WILLIAM M. MCDERMOTT, Plaintiff, Appellant,
MARCUS, ERRICO, EMMER & BROOKS, P.C., Defendant, Appellee
As Amended January 5, 2015.
[Copyrighted Material Omitted]
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. Hon. Marianne B. Bowler, Magistrate Judge.
Philip H. Cahalin for appellant.
Stephen J. Duggan and Edmund A. Allcock, with whom Lynch & Lynch and Marcus, Errico, Emmer & Brooks, P.C. were on brief, for appellee.
Before Thompson, Circuit Judge, Souter, Associate Justice,[*] and Stahl, Circuit Judge.
THOMPSON, Circuit Judge.
We are, once again, called upon to interpret and apply the Massachusetts consumer protection statute, Mass. Gen. Laws ch. 93A (" Chapter 93A" ). This case has humble origins: a seemingly-simple dispute over several $25 late fees the Pondview Condominium trustees charged to one of their residents, appellant William McDermott (" McDermott" ), after he didn't pay his condominium fees on time. Unable to resolve the matter with McDermott, the trustees hired law firm appellee Marcus, Errico, Emmer and Brooks, P.C. (" MEEB" ), to collect from McDermott. Soon enough, what began as a low-stakes disagreement quickly blossomed into wide-ranging litigation in the state and federal courts. We are concerned here with the two-count complaint McDermott filed against MEEB in the federal district court. McDermott alleged that MEEB's collections activities violated both Chapter 93A and the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (" FDCPA" ).
A magistrate judge held a bench trial and initially found in McDermott's favor on both counts. She awarded McDermott $10,400 on his Chapter 93A count, and $800 on the FDCPA claim. Both parties
filed motions for reconsideration, following which the magistrate judge reversed in part, finding MEEB not liable under Chapter 93A, and leaving McDermott with only the $800 recovery under the FDCPA.
McDermott's timely appeal followed.
The magistrate judge issued a 203-page written decision following a six-day bench trial. See McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 911 F.Supp.2d 1 (D. Mass. 2012). We have no need to fully detail the extensive factual background in order to decide the narrow issues before us, and we commend the magistrate judge's thorough decision to the reader seeking a full run-down. We need only sketch a rough outline of the goings-on, which we do based on the magistrate judge's factual findings, the vast majority of which are unchallenged on appeal.
McDermott owned two units -- 104 and 105 -- at the Pondview Condominiums, a 19-unit condominium in Lynn, Massachusetts. Pondview's trustees (from now on collectively referred to as " Pondview" ), as permitted by the condominium documents, required all unit owners to pay monthly assessments for the upkeep of common areas and facilities, along with several other types of monthly fees. Any assessments not paid on time incurred a late payment fee, which acted as a lien against the owner's unit. If Pondview had to turn the matter over to collections, the condominium documents allowed for the assessment of attorney's fees, late charges, and collection costs against the offending owner.
McDermott lost his job in 2004. He fell behind on his condominium fees for both units in July of that year, and the next month he fell behind on the late payment fees, too. In September, McDermott agreed to pay two months of condominium and late fees for unit 105 (but not unit 104) by September 22. Although McDermott ended up making payments for both units by September 22, this did not bring the accounts current because he did not pay all of the late fees.
In the first of a series of unfortunate misunderstandings, McDermott seems to have thought his September payments brought him up-to-date. Compounding his troubles, McDermott paid his October monthly assessment for unit 105 late, triggering another late fee. He fell further behind in December.
On December 18, Pondview sent McDermott a letter detailing how much he owed for unit 105. The letter also told McDermott that, pursuant to the condominium documents, he was being charged $25 late fees for payments received after the 15th of the month during which each of the payments were due. According to Pondview, by the end of 2004 McDermott owed, including late payment fees, $346.62 on unit 105 and $380.33 for unit 104. McDermott, however, let Pondview know that he disagreed with the late fee assessments and would not pay them. By the time March 2005 rolled around, McDermott had not paid condominium fees, loan payback
charges, or late fees for either unit for January, February, and March.
Having apparently decided enough was enough, Pondview brought in MEEB to collect McDermott's debt. MEEB informed McDermott in a March 23, 2005 letter that he owed $1,495.61 on unit 104, an amount it said encompassed collection costs and attorney's fees. A separate letter with the same date told McDermott he owed $1,431.61 on unit 105. McDermott, who does not appear to have lawyered-up by this point, stood by his refusal to pay.
Over the approximately three-and-a-half years between April 2005 and September 2008, MEEB filed nine collection actions in Massachusetts state court against McDermott. McDermott retained counsel somewhere along the way (the exact date is not important here). Five of MEEB's collection suits related to unit 105, and four related to unit 104. Only two reached trial, but MEEB won them both and was awarded attorney's fees to boot.
During the course of its collection activities, and while litigation was ongoing, MEEB repeatedly contacted the mortgagees on each of McDermott's units without his knowledge or consent, informed them of McDermott's delinquencies, and demanded payment directly from them. When asked to do so, the mortgagees accommodated MEEB and paid the amounts requested. They then passed these costs on to McDermott by tacking them onto the outstanding mortgages. Further, MEEB occasionally contacted McDermott directly, despite knowing he was represented by counsel.
Displeased with MEEB's collection activities, McDermott filed suit against the firm in the federal district court for Massachusetts on February 3, 2009. His two-count complaint alleged a variety of violations of federal (the FDCPA) and state (Chapter 93A) law.
Specifically, McDermott took issue with the wording of several collection letters, contending they " were deliberately misleading, sporadic, inconsistent, confusing, and contained numerous errors and double billings." He also alleged MEEB " consistently and deliberately misleadingly, confusingly, and deceptively conflated its legal fees with condominium assessments in most of its communications concerning [his] debts," and made certain " oppressive and extortive" statements to him in violation of the FDCPA. McDermott further complained about MEEB's direct contacts with himself and his mortgagees. McDermott wrapped up his complaint by espousing his theory that MEEB ran up between $54,000 and $59,000 in legal fees " by its deliberate, intentional provocation of a dispute between Pondview and [himself] over $150 in unlawful late fees and by its other, relentless, egregious, unfair, deceptive, false, misleading, oppressive, and abusive violations of the FDCPA."
After trial, the magistrate judge found that although MEEB acted at all times in good faith and that none of its actions were deceptive, it nevertheless committed numerous violations of the FDCPA. The
details of each FDCPA violation are not important for our purposes, other than that the judge found none of them were in bad faith. The magistrate judge further determined that, pursuant to regulations issued by the Massachusetts Attorney General, MEEB's FDCPA violations served as a basis for imposing liability under Chapter 93A, even though MEEB had not committed any unfair or deceptive acts. In other words, she found the FDCPA violations constituted " per se" violations of Chapter 93A. She also found, however, that MEEB did not commit any unfair or deceptive acts that could give rise to Chapter 93A liability independent of the per se violations. Ultimately, the magistrate judge awarded McDermott $800 under the FDCPA, and $10,400 for the Chapter 93A violations.
MEEB subsequently filed a motion for reconsideration pursuant to Fed.R.Civ.P. 59(e). The magistrate judge reviewed a newly-decided case from the Massachusetts Supreme Judicial Court (" SJC" ) interpreting Chapter 93A, Klairmont v. Gainsboro Restaurant, Inc., 465 Mass. 165, 987 N.E.2d 1247 (Mass. 2013), determined her finding of per se Chapter 93A violations was incorrect as a matter of law, and vacated the judgment on that count. See McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 969 F.Supp.2d 74 (D. Mass. 2013). She did not disturb her findings with respect to MEEB's FDCPA violations. As a result of the magistrate judge's reconsideration, McDermott saw his recovery slashed from $11,200 to $800.
Unsatisfied with this outcome, McDermott appealed to us.
II. STANDARD OF REVIEW
This case comes to us after a full bench trial, so we review the magistrate judge's factual findings for clear error. Smith v. F.W. Morse & Co., Inc., 76 F.3d 413, 420 (1st Cir. 1996). The clear error standard " constrains us from deciding factual issues anew." Id. " [W]e may not disturb the [magistrate judge's] record-rooted findings of fact unless on the whole of the evidence we reach the irresistible conclusion that a mistake has been made." Id. We afford this deference not just to straight-up findings of fact, but to any inferences drawn from them. Id. Similarly, we defer to a magistrate judge's " findings regarding an actor's motivation" where they are " plausible." Id. In sum, " we cannot second-guess the court's credibility determination[s]" following a bench trial. Calderón-Ortega v. United States, 753 F.3d 250, 253 n.1 (1st Cir. 2014).
In stark contrast to factual findings, we afford no deference to the magistrate judge's legal conclusions, which we review de novo.
United States v. 15 Bosworth Street, 236 F.3d 50, 53 (1st Cir. 2001); Smith, 76 F.3d at 420. And because the magistrate judge granted MEEB's motion for reconsideration on legal grounds only (rather than after, say, a reevaluation of the facts), we review the legal conclusions undergirding that decision de novo, too.
See, e.g., Santiago v. Puerto Rico, 655 F.3d 61, 67 (1st Cir. 2011) (applying de novo review where " the parties' arguments were directed to the underlying substantive issue (the propriety vel non of summary judgment) rather than the procedural issue (the desirability vel non of reconsideration)" ).
McDermott raises several discrete arguments in this appeal. First and foremost, he says the magistrate judge erred when she snatched away his victory on the Chapter 93A count because MEEB's FDCPA violations give rise to per se Chapter 93A liability, without the need of showing that they are unfair or deceptive. Next, he argues that the magistrate judge should have found MEEB violated the FDCPA by charging him excessive legal fees. Last but not least, and predicated upon the assumption that we will conclude MEEB is liable to him under Chapter 93A on some theory, McDermott takes the position that MEEB's violation of Chapter 93A entitles him to an award of multiple damages. Not surprisingly, MEEB disagrees with each of McDermott's arguments and asks us to affirm the magistrate judge's orders.
We address these topics ...