Aubrey v. Mccabe Trotter & Beverly, P.C., Civil Action No. 2:17-cv-656-RMG

Decision Date14 August 2018
Docket NumberCivil Action No. 2:17-cv-656-RMG
PartiesCandis Leann Aubrey, Plaintiff, v. McCabe Trotter & Beverly, P.C., Defendant.
CourtUnited States District Courts. 4th Circuit. United States District Court of South Carolina

This matter is before the Court on Defendant McCabe, Trotter & Beverly, P.C.'s motion for summary judgment (Dkt. No. 25) and Plaintiff Candis Leann Aubrey's motion for partial summary judgment (Dkt. No. 28). For the reasons set forth below, the Court denies Defendant's the motion for summary judgment and grants Plaintiff's motion for summary judgment as to liability.

I. Background

Plaintiff Candis Leann Aubrey ("Aubrey") owns a home in the Hunter's Wood subdivision of Crowfield Plantation, a housing development. (Dkt. No. 25 at 5.) The development is subject to the Crowfield Plantation Community Services Association, a homeowners' association ("HOA") that charges annual assessments pursuant to the HOA's covenants and restrictions ("CRs"). (Dkt. No. 25 at 1.) The HOA employs Defendant McCabe, Trotter & Beverly, P.C. ("MTB") to represent it in the collection of assessments. (Dkt. No. 25-1.)

Under the CRs, as owners in Crowfield, Plaintiffs are members of the HOA and are responsible for paying assessments. (Dkt. No. 25 at 6.) The fifth paragraph of Article IX, Section 1, of the CRs, titled "Creation of General and Parcel Assessments," discusses what owners are responsible for paying:

Assessments, together with Delinquent Payment Fees thereon and costs of collection thereof including reasonable attorney's fees as hereinafter provided, shall be a charge on the land and shall be a continuing lien upon the Residential or Commercial Unit or platted lots owned by the Declarant, or other property against which each assessment is made. Each such assessment, together with Delinquent Payment Fees, costs, and reasonable attorney's fees, shall also be the personal obligation of the person who was the Owner of such Unit at the time the assessment fell due.

(Dkt. No. 33-1 at 24) (emphasis added).1 Article IX, Section 6, specifies what occurs if an owner fails to pay an assessment:

Section 6. Effect on Non-Payment of Assessment; The Lien; Remedies of Association. If the assessments are not paid on the date when due then such assessment shall become delinquent and shall (together with a Delinquent Payment Fee as shall be provided in the By-Laws but not to exceed five (5%) percent of the unpaid balance per month from the due date and each month thereafter and so long as the assessment or any part thereof remains delinquent, and cost of collection thereof as herein provided) become a charge and continuing lien on the land and all improvements thereon...
If the assessment is not paid within sixty (60) days after the due date, the Association may bring an action at law against the property Owner personally obligated to pay the same or to foreclose the lien against the property, and there shall be added to the amount of such assessment the costs of preparing and filing the complaint in such action, and in the event a judgment is obtained, such judgment shall include Delinquent Payment Fees on the assessment as above provided and a reasonable attorney's fee together with the costs of the action.

(Dkt. No. 33-1 at 27 - 28) (emphasis added).2 The covenants for the Hunters Woods subdivision provides that a party "enforcing the Covenants" can recover "attorney's fees and expenses if he prevails." (Ex. 28-11 at 10.)

The CRs also state that the Board of Directors of the HOA can impose fines for violations of the CRs. The most recent amendment to the CRs explains that, "Notwithstanding the foregoing,the Board of Directors shall have the power to impose a reasonable fine for violations...." (Dkt. No. 33-1 at 37.) The amended CRs further provide that such fines shall become a continuing lien on the land. (Id.) A non-amended portion of the By-laws further discusses the levying of fines, stating in Article II, Section 21 that "[t]he Board shall not impose a fine...for violations of rules unless and until the following procedure is followed," and proceeds to require the Board to send a demand, send a notice, hold a hearing, and provide an avenue for appeal. (Dkt. No. 32-3 at 10 - 11.)

On August 24, 2015, the HOA entered into an Attorney Employment Agreement ("fee agreement") with Defendant. (Dkt. No. 25-1 at 7.) The fee agreement makes clear that it is Defendant's job to pursue the "collection and foreclosure of liens and assessments." (Dkt. No. 25-1 at 1.) The fee agreement provides that actions to pursue unpaid assessments are handled "on a flat fee basis." (Id.) Upon instituting an action to recover unpaid assessments, including sending a letter to the owner and eventually filing a notice of lien, the fee agreement identifies two sets of fees. (Id. at 8.) First, Defendant charges the HOA a flat fee of $65. (Id. at 8.) Second, the fee agreement identifies "fees to Homeowner," which includes the $65 already paid by the HOA and additional amounts depending on the amount of work performed. (Id.) The fees range from $425 for sending a letter and filing a notice of lien up to costs of $2,425 if the collection action continues through a post-hearing sale. (Id.) Defendant never generates an invoice for the remaining attorneys' fees until it is collected from the homeowner. (Id. at 1.)

Starting in April 2013, the HOA began to contact Plaintiff regarding a shed on her property that allegedly was built without approval. (Dkt. No. 25-8.) Plaintiff did not remove the shed, and the HOA imposed a $100 fine, plus a continuing fine of $25 per day as long as the shed remained.(Id.)3 In addition to not paying the fines, Plaintiff additionally ceased paying the annual assessments beginning on January 1, 2014. (Dkt. No. 25-11 at 2; Dkt. No. 28-9 at 3.) As of October 15, 2015, Plaintiff had incurred $13,625.83 in fines, assessments and interest. (Dkt. No. 25-11 at 3; Dkt. No. 28-9 at 5.)

The matter was referred by Crowfield to Defendant in October 2015. (Dkt. No. 25 at 13.) It is undisputed that Defendant then took the following actions:

• On October 26, 2015, Defendant filed a Notice of Lien for $14,005.21 for the unpaid assessments, fines, interest, and "attorney's fees." (Dkt. No. 28-7 at 2, 7; Dkt. No. 25-9.) The notice of lien was mailed to Plaintiff on the same day. (Dkt. No. 28-7.)
• On January 25, 2016, Defendant filed a complaint seeking to foreclose the Notice of Lien. (Dkt. No. 25-13.) In a letter dated January 22, 2016, (though seemingly sent later), Defendant served Plaintiff with the Complaint and stated that Plaintiff's "balance including attorney's fees is $16,251.83." (Dkt. No. 25-10 at 1) (emphasis added). The Complaint itself only sought $14,081.83 in principal, late fees, and interest, but stated that Crowfield was entitled to "reasonable attorneys' fees and costs." (Id.)
• On February 23, 2016, responding to a request from Plaintiff, Defendant mailed a letter with the subject line "Verification of Debt" that stated it was "For the Purpose of Collecting a Debt." The letter listed $16,366.65 as Plaintiff's "Total Amount Due," which included $1,925 in "Attorney's Fees." (Dkt. No. 25 at 14; Dkt. No. 28-12.)
• On March 4, 2016, Defendant mailed a letter with an attached itemized list of Plaintiff's allegedly outstanding debt. The letter stated it was "For the Purpose of Collecting a Debt." The itemized list identified $16,366.65 as the total amount due, and included $1,925 in "Attorney's Fees.' (Dkt. No. 25-11 at 3.)

While Plaintiff only brings one cause of action under the FDCPA, she alleges multiple violations of the Act. First, Plaintiff alleges that Defendant violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692, by attempting to collect attorneys' fees, since the fees were not authorized under the CRs. Second, Plaintiff additionally alleges that it was aviolation of the FDCPA for Defendant to file any Complaint against Plaintiff, since the statute of limitations on Plaintiff's owed fines expired after three years. Third, Plaintiff alleges that it was a violation of the FDCPA for the Defendant to seek to recover any fines against Plaintiff since the fines were not imposed according to the procedures detailed in the by-laws. Finally, Plaintiff alleges that all communications purporting to be from MTB violated the FDCPA since they were not meaningfully reviewed by an attorney.

II. Legal Standard

To prevail on a motion for summary judgment, the movant must demonstrate that there is no genuine issue of any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The party seeking summary judgment has the burden of identifying the portions of the "pleadings, depositions, answers to interrogatories, any admissions on file, together with the affidavits, if any, which show there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The Court will construe all inferences and ambiguities against the movant and in favor of the non-moving party. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). The existence of a mere scintilla of evidence in support of the non-moving party's position is insufficient to withstand a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). However, an issue of material fact is genuine if the evidence is such that a reasonable jury could return a verdict in favor of the non-movant. Id. at 257.

"When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "In the language of the Rule, the nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.'" Id. at 587. "Where the record taken...

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