Jorge A. AGRELO, Olga M. Fernandez, individuals, Plaintiffs-Appellants, v. AFFINITY MANAGEMENT SERVICES, LLC, a limited liability corporation, Marbella Park Homeowners’ Association, Inc., a Non-Profit corporation, Defendants-Appellees. The Meloni Law Firm, a.k.a. Edoardo Meloni, P.A, Edoardo Meloni, an individual, Defendants.
No. 15-14136
United States Court of Appeals, Eleventh Circuit.
Date Filed: 11/09/2016
VI. CONCLUSION
For all of these reasons, we must affirm Fritts‘s total 180-month sentence.
AFFIRMED.
Shane Haselbarth, Marshall Dennehey Warner et al Law Office, Philadelphia, PA, Jean Anne Hanrahan, Craig S. Hudson, Marshall Dennehey Warner Coleman & Goggin, PC, Fort Lauderdale, FL, for Affinity Management Services, LLC.
Dale Thomas Golden, Golden Scaz Gagain, PLLC, Tampa, FL, Benjamin W. Raslavich, Raslavich Law, P.A., Tampa, FL, for The Meloni Law Firm and Edoardo Meloni.
Scott Allan Cole, Melinda S. Thornton, Cole Scott & Kissane, PA, Miami, FL, Rachel Beige, Ryan Andrew Fogg, Cole Scott & Kissane, PA, West Palm Beach, FL, for Marbella Park Homeowners’ Association, Inc., a Non-Profit corporation.
Before ROSENBAUM and JILL PRYOR, Circuit Judges, and SCHLESINGER,* District Judge.
JILL PRYOR, Circuit Judge:
The main issue presented in this appeal is whether a fine imposed by a homeowners’ association (“HOA“) for violating the HOA‘s governing documents is a debt for purposes of the Florida Consumer Collection Practices Act (“FCCPA“),
After careful consideration and with the benefit of oral argument, we reverse the district court‘s grant of summary judgment to Affinity, vacate the grant of summary judgment to Marbella, and remand to the district court for further proceedings. The district court erred in concluding that the HOA fine at issue is not a debt for
I. BACKGROUND2
A. Factual Background
Agrelo and Fernandez, a married couple, owned a home together in Miami, Florida. During the relevant time, they were members of Marbella, an HOA. Affinity was Marbella‘s property manager. As members of Marbella, the homeowners were bound by Marbella‘s governing documents, which included the HOA‘s Bylaws, Articles of Incorporation (including amendments thereto) and a Declaration of Covenants and Restrictions for Marbella Park (and additions thereto), among other documents (collectively, the “governing documents“). The governing documents required HOA members to pay an annual assessment, due in monthly installments. These assessments were secured by a continuing lien held by the HOA on each property.
The governing documents also empowered Marbella to fine members for violating its Declaration of Covenants and Restrictions (a part of the governing documents). The maximum amount of a fine depended on the number of times the member previously had committed a similar offense, limiting the first fine to a payment equivalent to one month of the annual assessment (in this case, $115). Under the Declaration of Covenants and Restrictions, once a fine was imposed, it was “deemed an individual assessment, and if not paid when due[,] all of the provisions... relating to the late payment of assessments” applied. Declaration of Covenants and Restrictions for Marbella Park at Art. VI, § 9 (Doc. 30-6).3 To enforce such obligations, Marbella could sue the member or foreclose upon Marbella‘s continuing lien on the property.
Marbella notified the homeowners that they had violated the governing documents. Although Marbella identified no specific provision of the governing documents that the homeowners had violated, Marbella contended that they improperly performed unapproved construction, relocated a fence, and removed plants. Marbella gave the homeowners three weeks to correct the purported violation, but they took no action. After a hearing on the violation before Marbella‘s Grievance Committee, which the homeowners attended, the Committee recommended that Marbella‘s Board of Directors fine the homeowners $100 for each day the violation went uncorrected. Marbella set the total fine at $1,000, the maximum Florida law allows for a single, continuing violation. See
Over the next several months, Affinity and attorneys for Marbella—the Meloni Law Firm a/k/a Edoardo Meloni, P.A. and Edoardo Meloni, Esq. (together, “Meloni“)—sent the homeowners at least five
After Marbella received no payment, it had Meloni send another payment demand letter to the homeowners on August 9, 2013. Meloni notified the homeowners that they owed Marbella a total of $1,115 for “past due maintenance assessments.” August 9, 2013 Letter at 1 (Doc. 30-13). The amount was comprised of $1,000 for the fine imposed by the Marbella Board and an additional $115 for the monthly fee for August. Meloni also demanded $262.50 for legal services in connection with the collection effort. Meloni warned the homeowners that if they failed to pay, Marbella could foreclose on its continuing lien or sue them personally.
The homeowners responded to Meloni, disputing the “debt.” They stated that they were unaware of “any outstanding administration fees or any past due maintenance assessment owed” in the amount of $1,000. August 30, 2013 Letter at 1 (Doc. 30-15). They also contended that they paid the August assessment on time, attaching evidence reflecting the payment. The homeowners further made several requests under the Fair Debt Collection Practices Act (“FDCPA“),
In response, Meloni sent the homeowners another letter on Marbella‘s behalf, demanding they pay $1,000 for the fine that was assessed to their account. Meloni also attached an account statement reflecting a $262.50 attorney‘s fee and an unpaid September—but not August—assessment.
The homeowners again disputed the charges. Concerning the $1,000 charge, they acknowledged that the HOA had fined them for allegedly violating the governing documents, but they challenged the validity of the fine. Regarding the September monthly maintenance fee, the homeowners maintained that they had timely paid this fee and submitted evidence of their timely payment. The homeowners again lodged several FDCPA requests, once more demanding evidence that Meloni was licensed to collect debts in Florida.
Meloni responded on December 13 with a final letter to the homeowners demanding payment. Meloni maintained that the $1,000 demand reflected a delinquent fine, not a debt under the FCCPA and also asserted that the Florida statutes governing HOAs superseded any contrary provision in the governing documents. Meloni demanded $1,312.50, representing the $1,000 fine, two $25 late fees assessed on September 11 and November 11, and $262.50 for attorney‘s fees. The homeowners again responded, disputing the validity of the $1,000 fine and $25 late fees. They also challenged the amount of both the fine and the late fees, explaining that the governing documents capped the fine at $115 and the fees at $11.50. And for the
B. Proceedings Below
The homeowners filed this lawsuit against Marbella, Affinity, and Meloni,5 alleging that the five letters sent between May 16 and December 13, 2013 violated the FDCPA, the FCCPA, or both. The homeowners alleged that Affinity violated two FCCPA provisions when it sent the first two letters demanding $1,000. They alleged that Affinity violated
The homeowners also brought several counts against Meloni, six of which also named Marbella and are relevant to this appeal.8 The homeowners alleged that Meloni violated
Affinity and Marbella moved for summary judgment on all claims against them, arguing that they were not debt collectors and that the $1,000 fine was not a debt subject to the FCCPA. Meloni filed a motion for partial summary judgment and a motion for judgment on the pleadings, urging the court to dismiss some of the claims against it, including all of the FCCPA claims that also named Marbella as a defendant.
The district court granted Affinity‘s and Marbella‘s motions, holding that the HOA fine was not a debt and, in any event, Marbella could not be vicariously liable for its agents’ FCCPA violations. The court entered judgment in their favor and then certified the judgment as final for purposes of Rule 54(b) of the Federal Rules of Civil Procedure. Meloni‘s dispositive motions remained pending. This appeal followed.
II. LEGAL STANDARD
We review a district court‘s grant of summary judgment de novo, view
III. DISCUSSION
A. Whether the HOA Fine Is a “Debt” Under the FCCPA
Affinity and Marbella argue, and the district court held, that the letters demanding the payment of a fine do not fall within the FCCPA‘s scope because the fine, imposed pursuant to Marbella‘s governing documents, is not a debt under the FCCPA. We disagree.
“To recover under both the FDCPA and the FCCPA (a Florida state analogue to the federal FDCPA), a plaintiff must make a threshold showing that the money being collected qualifies as a ‘debt.‘” Oppenheim v. I.C. Sys., Inc., 627 F.3d 833, 836-37 (11th Cir. 2010).10 “[T]he mere obligation to pay does not constitute a ‘debt’ under the FDCPA” and FCCPA. Id. at 837. Instead, under both statutes, a debt is “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.”
Consistent with our obligation to construe consumer protection statutes broadly in favor of consumers,11 we have held that “[a]s long as the transaction creates an obligation to pay, a debt is created.” Brown v. Budget Rent-A-Car Sys., Inc., 119 F.3d 922, 924 (11th Cir. 1997) (alteration in original) (internal quotation marks omitted). Consequently, even if tort-like conduct triggered an obligation to pay, we have held where the obligation arose from a consumer contract—rather than solely by operation of law—the obligation is a debt under the FDCPA. For example, in Brown, a driver crashed and damaged a
By contrast, we have held that where the obligation to pay arises solely by operation of law, the obligation is not a debt under the FDCPA. In Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367, 1371 (11th Cir. 1998), we held that the obligation to pay money is not a debt if it did not “arise out of any consensual or business dealing.” Id. There, a tortfeasor brought an FDCPA action against a company attempting to collect damages resulting from the tortfeasor‘s negligence. Id. Because “no contract, business, or consensual arrangement” existed between the tortfeasor and the injured party, we held that the obligation to pay for damages arising out of the accident did not constitute a debt under the FDCPA. Id. In essence, our jurisprudence in this area of law can be distilled into the principle that FDCPA and FCCPA “debts” arise from actual—as opposed to social—contracts.
Affinity and Marbella argue that the $1,000 fine is akin to the negligence damages in Hawthorne. They also rely on cases holding that a government-imposed fine, which does not “stem from a consensual transaction,” is not a debt under the FDCPA. See, e.g., Gulley v. Markoff & Krasny, 664 F.3d 1073, 1074-75 (7th Cir. 2011) (collecting district court cases and holding that an unpaid municipal fine is not a debt).
We find these analogies unpersuasive. Affinity and Marbella‘s reasoning is contrary to our precedent and inconsistent with the remedial purpose of the FDCPA and FCCPA. Hawthorne and the municipal fine cases cited by Affinity and Marbella each concern payment obligations that only arose by operation of law. See, e.g., Hawthorne, 140 F.3d at 1371; Gulley, 664 F.3d at 1074-75. But here, unlike in Hawthorne and Gulley, the homeowners’ obligation arises from a contract—the governing documents—that explicitly treats HOA fines as assessments. According to the governing documents, “[a]ny fine levied against an Owner shall be deemed an individual assessment, and if not paid when due all of the provisions of [the governing documents] relating to the late payment of assessments shall be applicable.” Consequently, the central question is whether a contractual obligation to pay HOA assessments creates a “debt” under the FCCPA.
We hold that it does. HOA assessments stem directly from the consensual home-purchase transaction. When a home buyer must contractually agree to pay homeowners’ assessments in order to purchase a home, that home buyer takes on “debts” for those assessments under the FCCPA. See Brown, 119 F.3d at 925 (holding that, under the FDCPA, where “the transaction creates an obligation to pay, a debt is created“); see also Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 698 F.3d 290, 294 (6th Cir. 2012) (holding that because a homeowner‘s obligation to pay assessments derives from the original home-purchase transaction, the obligation constitutes a “debt” under the FDCPA); Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477, 481 (7th Cir. 1997) (holding that past-due homeowners’ assessments qualify as “debts” under the FDCPA). Because the governing documents contain a provision calling for the fine levied against the homeowners to be “deemed an individual assessment,” the contractual language renders the fine in this case a “debt” subject to the FCCPA.
The fact that the obligation may have been triggered by tort-like behavior does not take it out of the realm of FCCPA debts. Brown, in particular, is instructive. Brown concerned a car accident, a fact pattern typically associated with common law negligence claims. But the $825 the driver was obligated to pay did not constitute negligence damages arising out of tort law; it was comprised of specific fees and damages provided for in the underlying rental contract. By comparison, here, the HOA or the homeowners’ neighbors may have had common law nuisance or other non-contractual claims against the homeowners. But the actual obligations pursued by the HOA in this case were contractually treated as assessments. As a result, the homeowners’ obligation to pay a fine is a debt because the HOA assessments at issue—like the fees at issue in Brown—arose directly from a consumer contract. See Brown, 119 F.3d at 923-24; see also Franklin v. Parking Revenue Recovery Servs., Inc., 832 F.3d 741, 744-45 (7th Cir. 2016) (holding that a contractual penalty for failure to pay for parking in a private lot constituted a debt under the FDCPA).
By agreeing to the terms of the governing documents, the homeowners acknowledged that a failure to comply with HOA requirements could result in a fine that would be deemed and treated as an individual assessment. Thus, their obligation to pay an assessment for a claimed breach of the governing documents arose out of an underlying consumer transaction. See Brown, 119 F.3d at 923-24. Affinity and Marbella‘s disregard for the broader, contractual context of the homeowners’ payment obligation—which explicitly deems HOA fines to be assessments—conflicts with our holdings in Brown and Oppenheim. For these reasons, we conclude that the term “debt” encompasses the homeowners’ obligation to pay a fine pursuant to the governing documents.12 Accordingly, the district court erred in dismissing the claims against Affinity and Marbella on the ground that the collection letters were not governed by the FCCPA.
B. Issues Specific to Marbella
The homeowners’ claims against Marbella arise out of Affinity‘s two letters demanding payment of the fine and Meloni‘s three letters demanding payment of the fine and other fees. The district court dismissed these claims for two additional reasons, both of which we reject.
First, the district court erroneously held that because Marbella was not a “debt collector” under the FCCPA, it could not be liable for violating the statute. Al
Second, and relatedly, the district court held that Marbella could not be vicariously liable for the FCCPA violations of Affinity or Meloni because such vicarious liability only extends to principals who are themselves debt collectors. We acknowledge that some courts have reached this conclusion in the context of the FDCPA. See, e.g., Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 108 (6th Cir. 1996) (“We do not think it would accord with the intent of Congress, as manifested in the terms of the Act, for a company that is not a debt collector to be held vicariously liable for a collection suit filing that violates the Act only because the filing attorney is a ‘debt collector.’ “); Bent v. Smith, Dean & Assocs., Inc., No. 3:11-cv-66-J-TEM, 2011 WL 2746847, at *3 (M.D. Fla. July 14, 2011) (holding under the FDCPA that only a debt collector can be vicariously liable for the collection practices of its debt collecting agents). But these cases rest on the observation that FDCPA liability is expressly limited to “debt collectors.” As we explained above, however, the FCCPA has no such express limitation. Thus, cases considering vicarious liability under the FDCPA are inapposite.
In any event, the question of whether Marbella can be vicariously liable for FCCPA violations of its agents, Affinity and Meloni, is one of Florida law. The district court failed to apply Florida agency law to decide this issue on summary judgment, and on appeal Marbella cites no Florida authority supporting its position. We therefore decline to decide this issue and remand for the district court to do so under Florida law in the first instance. See Original Appalachian Artworks, Inc. v. S. Diamond Assocs., Inc., 911 F.2d 1548, 1550 n.3 (11th Cir. 1990) (declining to consider a claim not first decided by the district court).13 Because we reverse the entry of summary judgment on substantive grounds, we do not consider the plaintiffs’ procedural arguments in support of reversal.14
IV. CONCLUSION
For the foregoing reasons, the district court‘s grant of summary judgment in favor of Affinity is reversed, and the district court‘s grant of summary judgment in favor of Marbella is vacated. This action is
REVERSED IN PART, VACATED IN PART, AND REMANDED.