FYI: MD Pa Holds Initiation of a Call is Enough for TCPA Liability

The U.S. District Court for the Middle District of Pennsylvania recently held that, under the federal Telephone Consumer Protection Act (TCPAA), "a plaintiff need not answer or hear a call to prove prohibited conduct under the TCPA, but need only prove the act of placing the call itself."

 

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

 

The consumer alleged that the issue of statutory damages was resolved by the Court during the summary judgment phase when the Court held that "[u]ncontroverted record evidence establishes that Mercury Dialer placed 146 calls to [the consumer]."

 

The defendant argued that the Court's ruling during the summary judgment phase did not resolve the issue of statutory damages because the consumer must further demonstrate that he either answered his phone or heard it ring for each of the subject calls.

 

While the Third Circuit had not addressed the issue at hand, the Ninth Circuit has found that a "call" within the TCPA means "to communicate with or try to get into communication with a person by telephone."  Satterfield v. Simon & Schuster, Inc., 569 F.3d 946, 954 (9th Cir. 2009).

 

The Court relied on the Ninth Circuit's holding and other district courts' decisions in finding that "a plaintiff need not answer or hear a call to prove prohibited conduct under the TCPA, but need only prove the act of placing the call itself." See, e.g., King v. Time Warner Cable, 113 F. Supp. 3d 718, 725 (S.D.N.Y. 2015); Fillichio v. M.R.S. Assocs., Inc., No. 09-61629, 2010 WL 4261442, at *3 (S.D. Fla. Oct. 19, 2010); see also Forrest v. Genpact Servs., LLC, 962 F. Supp. 2d 734, 737 (M.D. Pa. 2013),

 

The Court clarified for the parties that the sole issue at trial was whether the consumer should be awarded treble damages.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: NJ Fed Ct Holds 18 Calls Over Two Weeks - Mostly Unanswered - Did Not Violate FDCPA

The U.S. District Court for the District of New Jersey recently ruled that 18 telephone calls to a consumer over a two-week period – of which 17 were unanswered, and the last where the consumer hung up – did not violate the federal Fair Debt Collection Practices Act (FDCPA).

 

In so ruling, the Court also affirmed that under the federal Telephone Consumer Protection Act (TCPA), persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary.

 

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

 

The consumer had a delinquent television services account that was referred to a debt collector for collection. The consumer had previously provided his telephone number to the television services provider. This information was given to the debt collector as part of the delinquent account.

 

The debt collector began contacting the consumer on April 30, 2015.  The debt collector called the consumer's cell phone multiple times until May 12, 2015.  On May 18, 2015, the debt collector received a letter from the consumer's attorney demanding a stop to all calls.

 

As you may recall, to prevail on an FDCPA claim, a consumer must prove that (1) she is a consumer, (2) the debt collector is a debt collector, (3) the debt collector's challenged practice involves an attempt to collect a debt as the FDCPA defines it, and (4) the debt collector has violated a provision of the FDCPA in attempting to collect the debt.

 

In this case, it was undisputed that the consumer was a consumer, the debt collector was a debt collector, and that the debt collector was trying to collect a debt owed to the television service provider.

 

The consumer specifically alleged a violation of  15 U.S.C. §§ 1962d and 1962d(5). Section 1692d of the FDCPA makes unlawful "any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." 15 U.S.C. § 1692d. The statute identifies certain conduct that is a per se violation, including as relevant here, "causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number." Id. at 1692d(5).

 

The debt collector argued that the consumer could not show the 18 calls to his cellular telephone constituted a violation of § 1692d or § 1962d(5).

 

The consumer disputed the number of phone calls only with his personal recollection, which were contradicted by evidence shown on telephone logs. The Court found the record established the debt collector only made 18 calls to the consumer over 13 days, between the hours of 9:30 am and 7 pm, as allowed under the FDCPA.

 

As to whether conduct is harassing, the Court noted that "actual harassment or annoyance turns on the volume and pattern of calls made," and "[t]here is no consensus as to the amount and pattern of calls necessary for a Court to infer a debt collector intended to annoy, abuse, or harass a debtor."  In addition, "[n]umerous courts have found that the number of calls alone cannot violate the FDCPA; there must also be outrageous in order to have the natural consequence of harassing a debtor."

 

The Court also noted that courts usually allow juries to decide whether a debt collector's conduct is annoying, abusive or harassing.  However, "if the conduct has — or does not have — the natural consequence of harassing, oppressing or abusing the consumer as a matter of law, summary judgment is appropriate."

 

The Court here found that the debt collector's calls were neither excessive nor harassing, as the calls were limited to no more than three times in one day, between regular business hours, only one call resulted in actual contact, the representative was polite, and the debt collector immediately ceased communications once requested.

 

Accordingly, the Court found the debt collector was entitled to summary judgment as a matter of law on the FDCPA claims.

 

The consumer also alleged a violation of 15 U.S.C. § 1692f, a catch-all provision for conduct that is "unfair" but not specifically identified in any section of the FDCPA. Courts have routinely found that § 1692f cannot be the basis for a separate claim for claims already addressed by another section of the FDCPA.

 

Here, the consumer's claim was based upon the same conduct as the prior counts.  Accordingly, the Court granted the debt collector's motion for summary judgment as to this claim as well.

 

The consumer also sued for alleged violation of the TCPA.  As you may recall, the TCPA prohibits the use of any automatic telephone dialing system or an artificial voice to make nonconsensual calls to cell phones.

 

Under the TCPA, persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary. Prior express consent extends to "[c]alls placed by a third party collector on behalf of that creditor."

 

Here, the parties disagreed as to whether the consumer provided his prior express consent to be called on his cell phone.

 

However, the Court noted that the consumer had a contract with the television service provider where he provided his address and phone number. The consumer alleged this was insufficient to show prior consent, but he did not provide any evidence that he ever revoked the original consent.

 

Accordingly, the District Court granted in full the debt collector's motion for summary judgment.

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

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FYI: Fla App Ct (5th DCA) Holds Noncompliance with FHA F2F Requirement Need Not Be Pled as Aff Def in Foreclosure

The District Court of Appeal of Florida, Fifth District, recently ruled that a specific denial that a mortgagee complied with HUD's pre-foreclosure regulations that were incorporated into the mortgage was a denial of a condition precedent to foreclosure that shifted the burden to the mortgagee to prove compliance. 

 

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

 

A borrower obtained an Federal Housing Administration (FHA) mortgage loan.  The note specifically incorporated federal HUD regulations, including 24 C.F.R. § 203.604(b).  That section requires, among other things, that a lender have a face-to-face interview with the mortgagor, or make a reasonable effort to arrange such a meeting, prior to commencing foreclosure.

   

The mortgagee filed a complaint to foreclose on the FHA mortgage loan.  In her answer, the borrower denied the mortgagee's allegation that it performed all conditions precedent to foreclosure, specifically the obligation to provide face-to-face counseling under 24 C.F.R § 203.604(b). 

 

At trial, the mortgagee called one witness, a research officer for the mortgagee.  Through the testimony, the mortgagee introduced and the trial court admitted into evidence the original note, the original mortgage, and the loan payment history. 

 

After the mortgagee rested, the borrower moved for involuntary dismissal, arguing that the mortgagee failed to comply with 24 C.F.R. § 203.604 before filing the complaint.  The mortgagee argued that the borrower had to establish the mortgagee's alleged noncompliance with section 203.604 as an affirmative defense.  The trial court agreed with the mortgagee.

 

The borrower recalled the mortgage's witness who testified that she did not know whether the borrower refused to participate in a face-to-face interview.  The witness testified that she did not have information on the interview.  However, she testified that it was the mortgagee's practice to have face-to-face interviews on these loans.

 

The borrower testified that she would have participated in an interview, but the mortgagee never offered her that opportunity.  After borrower rested, she renewed her motion for involuntary dismissal.  The trial court denied the involuntary dismissal and granted judgment of foreclosure for the mortgagee.  The borrower appealed. 

 

On appeal, the Fifth District noted that a plaintiff may plead a general satisfaction of all conditions precedent, but Florida Rule Civil Procedure 1.120(c) requires a defendant's corresponding denial of performance or occurrence to be made specifically and with particularity.  Moreover, the Court noted that under Florida law a specific denial of a general allegation of the performance or occurrence of a conditions precedent shifts the burden to the plaintiff to prove the allegations concerning the subject matter of the specific denial.

 

The Court determined that a denial as to a condition precedent is not an affirmative defense, which relates only to matters of avoidance.  Rather, a denial as to a condition precedent is a special form of denial that must be pled with specificity.  The Court explained that the most common condition precedent in the mortgage foreclosure context is paragraph 22, which requires the lender to send a default letter to the borrower before foreclosure.

 

The Fifth District acknowledged that no Florida court had held that 24 C.F.R. § 203.604 constitutes a condition precedent to foreclosure.  However, the Fifth District considered the issue in Diaz v. Wells Fargo Bank, N.A., 180 So. 3d 279 (Fla. 5th DCA 2016).  There, the defendants specifically denied in their answer that the lender complied with all conditions precedent to foreclosure, including section 203.604.  However, the mortgage in Diaz did not specifically incorporate the HUD regulations.  Consequently, the Diaz court held that when it is unclear whether alleged condition precedent applies, the burden is on the party asserting the existence of the condition precedent to establish their applicability.

 

The Fifth District explained that, unlike Diaz, the borrower's note and mortgage specifically incorporated HUD regulations, including the face-to-face interview requirement as a condition precedent to commencing foreclosure. 

 

The Court found no meaningful reason to treat compliance with 24 C.F.R. § 203.604 in connection with an FHA mortgage differently than compliance with paragraph 22 in a standard mortgage, which the Florida courts had determined is a condition precedent. 

 

The Fifth District was satisfied that the borrower specifically denied in her answer that the mortgagee complied with all conditions precedent, stating that the mortgagee did not engage in a face-to-face interview as mandated by 24 C.F.R. § 203.604.  This, the Court held, shifted the burden back to the mortgagee to prove at trial that it complied with the section.

 

The Fifth District determined that the mortgagee wholly failed to meet its burden, providing no evidence that it engaged in a face-to-face interview before filing its foreclosure complaint.  The Court also noted that the mortgagee additionally failed to demonstrate that any of the enumerated exceptions to the face-to-face interview requirement applied. 

 

Accordingly, the Fifth District reversed and remanded with instructions to enter an involuntary dismissal.

 

 

 

 

Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874
Email: rwutscher@MauriceWutscher.com

 

Admitted to practice law in Illinois

 

 

 

Alabama   |   California   |   Florida   |   Georgia  |   Illinois   |   Indiana   |   Maryland   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Texas   |   Washington, DC

 

 

NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.

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and

 

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