FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARTHA A. MCNAIR, an individual, No. 15-17383
Plaintiff-Appellant,
D.C. No.
v. 2:14-cv-00869-
DGC
MAXWELL & MORGAN PC, an
Arizona professional corporation;
CHARLES E. MAXWELL, husband; OPINION
W. WILLIAM NIKOLAUS, husband;
LISA MAXWELL, wife; LESLIE
NIKOLAUS, wife,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Arizona
David G. Campbell, District Judge, Presiding
Argued and Submitted September 14, 2017
San Francisco, California
Filed June 25, 2018
2 MCNAIR V. MAXWELL & MORGAN
Before: Jay S. Bybee * and Michelle T. Friedland, Circuit
Judges, and Janet Bond Arterton, ** District Judge.
Opinion by Judge Arterton
SUMMARY ***
Fair Debt Collection Practices Act
The panel affirmed in part and reversed in part the
district court’s grant of summary judgment in favor of the
defendants on plaintiff’s claims that the defendants,
including a law firm, violated the Fair Debt Collection
Practices Act in their efforts to collect unpaid homeowner
association assessments and other charges that she allegedly
owed their client.
The panel reversed the district court’s grant of summary
judgment on plaintiff’s claim that in judicial proceedings,
defendants misrepresented the amount of her debt and
sought attorneys’ fees to which they were not entitled.
Distinguishing Ho v. ReconTrust Co., NA, 858 F.3d 568 (9th
Cir. 2017), the panel held that the defendants’ effort to
*
Following the retirement of Judge Kozinski, Judge Bybee was
randomly drawn to replace Judge Kozinski on the panel. Judge Bybee
has read the briefs, reviewed the record, and watched a video recording
of the oral argument held on September 14, 2017.
**
The Honorable Janet Bond Arterton, United States District Judge
for the District of Connecticut, sitting by designation.
***
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
MCNAIR V. MAXWELL & MORGAN 3
collect homeowner association fees through judicial
foreclosure constituted “debt collection” under the FDCPA.
The panel held that defendants’ filing of a writ of special
execution violated 15 U.S.C. § 1692e because defendants
falsely represented the legal status of their request for
attorneys’ fees. The panel remanded to the district court for
a determination on damages.
In a concurrently-filed memorandum disposition, the
panel affirmed the district court’s summary judgment in part.
COUNSEL
Douglas C. Wigley (argued) and Jonathan A. Dessaules,
Dessaules Law Group, Phoenix, Arizona, for Plaintiff-
Appellant.
Robert Travis Campbell (argued), Jeffrey A. Topor, and
Tomio B. Narita, Simmonds & Narita LLP, San Francisco,
California, for Defendants-Appellees.
OPINION
ARTERTON, District Judge:
Plaintiff Martha McNair appeals the district court’s grant
of Defendant’s summary judgment motion in her action
under the Fair Debt Collection Practices Act (“FDCPA” or
the “Act”) and its denial of McNair’s motion for partial
summary judgment. McNair’s complaint alleged that
Defendants, including the law firm Maxwell & Morgan P.C.,
violated the FDCPA in their efforts to collect unpaid
homeowner association assessments and other charges that
4 MCNAIR V. MAXWELL & MORGAN
she allegedly owed their client, the Neely Commons
Community Association (“Association”). In the
Memorandum Disposition filed together with this Opinion,
we affirm the district court’s conclusion that all but two of
Plaintiff’s FDCPA claims were untimely and the grant of
summary judgment to Defendants on Plaintiff’s timely claim
that Defendant violated the FDCPA by not responding
expeditiously to Plaintiff’s requests for a statement of the
amount she owed.
The district court also granted summary judgment to
Defendants on Plaintiff’s sole other timely claim, which
alleged that in judicial proceedings in 2013 and 2014,
Defendants misrepresented the amount of Plaintiff’s debt
and sought attorneys’ fees to which they were not entitled.
With respect to this claim, we reverse the district court’s
grant of summary judgment against Plaintiff and denial of
Plaintiff’s motion for partial summary judgment, as
explained herein.
Because most of the facts in this decade-long saga bear
little or no relevance to the basis for this Opinion, we do not
recite the entire history of the case, which was ably
summarized in the district court’s decision. As relevant here,
Plaintiff bought a home in Gilbert, Arizona in 2004 that was
part of the Neely Commons Community Association.
Plaintiff was required, under a declaration of covenants,
conditions, and restrictions, to pay an annual assessment to
the Association in monthly installments. When an owner
fails to pay an installment, after the Association makes a
written demand, the Association can record a notice of lien
on the owner’s property. The Association has the right to
collect the debt, including late fees, costs, and attorneys’
fees, by suing the owner or by bringing an action to foreclose
the lien.
MCNAIR V. MAXWELL & MORGAN 5
Defendants first notified Plaintiff in 2009 of her failure
to pay a debt arising out of her homeowner association
assessment. Defendants represented the Association in suing
Plaintiff, after which the parties entered into a payment
agreement. After Plaintiff defaulted on the agreement,
Defendants revived the lawsuit and obtained a default
judgment in 2010. As the district court noted, the record is
silent as to what occurred in 2011. In 2012, Defendants
represented the Association in suing Plaintiff again, and the
parties agreed to a new payment plan and to execute a
stipulated judgment against Plaintiff that recognized the
Association’s right to collect the debt by selling Plaintiff’s
home. Plaintiff failed to make all of the required monthly
payments. In November 2013, Defendants requested via
praecipe, and the Maricopa Superior Court granted, a writ of
special execution for foreclosure on Plaintiff’s house. The
property was sold for $75,000 at a foreclosure sale, and
Defendants and their client received a total of $11,600.13 in
satisfaction of the debt, including attorneys’ fees and costs.
The district court rejected Plaintiff’s claim that
Defendants violated the FDCPA in judicial proceedings in
2013 and 2014 by misrepresenting the amount of Plaintiff’s
debt and seeking attorneys’ fees to which they were not
entitled, on two separate and apparently independent
grounds. First, the district court held that Defendants were
not engaged in “debt collection” as defined under the
FDCPA. Second, the district court held that Defendants’
filing of the writ did not violate the FDCPA because the
Maricopa County Superior Court later approved the
attorneys’ fees claimed in the writ. We disagree with both
grounds and therefore reverse.
Writing without the benefit of our subsequent published
opinions, discussed infra, the district court concluded that
6 MCNAIR V. MAXWELL & MORGAN
Defendants were not engaged in “debt collection” as defined
under the FDCPA because the writ was filed in order to
foreclose on a lien. We now clarify that Defendants’ effort
to collect homeowner association fees through judicial
foreclosure constitutes “debt collection” under the Act.
Under the FDCPA, 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 personal, family, or household purposes,
whether or not such obligation has been reduced to
judgment.” 15 U.S.C. § 1692a(5). The Act “defin[es] the
term ‘debt collector’ to embrace anyone who ‘regularly
collects or attempts to collect . . . debts owed or due . . .
another.’” Henson v. Santander Consumer USA Inc., 137 S.
Ct. 1718, 1721 (2017) (citing 15 U.S.C. § 1692a(6))
(alterations in original).
This statutory language notwithstanding, the district
court concluded that “Defendants’ filing of the writ did not
constitute a violation” of the Act, relying in part on Hulse v.
Ocwen Fed. Bank, FSB, 195 F. Supp. 2d 1188, 1204 (D. Or.
2002), for the proposition that foreclosure proceedings are
not the collection of a debt for purposes of the Act.
The district court’s holding cannot be reconciled with the
language of the FDCPA. The record makes clear that
Defendants were in fact “debt collectors” collecting “debt.”
The debt here accrued as a result of Plaintiff’s failure to pay
homeowner association fees. Accordingly, Plaintiff’s
“obligation . . . to pay money ar[ose] out of a transaction in
which the money, property, insurance, or services which are
the subject of the transaction are primarily for personal,
family, or household purposes[.]” 15 U.S.C. § 1692a(5)
(defining “debt” under the Act); see also Mashiri v. Epsten
MCNAIR V. MAXWELL & MORGAN 7
Grinnell & Howell, 845 F.3d 984, 989–90 (9th Cir. 2017)
(concluding that attorneys’ collection letter regarding failure
to pay homeowner’s assessment fee constituted debt
collection under the FDCPA). And “attorneys who
‘regularly’ engage in consumer-debt-collection activity” are
debt collectors under the Act, “even when that activity
consists of litigation.” Heintz v. Jenkins, 514 U.S. 291, 299
(1995).
Nonetheless, Defendants contend that under our recent
decision in Ho v. ReconTrust Co., NA, 858 F.3d 568 (9th
Cir.), cert. denied, 138 S. Ct. 504 (2017), they “are not debt
collectors when pursuing a foreclosure to enforce a security
interest.” In Ho, we held that a trustee in a non-judicial
foreclosure scheme that does not allow for deficiency
judgments was not engaged in “debt collection” under the
FDCPA. See id. at 572 (“[A]ctions taken to facilitate a non-
judicial foreclosure . . . are not attempts to collect ‘debt’ as
that term is defined by the FDCPA.”).
Our decision in Ho does not, however, preclude FDCPA
liability for an entity that seeks to collect a debt through a
judicial foreclosure scheme that allows for deficiency
judgments. In Ho, we noted that because “[t]he object of a
non-judicial foreclosure is to retake and resell the security,
not to collect money from the borrower[,]” and because
“California law does not allow for a deficiency judgment
following non-judicial foreclosure[,]” “the foreclosure
extinguishes the entire debt even if it results in a recovery of
less than the amount of the debt.” Id. at 571–72 (citing Cal.
Civ. Code § 580d(a); Burnett v. Mortg. Elec. Registration
Sys., Inc., 706 F.3d 1231, 1239 (10th Cir. 2013); Alaska Tr.,
LLC v. Ambridge, 372 P.3d 207, 228 (Alaska 2016)
(Winfree, J., dissenting)). Accordingly, we held that “actions
taken to facilitate a non-judicial foreclosure, such as sending
8 MCNAIR V. MAXWELL & MORGAN
the notice of default and notice of sale, are not attempts to
collect ‘debt’ as that term is defined by the FDCPA.” Id. at
572. Here, by contrast, Defendants filed the Praecipe and
Writ in order to collect a debt arising from Plaintiff’s failure
to pay homeowner association fees as part of a judicial
foreclosure scheme that in many cases allows for deficiency
judgments. See Ariz. Rev. Stat. §§ 33-727(A), 33-729(B)–
(C). Therefore, and for the reasons discussed above, this
action constitutes debt collection under the FDCPA. 1
As an independent basis for summary judgment, the
district court also concluded that the Maricopa County
Superior Court implicitly approved the attorneys’ fees
claimed, first by issuing the writ and later by rejecting
Plaintiff’s subsequent challenges to the amount of fees made
in Plaintiff’s motion to cancel the sheriff’s sale and in
Plaintiff’s motion for relief from judgment. In so doing,
however, the district court failed to examine whether
Defendants were legally entitled to claim the attorneys’ fees
owed at the time Defendants made the writ application.
In Arizona, a party that has obtained a judgment “may
have a writ of execution or other process issued for its
enforcement.” Ariz. Rev. Stat. § 12-1551(A). And in
Maricopa County, in order to request issuance of a post-
judgment writ of special execution, a party must file a
praecipe or an application in writing with the Clerk of the
1
The district court relied on Hulse, 195 F. Supp. 2d at 1204, as
described supra, for the broad proposition that foreclosure proceedings
are categorically not debt collection for purposes of the FDCPA. Ho
subsequently endorsed Hulse for the more limited proposition that
“‘foreclosing on a trust deed is an entirely different path’ than ‘collecting
funds from a debtor.’” 858 F.3d at 572 (emphasis added) (quoting Hulse,
195 F. Supp. 2d at 1204). Hulse, like Ho, involved a non-judicial
foreclosure, unlike here.
MCNAIR V. MAXWELL & MORGAN 9
Superior Court. 17C Ariz. Rev. Stat. Super. Ct. Local Prac.,
Maricopa Cty., R. 3.5.
The Praecipe filed by Defendants on November 5, 2013
requested that the Clerk of the Maricopa County Superior
Court issue the attached Writ of Special Execution against
McNair. The Writ states that “attorney fees of $1,687.50,
plus accruing attorney fees of $1,597.50 . . . are now at the
date of this Writ due” under the stipulated judgment
executed by both parties on June 27, 2012 and adopted by
order of the Superior Court on July 12, 2012.
Under the FDCPA, debt collectors “may not use any
false, deceptive, or misleading representation or means in
connection with the collection of any debt.” 15 U.S.C.
§ 1692e. This includes “[t]he false representation of the
character, amount, or legal status of any debt[.]” Id.
§ 1692e(2)(A). In Arizona, requests for post-judgment
attorneys’ fees must be made in a motion to the court. See
Ariz. R. Civ. P. 54(g). The record reflects that at the time the
Writ was filed, no court had yet approved the quantification
of the “accruing” attorneys’ fees claimed in the Writ. 2
Accordingly, Defendants falsely represented the legal status
of this debt, by implicitly claiming that the accruing
attorneys’ fees of $1,597.50 already had been approved by a
court. See Woliansky v. Miller, 704 P.2d 811, 813 (Ariz. Ct.
App. 1985) (“The determination of the reasonable amount of
attorney fees was peculiarly within the discretion of the trial
court.”); Costa v. Maxwell & Morgan PC, No. CV-15-
00315-PHX-NVW, 2015 WL 3490115, at *6 (D. Ariz. June
3, 2015) (plaintiff stated claim that Maxwell & Morgan PC
2
The stipulated judgment provided only that Plaintiff owed
“attorney fees . . . in an amount of $1,687.50, plus accruing attorney fees
incurred hereafter[.]”
10 MCNAIR V. MAXWELL & MORGAN
violated § 1692e(2) by “demanding attorneys’ fees not [yet]
approved by a court”).
Because the district court granted summary judgment to
Defendants on this claim, it did not assess what actual
damages, if any, Plaintiff may have suffered as a result of
this violation. While Plaintiff may not have suffered any
actual damages in light of the Superior Court’s later approval
of these attorneys’ fees, the district court should determine
the statutory (and, if applicable, actual) damages to which
Plaintiff is entitled. See 15 U.S.C. § 1692k. Accordingly, we
remand to the district court for a determination on damages.
REVERSED AND REMANDED IN PART.
Each party shall bear their own costs.