11th Cir. Exempts HOA Management Co. from FDCPA, So Long As Debt Collection Was Not Central to its Duties

In Harris v. Liberty Community Management, Inc. — F.3d —-, 2012 WL 6604518 (11th Cir 2012), the Court of Appeals for the Eleventh Circuit found that a homeowners’ association’s management company was exempt from the FDCPA, so long as its collection of association dues was not central to its fiduciary obligations to the HOA.

The Fair Debt Collection Practices Act ( FDCPA), 15 U.S.C. § 1692 et seq., “imposes civil liability on ‘debt collector[s]’ for certain prohibited debt collection practices,” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, ––– U.S. ––––, ––––, 130 S.Ct. 1605, 1608, 176 L.Ed.2d 519 (2010), but also exempts some individuals and entities from its provisions. The exemption at issue in this appeal, § 1692a(6)(F)(i), provides that the Act does not apply to persons or entities “collecting or attempting to collect any debt owed … another to the extent such activity is incidental to a bona fide fiduciary obligation,” and the question presented is whether this exemption applies to a management company which collects unpaid assessments on behalf of a homeowners association. We hold that it does, so long as the collection of such assessments from homeowners is not central to the management company’s fiduciary obligations.