In Glawe v. Carpenter, Hazelwood, Delgado & Boren PLC, the Ninth Circuit Court of Appeals reversed and remanded the district court’s entry of summary judgment for the appellees-defendants in a Fair Debt Collection Practices Act (FDCPA) case. In its holding, the court emphasized the need to conduct a factual analysis in that case as to whether the purchase of real property is primarily “consumer or commercial in nature” to determine exposure for alleged FDCPA violations.

In that case, the appellant-plaintiff (appellant) purchased a Mohave Property in 2009, which he rented out but intended to eventually use as a retirement home. The appellees-defendants (appellees), attorneys at the law firm representing the Sundance Residential Homeowners Association, Inc. (HOA), sued the plaintiff twice in state court for failure to pay HOA assessments and late fees associated with the property. The plaintiff subsequently filed suit in federal court, alleging the appellees violated the FDCPA in their attempts to collect the HOA assessments and late fees.

The district court granted summary judgment for the appellees — holding that there was no genuine dispute that the property was a “rental property,” and the obligation associated with it was “commercial, not consumer in nature.” However, the Ninth Circuit Court of Appeals reversed and remanded the entry of judgment to the district court to “make a factual determination of the true purpose of the [plaintiffs’] acquisition of the Mohave Property and the 228th Lane Property.”

The Court of Appeals reasoned that the “‘obligation’ underlying the [appellant’s] FDCPA claim ‘ar[ose] out of’ the purchase of the Mohave Property” and held that the district court erred in finding that the rental property obligation could not be “primarily consumer in nature.” Indeed, it emphasized that an “examin[ation] [of] the transaction as a whole, paying particular attention to the purpose for which the credit was extended,” was necessary. Accordingly, because a “genuine dispute of fact” remained as to whether the obligation was “consumer” or “commercial” in nature, the Court of Appeals reversed the entry of summary judgment for appellees and remanded the case to the district court.