Randall v. Paul

• Decision Date: 19 June 2017
• Docket Number: A16-1734
• Citation: 897 N.W.2d 842
• Parties: Bruce RANDALL, et al., Appellants, v. William D. PAUL, Respondent.
• Court: Minnesota Court of Appeals

897 N.W.2d 842

Bruce RANDALL, et al., Appellants,

v.William D. PAUL, Respondent.

A16-1734

Court of Appeals of Minnesota.

Filed June 19, 2017

Thomas M. Skare, Thos. Skare Law Office, S.C., Cloquet, Minnesota (for appellants).

William D. Paul, William Paul Law Office, Duluth, Minnesota (pro se respondent).

Considered and decided by Rodenberg, Presiding Judge; Jesson, Judge; and Klaphake, Judge.^*

OPINION

KLAPHAKE, Judge

Appellants challenge the district court's grant of summary judgment to respondent on their FDCPA claims, arguing that the district court erred in determining that the FDCPA did not apply when respondent-attorney, who was engaged in the business of debt collection, served appellants with two mechanic's lien statements. Because respondent was not immune from the FDCPA by reason of complying with the mechanic's lien statute, and genuine fact questions exist regarding whether respondent's communications with appellants were made "in connection with the collection of a debt," we reverse the entry of summary judgment in favor of respondent and remand to the district court for additional proceedings consistent with this opinion.

FACTS

Appellants Bruce and Kathy Randall hired Northstar Design and Build, Inc. (Northstar) to complete a home improvement project during the summer of 2014. On September 26, 2014, respondent William Paul, counsel for Northstar, served the Randalls via certified mail with a copy of a mechanic's lien statement and a letter, which said, "please find [enclosed] a copy of the Mechanics Lien Statement which is going to be recorded in the immediate future." Among other things, the lien statement provided that Northstar intended "to claim and hold a lien upon" the Randalls' land for the home improvement work in the amount of $9,901.75, which was "due and owing." On October 2, 2014, Paul recorded the lien statement.

On October 6, 2014, Paul served the Randalls via certified mail with a second copy of the mechanic's lien statement. For purposes of summary judgment, the parties appear to agree that the second copy of the lien statement was the same as the first copy, except it included an attachment providing a legal description of the Randalls' property. Paul explained in an accompanying letter to the Randalls that he realized after serving the first copy that he had failed to include the attachment, he was serving "a conformed copy" of the lien statement, and he had recorded the lien statement.

Over one year later, on October 15, 2015, the Randalls sued Paul for damages under the FDCPA, claiming that Paul failed to provide what the parties call a "mini-Miranda " warning advising them that he was a debt collector and that anything they said could be used in a debt collection action. The complaint also alleged that Paul failed to send the Randalls a validation notice verifying the amount owed and providing the procedures they could follow if they disputed the debt.

Paul moved for summary judgment, arguing that the letters and service of the mechanic's lien statements were not subject to the FDCPA because they were not "communications" regarding a debt collection action, and he was complying with the requirements under Minn. Stat. § 514.08 to perfect the lien. The district court granted Paul's summary judgment motion and dismissed the complaint, concluding that the Randalls were not entitled to relief as a matter of law because Paul's communications with them did "not trigger the protections afforded by the FDCPA." The Randalls appeal.

ISSUE

Did the district court err in granting Paul summary judgment based on its determination that Paul's service of two mechanic's lien statements was not, as a matter of law, a "communication" under the FDCPA?

ANALYSIS

This court reviews the interpretation of state and federal statutes de novo. Eischen Cabinet Co. v. Hildebrandt , 683 N.W.2d 813, 815 (Minn. 2004) (state statute); Citizens for a Balanced City v. Plymouth Congregational Church , 672 N.W.2d 13, 19 (Minn. App. 2003) (federal statute). This court also analyzes a district court's summary judgment decision de novo, assessing "whether the district court properly applied the law and whether there are genuine issues of material fact that preclude summary judgment." Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC , 790 N.W.2d 167, 170 (Minn. 2010). On a motion for summary judgment, "[j]udgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law." Minn. R. Civ. P. 56.03. Evidence is viewed "in the light most favorable to the nonmoving party" and all doubts are resolved against the moving party. Rochester City Lines, Co. v. City of Rochester , 868 N.W.2d 655, 661 (Minn. 2015). Summary judgment "is inappropriate when reasonable persons might draw different conclusions from the evidence presented." Osborne v. Twin Town Bowl, Inc. , 749 N.W.2d 367, 371 (Minn. 2008) (quotation omitted).

Enacted with the purpose of eliminating "abusive debt collection practices," the FDCPA "imposes civil liability on debt collectors for certain prohibited" conduct. Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA , 559 U.S. 573, 576–77, 130 S.Ct. 1605, 1608, 176 L.Ed.2d 519 (2010) (quotation omitted); see also 15 U.S.C. § 1692(e) (2016) (FDCPA purpose statement). Accordingly, courts liberally construe the FDCPA to achieve its broad remedial purpose. Hart v. FCI Lender Servs., Inc. , 797 F.3d 219, 225 (2d Cir. 2015) ; Picht v. Hawks , 77 F.Supp.2d 1041, 1043 (D. Minn. 1999), aff'd , 236 F.3d 446 (8th Cir. 2001). A plaintiff may sue a debt collector for FDCPA violations in federal or state court and recover actual damages, statutory damages, attorney fees, and costs. 15 U.S.C. § 1692k(a), (d) (2016) ; McIvor , 773 F.3d at 913. Debt collectors are strictly liable under the FDCPA. Tourgeman v. Collins Fin. Servs., Inc. , 755 F.3d 1109, 1119 (9th Cir. 2014).

Two FDCPA provisions are relevant here. First, section 1692e prohibits debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e (2016). One way a debt collector violates section 1692e is by failing to disclose in an initial written or oral communication with a debtor "that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose." Id. , § 1692e(11). This disclosure is sometimes referred to as a "mini-Miranda " warning. Garfield v. Ocwen Loan Servicing, LLC , 811 F.3d 86, 92–93 (2d Cir. 2016). Also, within five days of an initial communication made "in connection with the collection of any debt," a debt collector must send the debtor a validation notice, informing the debtor of the amount of debt owed, "the creditor to whom the debt is owed," and the timeframe within which the debtor may dispute the debt. 15 U.S.C. § 1692g(a)(1)–(2) (2016). Minnesota has statutorily adopted these FDCPA requirements for debt collection activities occurring in Minnesota. Minn. Stat. § 332.37(12) (2016).

For purposes of summary judgment, it is undisputed that the mechanic's lien involved a disputed debt between the Randalls and Northstar, and Paul did not include mini-Miranda warnings in the service letters or lien statements or send the Randalls a validation notice. Also, Paul does not contest that, when he served the mechanic's lien statements, he was acting as a "debt collector," as that term is defined under the FDCPA. See 15 U.S.C. § 1692a(6) (defining "debt collector"); see also generally Hemmingsen v. Messerli & Kramer, P.A. , 674 F.3d 814, 817–18 (8th Cir. 2012) (discussing attorneys as debt collectors under the FDCPA).¹ Thus, the sole issue on appeal is whether there are genuine issues of material fact that Paul's service of two mechanic's lien statements in September and October 2014 were "communications" "made in connection with the collection" of a debt under the FDCPA.

The Randalls contend that Paul's two communications triggered FDCPA protections because they were "associated with the collection of a debt," and fact questions exist that preclude summary judgment. Paul responds that his service of the lien statements was not an attempt to collect the debt, but rather was a necessary step under Minnesota law to perfect the lien. In granting Paul's summary judgment motion, the district court determined that Paul's communications with the Randalls were not subject to the FDCPA as a matter of law because Paul merely notified the Randalls "of the legal status of the case," the service letters "included no demand for payment or a threat if payment was not received, and were not an attempt to get immediate payment," and Paul was "not actively seeking to collect a debt on behalf of his client."

I.

We begin our analysis by addressing Paul's claim that he was not subject to the FDCPA when he served the lien statements because he was "merely following" Minnesota mechanic's lien law. Under Minnesota law, when a person contributes to the improvement of another's land, a mechanic's lien against the landowner attaches automatically "upon commencement" of the work. Minn. Stat. §§ 514.01, .05, subd. 1 (2016). But in order to perfect the lien, the lienholder must record the lien statement and serve a copy of the statement on the landowner within 120 days of completing the work; failure to comply "defeats the lien." Minn. Stat. § 514.08, subd. 1 ; David-Thomas Cos. v. Voss , 517 N.W.2d 341, 343 (Minn. App. 1994). The Randalls maintain that a lienholder is not immune from the FDCPA solely by virtue of complying with Minn. Stat. § 514.08. We agree.

All that is required to trigger FDCPA initial notice requirements is a debt collector's oral or written communication with a debtor made in connection with a debt collection. 15 U.S.C. §§ 1692e(11)...