McNair v. Maxwell & Morgan PC, No. 15-17383 (9th Cir. 2018)Annotate this Case
Plaintiff bought a Gilbert, Arizona home in 2004. She was required to pay the Community Association an annual assessment in monthly installments. Defendants notified Plaintiff in 2009 of her failure to pay a debt arising out of the assessment. Defendants represented the Association in suing Plaintiff. After Plaintiff defaulted on a payment agreement, Defendants revived the lawsuit and obtained a default judgment. The parties agreed to a new payment plan and to execute a stipulated judgment against Plaintiff that recognized the Association’s right to collect the debt by selling Plaintiff’s home. Plaintiff failed to make the required payments. The Maricopa Superior Court granted a writ of special execution for foreclosure on Plaintiff’s house. The property was sold for $75,000 at a foreclosure sale, and Defendants received $11,600.13 in satisfaction of the debt, including attorneys’ fees and costs. The district court rejected Plaintiff’s claim that Defendants violated the Fair Debt Collection Practices Act by misrepresenting the amount of Plaintiff’s debt and seeking attorneys’ fees to which they were not entitled. The Ninth Circuit reversed. Defendants’ effort to collect homeowner association fees through judicial foreclosure constitutes “debt collection” under the Act, 15 U.S.C. 1692a(5). In Arizona, requests for post-judgment attorneys’ fees must be made in a motion to the court. No court had yet approved the quantification of the “accruing” attorneys’ fees claimed by Defendants; Defendants falsely represented the legal status of this debt.
Court Description: Fair Debt Collection Practices Act. The panel affirmed in part and reversed in part the district court’s grant of summary judgment in favor of the defendants on plaintiff’s claims that the defendants, including a law firm, violated the Fair Debt Collection Practices Act in their efforts to collect unpaid homeowner association assessments and other charges that she allegedly owed their client. The panel reversed the district court’s grant of summary judgment on plaintiff’s claim that in judicial proceedings, defendants misrepresented the amount of her debt and sought attorneys’ fees to which they were not entitled. Distinguishing Ho v. ReconTrust Co., NA, 858 F.3d 568 (9th Cir. 2017), the panel held that the defendants’ effort to MCNAIR V. MAXWELL & MORGAN 3 collect homeowner association fees through judicial foreclosure constituted “debt collection” under the FDCPA. The panel held that defendants’ filing of a writ of special execution violated 15 U.S.C. § 1692e because defendants falsely represented the legal status of their request for attorneys’ fees. The panel remanded to the district court for a determination on damages. In a concurrently-filed memorandum disposition, the panel affirmed the district court’s summary judgment in part.