Ariel Arencibia v. Mortgage Guaranty Insurance Corporation

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-15387
Non-Argument Calendar
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D.C. Docket No. 2:15-cv-00248-SPC-CM
ARIEL ARENCIBIA,
on behalf of themselves and all others similarly
situated,
Plaintiffs-Appellants,
JOSE AYALA, on behalf of themselves and all others similarly situated,
Plaintiff,
versus
MORTGAGE GUARANTY INSURANCE CORPORATION,
a Wisconsin corporation,
Defendant-Appellee.
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Appeal from the United States District Court
for the Middle District of Florida
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(September 12, 2016)
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Before MARTIN, ROSENBAUM, and ANDERSON, Circuit Judges.
PER CURIAM:
Plaintiff-Appellant Ariel Arencibia 1 filed this class-action lawsuit against
Defendant Mortgage Guaranty Insurance Corporation (“Mortgage Guaranty”)
under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq.
Mortgage Guaranty, a mortgage-insurance provider, acquired Arencibia’s
remaining debt from his lender after the lender had obtained a foreclosure
judgment against him. 2 Mortgage Guaranty then filed a deficiency lawsuit against
Arencibia to collect on the debt, allegedly without providing him prior notice under
Florida law of assignment of the debt. See Fla. Stat. § 559.715 (“[T]he assignee
[of a consumer debt] 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.”). Arencibia alleged that Mortgage Guaranty violated
the FDCPA under § 1692e by failing to provide him, and numerous others, prior
notice under Fla. Stat. § 559.715.
For Mortgage Guaranty to be liable under § 1692e, Arencibia needed to
show that it was a “debt collector,” as that term is defined in the statute. See 15
1
Arencibia was joined in the district court by Plaintiff Jose Ayala. We dismissed the
appeal as to Ayala at his request. See 11th Cir. Dkt. No. 15-15387, Order dated June 17, 2016.
2
Mortgage Guaranty compensates lenders for losses in the event of borrower default and
lack of full recovery. Once Mortgage Guaranty pays a claim, it steps into the shoes of the lender
and can then pursue a deficiency judgment against the borrower.
2
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U.S.C. § 1692e (“A debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt.”). The
statute defines “debt collector” in two ways: (1) “any person who uses any
instrumentality of interstate commerce or the mails in any business the principle
purpose of which is the collection of any debts”; or (2) any person “who regularly
collects or attempts to collect, directly or indirectly, debts owed or due or asserted
to be owed or due another.” 15 U.S.C. § 1692a(6). The statute also provides a list
of exclusions to these definitions, see id. § 1692a(6)(A)–(F), such as “any person
collecting or attempting to collect any debt owed or due or asserted to be owed or
due another to the extent such activity . . . concerns a debt which was not in default
at the time it was obtained by such person,” id. § 1692a(6)(F)(iii).
Arencibia attempted to qualify Mortgage Guaranty as a “debt collector”
under the second definition. Arencibia alleged that Mortgage Guaranty regularly
collected or attempted to collect debts that were originally owed to others and
acquired after default. Mortgage Guaranty moved for summary judgment, arguing
that it was not a “debt collector” because, at the time of collection, it was collecting
on debts it owned and not collecting a debt owed or due another.
Little more than a week after Mortgage Guaranty filed for summary
judgment, this Court issued its decision in Davidson v. Capital One Bank (USA),
N.A., 797 F.3d 1309 (11th Cir. 2015), which settled the dispute in Mortgage
3
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Guaranty’s favor. Davidson, like this case, involved an FDCPA claim under
§ 1692e against an entity which regularly collected debts owed to it, but did not
collect or attempt to collect debts owed or due another. The panel in Davidson
held that “a person must regularly collect or attempt to collect debts for others in
order to qualify as a ‘debt collector’ under the second definition of the term.” Id.
at 1316 (emphasis in original). An entity collecting on its own debts—even debts
originally owned by another and acquired after default—does not qualify as a
“debt collector.” See id. at 1315–16.
On appeal from the dismissal of his complaint, Davidson had argued that an
entity which collects on debts it acquires after default qualifies as a “debt
collector” under the second definition. Relying on the exclusion in
§ 1692a(6)(F)(iii), Davidson asserted that “creditors” and “debt collectors” are
mutually exclusive terms under the FDCPA, and the line that separates the two, in
the case of acquired debt, is “the default status of the debt at the time it was
acquired.” Id. at 1314. In other words, as succinctly summarized by the Davidson
panel, “if the debt was not in default when it was acquired, § 1692a(6)(F)(iii)
excludes the entity from the definition of ‘debt collector,’ and the entity is a
‘creditor’; on the other hand, if the debt was in default when it was acquired,
§ 1692a(6)(F)(iii) does not apply, and the entity is a ‘debt collector.’” Id.
4
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Davidson rejected the argument that the line between “creditors,” who
“typically are not subject to the FDCPA,” and “debt collectors,” who are, “is
drawn by the default status of the debt.” Id. at 1313–14. The panel found
Davidson’s reliance on § 1692a(6)(F)(iii) unavailing because “§ 1692a(6)(F)’s
exclusions do not obviate the substantive requirements of § 1692(a)(6)’s
definition.” Id. at 1314. In other words, the exclusions come into play only once
one of the two substantive definitions of “debt collector,” set forth above, is
satisfied; the exclusions do not alter the substantive definitions. Id. at 1314–15.
And, while default status of the debt may affect the application of the
§ 1692a(6)(F)(iii) exclusion, “the statutory definition of ‘debt collector’ applies
without regard to the default status of the underlying debt.” Id. at 1314.
Therefore, “a person who does not otherwise meet the requirements of § 1692a(6)
is not a ‘debt collector’ under the FDCPA, even where the consumer’s debt was in
default at the time the person acquired it.” Id. at 1316.
Looking to the “entirely transparent” statutory text, the Davidson panel held
that the second definition of “debt collector” unambiguously is limited “to those
persons who regularly collect or attempt to collect debts owed or due or asserted to
be owed or due another.” Id. at 1316 (emphasis in original). In common usage,
“[t]he term ‘another’ most naturally connotes ‘one that is different from the first or
present one.’” Id. This means, according to the panel, that a “debt collector”
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under the second definition must collect debts or attempt to collect debt “for
others.” Id. (emphasis in original). The Court went on to affirm the dismissal of
Davidson’s complaint because it made “no factual allegations from which we
could plausibly infer that [the defendant] regularly collects or attempts to collect
debts owed or due to someone other than [the defendant].” Id. at 1318.
Finding Davidson controlling, the district court in this case granted summary
judgment to Mortgage Guaranty. The court ruled that Mortgage Guaranty was not
a “debt collector” under the FDCPA because “[t]he undisputed facts show that
Defendant does not regularly collect or attempt to collect debts owed or due
someone other than Defendant.”
Arencibia appeals the district court’s grant of summary judgment, arguing
that Davidson was wrongly decided. He asserts that Davidson conflicts with the
decisions of a majority of other circuit courts to have addressed the same issue.3
See, e.g., Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 359 (6th Cir. 2012)
(“For an entity that did not originate the debt in question but acquired it and
attempts to collect on it, that entity is either a creditor or a debt collector depending
on the default status of the debt at the time it was acquired.”); Ruth v. Triumph
P’ships, 577 F.3d 790, 796 (7th Cir. 2009) (“[A] party that seeks to collect on a
debt that was in default when acquired is a debt collector under the FDCPA, even
3
We note that the Fourth Circuit recently decided the issue in line with Davidson. See
Henson v. Santander Consumer USA, Inc., 817 F.3d 131, 136–37 (4th Cir. 2016).
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though it owns the debt and is collecting for itself.”). Arencibia also asserts that
the Davidson panel’s rationale contravenes several canons of statutory
interpretation and undermines the broad, remedial purposes of the FDCPA.
As Arencibia acknowledges, however, we are bound by Davidson under the
prior panel precedent rule, which provides that the holding of a prior panel is
binding “unless and until it is overruled or undermined to the point of abrogation
by the Supreme Court or this court sitting en banc.” United States v. Archer, 531
F.3d 1347, 1352 (11th Cir. 2008). Arencibia makes no claim that an exception to
this rule applies.4 Therefore, even if we believed that Davidson had been wrongly
decided, which, to be clear, we offer no opinion on the matter, we would
nevertheless be bound by Davidson’s holding. See United States v. Steele, 147
F.3d 1316, 1317–18 (11th Cir. 1998) (en banc) (“Under our prior precedent rule, a
panel cannot overrule a prior one’s holding even though convinced it is wrong.”).
Applying Davidson to the facts of this case, the district court quite clearly
was correct to grant summary judgment to Mortgage Guaranty. There is no
evidence that Mortgage Guaranty regularly collected or attempted to collect on
debts “for others.” See Davidson, 797 F.3d at 1316. Accordingly, Mortgage
Guaranty does not qualify as a “debt collector” under the second definition of that
term in the FDCPA. See id.; 15 U.S.C. § 1692a(6).
4
In recognition of that fact, Arencibia has filed a petition for initial hearing en banc, Fed.
R. App. P. 35, which has been denied by separate order.
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The judgment of the district court is AFFIRMED. 5
5
In light of our disposition of this appeal, we DENY AS MOOT Mortgage Guaranty’s
“Motion to Supplement the Record and to Take Judicial Notice,” which relates to an alternative
argument for affirming the district court.
8