Quote:
Originally Posted by Hedwig  Not necessarily. Foreclosures cost the company money, that's why they try to unload them. I think they'd fall more under the "Wells Fargo had an increase in credit losses during the quarter, which is a concern for investors" part. |
Oppong v. First Union didn't help them any, either, now that it's been ruled (and upheld on appeal) that Wells Fargo can be subject to the FDCPA.
(I'm talking about the 2007 U.S. App. LEXIS 1912 ruling, not the earlier one.)
Wells Fargo is not an entity whose "principal purpose" is to collect others' debts. Rather, the declaration by Kristina Nagel submitted to the District Court along with the renewed summary judgment motion shows that, in a three-month period, only 89, out of 141,597, of the loans that Wells Fargo acquired were in default. (Ex. T. Tab A.) However, the District Court was correct to conclude that Wells Fargo is a debt collector under the FDCPA because it "regularly" collects debts owed to another.
Wells Fargo's primary argument appears to be that, because the proportion of its business that involves collecting others debts is so small in relation to its other business of originating mortgages, as a matter of law it does not "regularly" collecting debts. However, even though this issue is an open in this circuit, Wells Fargo provides no authority from any other circuit that supports their interpretation of the law. n3 The authority from our sister circuits weighs heavily against Wells Fargo's position. The Fifth Circuit, in Garrett v. Derbes, 110 F.3d 317, 318 (5th Cir. 1997), held that "if the volume of a person's debt collection services is great enough, it is irrelevant [*12] that these services only amount to a small fraction of his total business activity." The Ninth Circuit, without inquiring into the proportion of its business consisted of debt collection activities, found that Western Union "regularly" collected debts because it engaged in debt collection in the usual course of its business. Romine v. Diversified Collection Services, Inc., 155 F.3d 1142, 1146 (9th Cir. 1998). And the Second Circuit recently overturned a district court that had found in favor of Wells Fargo's position. In Goldstein v. Hutton, Ingram, Yuzek, Gainen, Carroll & Bertollotti, 374 F.3d 56, 62-63 (2d Cir. 2004), the Second Circuit held that a law firm was "regularly" engaged in debt collection by assessing "facts closely relating to ordinary concepts of regularity" regardless of whether the entity derives significant portion of its business from debt collection.
[...]
For the foregoing reasons, Wells Fargo was not entitled to judgment as a matter of law. Although we agree with the District Court that Wells Fargo is a debt collector, we disagree with the District Court's ruling as to the res judicata defense. Accordingly, the District Court's judgment will be affirmed in part and vacated in part. We will remand for further proceedings.
