Bank of Am., N.A. v. Siefker

• Decision Date: 13 October 2016
• Docket Number: No. 4D14–1923.,4D14–1923.
• Citation: 201 So.3d 811
• Parties: BANK OF AMERICA, N.A., as Successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP, Appellant, v. Barbara C. SIEFKER a/k/a Barbara Siefker; CCM Condominium Association, Inc.; and Mortgage Electronic Registration System, Inc., Appellees.
• Court: Florida District Court of Appeals

201 So.3d 811

BANK OF AMERICA, N.A., as Successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP, Appellant,

v.Barbara C. SIEFKER a/k/a Barbara Siefker; CCM Condominium Association, Inc.; and Mortgage Electronic Registration System, Inc., Appellees.

No. 4D14–1923.

District Court of Appeal of Florida, Fourth District.

Oct. 13, 2016.

Adam M. Topel, J. Randolph Liebler, Tricia J. Duthiers and Kristen A. Tajak of Liebler Gonzalez & Portuondo, Miami, for appellant.

Mark P. Stopa of the Stopa Law Firm, Tampa, for appellee Barbara C. Siefker a/k/a Barbara Siefker.

CIKLIN

, C.J.

The appellant, Bank of America, N.A., as Successor by Merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP (“the bank”), appeals an order vacating a final judgment of foreclosure and dismissing the bank's complaint. We agree with the bank that the trial court erred in interpreting a notice requirement in a Florida debt collection statute as constituting a condition precedent to a mortgage foreclosure. Accordingly, we reverse and remand for the trial court to reinstate the final judgment of foreclosure. All other issues raised by the bank are moot.

The bank brought a mortgage foreclosure suit against the appellee, Barbara C. Siefker (“the borrower”). In her amended answer, the borrower raised the following as an affirmative defense: “Defendant states that Plaintiff failed to comply with F.S. § 559.715

which required Plaintiff to give Defendant written notice of the alleged Assignment.” The borrower was referencing section 559.715, Florida Statutes (2012), which requires a debt creditor's assignee to provide notice of the assignment to the debtor no later than thirty days before “any action to collect the debt.”

This case proceeded to trial and at the close of evidence, the borrower moved for involuntary dismissal, arguing among other things that “[t]here was zero evidence that they complied with [section 559.715

] and that is a condition precedent to bringing this foreclosure action.” The bank responded that the statute does not apply to mortgage foreclosure suits. The trial court agreed and denied the motion.

After the trial court entered a final judgment of foreclosure, the borrower moved for rehearing whereupon the trial court granted the motion with respect to the borrower's argument that the bank had failed to comply with the notice requirement of section 559.715

. The court then vacated the final judgment and dismissed the complaint.

We review the involuntary dismissal de novo. Wells Fargo Bank, N.A. v. Gonzalez, 186 So.3d 1092, 1095 (Fla. 4th DCA 2016)

(citation omitted). Additionally, “where the question involves interpretation of a statute, it is subject to de novo review.” Brown v. City of Vero Beach, 64 So.3d 172, 174 (Fla. 4th DCA 2011) (citation omitted).

A state statute and a federal statute govern consumer collection practices in Florida, to wit: the Florida Consumer Collection Practices Act, §§ 559.55–559.785 (“the FCCPA”), and the Fair Debt Collection Practices Act, 15 U.S.C. § 1692

–1692p (“the FDCPA”). “Both acts generally apply to the same types of conduct, and Florida courts must give ‘great weight’ to federal interpretations of the FDCPA when interpreting and applying the FCCPA.” Read v. MFP, Inc., 85 So.3d 1151, 1153 (Fla. 2d DCA 2012) (quoting § 559.77(5), Fla. Stat.).

Section 559.715

, at issue in this appeal, is contained in the FCCPA, and provides as follows:

This part does not prohibit the assignment, by a creditor, of the right to bill and collect a consumer debt. However, the assignee must give the debtor written notice of such assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt. The assignee is a real party in interest and may bring an action to collect a debt that has been assigned to the assignee and is in default.

§ 559.715, Fla. Stat

. (emphasis added). Section 559.55(1), Florida Statutes (2012), defines “debt” or “consumer debt” as “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.”¹

The first issue we must address is whether section 559.715

applies to mortgage foreclosure suits. In other words, whether a mortgage foreclosure suit is an “action to collect the debt” and as a separate and distinct issue, whether the notice requirement provided for in the statute acts as a condition precedent to bringing suit.

Federal courts have addressed this issue, and their opinions provide guidance. In Glazer v. Chase Home Fin. LLC, 704 F.3d 453 (6th Cir.2013)

, the Sixth Circuit summarized the position of most federal district courts:

While the concept [of debt collection] may seem straightforward enough, confusion has arisen on the question whether mortgage foreclosure is debt collection under the [FDCPA]. We have not addressed the issue.... Other courts have taken varying approaches on the issue.

The view adopted by a majority of district courts ... is that mortgage foreclosure is not debt collection. This view follows from the premise that the enforcement of a security interest, which is precisely what mortgage foreclosure is, is not debt collection. See, e.g., Rosado v. Taylor, 324 F.Supp.2d 917, 924 (N.D.Ind.2004)

(“Security enforcement activities fall outside the scope of the FDCPA because they aren't debt collection practices[,]” and “[n]o different rule applies in cases involving real property [.]”); Hulse v. Ocwen Fed. Bank, 195 F.Supp.2d 1188, 1204 (D.Or.2002). However, if a money judgment is sought against the debtor in connection with the foreclosure, this view maintains, there has been debt collection, because there was an attempt to collect money. See, e.g.,

McDaniel v. South & Assocs., P.C., 325 F.Supp.2d 1210, 1217–18 (D.Kan.2004).

Id. at 460 (alterations in parenthetical in original). However, the Sixth Circuit found this approach unpersuasive, and it looked to the text of the FDCPA for guidance.

[The FDCPA] defines the word “debt,” for instance, which 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 [.]” 15 U.S.C. § 1692a(5)

. The focus on the underlying transaction indicates that whether an obligation is a “debt” depends not on whether the obligation is secured, but rather upon the purpose for which it was incurred. Cf.

Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 698 F.3d 290, 293 (6th Cir.2012). Accordingly, a home loan is a “debt” even if it is secured. See

Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216–17, 1218 (11th Cir.2012) ; Maynard v. Cannon, 401 Fed.Appx. 389, 394 (10th Cir.2010) ; Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373, 376 (4th Cir.2006).

In addition, the [FDCPA's] substantive provisions indicate that debt collection is performed through either “communication,” id. § 1692c, “conduct,” id. § 1692d, or “means,” id. §§ 1692e, 1692f.... Nothing in these provisions cabins their applicability to collection efforts not legal in nature. Cf.

Heintz v. Jenkins, 514 U.S. 291, 292, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995) (holding that “a lawyer who ‘regularly,’ through litigation, tries to collect consumer debts” is a “debt collector” under the [FDCPA] ). Foreclosure's legal nature, therefore, does not prevent it from being debt collection.

Furthermore, in the words of one law dictionary: “To collect a debt or claim is to obtain payment or liquidation of it, either by personal solicitation or legal proceedings.” Black's Law Dictionary 263 (6th ed. 1990).... Thus, if a purpose of an activity taken in relation to a debt is to “obtain payment” of the debt, the activity is properly considered debt collection. Nothing in this approach prevents mortgage foreclosure activity from constituting debt collection under the [FDCPA]. See

Shapiro and Meinhold v. Zartman, 823 P.2d 120, 124 (Colo.1992) (explaining that “foreclosure is a method of collecting a debt by acquiring and selling secured property to satisfy a debt”). In fact, every mortgage foreclosure, judicial or otherwise, is undertaken for the very purpose of obtaining payment on the underlying debt, either by persuasion (i.e., forcing a settlement) or compulsion (i.e., obtaining a judgment of foreclosure, selling the home at auction, and applying the proceeds from the sale to pay down the outstanding debt). As one commentator has observed, the existence of redemption rights and the potential for deficiency judgments demonstrate that the purpose of foreclosure is to obtain payment on the underlying

home loan. Such remedies would not exist if foreclosure were not undertaken for the purpose of obtaining payment. See Eric M. Marshall, Note, The Protective Scope of the Fair Collection Practices Act: Providing Mortgagors the Protection They Deserve From Abusive Foreclosure Practices, 94 Minn. L. Rev. 1269, 1297–98 (2010)

. Accordingly, mortgage foreclosure is debt collection under the FDCPA.

Id. at 460–61 (second alteration in original).

The Third and Fourth Circuits have also issued opinions supporting the proposition that a mortgage foreclosure suit is an attempt to collect a debt. See Kaymark v. Bank of Am., N.A., 783 F.3d 168, 179 (3d Cir.2015)

(finding that “foreclosure meets the broad definition of ‘debt collection’ under the FDCPA”); Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373, 376–77 (4th Cir.2006) (rejecting argument that once foreclosure proceedings began, the pre-suit and post-suit letters demanding payment could not be viewed as attempts to collect a debt).

While the Eleventh Circuit initially held that “foreclosing on a security...