903 F. Supp. 2d 1037
D. Haw.2012Background
- Plaintiffs Turner and the estate of Guevara purchased a condominium in 2006 and joined the Association of Apartment Owners of Ewa Colony Estates.
- Hawaii First, Inc. acted as the Association's managing agent and collected both delinquent and nondelinquent assessments.
- In early 2010, Plaintiffs sought a TRO in state court regarding alleged attacks by the Association president and family members, and repudiated their obligation to pay attorney’s fees related to the dispute.
- The Association billed and paid for legal work in March–May 2010, and Defendant acquired the related debt from the Association on May 25, 2010.
- Defendant sent a bill to Plaintiffs on May 25, 2010 for $258.64 (the Debt) tied to the March 2010 legal work.
- Plaintiffs asserted fourteen FDCPA claims and three Hawaii state-law claims; Defendant moved to dismiss and, in the alternative, for summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Defendant is a debt collector under the FDCPA | Defendant is a debt collector; thus FDCPA applies. | Defendant is exempt as fiduciary-collection or as debt not in default when acquired. | Not resolved at issue; court analyzes exemptions and ultimately dismisses federal claims. |
| Whether collection is incidental to a bona fide fiduciary obligation | Collection was incidental to the fiduciary relationship with the Association. | Collection was central to fiduciary duties; not incidental. | Factual dispute precludes summary judgment on incidental-vs-central question. |
| Whether the Debt was in default when Defendant acquired it | Debt was in default at acquisition due to Plaintiffs’ repudiation. | Default status cannot be inferred; no default before the debt existed. | No genuine dispute that the Debt was not in default when acquired; Defendant entitled to summary judgment on this point. |
| Whether Defendant falls within the FDCPA as a debt collector under §1692a(6)(F) | Debt collection by Defendant falls within FDCPA coverage. | Exemption applies because collection is incidental to fiduciary obligation and/or debt not in default at acquisition. | Defendant may be exempt if facts show incidental collection and/or not in default; factual disputes preclude dismissal at Rule 12(b)(6) and summary judgment on exemptions. |
| Whether supplemental jurisdiction should extend to state-law claims after dismissal of federal claims | State-law claims should remain under pendent jurisdiction. | With federal claims dismissed, decline supplemental jurisdiction. | Court declines supplemental jurisdiction over state-law claims after dismissing federal claims. |
Key Cases Cited
- Arbaugh v. Y & H Corp., 546 U.S. 500 (U.S. 2006) (nonjurisdictional status of certain statutory limitations)
- Rowe v. Educational Credit Management Corp., 559 F.3d 1028 (9th Cir. 2009) (FDCPA 'debt collector' definition not jurisdictional; two-prong test for fiduciary exemption)
- De Dios v. Int’l Realty & Invs., 641 F.3d 1071 (9th Cir. 2011) (default definition under FDCPA depends on contract and state law)
- Franceschi v. Mautner-Glick Corp., 22 F.Supp.2d 250 (S.D.N.Y. 1998) (fiduciary-exemption analysis for debt collection by property manager)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden and evidence standard)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (material factual disputes preclude summary judgment only if reasonable minds could differ)
- Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)