UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

ERICA N. HAWTHORNE,

Plaintiff,

v. Civil Action No. 20-cv-393 (RDM) RUSHMORE LOAN MANAGEMENT SERVICES, LLC,

Defendant.

MEMORANDUM OPINION AND ORDER

On January 9, 2020, Plaintiff Erica Hawthorne, the record owner and borrower for a

property in the District of Columbia, brought this action against Defendant Rushmore Loan

Management Services, LLC (“Rushmore”), the entity that serviced her mortgage, for actions it

took in connection with that mortgage. Still pending before the Court are Hawthorne’s claims

under the Fair Credit Reporting Act (“FCRA”) and the Fair Debt Collection Practices Act

(“FDCPA”). See Dkt. 14. Rushmore now moves for summary judgment on those claims. See

Dkt. 32. For the reasons that follow, the Court DENIES that motion.

I. BACKGROUND

A. Factual Background

The Court recounted Hawthorne’s allegations in detail in its opinion granting in part and

denying in part Rushmore’s motion to dismiss. See Dkt. 14. The facts that follow are only those

most relevant to the resolution of Rushmore’s motion for summary judgment. When considering

a motion for summary judgment, a court must “take the facts in the record and all reasonable

inferences derived therefrom in a light most favorable to” the nonmoving party. Coleman v.

1 Duke,

(D.C. Cir. 2017) (internal quotation marks omitted) (quoting Al-Saffy v.

Vilsack,

(D.C. Cir. 2016)).

Hawthorne, a New Jersey resident, is the record owner of real property located in the

District of Columbia, for which she obtained a mortgage loan of $256,267 on November 30,

2007. See Dkt. 32-1 at 6 (Def.’s SUMF ¶ 1). In 2016, Rushmore assumed responsibility for

servicing Hawthorne’s mortgage. See

(Def.’s SUMF ¶ 3); Dkt. 35-1 at 3.

On December 6, 2017, Hawthorne entered into a loan modification agreement with

Rushmore. See Dkt. 32-1 at 6 (Def.’s SUMF ¶ 4); Dkt. 35-1 at 3. In the months leading up to

this agreement, Hawthorne alleges that she participated in a “trial modification” in which she

made modified payments on her loan to Rushmore. See Dkt. 1-1 at 4 (Compl. ¶ 11). Despite

participating in this trial process, Hawthorne claims that she received notices of foreclosure and

learned that Rushmore was providing negative reports to credit reporting agencies.

at 4–5

(Compl. ¶¶ 12, 14, 15, 17, 18). Hawthorne alleges that she contacted Rushmore about these

reports and asked other questions about her trial modification to no avail as “no one seemed to

know what her modified monthly payment would be.” Id. at 6 (Compl. ¶¶ 23–24).

The final loan modification agreement specified that Hawthorne’s new principal balance

was $299,060.28. See Dkt. 7-5 at 5. Of that, $9,260.28 would be “deferred,” and her “monthly

payments of principal and interest” would be $1,421.48. Id. at 5–6. A letter accompanying the

agreement also stated that “[d]ue to the timing of [Hawthorne’s] tax and insurance payments,”

Rushmore had determined that “there [was] a shortage of funds in [Hawthorne’s] escrow account

in the amount of $1,891.70,” which she was required to pay over five years. Id. at 3. When that

amount was added to her regular escrow payment, her total estimated monthly escrow payment

came to $977.36. Id. at 2.

2 The execution of the final loan modification agreement, however, did not resolve the

confusion Hawthorne had as to what she owed Rushmore. She alleges that in the two years that

followed she was informed by Rushmore many times that “she was overpaying” and that “she

was in default.” Dkt. 1-1 at 9 (Compl. ¶¶ 42–43). Her credit reports reflected that latter view,

stating that Hawthorne was past due on her payments as to this loan and that “foreclosure [had

been] initiated.” See, e.g., Dkt. 35-6 at 7. She alleges that she reported to both Rushmore and

the credit reporting agency that she believed the reports’ representation of her debt was

inaccurate, but neither entity took any remedial action. See Dkt. 1-1 at 9–10 (Compl. ¶ 45).

Hawthorne also alleges that, during this period, Rushmore provided her “false

information . . . regarding her monthly mortgage payment every month.” Id. at 20 (Compl.

¶¶ 98–99). And, she alleges that in 2019, Rushmore began “unnecessarily charging fees for

services” that were improperly rendered. Id. at 10 (Compl. ¶ 47). On October 24, 2019,

Rushmore informed Hawthorne that it had decided to “retract [her] escrow analysis review” for

her loan and that it would inform her of her new payment obligations at a date “to be

determined.” Id. at 10 (Compl. ¶ 48); Dkt. 32-10 at 2.

Hawthorne alleges that, as a consequence of Rushmore’s wrongful actions, she has

repeatedly applied for mortgages and lines of credit, but those applications have been denied.

See Dkt. 32-5 at 12 (Interrog. 8). She also alleges that Rushmore’s misconduct has caused her

substantial stress, which has exacerbated her Crohn’s Disease symptoms and has caused her to

endure panic attacks, headaches, and weight loss. Dkt. 1-1 at 11 (Compl. ¶ 52); Dkt. 32-5 at 7–

11 (Interrog. 6).

3 B. Procedural History

On January 9, 2020, Hawthorne initiated this action in the Superior Court for the District

of Columbia. Dkt. 1 at 1 (Notice of Removal ¶ 1). Rushmore removed the case to this Court on

February 10, 2020. Id. at 6. Hawthorne’s complaint originally included eight claims brought

under state and federal law. Id. at 5 (Notice of Removal ¶ 19). Rushmore moved to dismiss the

complaint, see Dkt. 7, and the Court granted in part and denied in part that motion, see Dkt. 14.

Now, only Hawthorne’s federal law claims remain: Count V alleges that Rushmore violated the

FCRA, Dkt. 1-1 at 18–19 (Compl. ¶¶ 88–93), and Count VI alleges Rushmore violated the

FDCPA, id. at 19–21 (Compl. ¶¶ 94–102).

After the Court ruled on Rushmore’s motion to dismiss, the case proceeded to discovery,

which concluded on August 5, 2022. Min. Order (July 14, 2022). On several occasions while

discovery was underway, Hawthorne expressed an interest in filing an amended (or, more

accurately, a supplemental) complaint, seeking to add new claims stemming from actions

Rushmore had taken after the initial action was filed. See Dkt. 33 at 2–3. She did not, however,

seek leave to amend (or to supplement) her complaint until one month after discovery had closed

and two weeks before Rushmore’s motion for summary judgment was due. Id. at 3. In that

motion, Hawthorne sought to add new factual allegations in support of her existing claims and to

add two new counts for violations of regulations implementing the Real Estate Settlement

Procedures Act. See Dkt. 30. After finding that granting such a motion would unfairly prejudice

Rushmore, and that Hawthorne had been dilatory in seeking leave to amend, the Court denied

Hawthorne’s motion for leave to file an amended complaint on October 10, 2022. See Dkt. 33 at

9.

4 Rushmore moved for summary judgment on September 30, 2022. See Dkt. 32.

Hawthorne opposed the motion on October 24, 2022, see Dkt. 35, and Rushmore replied on

November 18, 2022, see Dkt. 37.

II. LEGAL STANDARD

Summary judgment is warranted if a movant can “show[] that there is no genuine dispute

as to any material fact and [that] the movant is entitled to judgment as a matter of law.” Fed. R.

Civ. P. 56(a). A fact is “material” if it could “affect the outcome of the [litigation] under []

governing law,” see Anderson v. Liberty Lobby, Inc.,

(1986), and a dispute is

“genuine” if the evidence is such that a reasonable jury could return a verdict for the nonmoving

party, see Scott v. Harris,

(2007). The Court must view the evidence “in the

light most favorable to the nonmoving party” and “must draw all reasonable inferences” in that

party’s favor. See Talavera v. Shah,

(D.C. Cir. 2011).

The party seeking summary judgment “bears the initial responsibility” of “identifying

those portions” of the record that “demonstrate the absence of a genuine issue of material fact.”

Celotex Corp. v. Catrett,

(1986). Once the moving party carries its initial

burden on summary judgment, the nonmoving party must provide evidence that would permit a

“reasonable jury” to find in its favor. See Laningham v. U.S. Navy,

(D.C.

Cir. 1987). In ruling on a motion for summary judgment, “the court shall grant summary

judgment only if . . . the moving part[y] is entitled to judgment as a matter of law upon material

facts that are not genuinely disputed.” See Muslim Advocs. v. U.S. Dep’t of Just.,

(D.D.C. 2011).

5 III. ANALYSIS

A. Fair Credit Reporting Act Claim

The FCRA was enacted in 1970 to “promote ‘fair and accurate credit reporting’ and to

protect consumer privacy.” TransUnion LLC v. Ramirez,

(2021) (quoting

(a)). “To achieve this end, the Act regulates the creation and the use of

‘consumer report[s]’ by ‘consumer reporting agenc[ies]’” (“CRAs”). Spokeo, Inc. v. Robins,

(quoting 15 U.S.C. §§ 1681a(d)(1), 1681b(a)). In addition to imposing duties

on the CRAs themselves, the Act also imposes certain responsibilities on the “furnishers” of

information to CRAs. Himmelstein v. Comcast of the Dist., LLC,

(D.D.C.

2013). Common furnishers include credit card issuers, lenders, utilities, insurers, auto dealers,

and collection agencies.

Neither party disputes that Rushmore is a furnisher under the

FCRA. See Dkt. 32-1; Dkt. 35-1.

The FCRA imposes two sets of duties on furnishers. The first set, established by 15

U.S.C. § 1681s-2(a), provides that “[a] person shall not furnish any information relating to a

consumer to any [CRA] if the person knows or has reasonable cause to believe that the

information is inaccurate,” id. § 1681s-2(a)(1)(A). If a furnisher provides information to a CRA

that it “determines is not complete or accurate,” the furnisher is required to “promptly notify the

[CRA] of that determination” so that the CRA has information that is “complete and accurate.”

Id. § 1681s-2(a)(2). Finally, “[i]f the completeness or accuracy of any information furnished . . .

to [a CRA] is disputed . . . by a consumer, the person may not furnish the information to any

[CRA] without notice that such information is disputed by the consumer.” Id. § 1681s-2(a)(3).

This first set of duties imposed by § 1681s-2(a) does not provide a private right of action and

thus cannot be enforced by an individual. See Ihebereme v. Cap. One, N.A.,

,

6 110–11 (D.D.C. 2013), aff’d,

(D.C. Cir. 2014); Himmelstein, 931 F. Supp. 2d at

52–53; Mazza v. Verizon Washington DC, Inc.,

(D.D.C. 2012).

The second set of duties imposed by the FRCA does, however, provide such a private

right of action, and it is this set of duties that Hawthorne invokes in support of her claim.

Himmelstein, 931 F. Supp. 2d at 52–53; Mazza,

. These duties, established

by 15 U.S.C. § 1681s-2(b), are triggered when a consumer contests the accuracy of a credit

report to a CRA. Himmelstein,

. “[I]f the completeness or accuracy of any

item of information contained in a consumer’s file at a [CRA] is disputed by the consumer and

the consumer notifies the agency directly . . . of such dispute,” the CRA is obligated to

investigate and notify the furnisher of the dispute. 15 U.S.C. § 1681i(a)(1)(A), (a)2(A). Once

notified, a furnisher must “conduct an investigation with respect to the disputed information;”

“review all relevant information provided by the consumer reporting agency;” “report the results

of the investigation to the [CRA];” and correct their records for purposes of future reports to the

CRAs. Id. § 1681s-2(b)(1).

In Count V of the complaint, Hawthorne alleges that Rushmore violated § 1681s-2(b)(1)

“when it continued to report that [she] was late and/or in default on her monthly mortgage

statements after she disputed the reporting with . . . Rushmore and with the respective credit

reporting agencies.” Dkt. 1-1 at 18 (Compl. ¶ 91). She alleges, in particular, that she was not

late or in default on her mortgage; that she notified Rushmore and the CRA of that fact in 2018;

and that, as a result, Rushmore should have corrected that mistake and the default should not

have appeared on her credit reports thereafter. See Dkt. 35-1 at 7–8. Because that information

continued to appear on credit reports, Hawthorne contends that one of two things must be true:

either Rushmore did not comply with its obligations under FCRA to conduct an adequate

7 investigation with respect to the disputed information, or it did not report the results of that

investigation to the CRA. Id. at 8. Either way, Hawthorne maintains, Rushmore has violated the

FCRA. Id.

Rushmore moves for summary judgment on this claim. See Dkt. 32. It argues that

Hawthorne’s FCRA claim cannot succeed because (1) she has not demonstrated that she disputed

her credit report to the CRA prior to 2022, which is necessary for her to prove that Rushmore

violated its obligations under that Act, and (2) she has not demonstrated that she suffered any

harm as a result of Rushmore’s alleged violations. Id.

1. Evidence that Hawthorne disputed the accuracy of her credit report

Rushmore first contends that it is entitled to summary judgment on Count V because

there is no evidence that Hawthorne “submitted credit disputes to the CRAs between the years of

2017 and 2021.” See Dkt. 32-1 at 11. Although Rushmore acknowledges that its own records

indicate that Hawthorne reported a dispute to the CRA, which it received notice of in April 2022,

see id. (citing Dkt. 32-8 at 2 (Younger Decl. ¶ 6)), Rushmore contends that there is no evidence

that Hawthorne reported a dispute to a CRA before then, see id. Because a necessary element of

Hawthorne’s FCRA claim is proof that she “reported [the alleged] inaccuracy to a[] credit

reporting agency pursuant to section 1681i(a)(1),” Ihebereme,

, Rushmore

maintains that Hawthorne cannot succeed on her claim that it violated the FCRA prior to the

2022 dispute, see Dkt. 32-1 at 11–12. Simply put, a furnisher’s obligations to investigate a

dispute only arise under § 1681s-2(b) after the furnisher is notified by a CRA of a dispute.

The difficulty with this argument is that Rushmore’s description of the record is

incomplete. To be sure, the declaration that Rushmore submitted along with its motion for

summary judgment avers that the company “did not receive any other [Automated Consumer

8 Dispute Verifications (“ACDVs”)] regarding [Hawthorne] before April 28, 2022.” Dkt. 32-8 at

3 (Younger Decl. ¶ 12). But Hawthorne’s responses to Rushmore’s interrogatories state that she

“began disputing the negative [credit reporting] in September 2017,” Dkt. 32-5 at 7 (Interrog. 5),

and Hawthorne testified at her deposition, in response to a question asking for “evidence . . . that

[she] submitted credit reporting disputes to the credit reporting agencies before 2022,” that she

“kn[ew] that [she] did” dispute her credit reports but did not have copies of the resolved dispute

documents, Dkt. 32-4 at 15–16 (Hawthorne Dep. 144:6–8, 145:9). Finally, in response to

Rushmore’s motion for summary judgment, Hawthorne has provided the Court with a set of

records, which she describes as showing “credit disputes, investigation results and credit reports

for [] Hawthorne from January 2018 to May 2022.” Dkt. 35-1 at 7. These appear to be records

from TransUnion (a CRA) indicating that a dispute was pending regarding Hawthorne’s file on

January 11, 2018, May 17, 2018, October 3, 2019, and February 3, 2022. See Dkt. 35-6 at 4, 12,

18, 22. In addition, Hawthorne has proffered a letter addressed to her from TransUnion, dated

January 11, 2018, stating that its “investigation of the dispute [she] recently submitted is now

complete,” id. at 5, as well as several documents indicating that her credit report had been

disputed and corrections to the Rushmore loan had been made, id. at 13, 20. Considered

together, these records raise a triable issue of material fact about whether Hawthorne disputed

her credit report to a CRA prior to 2022.

Rushmore responds that these “non-dispute communications with Transunion

are . . . insufficient to establish a[] FCRA violation.” Dkt. 37 at 3. But Rushmore provides no

meaningful explanation as to why these records are insufficient. Although these documents may

not constitute the formal dispute documents themselves, a reasonable trier of fact could find that

they show that Hawthorne did, in fact, lodge a sufficient complaint with a CRA.

9 Rushmore also argues that Hawthorne “admit[ted]” in her brief in opposition “that she

submitted her credit disputes to Rushmore and not to the CRAs.” Id. Although Hawthorne’s

brief does describe several interactions that she had with Rushmore concerning the information it

furnished, she also states that she “contacted the CRA in 2018 to dispute the negative reporting.”

Dkt. 35-1 at 7–8. Accordingly, the Court is unpersuaded that Hawthorne “admitted” that she

failed to submit her dispute to the CRA.

The Court thus concludes that there remains a genuine dispute of material fact as to

whether, and when, Hawthorne disputed her credit report to the CRA such that Rushmore’s

investigatory obligations under the FCRA were triggered.

2. Evidence of damages

Rushmore also seeks summary judgment on Count V on the ground that Hawthorne

“cannot establish any damages” stemming from the alleged violation. Dkt. 37 at 4 (capitalization

altered); see also Renford v. Cap. One Auto Fin., No. 21-02382,

, at *5

(D.D.C. Apr. 25, 2022) (“A person who violates the FCRA’s requirements ‘with respect to any

consumer is liable to that consumer in an amount equal to the sum of . . . any actual damages

sustained by the consumer as a result of the failure.’” (quoting 15 U.S.C. § 1681o(a)(1))), aff’d,

No. 22-7055,

(D.C. Cir. Aug. 19, 2022). In support of this argument,

Rushmore asserts that the evidence Hawthorne has provided to show that she “was denied

credit/loans due to [Rushmore]’s erroneous credit reporting,” Dkt. 35-1 at 6 (Pl.’s SUMF ¶ 6)—

namely, a letter from Barclays, 1 dated May 26, 2022, informing Hawthorne of its decision to

deny her credit because of “[r]ecent delinquency indicated [by the] credit bureau,” Dkt. 32-9 at

1 The parties refer to this letter as being sent by JetBlue. See Dkt. 37 at 5; Dkt. 35-1 at 4. But the document itself appears to have been sent by Barclays in response to an application from Hawthorne for a “JetBlue Plus Credit Card.” Dkt. 32-9 at 2.

10 2—is insufficient standing alone to survive summary judgment because it does not demonstrate

that Barclays’ decision was because of Rushmore’s reporting, Dkt. 32-1 at 12; Dkt. 37 at 4–5;

see also Crabill v. Trans Union, LLC,

(7th Cir. 2001) (“Without a causal

relation between the violation of the statute and the loss of credit, or some other harm, a plaintiff

cannot obtain an award of ‘actual damages.’” (citations omitted)).

If this was the only evidence in the record concerning the effect that Rushmore’s alleged

violations of the FCRA had on Hawthorne’s ability successfully to apply for lines of credit, the

Court might agree that the letter does not suffice. After all, the letter from Barclays denying

Hawthorne’s application for the JetBlue credit card was dated May 26, 2022, Dkt. 32-9 at 2, and

this suit was filed in January 2020, see Dkt. 1. And while Hawthorne sought leave to add to her

complaint further allegations concerning FCRA violations that she says occurred in 2022, see

Dkt. 30-1 at 18–19 (Am. Compl. ¶¶ 96–103), the Court denied that motion, see Dkt. 33. As a

result, this suit pertains only to the violations Rushmore purportedly committed between 2018

and 2020. To succeed on her FCRA claims, Hawthorne must prove that she incurred actual

damages as a result of the alleged FCRA violations prior to 2020. See Mattiaccio v. DHA Grp.,

Inc., No. 12-1249,

, at *3 (D.D.C. Jan. 6, 2016) (“[A] Plaintiff may recover

actual damages for an FCRA violation only if those damages were caused by the violation.”).

The Barclays letter, as a result, is relevant only to the extent it shows that Rushmore’s allegedly

inaccurate reporting prior to 2020 harmed Hawthorne two years later in 2022. Without more

evidence to support such an inference—particularly in light of the lack of temporal proximity of

those two events—concluding that the May 2022 credit denial was as result of inaccurate

reporting at least two years earlier would, at least, arguably require too great a leap to support a

claim for damages.

11 But, fortunately for Hawthorne, she has provided the additional evidence required to raise

the issue above a speculative level. At her deposition, Hawthorne testified that her “credit score,

once it started getting bombarded with the late pays in 2017, from Rushmore,” was so low that

she “wasn’t even eligible to apply for a subprime loan.” Dkt. 35-4 at 7 (Hawthorne Dep. 40:9–

12). She also testified that Rushmore’s reporting “dropped [her credit] score enough that [she]

couldn’t get any kind of credit.”

(Hawthorne Dep. 104:17–18). Hawthorne

acknowledges that she was eventually able to obtain a subprime loan in 2020 after repeatedly

disputing Rushmore’s negative reporting; but she also says that she had to have someone else

“put . . . cash down” to do so and that she was told by the lender that this requirement was

“because of [her] mortgage.”

(Hawthorne Dep. 110:7–10). On Hawthorne’s account,

her recent struggles to obtain credit can be traced to Rushmore’s inaccurate reporting that began

in 2017 (and allegedly continues until present), which lowered and continues to dampen her

credit score. See also

(Hawthorne Dep. 59:9–11) (explaining that “the only person who

has reported recent delinquent payments is Rushmore” and her “credit cards [we]re all paid off”

when she applied to Barclays for the JetBlue credit card).

Hawthorne also attests in her responses to Rushmore’s interrogatories that, as a result of

Rushmore’s alleged negative reporting, she was denied a “Rocket Mortgage,” a “Better

Mortgage,” a “United Airlines Credit Card,” and a “Virginia Credit Union Loan.” Dkt. 32-5 at

12 (Interrog. 8). The summary judgment record does not contain any letters or other records of

these denials. At her deposition, Hawthorne testified that her Better Mortgage and United

Airlines Credit Card were denied because of “delinquencies” in her credit report. Dkt. 32-4 at 32

(Hawthorne Dep. 207:4). And, she testified that her Rocket Mortgage application was denied

because of Rushmore’s negative reporting, which she claims to know because she communicated

12 with a Rocket Mortgage employee via text messages about the basis for the denial.

(Hawthorne Dep. 206:5–17); see also

(Hawthorne Dep. 207:3–5) (explaining that “the

denial reason” Hawthorne received from Better Mortgage was “delinquencies on [her] credit

report” which she believes must be from Rushmore’s reporting “because [she did not] have other

delinquencies”).

The Court recognizes that this is not the strongest evidence of a connection between

Rushmore’s alleged FCRA violations and Hawthorne’s inability to obtain credit; but it is

sufficient to defeat a motion for summary judgment. A reasonable juror could credit

Hawthorne’s account of the import of Rushmore’s negative reporting—especially if the only

thing that had changed on her credit report during that period was its account of her Rushmore

loan. Notably, the Court does not have a full set of credit reports from which it can determine—

one way or the other—whether such an inference can be drawn. See, e.g., Llewellyn v. Allstate

Home Loans, Inc.,

, 1179–80 (10th Cir. 2013) (concluding that because the

plaintiff’s credit score had barely changed over the period in which the defendant was alleged to

have violated the FCRA and he had provided no other proof that the denial of credit was due to

the “negative credit reporting ruin[ing] his credit,” the plaintiff had failed to establish a triable

issue of material fact as to his actual damages from the alleged FCRA violation). Rushmore,

however, carries the burden at this stage of the proceeding, and, on the record before it, the Court

concludes that there remain material issues of fact in dispute as to Hawthorne’s FCRA claim.

The Court, accordingly, denies Rushmore’s motion for summary judgment as to Count V

of the complaint.

13 B. Fair Debt Collections Practices Act Claim

The FDCPA “imposes civil liability on ‘debt collector[s]’ for certain prohibited debt

collection practices.” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA,

(2010) (citation omitted). Those prohibited debt collection practices include the use of “any

false, deceptive, or misleading representation or means in connection with the collection of any

debt.” 15 U.S.C. § 1692e. Hawthorne alleges in Count VI of her complaint that Rushmore

violated § 1692e in communications it made to her, after January 9, 2019, concerning the

mortgage loan at issue that were misleading or false. 2 Dkt. 1-1 at 20 (Compl. ¶¶ 98–100).

Rushmore advances two arguments in support of its motion for summary judgment on

Count VI. First, it argues that Hawthorne is not a “consumer” for the purposes of the FDCPA.

See Dkt. 32-1 at 13. Second, it argues that its communications with Hawthorne were not

“representations” made in connection with the collection of any debt and as such cannot violate

the Act. See id. at 14–15. The Court is unpersuaded.

1. Hawthorne’s status as a “consumer”

Rushmore first asks the Court to grant summary judgment in its favor on Count VI on the

ground that Hawthorne “is not a consumer under the FDCPA.” Id. at 13. Hawthorne is not a

“consumer,” Rushmore argues, because “her purpose for obtaining the [l]oan

was . . . commercial . . . in that [Hawthorne] rented the [p]roperty for additional income.” Id.

This argument, the Court notes, is essentially the same argument Rushmore advanced—

unsuccessfully—in its motion to dismiss, Dkt. 14 at 33–34. Compare Dkt. 32-1 at 13–14, with

Dkt. 7-1 at 23–24. The Court will reject that argument for substantially the same reasons.

2 The parties agree that, in light of the FDCPA’s one-year statute of limitations, Hawthorne’s FDCPA claim concerns only those communications from Rushmore that occurred one year prior to the filing of the complaint in this action, January 9, 2019. See Dkt. 35-1 at 10; Dkt. 37 at 6.

14 Rushmore argues that the FDCPA does not apply here because the Act defines a “debt”

as “any 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,” Dkt. 32-1 at 13 (emphasis omitted) (quoting 15 U.S.C.

§ 1692a(5)), and, according to Rushmore, the record shows that Hawthorne “purchased the

[p]roperty as a rental unit for commercial purposes,” id. Rushmore is correct on the law, but not

on the facts.

Portions of Rushmore’s factual argument are undisputed. The real property for which

Hawthorne obtained the loan at issue is located in the District of Columbia, yet Hawthorne

acknowledged during her deposition that she has lived in New Jersey since 2013. See Dkt. 32-4

at 6 (Hawthorne Dep. 22:4, 13). She also acknowledged in her interrogatory responses that she

was harmed by Rushmore’s alleged actions because she was unable to qualify for a loan “that

she sought to use to renovate her property so that she could rent it for additional income.” Dkt.

32-5 at 5 (Interrog. 2). But, as the Court pointed out in its August 30, 2021, opinion denying

Rushmore’s motion to dismiss the FDCPA claim on these grounds, these facts merely show that

Hawthorne has maintained the loan for commercial purposes. See Dkt. 14 at 33. They do not

concede—as Rushmore incorrectly posits—“that she purchased the [p]roperty as a rental unit for

commercial purposes” or that she obtained the loan at issue for commercial purposes. Dkt. 32-1

at 13 (emphasis added).

Other facts in the record, moreover, suggest that Hawthorne, in fact, purchased the

property and incurred the debt at issue for a non-commercial purpose. Hawthorne testified in her

deposition that she lived in the property that is the subject of the loan from 2006 until 2011. See

Dkt. 35-4 at 2 (Hawthorne Dep. 23:16–17). The deed of trust for the property associated with

15 the loan is dated November 30, 2007, see Dkt. 7-2 at 2, showing that Hawthorne took out the

loan during the time she lived on the property. The deed of trust, moreover, is consistent with

Hawthorne’s testimony: it contains an “‘occupancy’ covenant, pursuant to which Plaintiff

represented that she would use the property as her ‘principal residence within sixty days after

execution of the [deed] and shall continue to occupy the [p]roperty as [her] principal residence

for at least one year after the date of occupancy.’” Dkt. 14 at 33 (quoting Dkt. 7-2 at 4).

Based on this evidence, a reasonable jury could find that, at the time Hawthorne incurred

the debt, she was using the property as her residence, even if, years later, it became a rental

property. Rushmore advances no argument as to why Hawthorne must maintain the loan

primarily for personal purposes to qualify as a consumer under the FDCPA. The cases it cites in

support of its argument discuss properties that were purchased as rental properties. See Aniel v.

TD Serv. Co., No. 10-05323,

, at *4 (N.D. Cal. Jan. 13, 2011) (dismissing an

FDCPA claim when “the loan money was used to pay for real property”); Fischer v. Fed. Nat’l

Mortg. Ass’n,

(S.D. Fla. 2018) (dismissing an FDCPA claim because

“the debt in question was obtained in connection with his business’s purchase of his real estate

investment property” (citation and internal quotation marks omitted)); Scarola Malone &

Zubatov LLP v. McCarthy, Burgess & Wolff,

(2d Cir. 2016) (“[T]o the

extent that the alleged debt, whether actually owed or mistakenly assessed, stems from

telecommunications services provided by Verizon to SMZ, the claim arises out of a commercial

transaction and is not covered by the FDCPA.”).

The Court will not do Rushmore’s homework for it and will, accordingly, deny its motion

for summary judgment as to Count VI on this ground. See also Miller v. McCalla, Raymer,

Padrick, Cobb, Nichols, & Clark, LLC,

(7th Cir. 2000) (concluding, in a case

16 in which the plaintiff took out a mortgage to buy a property, used the property as his personal

residence for a time, but was renting the property when the alleged violation of the FDCPA

occurred, that “the relevant time is when the loan is made, not when collection is attempted”).

2. “Representations” made “in connection with the collection of any debt”

Finally, Rushmore argues that its communications with Hawthorne after January 9, 2019,

were not “representation[s]” made “in connection with the collection of any debt.” Dkt. 32-1 at

14–15 (emphasis omitted) (quoting 15 U.S.C. § 1692e). In determining whether a

communication was made “in connection with the collection of a[] debt,” 15 U.S.C. § 1692e,

courts consider a number of factors including “the ‘nature of the parties’ relationship,’ the

‘[objective] purpose and context of the communication[],’ and whether the communication

includes a demand for payment.” In re Dubois,

(4th Cir. 2016) (alterations in

original) (quoting Gburek v. Litton Loan Servicing LP,

(7th Cir. 2010)).

Courts have not, however, viewed a demand for payment itself as the be-all and end-all of the

inquiry. See Simon v. FIA Card Servs., N.A.,

(3d Cir. 2013) (“[T]he absence

of a demand for payment is just one of several factors that come into play in the commonsense

inquiry of whether a communication from a debt collector is made in connection with the

collection of any debt.” (quoting Gburek,

)); Maynard v. Cannon,

(10th Cir. 2010) (same). Rather, courts consider whether the communication was made

“to induce” a debtor to settle her debt. See Heintz v. Jenkins,

(1995)

(explaining that in ordinary English, an attempt to “collect a debt” is an attempt “to obtain

payment or liquidation of it, either by personal solicitation or legal proceedings” (quoting

Black’s Law Dictionary 263 (6th ed. 1990))); Grden v. Leikin Ingber & Winters PC,

(6th Cir. 2011) (“[F]or a communication to be in connection with the collection of a

17 debt, an animating purpose of the communication must be to induce payment by the debtor.”

(citing Gburek,

)). And courts have recognized that communications can have

dual purposes and still satisfy this test. See, e.g., Daniels v. Select Portfolio Servicing, Inc.,

(11th Cir. 2022) (acknowledging that “a communication can ‘have dual

purposes,’ such as providing a consumer with information and demanding payment on a debt”

(quoting Reese v. Ellis, Painter, Ratterree & Adams, LLP,

(11th Cir.

2012))).

Rushmore acknowledges that it communicated with Hawthorne on at least two occasions

alleged in the complaint: in March 2019 and October 2019. But it argues that “[t]hese

communications . . . provide[d] updates and explanations as to how the escrow account analysis

changed” and were “standard communications between a loan servicer and its customer

pertaining to the servicing of the customer’s loan.” Dkt. 32-1 at 15. They were not, Rushmore

maintains, “intended . . . to collect a debt.”

At least one of those communications, the October 24, 2019 letter, is in the record. That

letter states that “[d]ue to unforeseen circumstances, [Rushmore] made the business decision to

retract [Hawthorne’s] escrow analysis and return [her] loan back to its original state prior to the

analysis.” Dkt. 32-10 at 2. It further explains that Hawthorne’s “loan will be re-analyzed on a

date later to be determined and [Rushmore] will send [her] advanced notification prior to the new

payment effective date.”

The letter does not contain an explicit demand for payment, but it

does state that if Hawthorne’s escrow account had a surplus, which Hawthorne alleges hers did at

that time, see Dkt. 1-1 at 10 (Compl. ¶ 48), “the surplus amount will not be refunded or credited

against the next year’s escrow payments on the loan unless the subject loan was current at the

time Rushmore [] conducted the escrow account analysis,” id. at 3.

18 Although not a debt collection notice in a traditional sense, the Court cannot foreclose the

possibility that a reasonable jury could find that the October 2019 letter contained an inducement

to settle a debt. See Heintz,

. The letter also arguably injected a layer of

confusion regarding Hawthorne’s payment obligations, see Dkt. 35-4 at 3–4, and that newfound

ambiguity was accompanied by the suggestion that any “surplus amount” held in escrow might

be lost to Hawthorne if she was not “current” on her payments, Dkt. 32-10 at 3. To be sure, the

letter might also be read to suggest that the surplus would be applied to arrears on the loan. But

that is not the only possible reading of the letter, and the Court may not substitute its own view

of the evidence for a reading of the letter that is within the purview of the jury. On that reading

of the letter, it seems possible to conclude that upon receipt of the letter, Hawthorne would have

been induced to settle her debt, and the letter would have constituted a “representation” made “in

connection with the collection of a[] debt.” 15 U.S.C. § 1692e. Moreover, that letter, by adding

yet another layer of confusion as to the amount Hawthorne owed, could be viewed by a

reasonable jury as “misleading” (and, at the very least, Rushmore advances no argument as to

why that would not be a reasonable conclusion to draw from this record).

In addition to the October 2019 letter, the Court also notes that other documents in the

record might also qualify as communications from Rushmore to Hawthorne made “in connection

with the collection of a[] debt.” 15 U.S.C. § 1692e. Appended to the complaint, for example, is

an October 11, 2019 mortgage statement that states that “Rushmore Loan Management Services

LLC is a Debt Collector, who is attempting to collect a debt” and details the amount Hawthorne

purportedly owed Rushmore. See Dkt. 1-1 at 32. Hawthorne contends that Rushmore violated

the FDCPA by sending this statement because the statement incorrectly included fees charged

for landscaping services, see Dkt. 1-1 at 10 (Compl. ¶ 47); Dkt. 35-1 at 9, and courts have found

19 that mortgage statements like this one can be the basis of an FDCPA violation if the

“representation[s]” in them are “false, deceptive, or misleading,” 15 U.S.C. § 1692e; see, e.g.,

Daniels,

(11th Cir. 2022).

Although an admittedly close question, the Court concludes that Rushmore has failed to

carry its burden of demonstrating that no reasonable jury could find that it made representations

to Hawthorne in connection with the collection of a debt.

CONCLUSION

For the foregoing reasons, Rushmore’s motion for summary judgment, Dkt. 32, is hereby

DENIED.

SO ORDERED.

/s/ Randolph D. Moss RANDOLPH D. MOSS United States District Judge

Date: September 29, 2023

20