Federal Court Rules Police Officer Qualifies as ‘Debt Collector’ Under FDCPA and ‘Creditor’ Under Massachusetts Law
The United States District Court for the District of Massachusetts recently denied a motion to dismiss from the FDCPA and Mass. Gen. Law. Ch. 93 and 93A claims 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 notice in Espinosa v. Metcalf is available on: Link to Reviews.
Plaintiffs, Sergio Espinosa, Sr. (“Senior”) and Sergio Espinosa, Jr. (“Junior”), brought an action against Andrew C. Metcalf, Judgment Acquisitions Unlimited (“JAU”), Champion Funding, Inc., Export Enterprises Inc., Massachusetts Constable Inc. d/b/a Massachusetts Constables Office (“MCO”) and Brian Abelli alleging, among other things, violations of the Fair Debt Collection Practices Act and Mass. Gen. Laws ch. 93 and 93A resulting from an attempted debt collection.
Under Massachusetts law, police officers are either elected or appointed to serve a specific municipality. In their designated area, they can serve a trial and even make arrests. Here, the constables, MCO and Abelli, filed a motion to dismiss the allegations against them.
Champion obtained a 2006 judgment from Senior regarding credit card debt. His son, Junior was a minor at the time and had no connection with the debt. Several years later, Champion hired Metcalf and JAU to collect judgment. Metcalf and JAU later hired MCO and Abelli to seize vehicles belonging to Senior and Junior.
At approximately 3:30 a.m. on September 22, 2020, Senior and Junior woke up to a truck in their driveway trying to tow Junior’s vehicle. Abelli or another MCO uniformed officer oversaw the seizure. Junior indicated that he was the sole owner of the vehicle and presented registration showing the same. The defendants asserted that they had the right to seize the vehicle and drive away.
The next day, Junior contacted JAU and spoke with Metcalf, informing him that they were not allowed to take his vehicle. Metcalf allegedly replied “you lie”, “I deal with liars every day” and that the vehicle was in fact registered in Senior’s name. The vehicle was actually registered to Junior, not Senior, who leased a Honda Accord through Honda Financial.
Even after being told they had seized the wrong vehicle, JAU and Metcalf told Junior they would “settle” for $4,000. Champion, Metcalf, JAU and Export refused to return Junior’s vehicle for 16 days. When they finally returned the vehicle, they immediately seized the Honda rented by Senior. Senior and Honda Financial repeatedly informed the defendants that they could not legally seize the Honda since Senior did not own it and provided a copy of the lease. Defendants refused to return Senior’s vehicle unless he paid thousands of dollars in storage fees.
MCO and Abelli argued that plaintiffs’ FDCPA claims should be dismissed because they fall outside 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 MCO and Abelli, they fell within the “legal proceeding” exclusion because, at all relevant times, they acted “in judicial enforcement of the debt as ordered by the [e]execution granted to [Champion] in 2006.”
The Court held that the exclusion did not apply because the complaint does not allege that MCO or Abelli attempted to serve the plaintiffs. Furthermore, to the extent that the complaint alleges that MCO and Abelli attempted to collect the 2006 judgment, it would disqualify them from exclusion from the court proceeding server because “a person who goes beyond simply being a courier in legal proceedings and engages in prohibited abusive or harassing acts. activities aimed at forcing an individual to repay a debt are no longer exempt under the legal process officer exception” because “it goes beyond the bounds of official duties inherent in the performance of the process and assumes a secondary role of “debt collector”. Andrews v S. Coast Legal Servs., Inc., 582 F. Sup. 2d 82, 88 (D. Mass. 2008).
Concluding that MCO and Abelli plausibly constitute “collectors,” the Court then held that the complaint sufficiently argued for violations of Sections 1692d and 1692e of the FDCPA. Section 1692d states that a “collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” 15 USC§. 1692d.
Although they were informed that the vehicle belonged to Junior, the defendants nevertheless insisted that they took it. Defendants also advised Export to continue to charge storage fees in connection with the illegal seizures of Junior and Senior vehicles. The Court held that such willful misconduct plausibly constituted harassing, oppressive or abusive behavior under Section 1692d.
Section 1692e prohibits debt collectors from using “any false, misleading, or misleading representation or means in connection with the collection of any debt.” 15 USC§. 1692nd. The Court held that defendants’ threats to sell Senior’s leased vehicle even after learning he did not own it to induce him to pay thousands of dollars in storage fees established a reasonable inference that defendants were liable of the violation of article 1692e as regards Senior. Similarly, the defendants’ contention that they had the right to seize Junior’s vehicle even after being advised that he was the sole owner of it likely constituted a false, misleading or deceptive representation.
Regarding Plaintiffs’ claims of breach of Mass. Gen Laws c. 93 and 93A, the Court noted that the Attorney General’s Debt Collection Regulations defined a “creditor” as “any person and his agents, servants, employees or attorneys engaged in the collection of a debt due or alleged to him. be due”. by a debtor and must also include a buyer of overdue debt who engages a third party or attorney to collect that debt[,]but not “if his activities are for the sole purpose of serving legal action on another person in the context of the judicial execution of a debt”. 940 CMR § 7.03.
For the reasons already discussed, the Court held that the defendants did not fall within the exception for “person[s]”whose “activities are solely for the purpose of furthering legal process.” In addition, the Massachusetts definition of “creditor” also includes “agents” and “servants” of creditors, which includes MCO and Abelli acting in the name of Champion, Metcalf and JAU.
Finally, the defendants argued that, even though they are “creditors” under the Attorney General’s debt collection regulations, the plaintiffs’ claim should be dismissed because the complaint does not allege sufficient facts to suggest a violation of these regulations. The Court rejected their argument for virtually the same reasons it rejected their attempt to dismiss plaintiffs’ FDCPA claims, finding that the complaint adequately pleads various violations of 940 CMR § 7.07.
Accordingly, the Court dismissed the defendants’ motion to dismiss.