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Hunte v. Safeguard Properties Management, LLC

United States District Court, N.D. Illinois, Eastern Division

June 6, 2017

JEREMY HUNTE, Plaintiff,
v.
SAFEGUARD PROPERTIES MANAGEMENT, LLC and JPMORGAN CHASE BANK, N.A., Defendant.

          GARY FEINERMAN, JUDGE

          MEMORANDUM OPINION AND ORDER

         Jeremy Hunte sued Safeguard Properties Management, LLC and JPMorgan Chase Bank, N.A., alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and state law. Doc. 1. Safeguard and Chase each move to dismiss under Federal Rule of Civil Procedure 12(b)(6). Docs. 19, 22. The motions are granted, and the complaint is dismissed without prejudice.

         Background

         In resolving a Rule 12(b)(6) motion, the court assumes the truth of the operative complaint's well-pleaded factual allegations, though not its legal conclusions. See Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016). The court must also consider “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice, ” along with additional facts set forth in Hunte's brief opposing dismissal, so long as those additional facts “are consistent with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir. 2013). The facts are set forth as favorably to Hunte as those materials allow. See Pierce v. Zoetis, 818 F.3d 274, 277 (7th Cir. 2016). In setting forth those facts at this stage, the court does not vouch for their accuracy. See Jay E. Hayden Found. v. First Neighbor Bank, N.A., 610 F.3d 382, 384 (7th Cir. 2010).

         Hunte owns real property in Momence, Illinois. Doc. 1 at ¶ 8. He entered into a mortgage agreement with Chase secured by the property. Id. at ¶ 9. Hunte eventually fell behind on his payments, sending the loan into default. Id. at ¶¶ 13-14. In May 2016, Hunte decided to complete a short sale of the property, and in June, he retained a law firm to assist him in the process. Id. at ¶¶ 18-19. He authorized Chase to share information concerning his mortgage with his attorneys. Id. at ¶ 20. Chase then approved “pre-foreclosure.” Id. at ¶ 23.

         In July, while Hunte was out of town, his law firm sent an agent to check the property for mail. Id. at ¶ 27. The mail included a letter from Chase (which Hunte's attorney also received directly), stating: “We've been notified your property is vacant. If this is incorrect and you're still living in or maintaining the property, please contact us … by August 3, 2016 … . If we don't receive your response by then, we'll secure the property, which may include changing the locks and winterizing it.” Id. at ¶¶ 28-29. Hunte's attorney responded to Chase via e-mail, fax, and U.S. mail to say that Hunte had not abandoned the property. Id. at ¶¶ 30-31.

         When Hunte returned home, he began receiving letters asking if he still lived there, and he responded by calling Chase to alert it that he did. Id. at ¶¶ 35-36. Hunte then left town once more. Id. at ¶ 39. On September 14, a neighbor called to tell him that Safeguard representatives had reported that his house was being seized due to a foreclosure action. Id. at ¶ 41, 44. Upon returning, Hunte found the home empty of his personal belongings, which had been placed in dumpsters. Id. at ¶ 46. The house's locks had been changed and its plumbing winterized. Ibid.

         Hunte then filed this lawsuit against Safeguard and Chase. Only one count, an FDCPA claim against Safeguard, arises under federal law. Id. at ¶¶ 72-84. Hunte premises subject matter jurisdiction over the state law claims on the supplemental jurisdiction, 28 U.S.C. § 1367(a); the complaint does not expressly invoke the diversity jurisdiction, 28 U.S.C. § 1332, and it does not allege the citizenship of Hunte or Safeguard, precluding any conclusion on the pleadings that the parties are completely diverse. Id. at ¶¶ 1, 3-6.

         Discussion

         The court will begin with the FDCPA claim, which alleges that Safeguard violated 15 U.S.C. §§ 1692f(6)(A), 1692c(b), 1692d(1), and 1692e(2), (10). Id. at ¶¶ 73-84. To be held liable under the FDCPA, a defendant must be a “debt collector.” See Ruth v. Triumph P'ships, 577 F.3d 790, 796 (7th Cir. 2009) (“The FDCPA regulates only the conduct of ‘debt collectors … .'”). The statute defines “debt collector, ” in pertinent part, as:

[A]ny person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. … For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.

15 U.S.C. § 1692a(6).

         In his opposition brief, Hunte does not contend that Safeguard's principal purpose is to collect debts. Rather, he argues that its principal purpose is to enforce security interests. As the text of § 1692a(6) clearly provides, a business with that principal purpose qualifies as a “debt collector” where, as here, the plaintiff alleges a violation of § 1692f(6), which prohibits “[t]aking or threatening to take any nonjudicial action to effect dispossession or disablement of property if … (A) there is no present right to possession of the property claimed as collateral through an enforceable security interest; (B) there is no present intention to take possession of the property; or (C) the property is exempt by law from such dispossession or disablement.” Doc. 33 at 2-6; see Nadalin v. Automobile Recovery Bureau, Inc., 169 F.3d 1084, 1085 (7th Cir. 1999). Safeguard retorts that it is not a “debt collector” because its principal purpose is property preservation, not the enforcement of security interests. Doc. 25 at ¶¶ 25-37.

         Paragraph 5 of Hunte's complaint alleges that “Safeguard's principal purpose is the enforcement of security interests.” Doc. 1 at ¶ 5. If that were all the complaint said about Safeguard's principal purpose, Safeguard would be, at least at the pleading stage, a debt collector for purposes of a § 1692f(6) claim. But Paragraph 4 of the complaint alleges that Safeguard's “principal purpose [is to] manage and preserve at-risk and foreclosed properties.” Id. at ¶ 4. If that were true, then Safeguard is not a debt collector under the FDCPA. See Alqaq v. CitiMortgage, Inc., 2014 WL 1689685, *3-4 (N.D. Ill. Apr. 29, 2014) (holding that property preservation incidental to debt collection does ...


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