United States District Court, M.D. Florida, Jacksonville Division
RANDOLPH SELLERS, individually and on behalf of a class of persons similarly situated and TABETHA SELLERS, individually and on behalf of a class of persons similarly situated, Plaintiffs,
RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Defendant.
TIMOTHY JOCOKRIGAN UNITED STATES DISTRICT JUDGE.
consumer credit putative class action is before the Court on:
(1) Defendant Rushmore Loan Management Services, LLC's
Motion for Summary Judgment (Doc. 33), to which Plaintiffs
Randolph and Tabetha Sellers responded (Doc. 37); and (2)
Plaintiffs' Motion for Class Certification (Doc. 28), to
which Rushmore responded (Doc. 31). On March 30, 2017, the
Court held a hearing on the motion for summary judgment, the
record of which is incorporated herein. (Doc. 53).
April 2007, Plaintiffs borrowed $122, 459 from Premier
Mortgage Funding, Inc. for a loan on their home in Keystone
Heights, Florida. (Doc. 33-2). The loan was evidenced by a
promissory note and secured by a mortgage on the property.
(Id.). The loan went into default, and in September
2008, Taylor, Bean & Whitaker and GMAT Legal Title Trust
2013-1, the holders of the mortgage and note, filed a
foreclosure action. (Doc. 37-1 ¶ 6). Plaintiffs moved
out of the property and into Ms. Sellers's mother's
residence. (Id. ¶ 7). On February 16, 2011,
Plaintiffs filed a voluntary Chapter 7 bankruptcy petition,
which triggered a stay of the foreclosure
action. (Id.¶ 9). Plaintiffs state
that they did not reaffirm the debt due to the continuously
increasing balance on the loan. (Id. ¶ 11). On
June 2, 2011, Plaintiffs received a Chapter 7 discharge,
which released them from personal liability for the loan on
their home. (Doc. 33-3). Under the discharge order,
a creditor is not permitted to contact a debtor by mail,
phone, or otherwise . . . or to take any other action to
collect a discharged debt. . . . However, a creditor may have
the right to enforce a valid lien, such as a mortgage or
security interest, against the debtors' property after
the bankruptcy, if that lien was not avoided or eliminated in
the bankruptcy case.
(Id. at 4).
August 2013, servicing of Plaintiffs' loan transferred
from Bank of America to Rushmore. (Doc. 33-1 ¶ 5).
Beginning in February 2014, Rushmore sent three written forms
to Plaintiffs: Mortgage Statement I, Mortgage Statement II,
and a Request for Taxpayer Identification Number
(“Request for TIN”).
from February 2014 through November 2014, on the first of
each month, Rushmore sent Plaintiffs a copy of Mortgage
Statement I. Page one lists a “Payment Due
Date” and an “Amount Due” in a box in the
top right corner. Located directly beneath that box in a
separate box is a disclaimer:
This communication is from a debt collector and any
information received will be used for that purpose. This does
not imply that Rushmore Loan Management Services is
attempting to collect money from anyone whose debt has been
discharged pursuant to (or who is under the protection of)
the bankruptcy laws of the United States; in such instances,
it is intended solely for informational purposes.
the disclaimer box is another box entitled “Explanation
of Amount Due, ” which itemizes the principal,
interest, escrow, regular monthly payment, total fees and
charges, and overdue payment on the loan. At the bottom of
page one is a detachable payment coupon, which lists a
“Due Date, ” “Amount Due, ” a
“Late Payment Amount” and instructions to make
checks payable to Rushmore.
beginning in December 2014 and through June 2015, on the
first of each month, Rushmore sent Plaintiffs a new form of
the mortgage statement. Mortgage Statement II contains the same
box at the top right corner listing a “Payment Due
Date, ” “Amount Due, ” and a sentence
informing the recipient that if payment is received after a
certain date, a late fee will be charged. Directly below that
box are two separate boxes, one showing the same disclaimer
language as in Mortgage Statement I, and the
“Explanation of Amount Due” information. However,
Mortgage Statement II eliminates the payment coupon and
replaces it with the following additional disclaimer language
in a box at the bottom of page one:
This is an Information Statement for borrowers in bankruptcy
or borrowers whose debt has been discharged in bankruptcy. It
is not an attempt to collect a debt. Please note that even if
your debt has been discharged in bankruptcy and you are no
longer personally liable on the debt, the lender may, in
accordance with applicable law, pursue its rights to
foreclose on the property securing the debt. If you do not
wish to receive informational statements in the future,
please call Rushmore toll-free at (888) 504-6700.
The bottom of the last page also contains disclaimer
Rushmore Loan Management Services LLC is a Debt Collector,
who is attempting to collect a debt. Any information obtained
will be used for that purpose. However, if you are in
Bankruptcy or received a Bankruptcy Discharge of this debt,
this letter is being sent for informational purposes only, is
not an attempt to collect a debt and does not constitute a
notice of personal liability with respect to the debt.
on March 5, 2014, Rushmore sent Plaintiffs a packet of
information which, among other information, included a
Request for TIN. The first page of the packet notes that
“We have enclosed important information regarding your
loan.” The document does not specify the amount of
Plaintiffs' loan, list a due date, request payment, or
provide a method to do so. At the top of the Request for TIN,
under the Privacy Act Statement heading, the document states:
Section 6109 of the Internal Revenue Code requires you to
give your correct [TIN] to persons who must file information
returns with the IRS to report interest, dividends and
certain other income paid to you, mortgage interest you paid,
the acquisition or abandonment of secured property,
cancellation of debt or contributions you made to an IRA.
receiving the monthly mortgage statements, Ms. Sellers called
Rushmore to confirm that it had a copy of Plaintiffs'
bankruptcy discharge order. (Doc. 37-3 at 46:23-47:4). During
a call to Rushmore, she states that she “was then
talked to about a deed in lieu [of foreclosure].”
(Id. at 48:1-2). Ultimately, in May 2014, Plaintiffs
declined Rushmore's offer to accept a deed in lieu of
foreclosure. (Id. at 63:5-64:4). The state court
entered a final judgment of foreclosure on August 28, 2014,
(Doc. 37 at 5), and the property was sold at a foreclosure
sale on October 4, 2014 (Doc. 33-5). Due to a clerical error,
the sale proceeds were initially made payable to an incorrect
party (Doc. 33-6), but were properly distributed in April
2015. (Doc. 33-7). Nevertheless, Plaintiffs continued
receiving a monthly communication containing Mortgage
Statement II through June 2015. (Doc. 37 at 5).
filed this putative class action, raising four claims. (Doc.
1). Count I alleges that Rushmore violated the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 et
seq. (“FDCPA”), by sending monthly account
statements which “attempted to collect a debt and
represented that it had a legal right to collect upon
discharged monetary amounts.” (Id.
¶¶ 32-51). Plaintiffs allege that this conduct
violates § 1692e, which prohibits the use of false,
deceptive, or misleading representations in connection with
the collection of a debt, and § 1692e(2)(A), because the
collection activities falsely represented the character,
amount or legal status of a debt. (Id. ¶¶
46-47). Count II alleges that Rushmore violated the Florida
Consumer Collection Practices Act, Fla. Stat. §§
559.55-559.785 (“FCCPA”), by sending the monthly
account statements because, in doing so, Rushmore
“claim[ed] and attempt[ed] to enforce a debt which was
not legitimate and not due and owing” in violation of
§ 559.72(9). (Id. ¶¶ 52-69). Count
III alleges that Rushmore violated the FCCPA by sending the
Request for TIN. (Id. ¶¶ 70-86).
Specifically, Plaintiffs allege that Rushmore violated §
559.72(9), because it had “no legal right to seek
collection of these amounts . . . and was in fact enjoined
from doing so pursuant to bankruptcy discharge of the subject
amounts.” (Id. ¶ 83). In addition,
Rushmore allegedly violated § 559.72(7) because
Rushmore's “IRS threat is reasonably expected to
abuse or harass the recipient.” (Id. ¶
84). Finally, in Count IV, Plaintiffs seek a declaration that
Rushmore's conduct was unlawful, an injunction
prohibiting Rushmore from sending documents requesting
payment on discharged debts, and an order requiring Rushmore
to “disgorge all ill-gotten gains” under the
Declaratory Judgment Act, 28 U.S.C. § 2201.
(Id. ¶¶ 87-106). Plaintiffs have also
filed a motion for class certification (Doc. 28), which
Rushmore opposes (Doc. 31).
STANDARD OF REVIEW
judgment is proper where “there is no genuine issue as
to any material fact” and “the movant is entitled
to judgment as a matter of law.” Fed.R.Civ.P. 56(c).
“The burden of demonstrating the satisfaction of this
standard lies with the movant, who must present pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, that establish
the absence of any genuine material, factual dispute.”
Branche v. Airtran Airways, Inc., 342 F.3d 1248,
1252-53 (11th Cir. 2003) (internal quotations omitted). An
issue is genuine when the evidence is such that a reasonable
jury could return a verdict for the non-movant. Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986).
determining whether summary judgment is appropriate, a court
must draw inferences from the evidence in the light most
favorable to the non-movant and resolve all reasonable doubts
in that party's favor. See Centurion Air Cargo, Inc.
v. United Parcel Serv. Co., 420 F.3d 1146, 1149 (11th
Cir. 2005). However, “Rule 56 mandates the entry of
summary judgment, upon motion, against a party who fails to
make a showing sufficient to establish an element essential
to his case on which he bears the burden of proof at
trial.” Schechter v. Ga. State Univ., 341 F.
App'x 560, 562 (11th Cir. 2009) (citing Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986)).
FDCPA provides a civil cause of action against any debt
collector who fails to comply with its requirements. See
Bacelli v. MFP, Inc., 729 F.Supp.2d 1328, 1331-32 (M.D.
Fla. 2010) (citations omitted). The FDCPA prohibits debt
collectors from using any false representation as to the
“legal status of any debt.” 15 U.S.C. §
1692e(2)(A). “A demand for immediate payment while a
debtor is in bankruptcy (or after the debt's discharge)
is ‘false' in the sense that it asserts that money
is due, although, because of . . . the discharge injunction
(11 U.S.C. § 524), it is not.” Bacelli,
729 F.Supp.2d at 1331-32 (quoting Randolph v. IMBS,
Inc., 368 F.3d 726, 728 (7th Cir. 2004) (dicta); see
also Ross v. RJM Acquisitions Funding LLC, 480 F.3d 493,
495 (7th Cir. 2007) (“Dunning people for their
discharged debts” is prohibited by 15 U.S.C. §
1692e(2)(A)); cf. Turner v. J.V.D.B. & Assocs.,
Inc., 330 F.3d 991, 995 (7th Cir. 2003) (reversing
summary judgment in favor of debt collector on claim under
§ 1692e(2)(A) in part because a reasonable jury could
conclude debt collector's collection letter implied that
the discharged debt was still payable)).
determining whether a debt collector's communication
violates § 1692e, courts in the Eleventh Circuit employ
the “least-sophisticated consumer” standard.
See LeBlanc v. Unifund CCR Partners, 601 F.3d 1185,
1193, 1201 (11th Cir. 2010). The “least sophisticated
consumer” is “presumed to possess a rudimentary
amount of information about the world and a willingness to
read a collection notice with some care.” Id.
However, the test is an “objective” one, designed
both to protect naïve consumers and prevent
“liability for bizarre or idiosyncratic interpretations
of collection notices.” See id. However,
“it is not necessary for a plaintiff to show that she
herself was confused by the communication she received; it is
sufficient for a plaintiff to demonstrate that the least
sophisticated consumer would be confused.” Beeders
v. Gulf Coast Collection Bureau, Inc., No.
809-CV-00458-EAK-AEP, 2010 WL 2696404, at *3 (M.D. Fla. July
6, 2010), aff'd, 432 F. App'x 918 (11th Cir.
2011) (quoting Jacobson v. Healthcare Fin. Servs.,
Inc., 516 F.3d 85, 91 (2d Cir. 2008)).
“Additionally, the Court need not determine whether the
named plaintiff or other putative plaintiffs read or were
confused by the notice, as the standard is whether the least
sophisticated consumer would have been misled.”
Battle v. Gladstone Law Grp., P.A., 951 F.Supp.2d
1310, 1315 (S.D. Fla. 2013) (citation omitted).
FCCPA provides that a debtor may bring a civil action against
any person who violates its provisions. Fla. Stat. §
559.77. The FCCPA prohibits any person, in collecting
consumer debts, from “claim[ing], attempt[ing], or
threaten[ing] to enforce a debt when such person knows that
the debt is not legitimate or assert[ing] the existence of
some other legal right when such person knows that the right
does not exist.” Id. § 559.72(9)
(alteration added). “In contrast to the FDCPA, §
559.72(9) of the FCCPA requires a plaintiff to demonstrate
that the debt collector defendant possessed actual knowledge
that the threatened means of enforcing the debt was
unavailable.” LeBlanc, 601 F.3d at 1192
(citing McCorriston v. L.W.T., Inc., 536 F.Supp.2d
1268, 1279 (M.D. Fla. 2008) (internal citations omitted)).
The FCCPA also prohibits “willfully engag[ing] in . . .
conduct which can reasonably be expected to abuse or harass
the debtor. . . .” Fla. Stat. § 559.72(7).
Finally, the FCCPA provides that in construing its
provisions, “due consideration and great weight shall
be given to the interpretations of the Federal Trade
Commission and the federal courts relating to the
[FDCPA].” Fla. Stat. § 559.77(5); Herrera v.
Bank of Am., N.A., No. 15-CV-62156, 2016 WL 4542105, at
*9 (S.D. Fla. Aug. 31, 2016).
Motion for Summary Judgment
Whether the Communications Violate the FDCPA and/or
FCCPA a. Mortgage Statement
argue that Mortgage Statement I violates § 1692e(2)(A)
in that it “misrepresent[s] the character, amount, or
legal status of the demands for the TOTAL AMOUNT DUE on its
statements, ” and that the least sophisticated consumer
could conclude that Rushmore was asserting that she was
personally liable for the total amount due. (Doc. 37 at
16-17). Specifically, Plaintiffs identify demands for payment
on the first page of the statement, including “Current
Payment Due, ” “Other Amounts Due, ” and in
bold letters and all capitals, “TOTAL AMOUNT
DUE.” (Id. at 16). They also quote the
language in the “Important Information” box,
which says, “IF YOU ARE [IN] FORECLOSURE OR BANKRUPTCY,
the amount listed here may not be the full amount necessary
to bring your account current. To obtain the most up-to-date
amount due information, please contact us at the number
listed on this statement.” (Id.; Doc. 33-8 at
2). According to Plaintiffs, this language undercuts the
disclaimers upon which Rushmore relies. Plaintiffs also note
the existence of the payment coupon “prominently
featured” in Mortgage Statement I. (Doc. 37 at 18).
Because they believe that a genuine issue of material fact
exists as to whether Mortgage Statement I was
“deceptive, confusing, and abusive” to the least
sophisticated consumer, Plaintiffs request that the Court
deny summary judgment.
argues that Mortgage Statement I is for informational
purposes and does not seek to induce payment from Plaintiffs,
noting the disclaimer at the top right corner of the first
page; thus, Rushmore argues, it is not subject to the FDCPA.
(Doc. 33 at 15). Moreover, given that creditors are permitted
to communicate with debtors regarding security liens on
property even after a discharge in bankruptcy, Rushmore
argues that it was clear that the statement was not sent to
induce payment of a debt. (Id. at 18).
FDCPA does not apply to every communication between a debt
collector and a debtor. “[F]or a communication to be in
connection with the collection of a debt, an animating
purpose of the communication must be to induce payment by the
debtor.” Parker v. Midland Credit Mgmt., Inc.,
874 F.Supp.2d 1353, 1357 (M.D. Fla. 2012) (quoting Grden
v. Leikin Ingber & Winters PC, 643 F.3d 169, 173
(6th Cir. 2011)). “Obviously, communications that
expressly demand payment will almost certainly have this
purpose.” Id. (quoting Grden, 643
F.3d at 173). However, “an implicit demand for payment
may exist where the letter states the amount of the debt,
describes how the debt may be paid, provides the phone number
and address to send payment, and expressly states that the
letter is for the purpose of collecting debt.”
Leahy-Fernandez v. Bayview Loan Servicing, LLC, 159
F.Supp.3d 1294, 1303 (M.D. Fla. 2016) (quoting Pinson v.
Albertelli Law Partners LLC, 618 F. App'x. 551, 553
(11th Cir. 2015)). “On the opposite end of the
spectrum, where a communication is ‘merely
information' and explicitly informs the debtor that the
communication or notice is not an attempt to collect a debt
or a demand for payment, courts have held that these
communications are not subject to the FDCPA.”