Hawthorne v. Mac Adjustment, Inc.

• Decision Date: 11 May 1998
• Docket Number: No. 97-6731.,97-6731.
• Citation: 140 F.3d 1367
• Parties: Carrie HAWTHORNE, Plaintiff-Appellant, v. MAC ADJUSTMENT, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

140 F.3d 1367

Carrie HAWTHORNE, Plaintiff-Appellant, v. MAC ADJUSTMENT, INC., Defendant-Appellee.

No. 97-6731 Non-Argument Calendar.

United States Court of Appeals, Eleventh Circuit.

May 11, 1998.

Charles H. Pullen, Huntsville, AL, for Plaintiff-Appellant.

Wayne Morse, Jr., Cynthia A. Martin, Clark & Scott, Birmingham, AL, for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before BLACK, HULL and MARCUS, Circuit Judges.

MARCUS, Circuit Judge:

This lawsuit arises out of an alleged tort-feasor's attempt to obtain statutory damages under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA"), against a company with subrogation rights of the insurance carrier of the party damaged by the alleged tortfeasor's actions. Based on a single letter sent by defendant-appellee Mac Adjustment, Inc. ("Mac Adjustment"), plaintiff-appellant Carrie Hawthorne claims that Mac Adjustment violated her rights that are protected by the FDCPA. Finding that Hawthorne's obligation to Mac Adjustment did not meet the statutory definition of a "debt" under the FDCPA, the district court granted Mac Adjustment's motion for judgment on the pleadings. Hawthorne now appeals that decision and asks us to reverse the district court's order and remand the case for further proceedings. For the reasons stated below, we decline Hawthorne's invitation and AFFIRM the ruling of the district court.

I.

Hawthorne was involved in an accident, allegedly resulting from her negligence.¹ Liberty Mutual Insurance Company ("Liberty Mutual") insured the other party to the accident, who was damaged in the amount of $2,020.18. After paying its insured's claim, Liberty Mutual then provided Mac Adjustment with subrogation rights to the $2,020.18 it claimed Hawthorne owed.

On June 5, 1996, Mac Adjustment sent Hawthorne a letter requesting payment of the subrogation claim incurred by Liberty Mutual. In relevant part, the letter stated:

Dear CARRIE HAWTHORNE:

The above captioned subrogation claim resulting from your negligence has been referred to us to bring to a conclusion. If you had liability insurance to cover this accident, kindly note the name of your Insurance Company and policy number on the bottom of this letter and return it to us. If you did not have insurance and wish to resolve this matter voluntarily, send your check for the full amount of the claims by return mail.

In the event that you are without insurance and you cannot remit payment immediately, please call our office AS SOON AS POSSIBLE to make arrangements to get this matter resolved.

Sincerely,

A.F. McGlone

Subrogation Dept.

Unless you, within 30 days after receipt of this notice, dispute the validity of this claim or any portion thereof, the claim will be assumed to be valid. If you notify us in writing within 30 days that the claim or any portion thereof is disputed, we will obtain verification of the claim or a copy of a judgment against you and a copy of verification or judgment will be mailed to you. Upon written request within 30 days, we will provide you with the name and address of the original creditor, if different from the current creditor. This is an attempt to collect a claim and any information obtained will be used for that purpose.

Averring that the claim referred to in the Mac Adjustment letter had expired under Alabama law on December 7, 1994, Hawthorne filed suit for damages in the Circuit Court of Madison County, Alabama, under the FDCPA. Mac Adjustment timely removed the case to federal court, and, shortly thereafter, filed a motion for judgment on the pleadings. Over Hawthorne's opposition, the district court entered judgment on the pleadings for Mac Adjustment. In its memorandum opinion granting judgment on the pleadings, the district court noted that the Eleventh Circuit had not yet addressed whether the FDCPA covers obligations such as those involved in this case. Based on other courts' analyses of similar claims, however, the district court concluded that the obligation at issue in this case did not constitute a "debt" under the FDCPA because it did not "arise out of any consumer transaction in which the plaintiff was `offered or extended the right to acquire "money, property, insurance, or services" which are "primarily for household purposes" and to defer payment.'" Consequently, the district court entered judgment on the pleadings for Mac Adjustment and dismissed the case with prejudice. This appeal followed.

II.

We review a judgment on the pleadings de novo. See Slagle v. ITT Hartford, 102 F.3d 494, 497 (11th Cir.1996) (citing Ortega v. Christian, 85 F.3d 1521, 1524-25 (11th Cir.1996)). Judgment on the pleadings is appropriate when there are no material facts in dispute, and judgment may be rendered by considering the substance of the pleadings and any judicially noticed facts. See Bankers Ins. Co. v. Florida Residential Property and Cas. Joint Underwriting Ass'n, 137 F.3d 1293, 1295 (11th Cir.1998) (citing Hebert Abstract Co. v. Touchstone Properties, Ltd., 914 F.2d 74, 76 (5th Cir. 1990)); see also Rule 12(c), Fed.R.Civ.P. When we review a judgment on the pleadings, therefore, we accept the facts in the complaint as true and we view them in the light most favorable to the nonmoving party. See Ortega, 85 F.3d at 1524 (citing Swerdloff v. Miami Nat'l Bank, 584 F.2d 54, 57 (5th Cir.1978)). The complaint may not be dismissed "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Slagle, 102 F.3d at 497 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957) & citing Hartford Fire Ins. Co. v. California, 509 U.S. 764, 811, 113 S.Ct. 2891, 2916-17, 125 L.Ed.2d 612 (1993)).

III.

Review of the plain language of the FDCPA provisions at issue and the case law yields the conclusion that the district court properly granted judgment on the pleadings for Mac Adjustment in this case. Congress enacted the FDCPA in 1977 as an amendment to the Consumer Credit Protection Act "to protect consumers from a host of unfair, harassing, and deceptive debt collection practices without imposing unnecessary restrictions on ethical debt collectors...." Consumer Credit Protect Act, S.Rep. No. 95-382, at 1-2 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1696. Indeed, the statute itself provides, "It is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e).

In analyzing the application of the FDCPA to the case at hand, we begin with the language of the statute itself. See Brown v. Budget Rent-A-Car Sys., Inc., 119 F.3d 922, 924 (11th Cir.1997) (citing Holly Farms Corp. v. NLRB, 517 U.S. 392, 397-99, 116 S.Ct. 1396, 1401, 134 L.Ed.2d 593 (1996)). Specifically, Hawthorne alleges that Mac Adjustment violated 15 U.S.C. § 1692e(10), which provides in its entirety:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

Thus, section 1692e makes the existence of a "debt" a threshold requirement for the section's applicability. See Mabe v. G.C. Servs. Ltd. Partnership, 32 F.3d 86, 88 (4th Cir. 1994); Zimmerman v. HBO Affiliate Group, 834 F.2d 1163, 1167 (3d Cir.1987); Riebe v. Juergensmeyer and Assocs., 979 F.Supp. 1218, 1220 (N.D.Ill.1997). The FDCPA defines "debt," in turn, 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 a judgment." 15 U.S.C. § 1692a(5). Although we recently held that a "debt" need not require the extension of credit, see Brown, 119 F.3d at 922, we have not previously addressed the limits of the FDCPA's definition of "debt."

By the plain terms of the statute, not all obligations to pay are considered "debts" subject to the FDCPA. See Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322, 1324 (7th Cir.1997). Rather, the FDCPA may be triggered only when an obligation to pay arises out of a specified "transaction." Although the statute does not define the term "transaction," we do not find it ambiguous. A fundamental canon of statutory construction directs us to interpret words according to their ordinary meaning. See Anderson v. Singletary, 111 F.3d 801, 804 (11th Cir.1997) (citing Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979)). The ordinary meaning of "transaction" necessarily implies some type of business dealing between parties. See Webster's New Collegiate Dictionary 1230 (1979) (defining "transaction" as "a business deal"); Bass, 111 F.3d at 1325 (citing Webster's New World Dictionary 1509 (2d ed. 1986)). In other words, when we speak of "transactions," we refer to consensual or contractual arrangements, not damage obligations thrust upon one as a result of no more than her own negligence. See Bass, 111 F.3d at 1326 ("[T]he FDCPA limits its reach to those obligations to pay arising from consensual transactions, where parties negotiate or contract for consumer-related goods or services."). While we do not hold that every consensual or business dealing constitutes a "transaction" triggering application of the FDCPA (such a holding would be contrary...