Reese v. Ellis, Painter, Ratterree & Adams, LLP
2012 U.S. App. LEXIS 8839
11th Cir.2012Background
- Izell and Raven Reese defaulted on a mortgage-secured loan for a Georgia property.
- Provident Funding Associates’s law firm Ellis, Painter, Ratterree & Adams LLP sent a dunning letter and three attached documents demanding payment and warning of foreclosure.
- The letter and documents stated the lender was enforcing the Note and Security Deed and that attorney’s fees would be added if unpaid.
- The Reeses filed a putative class action under the FDCPA, alleging the firm’s letters violated §1692e by false, deceptive, or misleading debt-collection communications.
- The district court dismissed the FDCPA claim under Rule 12(b)(6); the Reeses appeal.
- The panel reverses, holding the communications can constitute debt-collection activity and that the firm qualifies as a debt collector under the FDCPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the letter is debt-collection under the FDCPA | Reese argues the letter seeks to collect a debt | Ellis argues it merely enforces a security interest | Yes, it is debt-collection activity under §1692e |
| Whether Ellis is a 'debt collector' under §1692a(6) | Ellis regularly collects debts and thus is a debt collector | Ellis is not primarily in the business of debt collection | Yes, Ellis regularly collects debts and is a debt collector |
| Whether the complaint plausibly states a claim under §1692e | Complaint shows communications related to debt collection | Not all communications related to foreclosure are debt collection | Complaint plausibly states a debt-collection claim, reversal and remand |
Key Cases Cited
- Bourff v. Rubin Lublin, LLC, 674 F.3d 1238 (11th Cir. 2012) (treating a note-securing obligation as debt collection under FDCPA)
- Kojetin v. C U Recovery, Inc., 212 F.3d 1318 (8th Cir. 2000) (debt defined broadly to include notes tied to consumer debts)
- Gburek v. Litton Loan Servicing LP, 614 F.3d 380 (7th Cir. 2010) (foreclosure notice with collection cues can be debt-collection activity)
- Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373 (4th Cir. 2006) (debt remains a debt even as foreclosure proceedings commence)
- Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227 (3d Cir. 2005) (threat to lien collection can be debt-collection activity)
- Romea v. Heiberger & Assocs., 163 F.3d 111 (2d Cir. 1998) (notice in eviction context can be related to debt collection)