HUGH W. BRENNEMAN, Jr., Magistrate Judge.
Pro se plaintiff Jerry L. Fassett filed a complaint in this court seeking relief related to alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), 5 U.S.C. § 1692 et seq. and the M.C.L. § 339.901 et seq. Compl. (docket no. 1). Plaintiff has named as defendants a law firm, Shermeta, Adams & Von Allmen, P.C. (the "law firm"), and six attorneys employed by that firm, Douglas H. Shermeta, Kyle J. Von Allmen, Deborah A. Winslow, Tricia N. McKinnon, Teri P. Gruca, and April N. Nason. Id. at ¶¶ 6-12.
Plaintiff's claims arise from the following events. Defendants acted as the attorneys for Capital One, for the purpose of collecting a delinquent account on plaintiff's credit card ending in 9760. See Defendants' Letter (June 8, 2011) (docket no. 18-2); 58th District Court Complaint (docket no. 18-3 and 18-4). In a letter to plaintiff dated June 8, 2011, defendants identified the account and the current amount due of $12,064.23. Defendants' Letter (June 8, 2011). The letter advised plaintiff that "[b]ecause of interest and other charges that may accrue, the amount you own may continue to increase daily." Id. Defendants prepared a complaint to collect the debt which was dated July 5, 2011. See 58th District Court Complaint.
Plaintiff sent defendants a letter requesting validation of the debt dated July 6, 2011. Plaintiff's Letter (July 6, 2011) (docket no. 18-5). This letter was apparently received by defendants on July 11, 2011. Id. In this letter, plaintiff advised defendants that "your claim is disputed and validation is requested" pursuant to 15 U.S.C. § 1692g. Id. Plaintiff then provided defendants with a list of requests related to the debt:
Id. Plaintiff also advised defendants that, among other things, they may be liable for fraud if they reported information to any of the three major credit bureaus, and that "if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you" for "Violation of the Fair Credit Reporting Act," "Violation of the Fair Debt Collection Practices Act," and "Defamation of Character". Id.
On July 15, 2011, defendants' filed the complaint against plaintiff in Michigan's 58th District Court, which sought $12,194.10 as the amount presently due on account no. 9760. See 58th District Court Complaint. Defendants, however, did not serve plaintiff with a summons and complaint at that time.
In a letter dated October 3, 2011, defendants responded to plaintiff's request to validate the debt. See Defendants' Letter (October 3, 2011) (docket no. 19-1). Defendants' letter identified the creditor as Capital One, identified the credit card account (no. 9760), identified the current balance due as $12,522.89, stated that they represented Capital One, and referenced enclosed documents which validated the debt pursuant to § 1692g. The documents included: a Capital One Customer Agreement (i.e., printed terms of a credit card); a notification that plaintiff was "behind by 6 payments" and that his new balance due as of May 22, 2011 was $11,791.92, which included a past due fee of $35.00 and monthly interest of $177.41; and another notification that plaintiff's "account works differently now that you're 7 payments late" and that his balance, with additional past due fees and interest for the billing cycle was $12,001.69. See Documents (docket no. 19-1). The two past due notices included plaintiff's name, plaintiff's address, the credit card account number, the balance due, and the monthly interest and fees which had accrued since the previous credit card statement. Id.
On October 8, 2011, defendants served plaintiff with the 58th District Court complaint by certified mail. See Proof of Service (docket no. 19-2).
On November 14, 2011, defendants sent plaintiff a settlement letter proposing three settlement options. See Settlement Letter (Nov. 14, 2011) (docket no. 19-3). Under the first option, plaintiff could sign a consent judgment for the full balance due to Capital One with monthly payments of $265.00. Id. Under the second option, plaintiff could make a lump sum payment of $8,000.00 by January 9, 2012, and defendants would dismiss the 58th District Court Case. Id. Under the third option, plaintiff could sign a consent judgment admitting that he owed the money and then petition the court for installment payments. Id. There is no evidence that plaintiff agreed to any of the settlement options.
On January 12, 2012, plaintiff filed the present federal action. See Compl. (docket no. 1).
On January 30, 2012, the 58th District Court entered judgment against plaintiff in the amount of $12,194.10 in damages, $180.09 in costs and $20.00 statutory attorney fees, for a total judgment of $12,394.19. 58th District Court Judgment (Jan. 30, 2012) (docket no. 19-4). In addition, the court awarded Capital One accrued judgment interest in the amount of $815.57. Id.
Plaintiff set forth the following allegations in his complaint. The information provided in the law firm's October 3, 2011 response to his demand for validation "was in no way legal or proper validation of the alleged debt and was in fact another collection action." Compl at ¶ 16. Defendants violated 15 U.S.C. § 1692g(b) for continuing collection activity without validating the alleged debt and a violation of 15 U.S.C. § 1692e(2)(10), because defendants "used a misleading representation by stating an entirely different amount as being due on the alleged debt" and that this response "was also a deceptive means used to collect a debt." Id.
Defendants' service of the 58th District Court complaint was a continued collection action in violation of 15 U.S.C. § 1692g(b) because they had not validated the original debt as requested. Id. at ¶ 17. In addition, the amount alleged to be owed to Capital One in the 58th District Court action was substantially different than the amounts previously stated to be owed, was confusing to plaintiff, and was a blatant violation of 15 U.S.C. § 1692e(2)(l0), because the law firm and defendants Von Allmen, Gruca, and Winslow used a misleading representation of the amount of the alleged debt which was" a deceptive means used to collect a debt." Id. at ¶ 18. In addition, the law firm and defendants Von Allmen, Gruca, and Winslow failed to attach any verified statement of the damages alleged to have been incurred by Capital One, any alleged contract between Capital One and plaintiff, or any evidence that plaintiff ever had an account with Capital One. Id. at ¶ 19.
In addition, defendants' November 14, 2011 settlement demand stated "a radically different amount as being due on the alleged account," was "a false and misleading representation in the collection of a debt," and a false representation of the amount of the debt which were violations of 15 U.S.C. § 1692e(10) and § 1692e(2). Id. at ¶ 20.
Defendants' collection efforts of "harassing" him and "trying to coerce him to pay varying amounts at different times on the alleged debt before any trial in the county court" violated 15 U.S.C. § 1692d. Id. at ¶ 21. Such action was also "an unfair means to attempt to collect a debt in violation of 15 U.S.C. § 1692f" and "an attempt to collect an amount not authorized by the agreement creating the alleged debt in violation of 15 U.S.C. § 1692f(1)." Id.
Plaintiff alleged defendants also violated the FDCPA when the law firm appeared at a December 16, 2011, pre-trial conference in the 58th District Court, and continued to attempt to collect a disputed debt prior to validation in violation of 15 U.S.C. § 1692g(b). Id. at ¶ 22. In addition to the acts of the individual defendants, defendant Shermeta, in his position as a principal and president of the law firm, was aware, or should have been aware, of "the violative activities" of those employed by the law firm, and is individually liable for the actions of the other defnedants under the doctrine of respondeat superior. Id. at ¶ 23.
Plaintiff's pro se complaint seeks relief on four counts. In Count I, plaintiff claims that defendants violated 15 U.S.C. § 1692e(2) by using a false representation of the character, amount, or legal status of his alleged debt and violated 15 U.S.C. § 1692e(10) by using a false representation or deceptive means to collect or attempt to collect the alleged debt. Id. at ¶¶ 25-27. In Count II, plaintiff claims that defendants violation 15 U.S.C. § 1692d "because the natural consequence of their conduct was to harass, oppress, or abuse the Plaintiff into paying an alleged debt that Defendants at all times refused to properly validate." Id. at ¶¶ 28-30. In Count III, plaintiff claims that defendants violated 15 U.S.C. § 1692f "because their conduct constituted the use of unfair or unconscionable means to collect or attempt to collect a debt." Id. at ¶¶ 29-33. In Count IV, plaintiff claims that defendants violated 15 U.S.C. § 1692g(b), "because they continued collection activities, including initiating litigation, after Plaintiff had made a demand for validation of the alleged debt and no proper and legal validation was provided to the Plaintiff at any time up to the time this complaint was filed." Id. at ¶¶ 34-36. In Count V, plaintiff alleged that defendants violated M.C.L. § 339.918 because they "failed to properly provide validation of the alleged debt when requested by Plaintiff as required by MCL 339.918 before resuming collection actions against Plaintiff" and defendants' actions "in continually changing the amount due in communications with the Plaintiff" and not having any evidence on the record in the case in the 58th District court case "of any contract or verified proof of any obligation" by plaintiff to Capital One. Id. at ¶¶ 37-38.
Plaintiff seeks damages "including, but not limited to, fees and costs, time away from work, sleeplessness, severe emotional distress, depression, anger, embarrassment, and anxiety." Id. at ¶ 24. Specifically, plaintiff has requested: a declaratory judgment that defendants violated both the FDCPA and the state statute; actual damages in the amount of "any judgment" against plaintiff in the 58th District Court case; statutory damages pursuant to 15 U.S.C. § 1692k in the amount of $1,000.00 per defendant; treble damages or $150.00, whichever is greater, pursuant to the state statute; and costs and fees pursuant to 15 U.S.C. § 1692k and M.C.L. § 339.916(2). Id. at p. 8.
"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). Rule 56 further provides that "[a] party asserting that a fact cannot be or is genuinely disputed must support the assertion by":
Fed. R. Civ. P. 56(c)(1).
In Copeland v. Machulis, 57 F.3d 476 (6th Cir. 1995), the court set forth the parties' burden of proof in deciding a motion for summary judgment:
Copeland, 57 F.3d at 478-79 (citations omitted). "In deciding a motion for summary judgment, the court views the factual evidence and draws all reasonable inferences in favor of the nonmoving party." McLean v. 988011 Ontario Ltd., 224 F.3d 797, 800 (6th Cir. 2000).
Defendants have relied on the record as set forth in the documents cited in § I of this opinion. Plaintiff does not dispute these documents and in fact relies upon many of the same documents to support the allegations in his complaint. Plaintiff filed an affidavit in response to defendants' motion for summary judgment. However, this affidavit did not contest the evidence provided by defendants. Rather, the affidavit listed a number of documents which he did not receive from defendants and asserted that defendants did not comply with his discovery requests:
Plaintiff's Aff. (docket no. 24-1).
In his response to defendants' motion for summary judgment, plaintiff contends that defendants failed to answer all of his discovery, by objecting to 20 of his 23 interrogatories and 12 of his 14 requests for production. Plaintiff's claim that defendants did not fully comply with his discovery requests is not properly before the court. Plaintiff did not file a motion to compel production prior to the close of discovery on September 30, 2012. In fact, the record reflects that he has never filed a motion to compel production of discovery in this action. While plaintiff could conceivably seek relief under Fed. R. Civ. P. 56(d) on the ground that he "cannot present facts essential to justify [his] opposition" to the motion for summary judgment, plaintiff has not submitted an affidavit or declaration in support of such relief.
While plaintiff has alleged various violations of the FDCPA, the wrongful conduct at the heart of his FDCPA claims is defendants' alleged violation of 15 U.S.C. § 1692g ("Validation of debts"). Section 1692g provides in pertinent part that:
15 U.S.C. § 1692g(a) and (b).
One main issue before the court is whether defendants violated § 1692g(b) by failing to verify the disputed debt. Plaintiff contends that he is entitled to, among other things, ledger statements, contracts, and proof that defendants are licensed to collect debts in Michigan. Defendants contend that they are not required to keep and send "detailed files" of the alleged debt for verification or validation purposes. Contrary to plaintiff's contention, § 1692g(b) does not require defendants to produce exhaustive documentation in support of the creditor's claim. "[T]he purpose of § 1692g(b) is to require debt collecting agencies to cease collection activities if the amount has been disputed until the debt collector verifies the accuracy of the amount claimed." Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1031 (6th Cir. 1992) (internal quotation marks omitted). The FDCPA "does not require an independent investigation of the debt referred for collection." Id. at 1032. "Unlike the Fair Credit Reporting Act ("FCRA"), which requires the creditor to `conduct an investigation' upon notification of the consumer's dispute of the debt, 15 U.S.C. § 1681s-2(b)(1), the FDCPA only requires that a debt collector `obtain[ ] verification of the debt.'" Erickson v. Johnson, No. 05-427, 2006 WL 453201 at *6-7 (D. Minn. Feb. 22, 2006). Furthermore, the debt collector does not have a "concomitant obligation to forward copies of bills or other detailed evidence of the debt" to comply with the FDCPA's verification requirement. Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir.1999)
The Sixth Circuit explained the purpose of the verification requirement in Bridge v. Ocwen Federal Bank, FSB, 681 F.3d 355 (6th Cir. 2012):
Bridge, 681 F.3d at 361.
In Rudek v. Frederick J. Hanna & Associates, P.C., No. 1:08-cv-288, 2009 WL 385804 (E.D. Tenn. Feb. 17, 2009), the court addressed the issue of whether a debt collector complied with the verification requirements of § 1692g, stating in pertinent part:
Rudek, 2009 WL 385804 at *2.
Here, defendants' October 3, 2011 letter in response to plaintiff's request for verification identified the creditor as Capital One, identified the credit card account, identified the current balance due as $12,522.89, stated that defendants represented Capital One, and referenced the enclosed documents which validated the debt pursuant to § 1692g. See Oct. 3, 2011 Defendants' Letter (Oct. 3, 2011). Defendants' letter included a copy of Capital One's printed credit card agreement, as well as the 6th and 7th overdue notices sent from Capital One to plaintiff which identified the credit card number and the balance due. Id. at pp. 8-13.
Plaintiff points out that defendants' correspondence reflects different amounts due (i.e., the amount due increased over time), but this conduct does not demonstrate that defendants failed to verify the debt as required by the FDCPA. Rather, the different amounts reflect the fact that interest continued to accrue on plaintiff's account. The record includes an affidavit dated June 15, 2011, in which Stephen Hardy, an agent of Capital One, stated that: plaintiff opened an account with Capital One for the purpose of obtaining an extension of credit; that Capital One issued a credit card to plaintiff with a number ending in 9760; that plaintiff used the card for acquiring goods, services or advances; and that plaintiff breached the Customer Agreement by failing to make periodic payments as required by the Agreement. Hardy Aff. at ¶¶ 1-3 (docket no. 27-2). Mr. Hardy further stated that the books and records of Capital One show that plaintiff was currently indebted to Capital One on the account ending in 9760 "for the just and true sum of
In summary, defendants October 3, 2011 letter confirmed in writing the identity of the creditor and the amount which plaintiff owed as of the date of the letter. Nothing more is required under § 1692g. See Smith, 953 F.2d at 1031-32; Chaudhry, 174 F.3d at 406; Rudek, 2009 WL 385804 at *2.
In his response, plaintiff contends that defendants continued in their collection efforts during the 30-day time period in which plaintiff was allowed to dispute the debt. Here, defendants' June 8, 2011 letter notified plaintiff of his right to dispute the debt within thirty days of the receipt of the letter. Defendants prepared a summons and complaint against plaintiff, dated July 5, 2011. See 58th District Court Complaint. Plaintiff disputed the debt in a letter dated July 6, 2007, which defendants received on July 11, 2011. See Plaintiff's Letter (July 6, 2011) (docket no. 18-5). It appears that the complaint was filed in the 58th District Court on July 15, 2011, with summonses issued on that same date. See 58th District Court Complaint. Plaintiff contends that defendants violated the FDCPA by undertaking these actions during the 30-day period in which he had to dispute the debt.
The FDCPA explicitly addresses collection activities which may occur during this 30-day period as follows:
15 U.S.C. § 1692g(b). These two sentences were added to 15 U.S.C. § 1692g(b) in 2006. See Financial Services Regulatory Relief Act of 2006, Pub. L. No. 109-351, § 802(c), 120 Stat. 1266, 2006-07 (2006). "[T]his amendment has generally been viewed as a codification of the `overshadowed or contradicted' rule or gloss previously adopted by the courts themselves." Caprio v. Healthcare Revenue Recovery Group, LLC, 709 F.3d 142, 148-49 (3rd Cir. 2013).
In resolving plaintiff's claim, the court finds as persuasive the reasoning as set forth in Ellis v. Solomon and Solomon, P.C., 591 F.3d 130 (2d Cir. 2010).
Ellis, 591 F.3d at 135 (internal citations and quotation marks omitted). The same standard applies in this case.
Here, the record reflects that defendants filed the lawsuit in the 58th District Court before the expiration of the 30-day period. However, unlike the debt collector in Ellis, defendants did not serve plaintiff until after they responded to his letter requesting verification of the debt on October 3, 2011 and there is no evidence that plaintiff was even aware of the complaint filed against him. Under these circumstances, the least sophisticated consumer would have no reason to be concerned or uncertain about his right to seek validation for a disputed debt. In the court's opinion, defendants did not overshadow or act inconsistently with plaintiff's right to dispute the debt when they filed, but did not serve, a complaint against plaintiff during the 30-day period and there is no evidence that plaintiff knew about the complaint. See Federal Home Loan Mortgage Corporation v. Lamar, 503 F.3d 504, 510 (6th Cir. 2007) (the critical question in determining whether a violation of 15 U.S.C. § 1692g occurred is "whether the [debtor] has been led to believe that [he] did not have thirty days in which to dispute the validity of the debt") (internal quotation marks omitted). Accordingly, defendants are entitled to summary judgment as to Count IV.
Plaintiff's Counts I and II arose from defendants' alleged failure to verify the debt. See Compl. at ¶¶ 25-30. Specifically, Count I alleged violations of 15 U.S.C. § 1692e(2) (a debt collector may not use a false representation of "the character, amount, or legal status of any debt" in connection with the collection of any debt) and 15 U.S.C. §1692e(10) (the use of a false representation or deceptive means to collect a debt), while Count II alleged a violation of 15 U.S.C. § 1692d ("[a] debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt"). Because the court has determined that defendants properly verified plaintiff's debt, there is no factual basis in support either of these counts. Accordingly, defendants are entitled to summary judgment with respect to Counts I and II.
Plaintiff's Count III alleged violations of 15 U.S.C. § 1692f (the use of "unfair or unconscionable means to collect or attempt to collect any debt"). Specifically, plaintiff alleged that defendants engaged in unconscionable means to collect the debt because they tried "to coerce him to pay varying amounts at different times on the alleged debt before any trial in the county court" in violation of 15 U.S.C. § 1692f and this "was an attempt to collect an amount not authorized by the agreement creating the alleged debt" in violation of 15 U.S.C. § 1692f(1). Compl. at ¶ 21. See 15 U.S.C. § 1692f(1) (providing that the following conduct is an unfair practice under § 1692f "(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law").
The record reflects that defendants sent plaintiff three letters with respect to this debt: a letter dated June 8, 2011, demanding payment of the current amount due of $12,064.23 and advising plaintiff that "[b]ecause of interest and other charges that may accrue, the amount you owe may continue to increase daily"; a letter dated October 3, 2011 verifying the current amount of the debt as $12,522.89; and a letter dated November 14, 2011, offering plaintiff various options for settling the dispute. See Defendants' Letters (June, 8, 2011); (Oct. 3, 2011); (Nov. 14, 2011). There is no question that the amount due increased between June 8, 2011 and October 3, 2011. This increase could be explained by Mr. Hardy's affidavit, which established that under plaintiff's credit card agreement, his balance due on May 28, 2011 ($12,011.69) would accrue interest at an annual percentage rate of 14.65%. See Hardy Aff. at ¶ 4. Plaintiff has failed to produce any evidence that the amounts demanded by defendants were not authorized by the agreement in violation of 15 U.S.C. § 1692f(1). In the court's opinion, the three letters sent by defendants did not constitute "coercion" in violation in the FDCPA. Indeed, the October 3, 2011 letter verifying the debt was sent to plaintiff pursuant to the terms of the FDCPA. Accordingly, defendants are entitled to summary judgment with respect to Count IV.
Plaintiff's Count V seeks relief under state law. While plaintiff alleged that defendants violated the "Michigan Collection Practices Act, M.C.L. § 339.901 et seq.", his reference to that Act is a misnomer. Two acts in Michigan govern debt collection, M.C.L. § 339.101 et seq., the Michigan Occupational Code (MOC) and M.C.L. § 445.251 et seq., the Michigan Debt Collection Practices Act. See Montgomery v. Shermeta, Adams & Von Allmen, P.C., 885 F.Supp.2d 849, 858 (W.D. Mich. 2012); Voydanoff v. Select Portfolio Servicing, Inc., No. 298098, 2011 WL 6757841 at *10 (Mich. App. Dec. 22, 2011). The only statute referenced in plaintiff's complaint is a section of the MOC, M.C.L. § 339.918, which contains a debt verification requirement similar to the FDCPA.
For the reasons set forth in this opinion, defendants' motion for summary judgment (docket no. 17) will be
