim
        when the alleged violation occurs within the context of a debt-col-
        lection lawsuit. The Supreme Court has confirmed that the
        FDCPA applies to conduct “in litigation.” Heintz v. Jenkins, 514 U.S.
        291, 294 (1995). Yet the Court cautioned that the FDCPA should
        not be construed to prevent the communications and representa-
        tions “inherent in an ordinary lawsuit and thereby cause an ordi-
        nary debt-collecting lawsuit to grind to a halt.” Id. at 296. At the
        same time, as the Sixth Circuit has observed, we should not adopt
        an approach that permits debt collectors to violate the FDCPA
        “with impunity” during litigation “so long as a debtor does not in-
        itiate suit within one year of the first violation[.]” Bouye v. Bruce, 61
        F.4th 485, 493 (6th Cir. 2023).
            In short, “[t]here is a difference between litigating a case and
        committing affirmative FDCPA violations during that litigation.”
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        8                      Opinion of the Court                  23-11826

        Brown v. Transworld Sys., Inc., 73 F.4th 1030, 1042 (9th Cir. 2023)
        And “some litigation acts may constitute independent FDCPA vio-
        lations.” Id. at 1041. This is a “fact-sensitive inquiry that requires
        a case-by-case approach,” id. at 1044, with the focus “on the debt
        collector’s actions,” id. at 1042; see Hemmingsen v. Messerli & Kramer,
        P.A., 674 F.3d 814, 819 (8th Cir. 2012) (“[T]he diverse situations in
        which potential FDCPA claims may arise during the course of liti-
        gation, and the Supreme Court’s caution in Heintz . . . counsel
        against anything other than a case-by-case approach.”).
               The parties largely agree on the framework to determine
        whether mid-litigation conduct constitutes a “discrete” or “inde-
        pendent” FDCPA violation triggering its own limitations period,
        even if they disagree how it applies in this case. As outlined by the
        Sixth and Ninth Circuits in Bouye and Brown, respectively, no dis-
        crete FDCPA violation arises where the defendant simply “reaf-
        firm[s] the legitimacy of the state suit throughout the litigation.”
        Bouye, 61 F.4th at 493. Thus, “standard litigation events that rea-
        sonably follow the commencement of a lawsuit” ordinarily “are
        not independent FDCPA violations.” Brown, 73 F.4th at 1044.
               But if the debt collector “does more than simply reaffirm the
        legitimacy of the state suit,” that conduct may constitute a discrete
        FDCPA violation with its own limitations period. Id. (cleaned up).
        In Bouye, for example, the Sixth Circuit held that a discrete FDCPA
        violation plausibly occurred where the debt collector allegedly doc-
        tored evidence mid-litigation to falsely reflect an assignment of a
        debt. See 61 F.4th at 488, 491. Similarly, in Brown, the Ninth Circuit
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        23-11826                   Opinion of the Court                                 9

        found a discrete FDCPA violation where debt collectors offered an
        affidavit that “presented a new basis—not contained in the com-
        plaint—to show that [they] owned the debts.” 73 F.4th at 1044. By
        shifting their basis for asserting ownership mid-litigation, the debt
        collectors “did more than ‘reaffirm’ the original complaint,” the
        court stated. 1 Id.
                                               B.
               We assume without deciding that this general framework,
        on which both parties rely, is correct. Nevertheless, nothing in the
        record suggests that Shellpoint did “more than simply reaffirm the
        legitimacy of the state [foreclosure] suit” when it introduced the
        affidavit of its representative Mitchell in October 2020. See Brown,
        73 F.4th at 1044.
               Contrary to Delia’s claim, Mitchell’s affidavit did not contain
        any “new or unique misrepresentations” not embodied in the orig-
        inal complaint. In the affidavit, Mitchell merely reaffirmed the es-
        crow numbers reflected in both the notice of default—a condition

        1 While the Eighth Circuit’s decision in Demarais v. Gurstel Chargo, P.A., con-
        tains some broader language, its holding is consistent with Bouye and Brown.
        See 869 F.3d 685 (8th Cir. 2017). In Demarais, the Eighth Circuit found a dis-
        crete FDCPA violation based on a debt-collector law firm’s request for a con-
        tinuance on the date of trial, where the debtor plausibly alleged that the con-
        tinuance was not sought for ordinary litigation purposes, but rather was part
        of a pattern of falsely threatening to go to trial with no intention of ever prov-
        ing the case. See id. at 689–90, 694–96. By falsely threatening trial as a debt-
        collection maneuver, the law firm did “more than simply reaffirm the legiti-
        macy of the state suit.” Brown, 73 F.4th at 1044.
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        10                     Opinion of the Court                  23-11826

        precedent to the state foreclosure lawsuit—and a payment history
        document that, according to Mitchell’s deposition testimony, was
        created by the prior servicer, Ditech. In fact, it appears Delia’s
        counsel asked a Ditech representative about these same documents
        during a November 2019 deposition, which confirmed Delia’s sus-
        picion that the escrow balance included attorney’s fees, and which
        formed the basis for a detailed challenge to the notice of default’s
        figures in Delia’s December 2019 answer. Delia offers no support
        for his claim that Shellpoint doctored the payment history after the
        lawsuit was filed, as in Bouye, or presented a new basis for relief, as
        in Brown. See Bouye, 61 F.4th at 488, 491; Brown, 73 F.4th at 1044.
               Because the litigation conduct challenged by Delia involved
        no more than reaffirming the legitimacy of the foreclosure suit, this
        conduct is not independently actionable under the FDCPA. Thus,
        the one-year limitations period began to run from either filing or
        service of that lawsuit. See, e.g., Brown, 73 F.4th at 1045–46; Serna
        v. Law Office of Joseph Onwuteaka, P.C., 732 F.3d 440, 445–46 (5th Cir.
        2013); Johnson v. Riddle, 305 F.3d 1107, 1113–14 (10th Cir. 2002). Ei-
        ther way, Delia’s May 2021 complaint was filed well over one year
        from the initiation of the foreclosure case in August 2019. Accord-
        ingly, the district court properly dismissed this FDCPA action as
        time barred.
                                          V.
              One further issue warrants mention. Shellpoint contends
        that Delia lacked standing to bring an independent FDCPA claim
        based on Mitchell’s affidavit and deposition testimony in the
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        23-11826                Opinion of the Court                           11

        foreclosure case. The district court rejected that argument, reason-
        ing that Delia’s alleged “pain and suffering and mental anguish”
        were sufficient to establish an injury in fact at the motion-to-dis-
        miss stage.
                Before “reaching the merits” of an appeal, we must ensure
        the plaintiff has “Article III standing.” Trichell v. Midland Credit
        Mgmt., Inc., 964 F.3d 990, 996 (11th Cir. 2020). “We look to three
        elements to determine whether a plaintiff has standing to sue:
        (1) injury in fact, (2) causation, and (3) redressability.” Sierra v. City
        of Hallandale Beach, Fla., 996 F.3d 1110, 1112 (11th Cir. 2021).
               Here, Shellpoint does not dispute that Delia has standing to
        sue Shellpoint under the FDCPA for bringing a foreclosure action
        that misrepresented and overstated his debts. Rather, Shellpoint’s
        arguments on standing relate to the Mitchell affidavit and deposi-
        tion specifically. As we just explained, though, these matters were
        simply a reaffirmation of the legitimacy of the lawsuit, and so are
        considered part and parcel of that earlier, time-barred potential vi-
        olation. Accordingly, we need not independently consider
        whether Delia established standing to sue solely in relation to Shell-
        point’s mid-litigation conduct.
                                           VI.
               In sum, we affirm the district court’s judgment dismissing
        Delia’s FDCPA action as barred by the statute of limitations. See
        15 U.S.C. § 1692k(d).
               AFFIRMED.