In Ward v. NPAS, Inc., No. 21-6189, 2023 U.S. App. LEXIS 7100, at *12-16 (6th Cir. Mar. 24, 2023), the Court of Appeals for the 6th Circuit affirmed summary judgment for a servicer on the basis of the FDCPA’s servicer exemption.
But the statute also expressly excludes “any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity . . . concerns a debt which was not in default at the time it was obtained.” Id. at § 1692a(6)(F)(iii). So, in order for NPAS to be a debt collector, Ward’s debts to Stonecrest had to be in default on October 3 and December 22, 2018, when Stonecrest referred the bills to NPAS. The statute does not define “default.” Neither does this court’s caselaw. But dictionaries do; and so does the parties’ contract. [*13] Start with the dictionary. The parties rely heavily on Black’s Law Dictionary, which defines “default” as the “omission or failure to perform a legal or contractual duty; esp., the failure to pay a debt when due.” 5 Default, Black’S Law Dictionary (11th ed. 2019) (emphasis added). So, by definition, the terms of a default are set either by legal command (for example, a statute or regulation), or by the parties’ agreement itself. Here, no statute or regulation gives us a default date, so we look to the contract. See Willison v. Nelnet, Inc., 850 F. App’x 389, 391-92 (6th Cir. 2021) (relying in part on the terms of a service agreement to find that plaintiff’s debt was not in default at the time of defendant’s acquisition); De Dios v. Int’l Realty & Invs., 641 F.3d 1071, 1074 (9th Cir. 2011) (When deciding whether debt was in default at the time of acquisition, courts “look to any underlying contracts . . . governing the debt at issue.”); see also Wagoner v. NPAS, Inc., 456 F. Supp. 3d 1030, 1039 (N.D. Ind. 2020) (“[I]t makes little sense not to consult and enforce contracts to determine when debts are in default.”); Prince v. NCO Fin. Servs., Inc., 346 F. Supp. 2d 744, 748 (E.D. Pa. 2004) (gathering cases looking to statutes and contracts to determine whether an account was in default under the FDCPA). The parties’ contract, the Conditions of Admission, states that “[d]uring the time that the medical account is being serviced by the EBO Servicer, the account shall not be considered delinquent, past due or in default, and shall not be reported to a credit bureau or subject to collection legal proceedings.” And that Stonecrest would not “determine the account to be delinquent, past due and in default” until NPAS gave notice to Ward and returned the debt to Stonecrest. So, according to the contract terms, Ward’s debt was not in default during the time [**10] that NPAS held it. And neither was it “past due” or “delinquent.” NPAS says this language resolves the case. Not quite. The statute exempts only those debts that were “not in default at the time [they were] obtained.” 15 U.S.C. § 1692a(6)(F)(iii). So, if Ward’s debt was “in default” before NPAS obtained it, the fact that it became “not in default” once NPAS obtained it should not matter. See Willison, 850 F. App’x at 391 (“We have held that ‘a loan servicer . . . can . . . become a debt collector, depending on whether the debt was assigned for servicing before the default or alleged default occurred.'” (quoting Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 359 (6th Cir. 2012))). Ward attempts to show that he defaulted before NPAS acquired his debt; but his efforts come up short. Ward says that “to be ‘in default’ means to have [*15] failed to fulfil one’s obligation to pay money, i.e. to have breached the contract creating the debt.” Appellant Br. at 19. Ward says he breached (or defaulted) the day after he received, and failed to pay, the Stonecrest statements marked “due on receipt,” weeks before NPAS acquired his debt. But even assuming that any “breach” is synonymous with “default,” there is nothing in the record to suggest that Ward’s failure to pay immediately would be treated as a breach. The statements didn’t say that. And Stonecrest didn’t treat Ward’s failure to pay immediately as a breach either. Indeed, for eighty days on the first account and sixty days on the second, Stonecrest just waited for Ward to pay. Then it sent the debt to NPAS, who sent Ward statements with due dates that were ten to fifteen days out, with no interest charged. And while NPAS had the debt, Stonecrest agreed that it would not consider Ward’s account to be “delinquent, past due or in default.” That was a valuable promise. Until NPAS gave notice to Ward and returned the account to Stonecrest, Stonecrest committed that it would not exercise legal rights associated with a breach of a promise to pay. It would not collect late fees or interest, refer the debt to a collection agency, or report it to a credit bureau, and it would not sue. Cf. Alibrandi v. Fin. Outsourcing Servs., Inc, 333 F.3d 82, 87 (2d Cir. 2003) (per curiam) (declining to hold that FDCPA “default occurs immediately after payment becomes due” to avoid “the paradoxical effect of immediately exposing debtors to the sort of adverse measures, such as acceleration, repossession, increased interest rates, and negative reports to credit bureaus, from which the Act intended to afford debtors a measure of protection”). Per the terms of the agreement, Ward’s account was not “delinquent, past due or in default” while NPAS held the account. And there is nothing in the record to suggest that Stonecrest considered Ward’s account to be in default before it referred it to NPAS. We have held that a “debt collector” is one who “either acquired a debt in default or has treated the debt as if it were in default at the time of acquisition.” Bridge, 681 F.3d at 362. Here, no one—neither Stonecrest, nor NPAS—treated Ward’s debt as if it were in default at that time. We agree with the district court that NPAS is not a debt collector under the FDCPA. For the reasons set forth above, we AFFIRM the district court’s grant of summary judgment.