In Jenkins v. Midland Credit Management, Inc.,[1] the U.S. Bankruptcy Court for the Northern District of Alabama held that the filing of a proof of claim based on a time-barred debt cannot give rise to a claim for damages under the Fair Debt Collection Practices Act ("FDCPA"), reasoning that any such claim is precluded by the Bankruptcy Code's comprehensive claims-allowance procedure. The court further held that the filing of a proof of claim on a stale debt does not merit sanctions under Bankruptcy Rule 9011 where the proof of claim is filed in compliance with the Code. Accordingly, the ...
On September 8, 2015, United States District Judge Marvin H. Shoob declared Georgia's statutory garnishment process unconstitutional in Strickland v. Alexander, No. 1:12-CV-02735-MHS (N.D. Ga. Sept. 8, 2015) (granting summary judgment for plaintiff). In what is sure to be the first of many county-level responses, Gwinnett County officials announced on September 9, 2015 that they will stop issuing garnishment summonses and disbursements pending further judicial instruction. The opinion will potentially affect the debt collection industry (for an unknown duration ...
The U.S. Court of Appeals for the Sixth Circuit recently addressed both the timing and scope of "prior express consent" under the Telephone Consumer Protection Act ("TCPA"). The plaintiff in Stephen M. Hill v. Homeward Residential, Inc., - F.3d- , No. 14-4168 (6th Cir. Aug. 21, 2015) alleged that his mortgage lender violated the TCPA by calling his cell phone using an autodialer in an attempt to contact him related to a mortgage debt he owed. The plaintiff did not provide his cell phone number when the mortgage was originated, but provided it three years later by contacting the mortgage ...
It would be difficult to identify a federal circuit court of appeals that has released a larger number of influential consumer finance decisions in the last year than the Eleventh Circuit. And last week, the court continued its recent consumer finance trend. Before Friday's landmark FDCPA decision in Davidson v. Capital One (covered in a separate blog post), the court again waded into the turbulent waters of the TCPA. On Thursday, the Eleventh Circuit issued its decision in Murphy v. DCI Biologicals Orlando, LLC, --- F.3d ---, No. 14-10414 (11th Cir. Aug. 20, 2015), in which another ...
In Davidson v. Capital One Bank (USA), N.A., a case closely followed by the financial services industry and handled by Burr & Forman, LLP, the Eleventh Circuit held that an entity collecting a debt that was acquired after default, and which the entity now owns, is not a "debt collector" under the Fair Debt Collection Practices Act ("FDCPA") unless the principal purpose of the entity's business is the collection of debts or the entity regularly collects debts owed to others. In so holding, the Eleventh Circuit broke from the large majority of courts (including the Third, Seventh, and ...
In Cooper v. Fay Servicing, LLC, 2015 WL 4470213 (S.D. Ohio July 17, 2015), the mortgagors sued the servicer of their real estate loan asserting claims for alleged violations of Regulation X relating to the loss mitigation process. Critical to this case was the timing of the loss mitigation process that resulted in the alleged Regulation X violations, the date of the foreclosure filing, and the date of the foreclosure sale. Specifically, the foreclosure proceeding was initiated on January 4, 2014, six days prior to the effective date of the CFPB's new Mortgage Rules, while the alleged ...
Beginning August 31, 2015, the CFPB will begin supervising nonbank auto finance companies pursuant to 12 C.F.R. 1090.108. The Final Rule provides that auto finance companies that qualify as "larger participants of a market for automobile financing" will be subject to the new regulation. The Dodd-Frank Act gave the CFPB supervisory authority over "larger participants" of certain markets for consumer financial products or services, as defined by the CFPB. See 12 U.S.C. 5514(a)(1)(B). In June 2015, the CFPB finalized its larger participant regulation as it relates to the ...
Following the Supreme Court's ruling in Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010), it is clear that the bona fide error defense set forth in section 1692k(c) of the Fair Debt Collection Practices Act, 15 U.S.C. § § 1692 to 1692p (the "FDCPA"), "does not apply to a violation of the FDCPA resulting from a debt collector's incorrect interpretation of the requirements of th[e FDCPA]." Id. at 604-05. But as the district court recently recognized in Gray v. Suttell & Associates et al., a putative FDCPA class action filed in the Eastern District of ...
On July 29, 2015, Florida's Second District Court of Appeal held that substantial compliance, rather than strict compliance, is the legal standard for evaluating a foreclosing plaintiff's compliance with contractual conditions precedent to acceleration of mortgage debt (and in particular, the conditions identified in paragraph 22 of most standard residential first mortgages). Green Tree Servicing, Inc. v. Milam, 2015 WL 4549200, at 4-5, 2015 Fla. App. LEXIS 11324, at 9-11. The Milam decision built upon and clarified prior case law from Florida's Second and Fifth DCAs that ...
In Palm-Aire Vill. Private Homes Townhouse Park Bd., Inc. v. Epstein, No. COSO14-011561 (Fla. Cir. Ct. May 18, 2015), the Court was faced with the issue of whether the Homeowner successfully exercised his right of redemption pursuant to Fla. Stat. § 45.0315 even though a third-party purchaser at a foreclosure auction had tendered funds just before the Defendant did so. In this case, the property was sold at foreclosure auction on March 27, 2015 to a third-party purchaser. Three days later, the third-party purchaser tendered funds to the Clerk of Court at 9:39 a.m., but the Clerk refused ...