Court Opinion

ID: 9957766
Source: CourtListenerOpinion
Date Created: 2024-04-05 14:01:40.649683+00
Date Added: 2024-06-11T08:18:37.863006
License: Public Domain

USCA11 Case: 23-12853    Document: 27-1         Date Filed: 04/05/2024   Page: 1 of 11

                                                       [DO NOT PUBLISH]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

                           ____________________

                                 No. 23-12853
                           Non-Argument Calendar
                           ____________________

        JAMES MADDOX,
                                                          Plaintiﬀ-Appellant,
        KING SEMAJ,
        as Trustee for James Maddox,
                                                                    Plaintiﬀ,
        versus
        ALDRIDGE PITE, LLP,

                                                        Defendant-Appellee.

                           ____________________
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        2                      Opinion of the Court                  23-12853

                   Appeal from the United States District Court
                      for the Northern District of Georgia
                      D.C. Docket No. 1:23-cv-00398-ELR
                            ____________________

        Before JORDAN, LAGOA, and BRASHER, Circuit Judges.
        PER CURIAM:
                James Maddox, pro se, sued Aldridge Pite, LLP, under the
        Fair Debt Collection Practices Act (“FDCPA”) and Georgia law for
        claims related to the foreclosure of real property in Marietta, Geor-
        gia. The district court dismissed his complaint under Federal Rule
        of Civil Procedure 12(b)(6) for failure to state a claim upon which
        relief can be granted. Maddox appealed.
                After a careful review of the case law and record, we agree
        with the district court that Maddox fails to state a claim upon which
        relief can be granted. First, his complaint fails to state a claim that
        Aldridge Pite was not foreclosing on behalf of the lawful owners of
        the security interest in his property, so Count I was properly dis-
        missed. Second, his complaint fails to plead sufficient facts to estab-
        lish that Aldridge Pite was a “debt collector” under the FDCPA’s
        primary definition, so Counts II, III, and V were properly dis-
        missed. Third, Maddox fails to state a claim that Aldridge Pite used
        unfair or unconscionable means to collect a debt, so Count IV was
        properly dismissed. Fourth, Maddox fails to state a claim that Al-
        dridge Pite engaged in flat-rating or otherwise furnished him de-
        ceptive forms in violation of 15 U.S.C. § 1692j, so Count VI was
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        23-12853                 Opinion of the Court                            3

        properly dismissed. Fifth, Maddox fails to state a claim that Al-
        dridge Pite committed fraud because he did not plead fraud with
        particularity, so Count VII was properly dismissed. Because Mad-
        dox failed to allege facts plausibly stating a claim for any of his
        claims, the district court properly dismissed Maddox’s complaint.
        Therefore, we affirm.
                                            I.

                We review a dismissal for failure to state a claim de novo, ap-
        plying the same standard as the district court. See Holzman v. Mal-
        colm S. Gerald & Assocs., Inc., 920 F.3d 1264, 1268 (11th Cir. 2019).
        To state a claim, a complaint must contain facts that, accepted as
        true, state a “plausible claim for relief.” Id. (quoting Ashcroft v. Iqbal,
        556 U.S. 662, 679 (2009)); see Fed. R. Civ. P. 8(a). A fraud claim has
        an additional hurdle because it must be made with particularity. See
        Fed. R. Civ. P. 9(b). In analyzing the facts, we must exclude legal
        conclusions from the analysis. See Iqbal, 556 U.S. at 679; Bell Atl.
        Corp. v. Twombly, 550 U.S. 544, 555 (2007). We construe pro se plead-
        ings liberally. See Alba v. Montford, 517 F.3d 1249, 1252 (11th Cir.
        2008). But pro se parties must still plead “some factual support for a
        claim.” Jones v. Fla. Parole Comm’n, 787 F.3d 1105, 1107 (11th Cir.
        2015).
                                            II.

                                            A.

              First, we turn to Count I. Maddox alleges that Aldridge Pite
        did not represent a bona fide purchaser for value because the trust
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        4                      Opinion of the Court                23-12853

        was not a secured creditor, so Aldridge Pite could not foreclose on
        his property. This is wrong.
                Under Georgia law, a holder of a security deed is a secured
        creditor who can initiate nonjudicial foreclosure proceedings. See
        You v. JP Morgan Chase Bank, 743 S.E.2d 428, 433 (Ga. 2013). Here,
        Maddox has not alleged facts plausibly showing that Aldridge Pite
        was not foreclosing on behalf of a lawful holder of a security deed.
        See id.; Holzman, 920 F.3d at 1268.
               To buy the property underlying this case, Mr. Maddox and
        Janet Maddox obtained a mortgage in 2003. To secure the mort-
        gage loan, they executed a security deed in favor of Mortgage Elec-
        tronic Registration Systems, Inc. (“MERS”). It was recorded. In
        2012, the security deed was assigned from MERS to HSBC Bank
        USA, N.A. “as trustee for Deutsche Alt-A Securities, Inc., Mortgage
        Loan Trust, Series 2003-4XS” (the “Trust”). Servicing of the loan
        was transferred to PHH Mortgage Corporation. After a default, the
        security deed holder sought foreclosure, and Aldridge Pite noticed
        a foreclosure sale.
              Maddox alleged that the deed was transferred to the Trust
        represented by Aldridge Pite in 2012 but argued that the Trust had
        ceased to exist in 2004 when it had filed a “Certification and Notice
        of Termination of Registration under Section 12(g) of the Securities
        Exchange Act of 1934 or Suspension of Duty to File Reports under
        Sections 13 and 15(d) of the Securities Exchange Act of 1934.”
              But Maddox’s assumption that the Trust ceased to exist
        when the certification was filed is not supported by the record. The
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        23-12853               Opinion of the Court                          5

        filing was a securities law filing unrelated to the continued exist-
        ence of the Trust. The record also does not support that the secu-
        rity deed was ever transferred away from HSBC as trustee to the
        Trust. Maddox has also not plausibly alleged facts showing that
        documents he submitted satisfied the loan or even that they have
        any legal effect. Thus, HSBC held the security deed and was au-
        thorized to foreclose under Georgia law, undermining Maddox’s
        allegations related to this claim. The district court therefore did not
        err in dismissing Count I.
                                          B.

               We now address Counts II, III, and V. Maddox alleged that
        Aldridge Pite harassed and abused him in connection with the col-
        lection of a debt in violation of 15 U.S.C. § 1692d (Count II), had
        made false and misleading representations in connection with the
        collection of a debt in violation of section 1692e (Count III), and
        had failed to validate a debt in violation of section 1692g (Count V).
                Under the FDCPA, a debt collector may not (1) “harass, op-
        press, or abuse any person in connection with the collection of a
        debt” (Count II) or (2) “use any false, deceptive, or misleading rep-
        resentation or means in connection with the collection of any debt”
        (Count III). 15 U.S.C. §§ 1692d, 1692e. And within five days of an
        initial communication regarding a debt collection, a debt collector
        shall validate the debt in writing (Count V). See id. § 1692g(a). But
        what is a “debt collector” under the FDCPA?
              Under the FDCPA’s primary definition, a debt collector is
        “any person who uses any instrumentality of interstate commerce
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        6                      Opinion of the Court                 23-12853

        or the mails in any business the principal purpose of which is the
        collection of any debts, or who regularly collects or attempts to
        collect, directly or indirectly, debts owed or due or asserted to be
        owed or due another.” 15 U.S.C. § 1692a(6). This primary defini-
        tion applies broadly across FDCPA provisions except to sec-
        tion 1692f(6). See Obduskey v. McCarthy & Holthus LLP, 139 S. Ct.
        1029, 1038 (2019). Whether a party is an FDCPA debt collector is
        governed by the statutory definition, not by any self-identification
        by the party. See Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678
        F.3d 1211, 1214–19 (11th Cir. 2012) (analyzing whether defendant
        was an FDCPA debt collector even though defendant had stated in
        earlier letter that it was a debt collector). The Supreme Court has
        held that a person engaging only in nonjudicial foreclosures is not
        a debt collector under the primary definition. See Obduskey, 139 S.
        Ct. at 1038. Incidental notice about the need to pay outstanding
        debts to avoid foreclosure that is required under state law as part
        of the foreclosure process does not bring an entity outside the prac-
        tice of only nonjudicial foreclosures; that entity is still not a debt
        collector under the primary definition. See id. at 1039.
                Here, Maddox’s complaint does not adequately allege facts
        that establish Aldridge Pite is a “debt collector” under the FDCPA’s
        primary definition. 15 U.S.C. § 1692a(6); Fed. R. Civ. P. 8(a). The
        only relevant factual allegation in Maddox’s complaint is that Al-
        dridge Pite has repeatedly tried to initiate a nonjudicial foreclosure
        of his property. Maddox included the most recent foreclosure no-
        tice as an exhibit to the complaint. Based on the complaint, which
        includes this notice, Maddox has failed to plead that Aldridge Pite
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        23-12853                Opinion of the Court                          7

        does anything more than nonjudicial foreclosure. But again, the
        Supreme Court held in Obduskey that nonjudicial foreclosure alone
        does not meet the FDCPA’s primary definition of a debt collector.
        See 139 S. Ct. at 1038.
               Maddox also argues that we should consider new evidence
        from Aldridge Pite’s website in deciding whether the firm is a “debt
        collector.” But on appeal from a dismissal for failure to state a
        claim, we limit review to the complaint’s allegations and do not
        consider new factual allegations raised for the first time on appeal.
        See Lopez v. First Union Nat’l Bank of Fla., 129 F.3d 1186, 1188 (11th
        Cir. 1997); see also Callahan v. U.S. Dep’t of Health & Hum. Servs., 939
        F.3d 1251, 1266 (11th Cir. 2019) (“We are, after all, a court of re-
        view, not a court of first view.”).
                Because the complaint does not plead facts sufficient to plau-
        sibly show that Aldridge Pite is a debt collector within the FDCPA’s
        primary definition, the complaint does not state a claim upon
        which relief can be granted for Counts II (alleged violation of sec-
        tion 1692d), III (alleged violation of section 1692e), or V (alleged vi-
        olation of section 1692g(a)(2)). The district court therefore did not
        err in dismissing Counts II, III, and V.
                                          C.

               Next, we turn to Count IV. Maddox argues that Aldridge
        Pite had used unfair or unconscionable means to collect or attempt
        to collect a debt in violation of section 1692f(6).
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        8                      Opinion of the Court                 23-12853

                For claims under 15 U.S.C. § 1692f(6), the definition of debt
        collector “also includes any person who uses any instrumentality
        of interstate commerce or the mails in any business the principal
        purpose of which is the enforcement of security interests.” 15
        U.S.C. § 1692a(6). Under section 1692f(6), “[a] debt collector may
        not use unfair or unconscionable means to collect or attempt to
        collect any debt.” The statute also specifically states that “[t]aking
        or threatening to take any nonjudicial action” to dispossess prop-
        erty (e.g., foreclosing or threatening to foreclose) violates sec-
        tion 1692f(6) if “(A) there is no present right to possession of the
        property claimed as collateral through an enforceable security in-
        terest; (B) there is no present intention to take possession of the
        property; or (C) the property is exempt by law from such dispos-
        session or disablement.” Id. § 1692f(6).
               Here, assuming that Aldridge Pite is a debt collector for the
        purposes of section 1692f(6), Maddox’s complaint does not allege
        facts plausibly showing that Aldridge Pite used an unfair or uncon-
        scionable means to collect or attempt to collect a debt. The com-
        plaint does not do so generally. And the complaint fails to specifi-
        cally state a claim of a violation of section 1692f(6) because the
        complaint fails to state facts to show that Aldridge Pite foreclosed
        or threatened to foreclose (A) without a present right to possession
        through an enforceable security interest, (B) without a present in-
        tention to take possession, or (C) in the face of a legal exemption
        from foreclosure. See id. Maddox’s position that Aldridge Pite’s ac-
        tions were unfair and without a present right to possession is based
        on the theory that the Trust does not lawfully hold the security
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        23-12853                Opinion of the Court                          9

        deed to the property, which, as discussed above, is not adequately
        supported by non-conclusory factual allegations. See Fed. R. Civ. P.
        8. The district court therefore did not err in dismissing Count IV.
                                          D.

                Now we turn to Count VI. Maddox alleges Aldridge Pite vi-
        olated 15 U.S.C. § 1692j by furnishing deceptive forms through
        sending fourteen dunning notices, advertising the property over
        fifty-six times, and refusing to provide sufficient evidence to vali-
        date the purported debt they have attempted to collect. Sec-
        tion 1692j prohibits designing compiling, or furnishing a form
        knowing that it would be used to trick a consumer into thinking
        “that a person other than the creditor of such consumer is partici-
        pating [either] in the collection of or in an attempt to collect a debt
        such consumer allegedly owes such creditor, when in fact such per-
        son is not so participating.” 15 U.S.C. § 1692j(a). A dunning notice
        is a letter asking customers for money they owe. But section 1692j
        is concerned with “flat-rating.” Gutierrez v. AT&T Broadband, LLC,
        382 F.3d 725, 734 (7th Cir. 2004) (citing White v. Goodman, 200 F.3d
        1016, 1018 (7th Cir. 2000)). “The classic ‘flat-rater’ effectively sells
        his letterhead to the creditor, often in exchange for a per-letter fee,
        so that the creditor can prepare its own delinquency letters on that
        letterhead.” Id. (quoting Nielsen v. Dickerson, 307 F.3d 623, 633 (7th
        Cir. 2002)). “Use of a third party’s letterhead gives the delinquency
        letters added intimidation value, as it suggests that a collection
        agency or some other party is now on the debtor’s back.” Id. at
        734–35 (quoting Nielsen, 307 F.3d at 633). Mr. Maddox does not
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        10                      Opinion of the Court                  23-12853

        even suggest that Aldridge Pite was engaged in “flat-rating” in this
        case. The complaint alleges nothing that would fit within sec-
        tion 1692j’s prohibitions. Thus, Maddox has failed to state a claim
        on Count VI, and it was properly dismissed.
                                          E.

               Finally, we turn to Count VII, the fraud claim. Maddox al-
        leged that Aldridge Pite had engaged in fraudulent misrepresenta-
        tion to obtain property. Federal Rule of Civil Procedure 9(b) re-
        quires a plaintiff “alleging fraud or mistake . . . [to] state with par-
        ticularity the circumstances constituting fraud or mistake.” Regard-
        ing this Rule, we have held that “a plaintiff needs to plead the who,
        what, when, where, and how regarding a claim [] when Rule 9(b)’s
        heightened pleading standard applies.” Young v. Grand Canyon
        Univ., Inc., 57 F.4th 861, 873 (11th Cir. 2023) (citing Omnipol, A.S. v.
        Multinational Def. Servs., LLC, 32 F.4th 1298, 1307 (11th Cir. 2022)).
                Count VII is premised upon the allegations that Maddox sat-
        isfied the loan and the factually and legally incorrect idea that
        HSBC was not a secured creditor that could foreclose. As we dis-
        cussed above, Georgia law allowed foreclosure. After excluding the
        bare conclusory statement that the defendant had devised a scheme
        or artifice to defraud, the complaint does not contain sufficient facts
        to state a claim of fraud—especially given the heightened particu-
        larity pleading requirement. Count VII was properly dismissed.
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        23-12853             Opinion of the Court                      11

                                     ***
              We also note that Maddox does not challenge on appeal the
        dismissal of the so-called amended complaints that contained the
        name “King Semaj.” Accordingly, any challenge to that dismissal
        has been waived.
                                      III.

              For the reasons stated above, we AFFIRM.