Montgomery v. Huntington Bank

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 Montgomery v. Huntington Bank, et al. No. 01-1283
ELECTRONIC CITATION: 2003 FED App. 0362P (6th Cir.)
File Name: 03a0362p.06 _________________
COUNSEL
UNITED STATES COURT OF APPEALS
ON BRIEF: Daniel E. Best, WELTMAN, WEINBERG &
FOR THE SIXTH CIRCUIT REIS, Troy, Michigan, Donald R. Dillon, Jr., MOFFETT &
_________________ DILLON, Birmingham, Michigan, for Appellees. Duane
Montgomery, Livonia, Michigan, pro se.
DUANE MONTGO MERY , X
- _________________
Plaintiff-Appellant,
-
OPINION
- No. 01-1283
v. _________________
-
>
, SILER, Circuit Judge. Plaintiff Duane Montgomery,
HUNTINGTON BANK and - proceeding pro se, appeals the district court’s judgment
SILVER SHADOW RECOVERY , - dismissing his claims against Huntington Bank and Silver
INC., - Shadow Recovery, Inc. (“Silver Shadow”), filed under the
Defendants-Appellees. - Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.
- § 1692 et seq. He argues that the district court erred in
- finding that he was not a party in interest with respect to all
N his claims, and that Huntington Bank and Silver Shadow
Appeal from the United States District Court (collectively, the “Defendants”) were not “debt collectors,” as
for the Eastern District of Michigan at Detroit. that term is defined in the FDCPA. We AFFIRM.
No. 00-74323—Anna Diggs Taylor, District Judge.
I. BACKGROUND
Submitted: August 8, 2003 In 1998, Montgomery’s mother, Helen J. Smith, financed
the purchase of a 1998 BMW by entering into a personal loan
Decided and Filed: October 9, 2003 agreement with Huntington Bank. As collateral for the loan,
Huntington Bank took a security interest in the car. As
Before: BOGGS, Chief Circuit Judge; SILER, Circuit Montgomery has admitted in his complaint, the BMW in
Judge; RICE, Chief District Judge.* question was “owned by Helen Smith.” Approximately one
year later, Smith allegedly suffered an injury and was
apparently unable to work. Despite Montgomery’s repeated
contention that his mother was covered by credit disability
insurance that she had purchased as part of the personal loan
agreement to protect her in the event of a disability,
*
The Hono rable Walter Herbert Rice, Chief United States District Huntington Bank sought to take possession of the BMW.
Judge for the Southern District of Ohio, sitting by designation.

1
No. 01-1283 Montgomery v. Huntington Bank, et al. 3 4 Montgomery v. Huntington Bank, et al. No. 01-1283

Thus, Huntington Bank retained Silver Shadow to repossess (per curiam) (unpublished opinion). He also filed suit in
the vehicle pursuant to the terms of the loan agreement. federal court, claiming that Huntington Bank and Silver
Shadow violated various provisions of the FDCPA. The
In 2000, while Montgomery was away from his home, two Defendants moved to dismiss the complaint under Federal
employees of Silver Shadow repossessed Smith’s vehicle, Rule of Civil Procedure 12(b)(1) for lack of subject matter
which was parked in Montgomery’s garage. Upon returning jurisdiction, arguing that Montgomery was not a “consumer”
home, Montgomery discovered his mother’s BMW was within the meaning of the statute. Also, the Defendants
missing and immediately filed a police report with the West moved to dismiss the complaint pursuant to Federal Rule of
Bloomfield Township Police Department. The police report, Civil Procedure 12(b)(6), arguing that neither Huntington
which was attached to the complaint, stated that Montgomery Bank nor Silver Shadow met the statutory definition of a
had borrowed his mother’s BMW in order to transport some “debt collector” under the FDCPA. The district court granted
personal items.1 The complaint averred that the vehicle the motions by dismissing the complaint as to each of the
removed from his home was in fact a “borrowed BMW.” In Defendants. In later ruling on Montgomery’s motion for
the process of repossessing the car, Montgomery asserts that relief from judgment, the court determined that due to
Huntington Bank and Silver Shadow violated numerous “Plaintiff’s failure to make a claim upon which relief can be
Michigan laws. For instance, he insists that in order to granted, to show that he is party in interest in this suit or that
repossess the car, Silver Shadow’s employees opened his Defendants are ‘debt collectors’ under the Consumer Credit
locked garage door without permission, and thereby Protection Act, the disposition of the case will not change in
committed an unlawful breaking and entering.2 He also anyway [sic] upon rehearing or reconsideration.”
contends that Silver Shadow damaged his driveway, two of
his cars that were parked near the BMW, and various other II. STANDING
personal effects, including a laptop computer and a digital
camera; these latter items were also allegedly confiscated and As an initial matter, both Huntington Bank and Silver
ultimately returned to Montgomery by Silver Shadow for a Shadow contend that Montgomery lacks standing to pursue
small fee. Silver Shadow, however, would not return the this litigation because he is not a “consumer” as defined by
BMW to Montgomery, who offered to pay any outstanding the FDCPA. As the Defendants see it, it was Smith, not
towing and storage fees. Montgomery, who entered into the personal loan agreement
with Huntington Bank for the purchase of the BMW, and,
Montgomery sued the Defendants in Michigan state court, thus, it is Smith who is the real party in interest. Although the
alleging various violations of state law. See Montgomery v. Defendants’ assertion is correct for one of Montgomery’s
Huntington Bank, 2002 WL 31296642 (Mich. Ct. App. 2002) claims, the Defendants’ standing analysis--more precisely its
lack thereof--erroneously collapses the entire standing inquiry
under the FDCPA into whether a particular plaintiff is a
1
In a document submitted to the district court, Montgomery stated “consumer,” completely ignoring that other sections of the
instead that he “picked up the 1998 BMW from his mother’s home for the FDCPA are either expressly available, or have been
purpo se of delivering the 1998 BM W to the dealership for scheduled interpreted to be available, to “any person” aggrieved under
maintenance on the follow ing M onday mo rning.” the relevant statutory provision.
2
Mo ntgomery also claims that when he returned home he found the
side and front doors of his house unlocked and op en.
No. 01-1283 Montgomery v. Huntington Bank, et al. 5 6 Montgomery v. Huntington Bank, et al. No. 01-1283

Montgomery brought suit under three separate provisions that he lacks standing under § 1692c, as he is not a consumer
of the FDCPA: 15 U.S.C. §§ 1692c, 1692d and 1692e. Of for purposes of the FDCPA.
these three sections, relief is limited to “consumers” only
under § 1692c. As we have previously explained, “only a Under the FDCPA, a “consumer” is defined as “any natural
‘consumer’ has standing to sue for violations under 15 U.S.C. person obligated or allegedly obligated to pay any debt,” 15
§ 1692c.” Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, U.S.C. § 1692a(3), or “the consumer’s spouse, parent (if the
649 n.1 (6th Cir. 1994) (en banc). However, § 1692c consumer is a minor), guardian, executor, or administrator.”
“appears to be the most restrictive of the FDCPA’s 15 U.S.C. § 1692c(d). See also Wright, 22 F.3d at 649 n.1.
provisions. The other provisions are not limited to In the instant case, Montgomery has admitted in his complaint
‘consumers,’ and thus are broader than § 1692c.” Id. (citation that the personal loan agreement authorized Huntington Bank
omitted). to “[t]ak[e] possession of the collateral (BMW) . . . [held] in
the name of Helen J. Smith” in the event of breach. His
By its express terms, § 1692d provides that “[a] debt complaint further states that at the time of the repossession,
collector may not engage in any conduct the natural the BMW was “owned by Helen Smith” and merely
consequence of which is to harass, oppress, or abuse any “borrowed” by him. Nowhere in his complaint does he allege
person in connection with the collection of a debt.” that he is the legal guardian of his mother or that he is
(Emphasis added). We have interpreted this to mean that otherwise obligated or allegedly obligated to pay any debt in
“any person who has been harmed by a proscribed debt connection with the purchase of the BMW. Also, contrary to
collection practice under § 1692d . . . [may] sue for damages his suggestion, the mere fact that he possessed or borrowed
under § 1692k(a)(2)(A).” Wright, 22 F.3d at 649 n.1 his mother’s car, and that the Defendants were aware of this
(paraphrasing the court’s holding in Whatley v. Universal possible arrangement and communicated this information to
Collection Bureau, Inc., 525 F. Supp. 1204 (N.D. Ga. 1981)). one another, does not show that he was responsible or
Likewise, § 1692e states that “[a] debt collector may not use allegedly responsible for paying any debt stemming from the
any false, deceptive, or misleading representation or means in purchase of the automobile.4 Accordingly, he fails to meet
connection with the collection of any debt.” 15 U.S.C. the statutory definition of “consumer,” and, hence, lacks
§ 1692e. When read in conjunction with § 1692k(a),3 this standing under § 1692c.
means that “any aggrieved party may bring an action under
§ 1692e.” Wright, 22 F.3d at 649-50 (emphasis added). III. STANDARD OF REVIEW
Accordingly, the Defendants are mistaken to suggest that
Montgomery lacks standing to pursue his claims under This court reviews de novo a district court’s grant of a
§§ 1692d and 1692e. However, the Defendants are correct motion to dismiss under Federal Rule of Civil Procedure

4
3
According to M ontgo mery, he was “allegedly obligated to a pay a
Section 1692k(a) governs who m ay enforce the provisions of the deb t” because Huntington Bank faxed a letter to Silver Shadow indicating
FDCPA. It provides that “any d ebt co llector who fails to comply with any that “the unit [i.e., the car] was possibly in the possession of a person
provision of this subchapter with respect to any person is liable to such known to the bank as Duane Montgomery” and provided his address.
person . . . .” 15 U .S.C. § 1 692 k(a). T his enforcem ent pro vision “is Such awareness or exchange betw een the Defendants, however, says
couched in the broadest possible language.” Wright, 22 F.3d at 649 nothing as to whether Montgomery has, or allegedly has, a legal
(internal quotation marks and citation omitted). obligation to pay a debt in connection with the car.
No. 01-1283 Montgomery v. Huntington Bank, et al. 7 8 Montgomery v. Huntington Bank, et al. No. 01-1283

12(b)(6). Merriweather v. City of Memphis, 107 F.3d 396, owed or due another.”5 15 U.S.C. § 1692a(6). Creditors who
398 (6th Cir. 1997). In reviewing a motion to dismiss, we use names other than their own--such as a third-party name--
must “construe the complaint in the light most favorable to to collect on their own debts also qualify as debt collectors
the plaintiff . . . and determine whether the plaintiff under the Act. See id. Exempted from the definition of a debt
undoubtedly can prove no set of facts in support of the claims collector, however, is
that would entitle relief.” Grindstaff v. Green, 133 F.3d 416,
421 (6th Cir. 1998) (citation omitted). In the process of any person collecting or attempting to collect any debt
applying this standard, we must be cautious to remember that owed or due or asserted to be owed or due another to the
a pro se complaint must be held to “less stringent standards extent such activity . . . (ii) concerns a debt which was
than formal pleadings drafted by lawyers.” Haines v. Kerner, originated by such person . . . [or] (iii) concerns a debt
404 U.S. 519, 520 (1972) (per curiam). That said, we “need which was not in default at the time it was obtained by
not accept as true legal conclusions or unwarranted factual such person.
inferences.” Morgan v. Church's Fried Chicken, 829 F.2d 10,
12 (6th Cir. 1987). 15 U.S.C. § 1692a(6)(F)(ii), (iii). Finally, a “creditor” is “any
person who offers or extends credit creating a debt or to
IV. ANALYSIS whom a debt is owed . . . .” 15 U.S.C. § 1692a(4). As the
Fifth Circuit has concluded, “[t]he legislative history of
As a matter of law, liability under §§ 1692d and 1692e can section 1692a(6) indicates conclusively that a debt collector
only attach to those who meet the statutory definition of a does not include the consumer’s creditors . . . .” Perry v.
“debt collector.” The Defendants assert that they are not debt Stewart Title Co., 756 F.2d 1197, 1208 (5th Cir. 1985)
collectors within the meaning of the FDCPA. Thus, as a (internal quotation marks and citation omitted); see also
threshold matter, we must determine whether either of the Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 106
Defendants falls within the FDCPA’s definition of a “debt (6th Cir. 1996) (quoting Perry with approval for this
collector.” proposition).
The FDCPA was enacted to “eliminate abusive debt Based on the foregoing, it is clear that under the
collection practices by debt collectors, to insure that those circumstances of this case, Huntington Bank is not a “debt
debt collectors who refrain from using abusive debt collection collector” subject to liability under the FDCPA. First,
practices are not competitively disadvantaged, and to promote Huntington Bank falls within the exemption contained in
consistent State action to protect consumers against debt § 1692a(6)(F)(ii) because by retaining Silver Shadow to
collection abuses.” 15 U.S.C. § 1692(e). The statute defines repossess the BMW that served as collateral for the car loan
a “debt collector” as “any person who uses any to Smith, it was collecting or attempting to collect on a debt
instrumentality of interstate commerce or the mails in any that was owed, due, or asserted to be owed or due, and that
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 5
A debt is “any obligation or alleged obligation of a consumer to pay
money arising out of a transaction in which the money, property,
insurance, or services which are the subject of the transaction are
primarily for persona l, family, or ho useho ld purpo ses, whether or not such
obligation has been reduced to judgment.” 15 U.S.C. § 169 2a(5).
No. 01-1283 Montgomery v. Huntington Bank, et al. 9 10 Montgomery v. Huntington Bank, et al. No. 01-1283

originated with it. See, e.g., Thompson v. Bank One, 137 F. entered into the loan agreement with Huntington Bank.
Supp. 2d 721, 724 (E.D. La. 2001) (finding that “[i]n Therefore, Huntington Bank is not a “debt collector” pursuant
collecting on its own debts [through use of a third party or a to § 1692a(6)(F)(iii). See Wadlington, 76 F.3d at 107 (finding
subsidiary agent], [the] Bank . . . does not meet the criteria of that a corporation that obtained debts before they were in
a ‘debt collector’ pursuant to [§ 1692a(6)(F) of] the default did not fall within the definition of a debt collector).
FDCPA”); Zsamba v. Cmty. Bank, 63 F. Supp. 2d 1294, 1300 Accordingly, the district court was correct in dismissing the
(D. Kan. 1999) (finding that a creditor bank collecting on its FDCPA claims against Huntington Bank.
own debt falls outside the purview of the FDCPA by virtue of
§ 1692a(6)(F)(ii)); Vitale v. First Fidelity Leasing Group, 35 As a repossession agency, Silver Shadow, likewise, does
F. Supp. 2d 78, 81 (D. Conn.) (holding that “[a]lthough there not fall within the definition of a “debt collector.”
are allegations to suggest that [the automobile leasing and Montgomery suggests that we give meaning to the term debt
financing company] was collecting a debt, the debt was one collector as it applies to Silver Shadow by looking at
owed to it and thus its activities are not covered by the Michigan statutory law. State law, however, cannot be our
FDCPA”), aff’d, 166 F.3d 1202 (2d Cir. 1998) (unpublished reference point. Rather, to give proper meaning to a federal
opinion). In other words, Huntington Bank was an actual, statute we must be guided by the plain meaning of the statute,
original, consumer creditor of Montgomery’s mother canons of statutory construction, relevant legislative history,
collecting its account, and, as such, was exempted from the and other indicia that shed light on the statute’s meaning,
statutory definition of a “debt collector.” To this, the federal such as judicial precedent and administrative agency
courts are in agreement: A bank that is “a creditor is not a interpretations, which for purposes of the FDCPA, are
debt collector for the purposes of the FDCPA and creditors interpretations given by the Federal Trade Commission
are not subject to the FDCPA when collecting their accounts.” (“FTC”). See Jordan v. Kent Recovery Serv., Inc., 731 F.
Stafford v. Cross Country Bank, 262 F. Supp. 2d 776, 794 Supp. 652, 656 (D. Del. 1990). In Jordan, the court
(W.D. Ky. 2003) (citations omitted); see, e.g., Russell v. undertook a comprehensive analysis to determine whether
Standard Fed. Bank, 2000 WL 1923513, at *2 (E.D. Mich. those who enforce security interests, such as repossession
2000); James v. Ford Motor Credit Co., 842 F. Supp. 1202, agencies, fall outside the ambit of the FDCPA. It held that
1206-07 (D. Minn. 1994), aff’d, 47 F.3d 961 (8th Cir. 1995); “an enforcer of a security interest, such as a repossession
Meads v. Citicorp Credit Serv., Inc., 686 F. Supp. 330, 333 agency, falls outside the ambit of the FDCPA for all purposes,
(S.D. Ga. 1988). except for the purposes of § 1692f(6).”6 Id. at 659; see also

Furthermore, Huntington Bank also does not qualify as a
debt collector because it falls within the provision of 6
§ 1692a(6)(F)(iii), a “person collecting or attempting to Section 1692a(6) states that “[f]or the purpose of section 1692f(6)
collect any debt owed or due . . . to the extent such activity of this title, [the term debt collector] also includes any person who uses
any instrumentality of interstate commerce or the mails in any business
. . . concerns a debt which was not in default at the time it was the princip al purp ose o f which is the enforc ement of security interests.”
obtained by such person.” Under Montgomery’s version of Section 16 92f(6 ) itself prohibits the fo llowing cond uct:
the facts, at the time Huntington Bank extended a personal Taking or threatening to take any nonjudicial action to effect
loan to Smith to purchase a car, and thus acquired a “debt,” dispo ssession or disa blement of property if--
the personal loan was not “in default.” In fact, the alleged (A) there is no present right to possession of the pro perty
claime d as collatera l through an enforceable se curity interest;
default in this case did not occur until over a year after Smith (B) there is no present intention to take possession of the
No. 01-1283 Montgomery v. Huntington Bank, et al. 11 12 Montgomery v. Huntington Bank, et al. No. 01-1283

Seibel v. Society Lease, Inc., 969 F. Supp. 713, 716-17 (M.D. lacks the money sought, the possessor of secured property
Fla. 1997) (concluding that except for purposes of § 1692f(6), still has control of the property. Any failure to return the
a defendant in the business of repossessing vehicles does not property to the rightful owner occurs not through misfortune
fall within the FDCPA’s definition of debt collector). We but through a deliberate decision by the present possessor to
agree. avoid returning the property.” Id. It was thus the court’s
view that “the legislative history confirms that Congress
In Jordan, the court found that although Congress included intended an enforcer of a security interest, such as a
within the definition of “debt collectors” those who enforce repossession agency, to fall outside the ambit of the FDCPA
security interests, it limited this definition only to the for all purposes except for the prohibitions described in
provisions of § 1692f(6). As the court put it, “[s]uch a § 1692f(6).”7 Id. (citation omitted). In sum, we likewise
purposeful inclusion for one section of the FDCPA implies conclude that except for purposes of § 1692f(6), an enforcer
that the term ‘debt collector’ does not include an enforcer of of a security interest, such as a repossession agency, does not
a security interest for any other section of the FDCPA.” Id. meet the statutory definition of a debt collector under the
at 657. The court further indicated that when § 1692f(6) is FDCPA.
read in conjunction with its legislative history, the two
provide “the key to understanding the reason Congress drew In the case at bar, Montgomery has not alleged any
a distinction between a debt collector and an enforcer of a violation of § 1692f(6).8 Also, other than conclusorily stating
security interest.” Id. that Silver Shadow is a “debt collector,” he has not alleged
that Silver Shadow is a business whose “principal purpose” is
It went on to find that the FDCPA was enacted in order “to debt collection, or that it regularly collects or attempts to
prevent the ‘suffering and anguish’ which occur when a debt collect debts owed to another. His allegations reveal only that
collector attempts to collect money which the debtor, through Silver Shadow was seeking recovery of the BMW that was
no fault of his own, does not have.” Id. at 658 (citation posted as collateral for the personal loan given to Smith by
omitted). In contrast, the court found that the evil sought to Huntington Bank. In fact, Montgomery admits that Silver
be prevented by proscribing the conduct of debt collectors,
namely, “harassing attempts to collect money which the
debtor does not have due to misfortune,” is not implicated in 7
The court also found helpful an FTC commentary that provided that
the situation of a repossession agency that enforces a “present Because the FDCPA’s definition of “debt collection” includes
right” to a security interest because in the latter context, “an parties whose principal business is enforcing security interests
enforcer of a security interest with a ‘present right’ to a piece only for . . . [§ 169 2f(6) ] purp oses, such parties (if they do not
of secured property attempts to retrieve something which otherwise fall within the definition) are subjec t only to this
provision and not to the rest of the FDCPA.
another person possesses but which the holder of the security
interest still owns.” Id. It noted that “[u]nlike the debtor who Jordan, 731 F. Supp. at 658 (quoting Statements of General Policy or
Interpretation Staff Commentary on the Fair Debt Collection Practices
Act, 53 Fed. Reg. 50097, 50108 (1988) (published Decemb er 13, 1998)).
property; or 8
(C) the property is exempt by law from such dispossession or W e leave for ano ther da y the question o f whether M ontgo mery’s
disab lement. allegations may ha ve stated a claim under § 15 U.S.C. § 1 692 f(6). See,
e.g., Purkett v. Key Bank USA, N.A., 200 1 W L 50 305 0, at *2-*3 (N.D . Ill.
15 U.S.C. § 16 92f(6). 2001) (unrepo rted).
No. 01-1283 Montgomery v. Huntington Bank, et al. 13

Shadow was simply acting as a repossession agency when it
seized his mother’s BMW. As such, Silver Shadow does not
qualify as a debt collector under §§ 1692d and § 1692e, the
only two claims remaining. Accordingly, the district court
did not err in dismissing the complaint against Silver Shadow
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure.9
AFFIRMED.

9
On appeal, Montgomery recites numerous Michigan laws that he
claims the Defendants violated in c onne ction with the rep ossession of his
mother’s car. These alleged state law violations were not ruled on by the
district court, nor were they even set forth in the com plaint. Accordingly,
they are not properly b efore this court on ap peal. See United States v.
Ha rris, 9 F.3 d 49 3, 49 9 (6th Cir.1993 ) (“As a general rule, we will not
consider issues not presented to and considered by the district court.”)
(citation omitted).
Also, he briefly suggests that the district court erred in denying his
motion for relief from judgment or for reconsideration because he did not
receive notice regarding the court’s hearing on the Defendants’ motion to
dismiss. The district court considered M ontgomery’s request and
concluded that he failed to show “a palpable defect by which the Court
was misled or that if another hea ring is granted, the disposition of the case
will chang e in any way.” The motion for relief from judgment or for
reconsideration was essentially a motion pursuant to Federal Rule of Civil
Procedure 60(b). A district court’s denial of a Rule 60(b) motion is
reviewed for an abuse of discretion. Browder v. D irector, Dep t. of
Corrections, 434 U.S. 257, 263 n.7 (1978). Here, M ontgomery lacks
standing with rega rd to his § 1692c claim, and the Defendants do not meet
the statutory definition of debt collectors with regard to his §§ 1692d and
169 2e claims. Accord ingly, as a ma tter of law, a new hearing would not
have changed the disposition of the case. The district co urt, therefore, did
not abuse its discretion in denying the motion for rehearing or
reconsideration.