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Watts v. Wells Fargo Dealer Services, Inc.

United States District Court, N.D. Alabama, Middle Division

May 25, 2014

ROGER W. WATTS, JR., Plaintiff,



         This case concerns Roger W. Watts, Jr.'s attempts to retain possession of a BMW car for which he has not paid. This matter is before the court on Defendant/Counter-claimant Wells Fargo's Motion for Summary Judgment. (Doc. 60). Wells Fargo moves for summary judgment on both Mr. Watts's claims and its counterclaim for breach of contract. Mr. Watts did not respond to the motion; therefore Wells Fargo's facts are undisputed pursuant to the court's requirements for summary judgment briefs in Appendix II, referenced in the court's Scheduling Order. (Doc. 22 at 5).

         I. Standard of Review

         Summary judgment allows a trial court to decide cases when no genuine issues of material fact are present and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). When a district court reviews a motion for summary judgment it must determine two things: (1) whether any genuine issues of material fact exist; and if not, (2) whether the moving party is entitled to judgment as a matter of law. Id.

         The moving party “always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party meets its burden of showing the district court that no genuine issues of material fact exist, the burden then shifts “to the non-moving party to demonstrate that there is indeed a material issue of fact that precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The court cannot grant a motion for summary judgment merely because the nonmoving party fails to respond; it “must consider the merits of the motion” and “ensure that the motion itself is supported by evidentiary materials.” United States v. One Piece of Real Prop., 363 F.3d 1099, 1101 (11th Cir. 2004).

         In reviewing the evidence submitted, the court must view all evidence and factual inferences drawn from it in the light most favorable to the non-moving party. See Augusta Iron & Steel Works, Inc. v. Emp'rs Ins. of Wausau, 835 F.2d 855, 856 (11th Cir. 1988) (citation omitted). However, the non-moving party “need not be given the benefit of every inference but only of every reasonable inference.” Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999) (citation omitted).

         II. Factual and Procedural History

         This case centers on Mr. Watts's purchase of a 2011 BMW, VIN WBAKC8C56BC434525, from CarMax on credit in May 2014. Wells Fargo, a preferred lender for CarMax, loaned Mr. Watts $50, 363.40 at 9.9% interest to finance the purchase from CarMax. Mr. Watts signed the Retail Installment Contract with CarMax; the agreement specifically provided that the contract and Mr. Watts's obligations to make payments under it were assigned to Wells Fargo. Under the contract, Wells Fargo retained a security interest in the car. The contract provided that Mr. Watts would make monthly payments and that, if he defaulted on those payments, Wells Fargo had the right to repossess the vehicle. The contract also provided for an award of reasonable attorneys' fees and court costs, not to exceed 15% of the amount Mr. Watts owed at the time of default and referral, incurred in collection or enforcement. Mr. Watts made payments on that loan through June of 2015, with those payments totaling $11, 239.15 of the $70, 438.80 he was scheduled to pay under the contract. In October 2015, Wells Fargo apparently unsuccessfully attempted to repossess the vehicle.

         Mr. Watts brought this lawsuit in November 2015 in state court. Wells Fargo removed it to federal court in December 2015, and Mr. Watts amended his complaint in May 2016. Mr. Watts's “Amended Verified Fair Debt Collection Practicing Act Complaint; Petition for Declaratory Relief and for Compensatory and Punitive Damages” apparently asserts two claims: one alleging that Defendant Wells Fargo violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., by failing to validate the debt it claims Mr. Watts owes under the Retail Installment Contract, and another stating that, under the contract, Mr. Watts is the rightful owner of the vehicle and Wells Fargo is indebted to him.[1] Wells Fargo filed a Counter-complaint alleging that Mr. Watts breached the Retail Installment Contract and seeking a preliminary injunction to obtain possession of the collateral as well as attorneys' fees under the contract.[2]

         Because all evidence supported a breach of the contractual obligation to pay on the loan for more than a year, this court granted Wells Fargo's request for a preliminary injunction and ordered Mr. Watts to turn over possession of the car to Wells Fargo by noon on October 28, 2016. Mr. Watts failed to turn over the car and, after a series of evasive measures on Mr. Watts's part, including the filing of a bankruptcy case that was dismissed, reinstated, and dismissed again, the court found him in civil contempt of the court's Order on March 23, 2017. The court ordered that Mr. Watts remain in the custody of the U.S. Marshals until he surrendered possession of the vehicle to the Marshals. He remains in custody as of this date despite the court's repeated admonitions to him, including as recently as May 15, 2017, that he holds the keys to the jail.

         III. Discussion

         A. FDCPA

         To the extent Mr. Watts's Amended Complaint states a claim under the FDCPA, that claim fails as a matter of law because Wells Fargo is not a “debt collector” under the statute. That a defendant is a debt collector comprises an element of an FDCPA claim. Janke v. Wells Fargo & Co., 805 F.Supp.2d 1278, 1281 (M.D. Ala. 2011) (quoting Kaplan v. Assetcare, Inc., 88 F.Supp.2d 1355, 1360-61 (S.D. Fla. 2000)) (“In order to prevail on an FDCPA claim, a plaintiff must prove that: . . . (2) the defendant is a debt collector as defined by the FDCPA . . . .”). The FDCPA defines a “debt collector” as “any 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.” 15 U.S.C. § 1692a(6). The statute explicitly excludes from that definition “any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor.” Id. at § 1692a(6)(A). This exclusionary language has universally been interpreted as applying to a creditor itself and not merely officers or employees of a creditor. E.g., Shedd v. Wells Fargo Bank, N.A., No. 14-0275-WS-M, 2016 WL 3264127, at *9 & n.16 (S.D. Ala. June 13, 2016) (collecting cases). So the FDCPA by its clear language excludes or does not apply to a creditor like Wells Fargo.

         Under the Retail Installment Contract, Wells Fargo owns the debt owed to it by Mr. Watts; its attempts to collect on that debt are those of a creditor who cannot be liable under the FDCPA. Shedd, 2016 WL 3264127, at *8-9 (finding that Wells Fargo was a creditor under § 1692a(6)(A) where it owned the subject promissory note and mortgage); Johns v. Wells Fargo Bank, N.A., No. 14-0254-KD-C, 2015 WL 9238957, at *9 (S.D. Ala. Dec. 17, 2015) (finding that Wells Fargo was exempt from liability under the FDCPA as a creditor because it owned the debt on which it was attempting to collect); Janke, 805 F.Supp.2d at 1282 (dismissing plaintiff's FDCPA claim because Wells ...

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