United States District Court, D. Rhode Island
KENNETH FITCH and ESTATE OF DIANNE L. FITCH, Plaintiffs,
FEDERAL HOUSING FINANCE AGENCY; FEDERAL NATIONAL MORTGAGE ASSOCIATION; WELLS FARGO BANK, N.A.; HARMON LAW OFFICES, P.C.; and 266 PUTNAM AVENUE, LLC, Defendants.
MEMORANDUM AND ORDER
J. McCONNELL, JR., UNITED STATES DISTRICT JUDGE.
Harmon Law Offices, P.C. ("Harmon") moves to
dismiss the single claim in Count VI that Kenneth Fitch and
the Estate of Dianne L, Fitch levels against it for violating
the Fair Debt Collection Practices Act ("FDCPA").
ECF No. 42. Because the Court agrees with Harmon that it did
not act as a debt collector in representing the mortgagee in
the non-judicial foreclosure of the Fitch's property,
Harmon's motion is GRANTED.
Court takes the allegations in Plaintiffs Complaint as true
for the purposes of Harmon's motion.
Fitch executed a note on a $96, 648.00 loan on December 31,
2009 on a property in Cumberland, Rhode Island, and a
mortgage as security for the note. ECF No. 1 at ¶ 48.
She was the sole owner of the property; Mr. Fitch was not a
party to the loan transaction and did not sign the note. Id.,
Mr. Fitch appears to have executed the mortgage but only in
his capacity as a non-vested spouse. Ms. Fitch passed away on
April 7, 2014. Id. at ¶ 13.
about March 31, 2017, the loan went into default for
nonpayment. Wells Fargo hired Harmon to bring foreclosure
proceedings. Id. at ¶ 52. On April 20, 2017,
Harmon sent a notice of foreclosure sale. Id. at
¶ 53. Harmon advertised the notice of sale during May,
June, and July 2017 in the Pawtucket Times newspaper. On July
28, 2017, the Kay Street property was sold at foreclosure
auction. Id. at ¶ 56. Months later in December
2017, Mr. Fitch was appointed administrator of Ms.
Fitch's estate. The Estate of Ms. Fitch and Mr. Fitch
filed an eight count Complaint against Federal Housing
Finance Agenc3r, Federal National Mortgage
Association ("Fannie Mae"), Wells Fargo Bank, N.A.,
Harmon, and 266 Putnam Avenue, LLC, alleging violations of
various statutes and due process.
STANDARD OF REVIEW
survive a motion under Ride 12(b)(6) of the Federal Rules of
Civil Procedure, a "complaint must contain sufficient
factual matter, accepted as true, to 'state a claim to
relief that is plausible on its face.'" Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
"The plausibility inquiry necessitates a two-step
pavane." Garcia-Catalan v. United States, 734
F.3d 100, 103 (1st Cir. 2013). "First, the court must
distinguish 'the complaint's factual allegations
(which must be accepted as true) from its conclusory legal
allegations (which need not be credited).'"
Id., (quoting Morales-Cruz v. Univ. of
P.R., 676 F.3d 220, 224 (1st Cir. 2012)). "Second,
the court must determine whether the factual allegations are
sufficient to support 'the reasonable inference that the
defendant is liable for the misconduct alleged.'"
Garcia-Catalan, 734 F.3d at 103 (quoting Haley
v. City of Boston, 657 F.3d 39, 46 (1st Cir. 2011)).
"In determining whether a complaint crosses the
plausibility threshold, 'the reviewing court [must] draw
on its judicial experience and common sense.'"
Garcia-Catalan, 734 F.3d at 103 (quoting
Iqbal, 556 U.S. at 679).
conducted a nonjudicial foreclosure proceeding on behalf of
Wells Fargo and Fannie Mae to enforce their security
interests in the Fitch's property after the Fitch's
failure to make payments. In Count VI of the Complaint, the only
count to address Harmon's alleged conduct, Mr. Fitch
alleges that Harmon sent a notice of sale to him on April 20,
2017 about a foreclosure sale to take place that summer.
Harmon conducted the foreclosure sale on July 28, 2017 after
publishing notices of sale in the Pawtucket Times from May
22, 2017 until July 27, 2017.
Complaint allegations are not particularly pointed, rendering
a decision on a motion to dismiss tricky. Harmon levels
several arguments in support of its motion to dismiss but
emphasizes its argument that Harmon is not a "debt
collector" as defined in the FDCPA. Because the Court
finds that Harmon's conduct did not put it in the
category of an FDCPA debt collector, it will address
Harmon's conduct in executing the foreclosure on Wells
Fargo and Fannie Mae's behalf first.
to the FDCPA, a "debt collector" is defined as a
person in any business "the principal purpose of which
is the collection of any debts, or who regularly collects or
attempts to collect, directly or indirectly, debts owed or
asserted to be owed or due another." 15 U.S.C. §
1692a(6). The United States Supreme Court dealt with the
parameters of this definition in Obduskey v. McCarthy
& Holthus LLP, 139 S.Ct. 1029, 1036-38 (2019). The
Supreme Court noted that Congress wrote a primary definition,
which it recognized would include a business, like Harmon,
engaged in nonjudicial foreclosure proceedings. Id.
at 1036 (quoting § 1692a(6)) ("[Foreclosure is a
means of collecting a debt. And a business pursuing
nonjudicial foreclosures would, under the capacious language
of the Act's primary definition, be one that
'regularly collects or attempts to collect, directly or
Supreme Court also noted that Congress included a
"limited-purpose definition," that explains
'"[f]or the purpose of section
1692f(6)' a debt collector 'also includes' a
business, ..., 'the principal purpose of which is the
enforcement of security interests'" Id., at 1037
(quoting § 1692a(6)). Focusing on the addition of the
word "also" and giving it its full effect, the
Supreme Court concluded that "the limited-purpose
definition narrows the primary definition, so that the
debt-collector-related prohibitions of the FDCPA (with the
exception of § 1692f(6)) do not apply to those who, .,
., are engaged in no more than security-interest
enforcement." Id., at 1037. In conclusion, the Obduskey
Court was convinced "that, but for § 1692f(6),
those who engage in only nonjudicial foreclosure proceedings
are not debt collectors within the meaning of the Act."
Id. at 1038; see also King v. Wells Fargo Home
Mortg., Civil Action No. 1M0781-GAO, 2013 WL 1196664, at
*3 (D. Mass. Mar. 25, 2013); Speleos v. BACHome Loans
Serv., L.P., 824 F.Supp.2d 226 (D. Mass. 2011).
the Obduskey Court's definitive ruling on this issue
under similar factual circumstances, the Court applies that
holding to Mr. Fitch's case. Harmon was engaged by Wells
Fargo and Fannie Mae to begin foreclosure proceedings to
protect their security interest in the Fitch's property
therefore it was not a debt collector ...