Saturday, August 27, 2022

FYI: Federal Court Holds a Constable Qualifies as a 'Debt Collector' Under FDCPA and a 'Creditor' Under Massachusetts Law

The U.S. District Court for the District of Massachusetts recently denied a motion to dismiss federal Fair Debt Collection Practices Act (FDCPA) and Mass. Gen. Law. Ch. 93 and 93A claims, holding that a constable qualifies as a "debt collector" under the Fair Debt Collection Practices Act and a "creditor" under Mass. Gen. Laws ch. 93.


A copy of the opinion is available at:  Link to Opinion


The plaintiffs filed suit against several debt collectors -- and two constables -- alleging, amongst other things, violations of the FDCPA and Mass. Gen. Laws ch. 93 and 93A arising from an attempted debt collection.


Under Massachusetts law constables are either elected or appointed to serve a specific municipality. Within their designated area, they can serve process and even make arrests. Here, the constables filed a motion to dismiss the claims asserted against them.


One of the defendant debt collectors obtained a judgment in 2006 against one of the plaintiffs relating to a credit card debt. The judgment debtor plaintiff's son was a minor at the time and had no connection to the debt. Several years later, the debt buyer hired two of the other debt collectors to collect the judgment. These debt collectors subsequently hired the constables to seize vehicles belonging to the plaintiffs.


At approximately 3:30 a.m. on Sept. 22, 2020, the plaintiffs awoke to a truck in their driveway trying to tow the son's vehicle. The constables oversaw the seizure. The plaintiff son advised that he was the sole owner of the vehicle and presented registration demonstrating the same. The defendant constables claimed they had a right to seize the vehicle and drove off with it.


The next day the plaintiff son contacted the debt collectors, allegedly advising them that they had no right to take his vehicle. One of the debt collectors allegedly responded, "you are lying," "I deal with liars every day" and that the vehicle was in fact registered to the plaintiff father. The vehicle was in fact registered to the plaintiff son, not the plaintiff father, who leased a Honda Accord through Honda Financial.


Even after allegedly being advised they seized the wrong vehicle, the debt collectors allegedly said they would "settle" for $4,000 and refused to return the plaintiff son's vehicle for 16 days. When they finally returned the vehicle, they immediately seized the plaintiff father's leased Honda. The plaintiff father and Honda Financial repeatedly advised the defendants they could not legally seize the Honda as the plaintiff father did not own it and provided a copy of the lease. The defendants refused to return the plaintiff father's vehicle unless he paid thousands of dollars in storage fees.


The constables argued the plaintiffs' FDCPA claims should be dismissed because the constables are excluded from the definition of "debt collector," relying on Section 1692a(6)(D), which excludes "any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt." According to the constables, they fell under the "legal process" exclusion because, at all relevant times, they acted "in connection with the judicial enforcement of the debt as ordered by the [e]xecution granted to [the debt buyer] in 2006."


The Court held the exclusion did not apply because the complaint does not allege that the constables attempted to serve process to plaintiffs.


In addition, to the extent the complaint alleges the constables attempted to collect the 2006 judgment, the Court held this would disqualify them from the legal process server exclusion because "a person who goes beyond being merely a messenger in serving legal process and engages in prohibited abusive or harassing activities to force an individual to repay a debt is no longer exempt under the legal process server exception" because "he steps beyond the bounds of the official duties inherent in serving process and takes on a secondary role of 'debt collector.'" Andrews v. S. Coast Legal Servs., Inc., 582 F. Supp. 2d 82, 88 (D. Mass. 2008).


Concluding that the constables plausibly constitute "debt collectors," the Court next held that the complaint sufficiently pleaded violations of Sections 1692d and 1692e of the FDCPA. Section 1692d provides that a "debt collector may not engage in any conduct the natural consequences of which is to harass, oppress, or abuse any person in connection with the collection of a debt." 15 U.S.C. §. 1692d.


Despite allegedly being informed that the vehicle belonged to the plaintiff's son, defendant constables nevertheless insisted they were taking it. The defendant constables also allegedly advised one of the debt collectors to continue charging storage fees in connection with the illegal seizures of both vehicles. The Court held that such knowing misconduct plausibly qualifies as harassing, oppressing or abusive behavior under Section 1692d.


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. The Court held the defendants' threats to sell the plaintiff father's leased vehicle even after learning he did not own it to induce him to pay thousands of dollars of storage fees established a reasonable inference that the defendants were liable for violating Section 1692e. Similarly, the defendants' claim they had the right to seize the plaintiff son's vehicle even after being advised that he was the sole owner plausibly constituted a false, deceptive or misleading representation.


Regarding the plaintiffs' claims for violation of Mass. Gen Laws ch. 93 and 93A, the Court noted that the Attorney General's debt collection regulations defined a "creditor" as "any person and his or her agents, servants, employees, or attorneys engaged in collecting a debt owed or alleged to be owed to him or her by a debtor and shall also include a buyer of delinquent debt who hires a third party or an attorney to collect such debt[,]" but not "if his or her activities are solely for the purpose of serving legal process on another person in connection with the judicial enforcement of a debt." 940 C.M.R. § 7.03.


For the reasons already discussed, the Court held the defendants did not fall under the exception for "person[s]" whose "activities are solely for the purpose of serving legal process." Further, the Massachusetts definition of "creditor" also includes "agents" and "servants" of creditors, which encompasses the constables acting on behalf of the debt collectors.


Finally, the defendants argued that, even if they constitute "creditors" under the Attorney General's debt collection regulations, the plaintiffs' claim should be dismissed because the complaint failed to allege sufficient facts to suggest a violation of such regulations. The Court rejected their argument for virtually the same reasons it rejected their attempt to dismiss the plaintiffs' FDCPA claims, holding that the complaint adequately pleaded various violations of 940 C.M.R. § 7.07.


Accordingly, the Court denied the defendant constables' motion to dismiss.




Ralph T. Wutscher
Maurice Wutscher LLP
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