Obduskey v. Wells Fargo
879 F.3d 1216
| 10th Cir. | 2018Background
- In 2007 Obduskey took a mortgage loan later serviced by Wells Fargo; he defaulted in 2009 and the loan remains in default.
- Wells Fargo hired law firm McCarthy & Holthus in 2014 to pursue a non-judicial foreclosure in Colorado; McCarthy sent an undated notice stating it may be considered a debt collector and that foreclosure would commence.
- Obduskey disputed the debt in writing; McCarthy did not substantively respond and initiated non-judicial foreclosure in May 2015.
- Obduskey sued asserting FDCPA violations, Colorado consumer-protection claims, defamation, intentional infliction of emotional distress, and unlawful collections; defendants moved to dismiss.
- The district court dismissed all claims; on appeal the Tenth Circuit affirmed, addressing whether the FDCPA covers Colorado non-judicial foreclosures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wells Fargo is a "debt collector" under the FDCPA | Obduskey alleged Wells Fargo gave confusing servicing/ownership information and acted as a collector | Wells Fargo began servicing the loan before default, so it is excluded from FDCPA definition | Held: Wells Fargo is not a debt collector (excluded because it obtained the loan for servicing prior to default) |
| Whether McCarthy is a "debt collector" under the FDCPA for pursuing non-judicial foreclosure | Obduskey alleged McCarthy failed to validate a disputed debt and thus acted as a collector | McCarthy argued dismissal; also that foreclosure enforcement is not debt collection and would conflict with Colorado law | Held: McCarthy is not a debt collector; non-judicial foreclosure enforcement in Colorado is not covered by the FDCPA |
| Whether the FDCPA applies to non-judicial foreclosure proceedings in Colorado | Obduskey relied on decisions holding foreclosures can be debt collection (e.g., Glazer) | Defendants invoked plain text, difference between judicial and non-judicial foreclosure, and state foreclosure scheme conflicts with FDCPA | Held: FDCPA does not apply to Colorado non-judicial foreclosures absent other collection-oriented conduct |
| Remaining state-law and other claims (defamation, IIED, limitations, Rule 120 constitutional challenge) | Obduskey asserted damages from defamation, extreme conduct, statute-barred foreclosure, and Rule 120 unfairness | Defendants argued failure to plead required elements or specific damages and incorrect limitations period | Held: Court affirmed dismissal—no specific monetary loss alleged for defamation; IIED not pled; Colorado 15-year limitations applies; constitutional Rule 120 claim not adequately pled |
Key Cases Cited
- Khalik v. United Air Lines, 671 F.3d 1188 (10th Cir. 2012) (standard of review for motions to dismiss)
- Burnett v. Mortgage Elec. Registration Sys., Inc., 706 F.3d 1231 (10th Cir. 2013) (distinguishing non-judicial foreclosure from FDCPA coverage)
- Vien-Phuong Thi Ho v. ReconTrust Co., 858 F.3d 568 (9th Cir. 2016) (holding non-judicial foreclosure not covered by FDCPA)
- Glazer v. Chase Home Fin. LLC, 704 F.3d 453 (6th Cir. 2013) (holding non-judicial foreclosure may be debt collection)
- Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373 (4th Cir. 2006) (treating foreclosure activity as FDCPA-covered)
- Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006) (same)
- Perry v. Stewart Title Co., 756 F.2d 1197 (5th Cir. 1985) (servicer-not-collector principle)
- Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005) (federal statutes do not displace state regulation absent clear intent)
- BFP v. Resolution Trust Corp., 511 U.S. 531 (1994) (foreclosure as an area of state interest)