The U.S. Court of Appeals for the Eleventh Circuit recently upheld the dismissal of a borrower's allegations that a mortgage loan servicer violated the federal Fair Debt Collection Practices Act (FDCPA)  and the Florida Consumer Collection Practices Act (FCCPA) by leaving a letter in the borrower's mailbox, posting a letter to his front door, and sending a letter to the borrower via registered mail, all offering the borrower various sums of financial assistance if he vacated the property.

The Court held that the servicer's actions did not constitute a demand for payment under the FDCPA and FCCPA.

A copy of the opinion is available at:  Link to Opinion

The borrower obtained a mortgage loan secured by his residence.  The borrower defaulted and the mortgagee foreclosed in November 2009.  After several delays, including the filing and administration of the borrower's petition for bankruptcy relief, the property was sold in a foreclosure sale in November 2013.  A writ of possession was issued in August 2014.

After the property was sold, the mortgage loan servicer's employee left a letter in the borrower's mailbox offering various sums of financial assistance if the borrower vacated the property by a certain date.  The employee returned to the residence the next day and posted the letter on the front door, and the day after that sent the letter to the borrower via registered mail.

The Eleventh Circuit held that the borrower's allegations failed to state a claim against the mortgage loan servicer or any of the other defendants.  In particular, the Court noted that the servicer offered to provide the borrower funds if he would vacate the property.  The Eleventh Circuit held that these actions did not constitute a demand for payment under the FDCPA and FCCPA.

As you may recall, the FDCPA imposes civil liability on "debt collectors" for certain prohibited debt collection practices.  In order to state a plausible FDCPA claim, "a plaintiff must allege, among other things, (1) that the defendant is a debt collector and (2) that the challenged conduct is related to debt collection."  Reese v. Ellis, Painter & Adams LLP, 678 F.3d 1211, 1215 (11th Cir. 2012) (quotation omitted).

The FDCPA and the FCCPA have certain parallels, including nearly identical definitions of "communication," "debt," and "debt collector." 15 U.S.C. §§ 1692a(2), (5)-(6); FLA. STAT. §§ 559.55(2), (6)-(7).

The FDCPA and FCCPA define a "debt collector," in relevant part, as one who engages "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); Fla. Stat. § 559.55(7).

The FDCPA prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt."  15 U.S.C. § 1692e. When determining whether a letter is "in connection with the collection of any debt," courts look to the language of the letter, specifically to statements that demand payment and mention additional fees if payment is not tendered.  Caceres v. McCalla Raymer, LLC, 755 F.3d 1299, 1302 (11th Cir. 2014). 

The Court noted that a demand for payment need not be express, and may be implicit.  An example of a collection communication is a letter that indicates that it is being sent to collect a debt, states the amount of the debt, describes how the debt may be paid, and provides the address to which the payment should be sent and a phone number.  Id. at 1303 n.2.

The FCCPA prohibits anyone, in the course of collecting debts, from using threats or force, and from disclosing information concerning the existence of a debt known to be reasonably disputed. Fla. Stat. §§ 559.72(2), (6).  "Debt" is defined as "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment."  Fla. Stat. § 559.55(6).

In ruling on the servicer's motion to dismiss, the Eleventh Circuit held that, even accepting all of the borrower's allegations as true, the borrower failed to state a claim.  The servicer offered the borrower money to vacate the property.  The Court held that "[w]hile a demand for payment need not be express to fall under the protections of the FDCPA, the facts alleged show no demand of any sort."

As to the borrower's FCCPA claim, the Eleventh Circuit held that borrower failed to allege facts showing that the servicer was collecting a consumer debt, as defined in the FCCPA.  See Fla. Stat. §§ 559.55, 559.72. 

The Court noted that the allegations only indicated that the servicer, through its employee, attempted to leave notices informing the borrower that he was eligible to receive financial relocation assistance.  The Court further noted that the borrower did not allege that anyone ever asked him for payment for a debt, or told him he had an obligation to pay the servicer for a debt.

Finally, the Eleventh Circuit rejected the borrower's argument that the district court abused its discretion in failing to grant him leave to file a second amended complaint, holding that "[t]he argument is frivolous.  Filing a second amended complaint would be a futile exercise."

Accordingly, the Eleventh Circuit affirmed the district court's dismissal of the borrower's allegations.