Angela Harris v. Liberty Community Management, Inc.
2012 U.S. App. LEXIS 26004
| 11th Cir. | 2012Background
- FDCPA exempts certain debt collectors, including those acting incidental to a bona fide fiduciary obligation.
- Liberty Community Management managed Little Suwanee Point HOA and served as its sole and exclusive agent.
- Liberty performed broad management duties beyond debt collection, including budgeting, accounting, contracting, insurance, and maintenance.
- The HOA required delinquent assessments to be collected; Liberty was authorized to collect and take action to recover past due amounts.
- A 2009 HOA amendment allowed water shutoff for unpaid assessments over $750, with three notices prior and costs becoming a lien against the Lot; this led to water service suspensions for nonpaying homeowners.
- Plaintiffs sued Liberty in federal court asserting FDCPA and Georgia GFBPA violations; district court granted summary judgment to Liberty on FDCPA exemption and GFBPA defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Liberty falls within § 1692a(6)(F)(i) exemption. | Harris et al. argue debt collection was core to Liberty’s duties. | Liberty contends collection was incidental to fiduciary obligations. | Liberty is exempt; debt collection is incidental to fiduciary duties. |
| Whether Liberty’s actions violated Georgia’s Fair Business Practices Act. | Plaintiffs claim water shutoffs and threats were unfair practices. | Liberty asserts no violation as a matter of law under GFBPA. | No GFBPA violation; actions lawful under state law and FDCPA interpretation. |
Key Cases Cited
- Berndt v. Fairfield Resorts, Inc., 339 F. Supp. 2d 1064 (W.D. Wis. 2004) (district court recognized similar exemption under § 1692a(6)(F)(i))
- Pelfrey v. Educ. Credit Mgmt. Corp., 208 F.3d 945 (11th Cir. 2000) (education loan debt collection incidental to fiduciary duties)
- Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373 (4th Cir. 2005) (debt collection not incidental if central to fiduciary duties)
- Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028 (9th Cir. 2009) (debt collection must be incidental to fiduciary duties to qualify)
- Premier/Georgia Mgmt. Co., Inc. v. Realty Mgmt. Corp., 613 S.E.2d 112 (Ga. Ct. App. 2005) (confirms fiduciary relationship under Georgia law)
- Nilan’s Alley, Inc. v. Ginsburg, 430 S.E.2d 368 (Ga. Ct. App. 1993) (recognizes fiduciary duty arising from agency relationships)
- Sphere Drake Ins. Ltd. v. Am. Gen. Life Ins. Co., 376 F.3d 664 (7th Cir. 2004) (agency fiduciary relationship discussed in appellate context)
- Leblanc v. Unifund CCR Partners, 601 F.3d 1185 (11th Cir. 2010) (FDCPA coverage and least-sophisticated consumer standard)
- Memphis Light, Gas & Water Div. v. Craft, 436 U.S. 1 (U.S. 1978) (utility may terminate service for nonpayment; supports service termination reasonableness)
- Henderson v. Gandy, 608 S.E.2d 248 (Ga. Ct. App. 2004) (GFBPA violations considered as questions of law)