In this week's Alabama Law Weekly Update, we report on a decision from the United States Court of Appeals for the Eleventh Circuit addressing the sufficiency of a pro se complaint alleging a violation of the Fair Debt Collection Practices Act.  

Anthony Tharpe v. Nationstar Mortgage, LLC, No. 15-13153, 2016 WL 231494 (11th Cir. Jan. 20, 2016) (Pro se complaint alleging business violated Fair Debt Collection Practices Act by communicating with complainant regarding foreclosure action contained additional allegations sufficient to survive a motion to dismiss for failure to state a claim.)

Anthony Tharpe, a pro se litigant, filed suit against Nationstar Mortgage, LLC (“Nationstar”) in the United States District Court for the Southern District of Florida (“District Court”), alleging that Nationstar violated the Fair Debt Collection Practices Act (“FDCPA”) by communicating with Tharpe regarding a mortgage identifying Tharpe as the mortgagor. Per the District Court's reading of Tharpe's complaint, Tharpe identified only one example of Nationstar communications in violation of the FDCPA, Nationstar's filing of a foreclosure action. The District Court held that the complaint failed to state a claim for which relief could be granted, holding that the FDCPA is limited to debt collection activity and “[a] foreclosure action does not count as debt collection activity for FDCPA purposes.” Tharpe appealed the District Court's dismissal of his complaint.

The United States Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) highlighted its decision in Reese v. Ellis, Painter, Ratterree & Adams, 678 F.3d 1211 (11th Cir. 2012) to identify two items relevant to Tharpe's appeal. First, the Eleventh Circuit has not answered the question on which the District Court based its holding: “whether enforcing a security interest is itself debt-collection activity covered by the [FDCPA].” Second, the Eleventh Circuit in Reese held that “[a] communication related to debt collection does not become unrelated to debt collection simply because it also relates to the enforcement of a security interest.” Consequently, irrespective of any communications by Nationstar pursuant to the filing of the foreclosure action, Nationstar's communications with Tharpe may be subject to the FDCPA if such communications were used by Nationstar for the purpose of collecting the underlying debt from Tharpe. 

The Eleventh Circuit, applying a liberal construction of Tharpe's complaint given that Tharpe is a pro se litigant, held that the District Court erred in granting Nationstar's motion to dismiss because Tharpe's complaint contained allegations beyond Nationstar's foreclosure action. Tharpe's complaint contended that “Nationstar and its predecessors” have made efforts to collect from Tharpe on the note over a 7 year period, including times in which Nationstar was not pursuing the foreclosure of Tharpe's property. Tharpe's complaint also contained allegations sufficient to identify Nationstar as a debt collector likely subject to the FDCPA, describing Nationstar's business as the collection of thousands of debts from thousands of customers. Given the language of Tharpe's complaint, the Eleventh Circuit held that Nationstar's motion to dismiss should have been denied. 

It is important to note that the Eleventh Circuit did not make any determination regarding the appropriateness of Nationstar's actions in attempting to foreclose on Tharpe's property. It is also important to note that the Eleventh Circuit did explicitly state that this ruling left the following unanswered: “[W]hether foreclosing on mortgaged property is, by itself, debt collection activity within the scope of the FCPDA.”