SD Fla. Holds Servicer’s Calling System Was Not ‘ATDS’ Under TCPA

The U.S. District Court for the Southern District of Florida recently held that a dialing system — which required calls to be manually dialed, could not place calls without human input, and could not dial predictively, or store or produce telephone numbers independently, which in this case was the Avaya X1 Platform — was not an automatic telephone dialing system (“ATDS”) under the federal Telephone Consumer Protection Act.

Accordingly, the Court entered summary judgment in favor of the defendant mortgage loan servicers.

A copy of the opinion in Ferrer v. Bayview Loan Servicing, LLC et al. is available at:  Link to Opinion.

Upon transfer of her mortgage loan to a new servicer, a borrower sent debt validation demand letters to the defendant servicer and its agent (collectively, “defendant servicers” or “servicers”).

The borrower alleged that the defendant servicers failed to respond to her demands, and continued collection efforts by instituting foreclosure proceedings, mailing collection notices every month, and placing calls to the borrower, including 53 calls placed by the servicer over the course of eight months.

The defendant servicers contended that they responded to the borrower’s debt validation requests.  They also acknowledged placing phone calls to a voice-over IP telephone “MagicJack” number — which was not registered in the borrower’s name — for some of the calls at issue, and then placed subsequent calls to the borrower’s cell phone, after she provided the cell phone number as her best contact number in her request for mortgage assistance.

The borrower filed suit against the defendant servicers alleging violations of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., the Florida Consumer Collection Practices Act (FCCPA), Fla. Stat. § 559.55 et seq., and the TCPA, 47 U.S.C. § 227, et seq.  However, the action was stayed for nearly two years pending resolution of a final judgment of foreclosure entered in December 2015 in a related foreclosure proceeding, after multiple appeals to Florida state appellate courts, the Florida Supreme Court, and the United States Supreme Court were all denied or dismissed.

After the stay of litigation was lifted, the defendants moved for entry of summary judgment.

The borrower’s FCCPA and FDCPA claims alleged that the defendant servicers used prohibited practices in order to collect a debt that was allegedly non-existent or invalid.  The servicers argued that the claims were barred by collateral estoppel as a result of the entry of final judgment against the borrower in the underlying foreclosure proceedings.

The trial court agreed that the borrower’s FCCPA claims were entirely premised upon the purported invalidity of the debt, and barred by res judicata as a result of the adjudication of the foreclosure action.

The borrower argued that her FDCPA claims did not attack the validity of the debt, but were premised upon the servicers filing the state foreclosure action, placing telephone calls and mailing collection notices following receipt of her debt validation demands.  Specifically, the borrower argued that the collection notices sent by the servicer defendants were intended to oppress or harass, and that the defendants used false and misleading representations in their debt collection efforts.

To the extent any of the borrower’s FDCPA claims challenged the validity of the debt, the Court held that those claims were similarly barred by collateral estoppel.  Moreover, the Court also held that any challenge to the servicers’ response to the debt validation requests was not adequately pleaded, and it was undisputed that the servicers provided a timely response to the request.  Thus, no genuine issue of material fact remained regarding the borrower’s FDCPA claims, and the Court held that summary judgment was proper as to these claims.

Lastly, the defendant servicers argued that the borrower’s TCPA claims failed because (i) they did not use an auto-dialer, (ii) any calls received on a line not owned by the borrower were not actionable, and (iii) the borrower consented to receive calls on her cell phone.

As you may recall, to make a claim under the TCPA, a plaintiff must show that “(1) a call was made to a cell or wireless phone, (2) by the use of any automatic dialing system or an artificial or prerecorded voice, and (3) without prior express consent of the called party.”  Augustin v. Santander Consumer USA, Inc., 43 F. Supp. 3d 1251, 1253 (M.D. Fla. 2012).

First, the Court noted that the calls placed to the “MagicJack” number did not violate the TCPA because the borrower did not own the number, and thus was not a called party charged for the call as required for protection under the TCPA.  47 U.S.C. § 227(b)(1)(A)(iii)

Next, the Court examined whether or not the calls to the borrower’s cell phone were placed using an ATDS.

As you may recall, the TCPA makes it unlawful to call a cell phone using an ATDS or prerecorded voice, which it defines as equipment that has the capacity to store or produce telephone numbers to be called using a random or sequential number generator and dial the stored numbers. 47 U.S.C. § 227(a)(1); 47 U.S.C. § 227(b)(1)(A).

The calling servicer admitted some calls were placed to the borrower using an autodialer, but because they were placed to numbers other than her cell phone, they were not subject to the TCPA.

Pursuant to declaration and deposition testimony provided by an employee of the servicer, the 44 calls placed to the borrower’s cell phone during the relevant time frame were placed through the Avaya X1 Platform, which operates separately from the servicer’s servicing platform.

The servicer’s witness asserted that the Avaya platform’s primary function is to permit a user to dial phone calls using a computer keyboard and mouse, and that calls must be manually dialed and cannot be placed without human input.  In addition, the platform does not have the ability to store telephone numbers, dial predictively, or produce telephone numbers independently.

Accordingly, the Court concluded that the servicer’s dialing equipment used to place calls to the borrower’s cell phone was not an ATDS as defined by the TCPA, and summary judgment was entered in the servicers’ favor as to the borrower’s TCPA claims.

For the foregoing reasons, summary judgment was granted in the defendant servicers’ favor, and against the borrower.

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Christopher P. Hahn practices in Maurice Wutscher’s Commercial Litigation, Consumer Credit Litigation and Insurance Recovery and Advisory groups. Prior to joining Maurice Wutscher LLP, he served under the General Counsel at the Florida Office of Financial Regulation. He also obtained extensive experience litigating property insurance claims through all phases of discovery, motion practice and other pre-trial activities. Christopher obtained his Bachelor of Science degree in Business Administration from the University of Southern California, followed by his Juris Doctorate degree from the University of Miami School of Law. He is also a graduate of the University of Miami’s Masters of Business Administration program, completing his degree with an emphasis on finance and mergers and acquisitions.