Bridge v. Ocwen Federal Bank, FSB
2012 U.S. App. LEXIS 8671
| 6th Cir. | 2012Background
- Bridges alleged FDCPA violations by Ocwen and Deutsche Bank related to mortgage debt collection and misapplication of payments.
- Firstar dishonored Bridges' April 2002 mortgage payment; double payments occurred and were later reconciled, creating confusion about default.
- Ocwen began dunning for May despite proof of double April payment and claimed assignment of mortgage; continued collection calls and threats of foreclosure.
- A law firm contracted by Ocwen allegedly sent a collection letter threatening foreclosure; Bridges alleged multiple FDCPA violations (c, d, e).
- District court dismissed the complaint under Rule 12(b)(6); Bridges appealed alleging FDCPA coverage and sufficiency of pleadings.
- The Sixth Circuit reversed, holding Bridges stated a plausible FDCPA claim because debt-collector coverage can attach to non-originating holders/servicers when in default or treated as such.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Defendants debt collectors under FDCPA? | Bridges contends they are debt collectors. | Ocwen and Deutsche argue not debt collectors; may be creditors or not covered. | Yes; Defendants can be debt collectors under FDCPA. |
| Did the SAC adequately plead Ocwen LS as a debt collector? | Ocwen LS engaged in default-focused collection activities. | Ocwen LS not clearly a debt collector; status unclear. | Ocwen LS plausibly a debt collector; §1692a(6)F(iii) supports coverage. |
| Did the SAC adequately plead Ocwen FB and Deutsche Bank as debt collectors? | Allegations show they are debt collectors through default actions and conduit for collection. | Deutsche Bank and Ocwen FB lack proof of regular collection activity. | Deutsche Bank and Ocwen FB not adequately pled as debt collectors; Ocwen LS validly pled. |
| Do Bridges’ FDCPA allegations state a plausible claim? | Allegations of third-party communications, cease-and-desist ignored, harassment, and misrepresentations state a claim. | Arguments about status of debt and nature of collection should not create liability. | Yes; allegations state a plausible FDCPA claim against appropriate debt-collection defendants. |
Key Cases Cited
- FTC v. Check Investors, Inc., 502 F.3d 159 (3d Cir.2007) (assignees can be debt collectors if debt in default when acquired)
- Montgomery v. Huntington Bank, 346 F.3d 693 (6th Cir.2003) (creditors are not debt collectors)
- Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997 (8th Cir.2011) (debt collectors must verify disputed debt; protection for mistaken targets)
- Barany-Snyder v. Weiner, 539 F.3d 327 (6th Cir.2008) (FDCPA breadth; least sophisticated consumer)
- Shugart v. Ocwen Loan Servicing, LLC, 747 F. Supp. 2d 938 (S.D. Ohio 2010) (treatment of default and servicer status for FDCPA purposes)
- Kistner v. Law Offices of Michael P. Margelefsky, LLC, 518 F.3d 433 (6th Cir.2008) (FDCPA debt collector definition and scope)