DSNews--David Wharton
Editor's note: This is a breaking story, please stay tuned for updates.
The U.S. Supreme Court ruled on the case of Obduskey v. McCarthy & Holthus LLP Wednesday morning, finding that businesses engaged in nonjudicial foreclosure proceedings are not considered "debt collectors" under the Fair Debt Collection Practices Act.
The Justices ruled 9-0 in the case, with Justice Stephen Breyer writing the opinion and Justice Sonia Sotomayor also penning a concurring opinion. You can read the full text of the opinion by clicking here.
In 2007, Dennis Obduskey obtained a loan for $329,940 to buy a residential property in Bailey, Colorado, and defaulted in 2009. Later in 2014, Wells Fargo hired McCarthy & Holthus, to pursue a non-judicial foreclosure on the property. On 8/12/2015, petitioner filed suit against M&H and multiple Wells Fargo entities in the United States District Court for the District of Colorado. The firm and the Wells Fargo entities moved to dismiss the complaint, and on 7/19/16 the district court granted the motions and denied the Temporary Restraining Order.
On the same day that the district court issued its order, Obduskey filed for Chapter 13 bankruptcy and appealed to the 10th Circuit and on 1/19/18 the court of appeals affirmed the lower court’s ruling, which sought to interpret the congressional intent in passing the FDCPA by analyzing the plain language of the statute and policy considerations. A total of nine Amicus briefs by 19 entities were filed in support of McCarthy & Holthus, LLP.
In February, the Legal League 100 held a webinar that explored the potential outcomes of the Dennis Obduskey vs. McCarthy & Holthus Supreme Court case and the impact of these outcomes on both the mortgage industry and the legal professionals supporting it. The webinar was presented by Matthew Podmenik, Managing Partner, McCarthy & Holthus Law Firm.
Earlier in November 2018, the amicus curiae brief filed by the Legal League in support of McCarthy & Holthus contended that law firms acting on behalf of their mortgage servicer clients by completing the non-judicial foreclosure process in states where permitted are not subject to regulation under the Fair Debt Collection Practices Act (FDCPA). The brief noted that such servicers are not collecting a debt as defined under the plain language of the statute.