Echevarria, McCalla, Raymer v. Cole

• Decision Date: 01 February 2007
• Docket Number: No. SC05-564.,SC05-564.
• Citation: 950 So.2d 380
• Parties: ECHEVARRIA, McCALLA, RAYMER, BARRETT & FRAPPIER, etc., et al., Petitioners, v. Bradley COLE, etc., Respondent.
• Court: Florida Supreme Court

950 So.2d 380

ECHEVARRIA, McCALLA, RAYMER, BARRETT & FRAPPIER, etc., et al., Petitioners, v. Bradley COLE, etc., Respondent.

No. SC05-564.

Supreme Court of Florida.

February 1, 2007.

John Beranek of Ausley and McMullen, Tallahassee, FL, Michael J. McGirney and Dale T. Golden of Marshall, Dennehey, Warner, Coleman and Goggin, Tampa, FL, for Petitioners.

M. Stephen Turner, Kelly Overstreet Johnson, David K. Miller and Jennifer Winegardner of Broad and Cassel, Tallahassee, FL, Thomas J. Guilday, Claude W. Walker and Shawn M. Heath of Huey, Guilday, Tucker, Schwartz and Williams, Tallahassee, FL, for Respondent.

ANSTEAD, J.

Echevarria, McCalla, Raymer, Barrett & Frappier, et al., seek review of the decision of the First District Court of Appeal in Echevarria, McCalla, Raymer, Barrett & Frappier v. Cole, 896 So.2d 773 (Fla. 1st DCA 2004), on the ground that it expressly and directly conflicts with a decision of the Third District Court of Appeal, Boca Investors Group, Inc. v. Potash, 835 So.2d 273 (Fla. 3d DCA 2002), on a question of law. We have jurisdiction. See art. V, § 3(b)(3), Fla. Const. We limit our review to the question of law upon which jurisdiction was granted, and hold that the litigation privilege applies in all causes of action, statutory as well as common law. Accordingly, we quash the contrary decision of the First District and remand for further proceedings consistent with our holding.

Facts and Procedural History

This case was presented to the district court under the limited circumstances of an interlocutory review of a trial court's order certifying the case for class action status. The First District explained the underlying facts giving rise to this action in its decision below:

The plaintiffs are property owners who defaulted on their mortgages with their respective lenders. The Echevarria firm, one of the defendants below, was the primary firm retained by the lenders to handle the foreclosure proceedings against the plaintiffs. Echevarria sent reinstatement letters to the plaintiffs at the outset of the foreclosure proceedings, stating that the plaintiffs were in default on their respective mortgages and faced foreclosure unless they reinstated the mortgages by bringing their payments up to date. The letters further claimed that the plaintiffs owed certain costs incurred by the lenders in the course of the proceedings. Kim Nabors and Otis Pye, the original plaintiffs in this action, both had defaulted on their respective mortgages and received reinstatement letters from Echevarria. Neither reinstated their mortgage, and their properties were ultimately foreclosed.

Nabors and Pye filed suit against Echevarria and the other named defendants, alleging that the firm had violated the Florida Consumer Collection Practices Act and the Florida Unfair and Deceptive Trade Practices Act. The essence of the complaint was that the defendants acted unlawfully by asserting a claim for a debt that was in excess of the actual costs their clients incurred during the foreclosure proceedings. Specifically, the plaintiffs argued that the reinstatement letter claimed costs of $325 for title search and examination and various other charges for service of process, when the only cost incurred by the firm was $55 for the title search.

In response, the defendants asserted that the $325 charge was legitimate, as it included $150 for a title search and $175 for a title examination performed by their in-house staff. They further argued that they had not violated either of the statutes referred to in the complaint because their contracts with their lender clients authorized them to charge these amounts.

. . . .

Cole had previously received a reinstatement letter from Echevarria regarding the potential foreclosure of his mortgage, and as a result, paid the disputed amounts to reinstate his mortgage. On November 13, 2000, Cole, Nabors and Pye moved for leave to file a third amended complaint to assert Cole's statutory claims.

. . . .

Later, Cole, as the putative class representative, filed a motion to certify a class that consisted of "all persons from whom the defendants have filed foreclosure actions and claimed, attempted or threatened to collect costs in the collection of a `consumer debt,' as that term is defined in 559.55(1), Florida Statutes, which were in excess of the amount allowed or authorized by law" for the four years prior to the filing of the initial complaint through the present. He subsequently filed an amended motion for class certification seeking to define the class as all persons in Florida to whom the defendants sent reinstatement letters or against whom they had filed a foreclosure action as counsel for a lender or mortgagee for the period of July 6, 1994, through June 30, 2001.

The trial court granted the plaintiff's amended motion to certify the class action, and concluded that Cole was an appropriate class representative under rule 1.220, Florida Rules of Civil Procedure. In the certification order, the trial court defined the class as all persons in Florida to whom the Echevarria firms sent reinstatement letters between July 6, 1994, and June 30, 2001, seeking to collect amounts for (1) a title search or examination exceeding the firms' actual out-of-pocket expenses incurred to a third-party vendor; (2) service of process; and (3) fees or costs that had not been incurred at the time the firms sent the reinstatement letter. However, the court limited the class to those persons whose default or failure to timely pay their mortgage obligations did not ultimately result in a foreclosure judgment or sale.

Echevarria, 896 So.2d at 774-75 (footnotes omitted). In appealing the trial court's decision to the First District, Cole argued that the class definition was too narrow because it excluded property owners who received a reinstatement letter but who then failed to reinstate their mortgage, leading to a foreclosure judgment or sale of their properties. Id. at 775-76.

Cole asserted that an action under the Consumer Collection Practices Act does not depend on whether the underlying debt is valid, owed, paid, or reduced to judgment since the right to bring a suit under the Act arises from the debt collector's conduct in collecting the debt and whether the conduct involves unscrupulous debt collection practices. Id. at 776. The trial judge seemingly agreed with Cole that the class should include everyone who received a reinstatement letter; the class certification order stated both that it was irrelevant whether the prospective class member reinstated the mortgage and that the mere transmission of the letter impacted all class members similarly. Id. Nevertheless, despite its explicit finding that "the violation of the Consumer Collection Practices Act is triggered by the transmission of the reinstatement letter seeking illegitimate costs, not by the ultimate outcome of any foreclosure proceedings," the trial court limited the class to include only those whose failure to pay their mortgage obligations did not result in a foreclosure judgment or sale. Id.

In attempting to reconcile the discussions on the record from the trial court's hearing with the trial court's statements in the final order regarding the significance of an actual foreclosure judgment, the First District concluded that the trial court's inclusion of this qualifier in the class definition was a misstatement. Id. The First District further held that, if it was not a misstatement, the trial court's decision to limit the class size in such a manner was plain error under both the trade practices and the collection statutes because there was no legal justification for such a limitation. Id.

Echevarria asserted that the trial court limited the class in an attempt to avoid the implications of a possible litigation privilege bar to those claimants involved in judicial mortgage foreclosure actions. Id. The First District rejected that argument, finding that the litigation privilege did not apply to the instant case because the suit was initiated as a statutory cause of action. Id. at 777. The court below reasoned that the litigation privilege has traditionally been reserved only for common law tort actions such as libel, defamation and fraud. Id. at 776-77. Then, invoking a separation of powers analysis, the court stated that "a judicially created policy such as the judicial immunity rule must not be used to limit the application of a legislatively created, statutory cause of action." Id. at 777. Thus, the First District concluded that "the judicially created judicial immunity rule cannot be applied as a bar to the statutory causes of action in this case." Id.

Litigation Privilege

Echevarria now appeals to this Court, citing conflict with the Third District's decision in Boca Investors as to the application of the litigation privilege in proceedings involving statutory causes of action. Boca Investors initially involved a suit for tortious interference with a business relationship; however, the plaintiffs later moved to amend their original complaint to add a "statutory anti-trust claim." 835 So.2d at 274-75. The trial court dismissed the case and denied the motion to amend, citing this Court's decision in Levin, Middlebrooks, Mabie, Thomas, Mayes Mitchell, P.A. v. United States Fire Insurance Co., 639 So.2d 606 (Fla.1994), for the proposition that absolute immunity is properly afforded to any act occurring during the course of a judicial proceeding. Boca Investors, 835 So.2d at 274. The Third District subsequently upheld the trial court's dismissal, including the rejection of the amendment, finding "such a [statutory] claim is also based on statements covered by the litigation privilege. See Burton [v. Salzberg, 725 So.2d 450, 451 (Fla. 3d DCA 1999)]." Boca Investors, 835 So.2d at 275. Thus, in a case where a statutory antitrust claim was asserted, the Third District explicitly acknowledged that the litigation privilege...