Auld v. New Penn Financial LLC

Background

Cindy M. Auld and Scott B. Auld sued New Penn Financial LLC, doing business as Shellpoint Mortgage Servicing; John Doe, an unidentified Shellpoint employee; and Mortgage Contracting Services LLC. The Aulds alleged violations of the Fair Debt Collection Practices Act, a federal law regulating debt-collection conduct, and related tort claims arising from events in 2017.

The Aulds’ mortgage was in default when Shellpoint began servicing it. Shellpoint had contracted with MCS to conduct property-occupancy inspections. MCS used vendors and inspectors, including John Waldron. On July 7, 2017, Waldron told Scott Auld that he was conducting an occupancy check for the mortgage company and that his job was to verify that someone was living at the property. The Aulds claimed that this interaction violated statutory restrictions on communications with represented consumers, communications after a written request to stop, and required debt-collector disclosures.

On May 10, 2017, Hennepin County Human Services received an anonymous report that mold in the Aulds’ home endangered their five children. The county investigated, found no visible mold, made no maltreatment finding, and did not recommend continuing services. The Aulds alleged that Shellpoint or its unidentified employee made the report, but they did not know the reporter’s identity.

Summary-judgment standard

The court applied the summary-judgment standard under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when the evidence shows no genuine dispute about a fact that could affect the result and the moving party is entitled to judgment under the law. The nonmoving party must present admissible evidence supporting specific facts; allegations, denials, speculation, and conjecture are not enough.

Count I: July 7, 2017 interaction

The court held that every Fair Debt Collection Practices Act provision asserted in Count I required both a covered debt collector and a communication. Because the Aulds sought to hold Shellpoint and MCS responsible for Waldron’s conduct, Waldron himself had to qualify as a debt collector.

The court concluded that Waldron did not qualify under the Act’s primary definition, which covers people whose business principally involves collecting debts or who regularly collect or attempt to collect debts owed to someone else. The Aulds offered no evidence that Shellpoint gave MCS or Waldron specific information about the Aulds’ debt, that Waldron selected properties based on their likelihood of repayment, or that he attempted to collect payments. The Shellpoint-MCS contract also barred MCS and its agents from taking action related to debt collection or making statements about the amount owed.

Because Waldron was not a debt collector, the court held that the Aulds’ Count I claims against Shellpoint and MCS failed as a matter of law. The court therefore did not decide whether Waldron’s interaction with Scott Auld was a qualifying communication or whether Shellpoint or MCS could otherwise be held responsible for Waldron’s actions.

Counts II–IV: May 10, 2017 report

Counts II through IV alleged that Shellpoint and John Doe were responsible for the anonymous report to Hennepin County. The claims included a Fair Debt Collection Practices Act claim, abuse of process, and slander.

The Aulds relied on the fact that Shellpoint knew about mold from their attorney’s February 2017 letter, an occupancy inspection occurred on the same day as the county report, and the reporter later referred to alleged failures to allow interior mold inspections. The court found that these facts did not connect Shellpoint to the report. The court also noted that the Aulds acknowledged that mold problems were known in the community and that they did not pursue a possible procedure for having the county’s records reviewed to identify the reporter.

The court held that the Aulds’ evidence amounted only to speculation, conjecture, or fantasy and was insufficient to create a genuine factual dispute. It therefore granted Shellpoint’s motion for summary judgment on Counts II through IV.

Disposition

The order states:

1. New Penn Financial LLC’s, doing business as Shellpoint Mortgage Servicing, motion for summary judgment was GRANTED. 2. MCS’s motion for summary judgment was GRANTED.

The court ordered that judgment be entered accordingly.