Plaintiff, O’Donnell, bought his condo in 2012 and sold it in 2019. Beginning in 2013, O’Donnell missed various assessment payments. In late 2013 the association filed a lien, and in 2018 the association commenced a foreclosure action. To bring the lawsuit to an end, O’Donnell sold his unit. The sale allowed O’Donnell to pay off the claimed past due assessments and attorney fees. At the time of sale, he paid $23,342 to the association and $22,234.94 to the attorneys which brought the case to an end. Plaintiff then filed suit against the association’s law firm alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) by filing a foreclosure suit without legal authority. Specifically, O’Donnell alleged the law firm failed to satisfy several of the prerequisites to proceed with a foreclosure suit against him. Both parties moved for summary judgment.
US District Court in Oregon
After succinctly setting forth the legal requirements for an FDCPA claim, the court ruled that:
- Although the unit was actually owned by the O’Donnell trust, which gave rise to the law firm’s argument that O’Donnell was not a consumer and therefore the FDCPA did not apply, the Court held that there “is no dispute that O’Donnell is a natural person, and as sole trustee and beneficiary of the … Trust, O’Donnell was personally obligated to pay the debt at issue here.”
- “The plain language of the statute requires that the notice of claim of lien inform the debtor that if he fails to pay the assessments when due: (1) the unpaid amount of assessments automatically continue to accumulate, (2) with interest, and (3) without the necessity of further recording. REV. STAT. § 100.450(2)(d),” but the law firm’s notice failed to satisfy the statutory requirements since all it said was: “This is a continuing lien the amount will increase as additional unpaid assessments accrue.” The law firm’s argument that it “substantially complied” with the requirements would not carry the day because the statute is clear on its face.
- “Had [the law firm] never filed a foreclosure suit, its deficient notice of claim of lien, standing alone, may not have risen to an FDCPA violation. See, e.g., Wade v. Reg’l Credit Ass’n, 87 F.3d 1098, 1100 (9th Cir. 1996) (“We disagree with Wade that debt collection practices in violation of state law are per se violations of the FDCPA.”)”
- The law firm’s attempts to use the Bona Fide Error Defense also failed because it cannot be used for mistakes of law (like the deficient notice). In addition, the law firm didn’t timely send the notice, failed to get the required board action to approve the foreclosure and failed to mail the notice to the correct address.
- Based on all of the above, the Court recommended “that the district judge grant O’Donnell’s motion for summary judgment with respect to [the law firm’s] bona fide error defense regarding the board vote and the late mailing, but deny the motion with respect to mailing the notice to the wrong address.’
- The board failed to follow the law and its own documents relative to filing a foreclosure claim. Once that was determined, the outcome of the case was determined;
- When the facts disclose that you have made a mistake, especially where the unit owner is entitled to attorney fees (like in FDCPA cases), find a way to resolve the case ASAP; and
- The FDCPA is a strict liability statute and the cases do not favor contesting what can be strongly argued as a clear violation
O’Donnell v. Vial Fotheringham LLC, 2020 WL 6365521 (9/15/20 Oregon)