Action on a deficiency judgment not an action on a debt under Florida Collection Practices Act.

In Dyck O’Neal, Inc. v. Ward, No. 2D15-2989 (Fla. Dist. Ct. App. Jan. 27, 2017) a Florida Appellate court found that a creditor need not comply with Section 559.715 of the Florida Consumer Collection Practices Act (FCCPA) when attempting to enforce a final foreclosure judgment.

In this case, after the final judgment was entered against the borrower in the foreclosure action the property was sold to the creditor for an amount much lower than what was owed on the judgment. After the sale, the judgment was assigned to plaintiff who sued the borrower for the deficiency.

The borrower sought summary judgment arguing that plaintiff failed to comply with FCCPA §559.55-.785 which requires the assignee of consumer debt to give the debtor written notice of the assignment as soon as practical after the assignment is made, but at least 30 days before it commences any action. The trial court granted summary judgment for the borrower because the Plaintiff gave the borrower only 13 days-notice prior to suit.

On appeal, plaintiff argued that §559.715 did not apply to deficiency actions. The Appellate court agreed. It explained that the FCCPA is to be interpreted similarly to the FDCPA. Because the FCCPA employs the same definition of “debt” as the FDCPA the analysis is the same. According to recent case law, a deficiency proceeding is not an “action on a consumer debt that has been reduced to a judgment” under the FDCPA; it is instead an action to enforce a foreclosure proceeding. Contrary to borrower’s contentions, a deficiency suit is not action brought on the note; it is an action brought on the final judgment of foreclosure. As such the debt is not a consumer debt as contemplated by the FDCPA. Thus, as the action sought to enforce a final judgment of foreclosure against the borrower the suit did not fall under the FCCPA.