GLAZER v CHASE HOME FINANCE: FDCPA – 6th Circuit Court of Appeals Rules Mortgage Foreclosure is Debt Collection Under the Act
FDCPA – 6th Circuit Court of Appeals Rules Mortgage Foreclosure is Debt Collection Under the Act
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
LAWRENCE R. GLAZER,
CHASE HOME FINANCE LLC; CINDY A.
SMITH; REIMER, ARNOVITZ, CHERNEK &
JEFFREY CO., L.P.A.; RONALD CHERNEK;
and DARRYL E. GORMLEY,
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 09-01262—Christopher A. Boyko, District Judge.
Argued: March 8, 2012
Decided and Filed: January 14, 2013
Before: GRIFFIN and KETHLEDGE, Circuit Judges; and THAPAR, District Judge.*
GRIFFIN, Circuit Judge. This action involves claims under the Fair Debt Collection Practices Act (“FDCPA” or the “Act”), 15 U.S.C. § 1692, and Ohio law that plaintiff Lawrence Glazer asserts against a mortgage servicing company and the lawyers it hired to foreclose on property Glazer inherited. The district court dismissed the federal claims under Federal Rule of Civil Procedure 12(b)(6) and declined to exercise jurisdiction over the state-law claims. For the reasons that follow, we affirm in part and reverse in part. In doing so, we hold that mortgage foreclosure is debt collection under the Act.
In June 2008, RACJ filed a foreclosure action on Chase’s behalf in state court, alleging that Chase held and owned the Klie promissory note and that the original note had been lost or destroyed. According to Glazer, Chase and RACJ fraudulently concealed the fact that Fannie Mae owned the loan, and that the original note was not lost or destroyed and was being held by a custodian for Fannie Mae’s benefit. The complaint named plaintiff Lawrence Glazer as someone possibly having an interest in the Klie property, and RACJ served Glazer with process. Glazer answered and asserted defenses. He also notified RACJ that he disputed the debt and requested verification. RACJ refused to verify the amount of the debt or its true owner.
For these reasons, we hold that mortgage foreclosure is debt collection under the Act. Lawyers who meet the general definition of a “debt collector” must comply with the FDCPA when engaged in mortgage foreclosure. And a lawyer can satisfy that\ definition if his principal business purpose is mortgage foreclosure or if he “regularly” performs this function. In this case, the district court held that RACJ was not engaged in debt collection when it sought to foreclose on the Klie property. That decision was erroneous, and the judgment must be reversed.
Full opinion below…
GLAZER v CHASE HOME FINANCE