Court Opinion

ID: 2718256
Source: CourtListenerOpinion
Date Created: 2014-08-15 15:02:56.690836+00
Date Added: 2024-06-11T12:54:38.298998
License: Public Domain

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                      MOTION AND, IF FILED, DETERMINED

                                              IN THE DISTRICT COURT OF APPEAL
                                              OF FLORIDA
                                              SECOND DISTRICT

MARIAN GANN,                        )
                                    )
            Appellant,              )
                                    )
v.                                  )                   Case No. 2D12-6271
                                    )
BAC HOME LOANS SERVICING LP,        )
n/k/a BANK OF AMERICA, N.A.,        )
                                    )
            Appellee.               )
___________________________________ )

Opinion filed August 15, 2014.

Appeal from the Circuit Court for Lee
County; Sherra Winesett, Judge.

Joseph C. LoTempio of The Dellutri Law
Group, P.A., Fort Myers, for Appellant.

Joseph F. Poklemba and K. Denise Haire
of Blank Rome, LLP, Boca Raton, for
Appellee.

SILBERMAN, Judge.

              In her action for alleged violations of the Florida Consumer Collection

Practices Act (FCCPA) against BAC Home Loans Servicing LP, n/k/a Bank of America,

N.A. (the Bank), Marian Gann appeals a final order dismissing with prejudice her

complaint for failure to state a cause of action. We reverse the order to the extent that it

dismisses count one and remand for further proceedings.
             Gann filed a two-count complaint against the Bank, alleging a violation of

the FCCPA and a violation of the Florida Deceptive and Unfair Trade Practices Act

(FDUTPA). She does not contest the dismissal of count two for alleged violations of the

FDUTPA. In count one, Gann alleged that the Bank entered into a permanent loan

modification in connection with her mortgage loan and that she kept all payments

current pursuant to the terms of the modification. She further alleged that the Bank

subsequently notified her of an alleged default although all payments were timely made

pursuant to the modification. Gann further alleged that the Bank breached its duty to

her and ignored the terms of the modification. She asserted that in its collections

actions and communications to her the Bank violated the FCCPA, including section

559.72(9), Florida Statutes (2011). Attached to Gann's complaint as an exhibit are the

two letters that she alleges violated the FCCPA. Both parties rely on these two letters in

making their respective arguments.

             In the first letter, the first section of the letter states as follows:

             IMPORTANT MESSAGE ABOUT YOUR HOME LOAN

             We recently received your payment in the amount of
             $780.76. This payment was less than the total amount
             needed to bring your loan up to date. However, we have
             applied the above referenced payment to your loan in
             accordance with your loan terms. The total amount due after
             we applied your payment is $436.97.

             We previously sent you a notice informing you of the amount
             needed to reinstate your loan. The expiration date provided
             on that notice remains in effect. If the amount due is not
             received by the specified due date, foreclosure proceedings
             may begin or continue.

(Emphasis added.) The letter also states, "If you are having difficulty making your home

loan payment, we can work with you to determine what options may be available to

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assist you." And the letter provides that the lender has not waived its rights under the

loan documents by accepting less than the amount owed.

               In the second letter, the first section of the letter states as follows:

               IMPORTANT MESSAGE ABOUT YOUR LOAN

               Thank you for your recent payment to Bank of America,
               N.A., your home loan servicer.

               However, your loan payment for the current month has not
               been received. As of September 13, 2011, the total due on
               your loan is $414.30, which includes the payment due on
               September 01, 2011.

Later in the letter it states that "it is vital that the full amount currently due is paid in

order to avoid other default-related actions, which may include returning payments that

are less than the total amount owed." (Emphasis added.) The letter then states,

"Please send us the total amount due, $414.30, immediately or contact our office to

discuss a mutually acceptable repayment agreement." (Emphasis added.)

               The Bank filed a motion to dismiss the complaint and, with respect to the

FCCPA claim, argued that the enforcement of a security interest such as a mortgage is

not considered the collection of a consumer debt under the Federal Debt Collection

Practices Act (the Federal Act). The Bank further argued that when applying the

FCCPA due consideration and weight should be given to the interpretation of federal

law. The Bank contended that Gann's complaint demonstrated that the Bank was

seeking to enforce a security interest and that the Bank's conduct does not fall within

the scope of the FCCPA.

               The only issue before the trial court on the motion to dismiss was whether

the correspondence from the Bank could be construed as an attempt to collect a

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consumer debt. After a hearing, the trial court entered an order granting the Bank's

motion to dismiss with prejudice. The order states, "Because the Letters did not contain

language which could be construed as an attempt to collect on the underlying debt, [the

Bank's] communications therein were merely attempts to enforce its security instrument

and not attempts to collect a consumer debt."

             A ruling on a motion to dismiss concerning a question of law is subject to

de novo review. Fla. Bar v. Greene, 926 So. 2d 1195, 1199 (Fla. 2006). A motion to

dismiss tests the legal sufficiency of the complaint and does not determine factual

issues. Id. The complaint's allegations "must be taken as true and all reasonable

inferences therefrom construed in favor of the nonmoving party." Id. The trial court

confines itself to considering the four corners of the complaint when ruling on a motion

to dismiss. Swope Rodante, P.A. v. Harmon, 85 So. 3d 508, 509 (Fla. 2d DCA 2012).

             Section 559.72(9) provides as follows:

             In collecting consumer debts, no person shall:

             ....

             (9) Claim, attempt, or threaten to enforce a debt when such
             person knows that the debt is not legitimate, or assert the
             existence of some other legal right when such person knows
             that the right does not exist.

With reference to section 559.72(9), the gist of Gann's claim is that the Bank sought to

enforce a debt that was not legitimate because the parties had entered into a

modification of the loan and that Gann was current on her payments.

             In the section allowing for civil remedies against a person violating the

provisions of section 559.72, the FCCPA states that "[i]n applying and construing this

section, due consideration and great weight shall be given to the interpretations of the

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Federal Trade Commission and the federal courts relating to the federal Fair Debt

Collection Practices Act." § 559.77(5); see also Kelliher v. Target Nat'l Bank, 826 F.

Supp. 2d 1324, 1327 (M.D. Fla. 2011). In addition, "[i]n the event of any inconsistency

between any provision of this part and any provision of the federal act, the provision

which is more protective of the consumer or debtor shall prevail." § 559.552.

              The trial court erred in granting the Bank's motion to dismiss when it

determined that the Bank was only trying to enforce a security interest and not trying to

collect a consumer debt from Gann. The trial court and the Bank relied upon the federal

decision of the Middle District of Florida in Trent v. Mortgage Electronic Registration

Systems, Inc., 618 F. Supp. 2d 1356 (M.D. Fla. 2007), aff'd, 288 F. App'x 571 (11th Cir.

2008). In Trent, the Middle District explained that "the purpose and intent of the

FCCPA, like the [Federal Act], is to eliminate abusive and harassing tactics in the

collection of debts. It is not meant to preclude a creditor or someone otherwise holding

a secured interest from invoking legal process to foreclose." Id. at 1361. The court

concluded that "filing a foreclosure lawsuit is not a debt collection practice under §

559.72 of the FCCPA." Id.

              The court then went on to consider whether presuit letters or notices

violated section 559.72(9). The court determined that MERS' conduct did not violate

section 559.72(9) because the debt was legitimate and MERS as mortgagee had the

ability to foreclose. Id. at 1362. The court also determined that MERS did not violate

section 559.72 by referring to itself as a "creditor" in the notice. Id. at 1363-64. But the

court did not state that the presuit notice was not an attempt to collect a consumer debt.

                                            -5-
              Subsequent to Trent, the Eleventh Circuit considered a claim under the

Federal Act based on a letter and enclosed documents that a law firm representing the

lender sent to the debtors which demanded payment of the debt and threatened to

foreclose on the property if the debtors did not pay. Reese v. Ellis, Painter, Ratterree &

Adams, LLP, 678 F.3d 1211, 1214 (11th Cir. 2012). The law firm moved to dismiss the

complaint for failure to state a claim and argued, among other things, that the letter and

documents attached to the complaint did not constitute debt collection activity but

instead were only an attempt to enforce its client's security interest. Id. at 1215. The

district court dismissed the claim, and the Eleventh Circuit reversed. Id. at 1218-19.

              The Reese case involved both a promissory note and a security interest,

and the promissory note is a debt within the plain language of the Federal Act. Id. at

1217. The letter stated "that the 'Lender hereby demands full and immediate payment

of all amounts due.' " Id. The letter also threatened "that 'unless you pay all amounts

due and owing under the Note,' attorney's fees 'will be added to the total amount for

which collection is sought.' " Id. The other documents also had language indicating that

the law firm was " 'ATTEMPTING TO COLLECT A DEBT.' " Id.

              The Eleventh Circuit rejected the law firm's argument that the purpose of

the letter and documents was only to enforce a security interest. Id. "That argument

wrongly assumes that a communication cannot have dual purposes." Id. The court

recognized that if it had adopted the law firm's argument "[t]he practical result would be

that the [Federal] Act would apply only to efforts to collect unsecured debts. So long as

a debt was secured, a lender (or its law firm) could harass or mislead a debtor without

violating the [Federal Act]." Id. at 1218. Rather, "[a] communication related to debt

                                           -6-
collection does not become unrelated to debt collection simply because it also relates to

the enforcement of a security interest. A debt is still a 'debt' even if it is secured." Id.;

see also Birster v. Am. Home Mortg. Servicing, Inc., 481 F. App'x 579, 583 (11th Cir.

2012) ("Reese provides that an entity can both enforce a security interest and collect a

debt.").

              Here, the language in the letters from the Bank to Gann do not explicitly

state that it is attempting to collect a debt as the documents did in Reese. However, the

first letter states that if the Bank does not receive a specific amount due by a specified

date, "foreclosure proceedings may begin or continue." The second letter states that "it

is vital that the full amount currently due is paid" and asks Gann to send "the total

amount due, $414.30, immediately" or contact the Bank's office. The letters plainly

seek collection of an alleged debt.

              Therefore, the trial court erred in determining that the letters did not

contain language that could be construed as an attempt to collect on the underlying

debt and only were attempts to enforce the Bank's security instrument. Accordingly, we

reverse the order to the extent it dismisses the FCCPA claim in count one.

              We note that the Bank makes an alternative argument on appeal that

Gann's complaint was subject to dismissal because the Bank is not a debt collector

under the FCCPA. The Bank did not argue this as a ground for dismissal in its motion

or at the hearing. In fact, defense counsel asserted that the only issue at the hearing

was whether debt collection activity had occurred.

              Moreover, Florida courts have recognized that the FCCPA applies not only

to debt collectors but also to any "person." See Schauer v. Gen. Motors Acceptance

                                             -7-
Corp., 819 So. 2d 809, 812 (Fla. 4th DCA 2002); see also § 559.72 (providing that "[i]n

collecting consumer debts, no person shall . . . "). This provision "includes all allegedly

unlawful attempts at collecting consumer claims." Schauer, 819 So. 2d at 812. Thus,

the Fourth District determined that GMAC, the creditor, qualified as a person under the

FCCPA and reversed the dismissal of the count against GMAC. Id. In doing so, the

Schauer court noted that "[t]he Florida Act is different than its federal counterpart

because it is not limited to debt collectors." Id. at 812 n.1.

              Furthermore, in Morgan v. Wilkins, 74 So. 3d 179, 181 (Fla. 1st DCA

2011), the appellees conceded "that the trial court was in error when it ruled that

FCCPA pertains only to debt collectors, as that term is defined in the Act." The court

stated that "[s]ection 559.72 provides that 'no person' shall engage in certain practices

while attempting to collect a consumer debt." Id.; see also Kelliher, 826 F. Supp. 2d at

1327 ("Although the [Federal Act] does not apply to original creditors, the FCCPA has

been interpreted to apply to original creditors as well as debt collection agencies.").

              Therefore, we reject the Bank's alternative argument on appeal because

the FCCPA applies to the Bank. Accordingly, we reverse the order to the extent that it

dismisses count one and remand for further proceedings.

              Affirmed in part, reversed in part, and remanded.

NORTHCUTT and BLACK, JJ., Concur.

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