NANCY G. EDMUNDS, District Judge.
This matter has come before the Court on the Magistrate Judge's Report and Recommendation. Being fully advised in the premises and having reviewed the record and the pleadings, including the Report and Recommendation and any objections thereto, the Court hereby ACCEPTS AND ADOPTS the Magistrate Judge's Report and Recommendation. It is further ordered that Defendants' Motion for Summary Judgment/Dismissal [#20] is GRANTED and that Plaintiff's Amended Complaint is hereby DISMISSED.
SO ORDERED.
LAURIE J. MICHELSON, United States Magistrate Judge.
In his initial Complaint, pro se Plaintiff Todd C. Newman ("Plaintiff") alleged that Defendants Trott & Trott PC, and Trott & Trott employees Marcy J. Ford, David A. Trott, Kenneth E. Krurel and John and Jane Does 1-10 ("Defendants"), engaged in abusive, deceptive, and unfair practices in their attempted collection of a debt. (Dkt. 1.) Plaintiff filed an Amended Complaint (Dkt. 15) alleging primarily that Defendants violated the Fair Debt Collection Practices Act. 15 U.S.C. § 1692 et seq. ("FDCPA") and the Michigan Collection Practices Act Mich. Comp. Laws § 445.521 et seq. ("MCPA"), as well as other state law claims. Presently before the Court for Report and Recommendation is Defendants' Motion for Summary Judgment/Dismissal. (Dkt. 20.) The Court has considered Defendants' Motion, Plaintiff's Response (Dkt. 22), and Plaintiff's supplemental brief (Dkt. 24, Ex. A) and will waive oral argument. See E.D. Mich. LR 7.1(f).
For the following reasons, this Court
On April 19, 2006, Plaintiff and his wife, Kelly L. Newman, borrowed $320,000 from non-party Countrywide Home Loans, Inc. ("Countrywide"), to purchase a home located at 7637 Arnold Road, Ira Township, Michigan ("Property")
Plaintiff alleges that Countrywide created the Harborview Mortgage Loan Trust 2006-5 ("Trust") on April 26, 2006 and filed a Pooling Agreement ("PA") with the Securities & Exchange Commission ("SEC") on June 1, 2006. (Dkt. 15, Am. Compl., Ex. I, Aff. of Lane A. Houk.) The PA lists Deutsche Bank National Trust Company ("Deutsche Bank") as the trustee for the Trust. (Id.) Plaintiff further alleges that Countrywide assigned the Mortgage to non-party Greenwich Capital Financial Products, Inc., which assigned it to non-party Greenwich Capital Acceptance, Inc. (Id.)
On November 19, 2011, MERS "for value received, assign[ed] and transfer[red] to Deutsche Bank ... all its right, title and interest in" the Mortgage. (Dkt. 15, Am. Compl., Ex. A; Dkt. 20, Def. Mot. Summ. J., Ex. D.) MERS assigned the Mortgage to Deutsche Bank "As Trustee for the Harborview Mortgage Loan Trust." (Id.) This assignment was recorded by the St. Clair County Register of Deeds on January 7, 2011. (Id.) Defendant Marcy J Ford, a Trott and Trott attorney, drafted the assigning document, and Defendant Kenneth E. Krurel, also a Trott and Trott attorney, signed it on behalf of MERS.
After preparing and executing the assignment of the Mortgage to Deutsche Bank, Defendant Trott and Trott P.C. ("Trott") sent Plaintiff two letters and a notice of compliance with the FDCPA. (Dkt. 15, Am. Compl. ¶ 32, Dkt. 20, Def. Mot. Summ. J., Ex. E.) The first letter stated that Trott represents "BAC Home Loans Servicing, L.P., which is the creditor to which your mortgage debt is owed or the servicer for the creditor to which the debt is owed." (Id.) The letter further advised that Plaintiff had an outstanding debt of $375,918.49 and that Trott had been instructed to foreclose on the Mortgage. (Id.) The letter also explained the process for challenging the validity of the debt:
(Dkt. 20, Def. Mot for Summ. J., Ex. E.) Attached to the letter was a notice stating that Defendants were proceeding in compliance with the FDCPA. (Id.)
Trott sent a second letter to Plaintiff and his wife. (Id.) This November 22, 2010 letter explains that their Mortgage "is in default for non-payment." (Id.) The letter lists the amount due as $375,918.49 and provides that Plaintiff or his wife could contact Trott within fourteen days of the letter "to work out a modification of the mortgage loan to avoid foreclosure." (Id.)
On December 9, 2010, Trott responded to Plaintiff's November 29, 2010 letter. (Dkt. 15, Am. Compl. ¶ 38-39, Dkt. 20, Def. Mot. Summ. J., Ex. G.) Plaintiff was advised that "This letter is in response to your request for a reinstatement amount." (Id.) The letter provides a description of the charges, fees and payments owed in order to reinstate the mortgage. (Id.) While Trott did not expressly verify the debt, the letter makes clear that Plaintiff owed BACHLS $18,644.48. (Id.)
In response to this letter, Plaintiff sent BACHLS — and allegedly Defendants
(Dkt. 20, Def. Mot. Summ. J., Ex. H.) Plaintiff requested that BACHLS produce a number of documents to "prov[e] that it had authority to service and collect on Plaintiff's loan obligation." (Dkt. 15, Am. Compl. ¶ 40.)
Plaintiff alleges that on December 30, 2010, "BAC acknowledged receipt of the December 17, 2010 qualified written request and dispute letter." (Dkt. 15, Am. Compl. ¶ 41.) This December 30, 2010 letter, however, sent by John W. Ellis, an attorney for BACHLS, states that BACHLS was in receipt of Plaintiff's letters "dated November 26, 2010 and December 4, 2010."
Plaintiff alleges that Trott "sent Plaintiff another demand letter" on January 11, 2011. (Dkt. 15, Am. Compl. ¶ 42.) This letter is essentially identical in substance to the letter sent to Plaintiff on December 9, 2010. (Dkt. 15, Am. Compl., Ex. F, Dkt. 20, Def. Mot. Summ. J., Ex. I.) The January 11, 2011 letter states, "This letter is in response to your request for a payoff amount." (Id.) The letter advises that Plaintiff owes $378,364.10 to BACHLS. (Id.) This is the last correspondence in the record between Plaintiff and Defendants. Subsequently, on May 24, 2011, May 31, 2011, June 7, 2011 and June 14, 2011, Trott published Foreclosure Advertisements in the St. Clair Shore County "Times Herald." (Dkt. 15, Am. Compl., ¶ 51, Dkt. 15, Am. Compl., Ex. I.)
Plaintiff maintains that Defendant Trott & Trott is a Michigan law firm, which operates as a debt collector in the area of foreclosure and mortgage servicing. (Dkt. 15, Am. Compl. ¶ 18-20.)
Defendants maintain that neither the November 29, 2010 letter nor the December 16, 2010 letter "request[ed] that Trott or anyone else validate the debt." (Dkt. 20, Def. Mot. Summ. J. at 2.) Even if they did, claim Defendants, the letters from Trott dated December 8, 2010 and January 11, 2011, both independently "identified the entity foreclosing, validated the debt at issue and included an amount necessary to reinstate.... [or] pay off the loan." (Id. at 2-3.) Lastly, Defendants maintain that the December 30, 2010 letter from attorney Ellis, resolved the controversy, thereby "mooting all of Plaintiff's claims" that the debt had not been verified or validated. (Id. at 3.)
Plaintiff brings seven claims against Defendants and one claim in the alternative
Motions for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) are analyzed under the same standard as motions to dismiss pursuant to Rule 12(b)(6). See Albrecht v. Treon, 617 F.3d 890, 893 (6th Cir.2010).
In reviewing a motion to dismiss under Fed.R.Civ.P. 12(b)(6), the Court must "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff," but the Court "need not accept as true legal conclusions or unwarranted factual inferences." Hunter v. Sec'y of U.S. Army, 565 F.3d 986, 992 (6th Cir.2009) (quoting Jones v. City of Cincinnati, 521 F.3d 555, 559 (6th Cir.2008)). To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must plead "sufficient factual matter" to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The plausibility standard is not a "probability requirement," but it does require "more than a sheer possibility that a defendant has acted unlawfully." Id.
In ruling on a motion to dismiss, the Court may consider the complaint as well as (1) documents referenced in the pleadings and central to plaintiff's claims, (2) matters of which a court may properly take notice, and (3) public documents. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127 S.Ct. 2499, 2509, 168 L.Ed.2d 179 (2007); Amini v. Oberlin College, 259 F.3d 493, 502 (6th Cir.2001). The court's consideration of these document does not require conversion of the motion to one for summary judgment. Greenberg v. Life Ins. Co. of Virginia, 177 F.3d 507, 514 (6th Cir.1999).
Turning to Defendants' alternative request for relief, summary judgment is proper "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). A fact is material only if it might affect the outcome of the case under the governing
The moving party may discharge its initial summary judgment burden by "pointing out to the district court ... that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (explaining that the moving party may carry its summary judgment burden without "produc[ing] evidence showing the absence of a genuine issue of material fact, even with respect to an issue on which the nonmoving party bears the burden of proof"). If the moving party does so, the party opposing the motion "must come forward with specific facts showing that there is a genuine issue for trial." Matsushita, 475 U.S. at 587, 106 S.Ct. 1348. A party must support its assertions by:
Fed.R.Civ.P. 56(c)(1). The Court must determine whether the evidence presents a sufficient factual disagreement to require submission of the challenged claims to a jury, or whether the evidence is so one-sided that the moving party must prevail as a matter of law. Anderson, 477 U.S. at 252, 106 S.Ct. 2505 ("The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.").
Plaintiff alleges that Defendants violated four sections of the FDCPA. (Dkt. 15, Am. Compl. ¶ 44-79.) Plaintiff first alleges that Defendants violated Section 1692d(4) by advertising the foreclosure sale of the Property on four separate occasions. (Id. at ¶ 51.) Next, Plaintiff argues that Defendants violated Section 1692e(2)(A) by misrepresenting "the character of the debt by producing, signing and recording a fraudulent assignment of mortgage." (Id. at ¶ 58-59.) Similarly, Plaintiff alleges that Defendants violated Section 1692f(1) by "trying to collect on a debt that is not expressly authorized by the agreement creating the debt or in compliance with state law.... because there is no evidence ... that the promissory note is held by the alleged creditor represented by the Defendants," and therefore, the assignment of Mortgage is null and void without an assignment of the Note. (Id. at ¶ 69-70.) Lastly, Plaintiff alleges that Defendants violated Section 1692g(b) because they continued collection practices without verifying or sending a copy of the verification to Plaintiff after Plaintiff disputed the debt. (Id. at ¶ 79.)
Defendants contend that they are entitled to summary judgment on these claims because: (1) they are not "debt collectors"
"As a matter of law, liability under §§ 1692d and 1692e can only attach to those who meet the statutory definition of a `debt collector.'" Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6th Cir. 2003). The FDCPA, which was enacted to "eliminate abusive debt collection practices by debt collectors," 15 U.S.C. § 1692(e), defines a "debt collector" as "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6).
The Supreme Court has held that the FDCPA "applies to attorneys who regularly engage in consumer-debt-collection activity, even when that activity consists of litigation." Heintz v. Jenkins, 514 U.S. 291, 299, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995); see also Kistner v. Law Office of Michael P. Margelefsky, LLC, 513 F.3d 433, 438 (6th Cir.2008) (holding that an attorney, who regularly engaged in debt-collection was a "debt collector" under the FDCPA); Romberger v. Wells Fargo Bank, N.A., No. 07-13210, 2008 WL 3838026, at *4 (E.D.Mich. Aug. 14, 2008) (relying on Heintz that "law firms which `regularly' engage in consumer-debt collection activity are considered `debt collectors'"). While Defendants acknowledge Heintz, they rely instead on cases that hold that law firms and attorneys who pursue non-judicial foreclosures for a lender-client are not "debt collectors" under the FDCPA because they are enforcing a security interest in the property through the foreclosure. (Def. Mot. Summ. J. at 12-14.). This argument stems from the Sixth Circuit's ruling in Montgomery v. Huntington Bank, 346 F.3d 693 (6th Cir. 2003).
In Montgomery, the plaintiff asserted that defendant, a repossession agency, violated the FDCPA when it repossessed the plaintiff's mother's automobile. Montgomery, 346 F.3d at 695. The repossession agency, which had been hired by the bank that held a security interest in the automobile, moved to dismiss the complaint on the grounds that it was not a "debt collector" under the FDCPA. Id. The Court concluded that the defendant repossession agency was not a "debt collector" because Congress did not intend for the FDCPA to apply to agencies or individuals enforcing security instruments, except under § 1692f(6), and the plaintiff had not alleged a violation under that section. Id. at 700-01.
In Montgomery, however, the Sixth Circuit also stated that:
Id. at 701. Thus, other courts, in this District, have construed Montgomery to mean that even if a defendant is enforcing a security interest, it can still be deemed a debt collector if the record establishes that its principal business is debt collection or that it regularly engages in debt collection. See e.g. McDermott v. Randall S. Miller & Associates, P.C., 835 F.Supp.2d 362, 376-77 (E.D.Mich.2011) (citing Kaltenbach v. Richards, 464 F.3d 524, 527 (5th Cir.2006) and collecting cases). In McDermott, the Court explained:
McDermott, 835 F.Supp.2d at 377 (emphasis in original). The Court further noted:
Id. at 377 n. 2; see also Golliday v. Chase Home Fin., LLC, 761 F.Supp.2d 629, 635 (W.D.Mich.2011) ("To determine whether a defendant is a debt collector, the Court must look beyond the facts of the particular case to determine whether a defendant's `principal purpose' is to collect debts or whether the defendant regularly engages in collecting debts."). As the McDermott court summarized, "under Montgomery, an entity whose business has the principal purpose of enforcing security interests is subject only to § 1692f(6), — provided that entity does not otherwise satisfy the definition of a debtor collector under the statute." Id. at 376.
While the record supports that Trott's primary duty in this matter was to enforce its client's security interest, the Court has to consider whether the record also reveals that Trott's principal business is debt collection. Plaintiff's Amended Complaint alleges that Trott is in the business of collecting debts and that "Defendants are `debt collectors' under 15 U.S.C. § 1692a(6)." (Dkt. 15, Am. Compl. ¶ 47.) Plaintiff attaches letters from Trott to his Amended Complaint that include the heading, "THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT. ANY INFORMATION WE OBTAIN WILL BE USED FOR THAT PURPOSE." (Dkt. 15, Am. Compl., Exs. B, C, F; Dkt. 20, Def. Mot. Summ. J., Exs. E, G, I.). And the November 22, 2010 letter that Trott sent to Plaintiff includes directions on how to dispute the debt under § 1692g(b) and an attachment entitled, "NOTICE REQUIRED BY THE FAIR DEBT COLLECTIONS PRACTICES
In analyzing similar facts involving another law firm that operates like Trott, District Judge Nancy G. Edmunds ruled that the firm was not a "debt collector" for purposes of the FDCPA. As Judge Edmunds explained:
Rogers v. RBC Mortg. Co., No. 11-11167, 2011 WL 3497432, at *7-9, 2011 U.S. Dist. LEXIS 88517, at *20-25 (E.D.Mich. Aug. 10, 2011); see also Johnson v. Trott & Trott, 829 F.Supp.2d 564 (W.D.Mich.2011) (explaining that "[t]he only factual allegation in Plaintiff's amended complaint that could possibly be viewed as alleging that Trott & Trott is a `debt collector' for non-1692f(6) purposes occurs when Plaintiff notes that the letter he received stated `THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT.' (citation omitted) This district and other districts within this circuit have previously held that such disclaimers are insufficient to show that a law firm is a debt collector for non-1692f(6) purposes."). But see McDermott, 835 F.Supp.2d at 377 (finding that plaintiff's allegations that defendant was a debt collector, that its phone greeting indicated it was a debt collector, and that it regularly attempted to collected defaulted consumer mortgage debts by attempting to effectuate loan modifications, were sufficient to plead a claim under the FDCPA); Romberger, 2008 WL 3838026, at *4 ("When construing the facts in a light that are most favorable to [Plaintiff] at this stage of the proceedings, the Court cannot conclude that Trott & Trott is not a debt collector, as that term is used in the FDCPA. In fact, there is evidence that this law firm forwarded letters to [Plaintiff] which stated: THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT.").
Here, Trott was not seeking to collect on a debt, but informed Plaintiff it was going to initiate foreclosure proceedings. The weight of authority suggests that Trott's letters are insufficient to transform it into a debt collector for non-1692f(6) purposes Thus, the Court recommends granting Defendants' Motion for Summary Judgment/Dismissal as it relates to the FDCPA claims. Moreover, even if Trott's conduct in this case was subject to the FDCPA, the Court would still recommend dismissal of the FDCPA claims on the merits.
Plaintiff contends that the assignment of the Mortgage to Deutsche Bank was invalid and thus, Defendants' actions with respect to the outstanding Mortgage debt violate §§ 1692e & 1692f of the FDCPA. (Dkt. 15, Am. Compl. ¶¶ 43, 59, 70.) Section 1692e provides, in general, that "a debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Section 1692f likewise provides that "a debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt." 15 U.S.C. § 1692f. (Id. at ¶ 58, 69.) More specifically, section 1692e(2)(A) provides that it is a violation of the FDCPA for a debt collector to provide "the false representation of the character, amount or legal status of a debt." 15 U.S.C. § 1692e(2)(A). Section 1692f(1) provides that it is a violation of the FDCPA for a debt collector to collect "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." 15 U.S.C. § 1692f(1). Plaintiff contends these specific provisions were violated "because there is no evidence that the promissory note.... continues to exist or that the promissory note is held by the alleged creditor." (Id. at 59, 70.)
Plaintiff alleges that the assignment of the Mortgage to Deutsche Bank was not valid because either (1) the trust referenced in the assignment does not exist or (2) there was no assignment of the Note. (Dkt. 15, Am. Compl. ¶ 27, 70). In addressing a virtually identical argument, another court in this District recently ruled:
Cable v. Mortgage Electronic Registration Sys., Inc., No. 11-14877, 2012 WL 2374236, at *2-3, 2012 U.S. Dist. LEXIS 87092, at *6-8 (E.D.Mich. June 22, 2012); see also Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, 399 Fed.Appx. 97, 102 (6th Cir.2010) (stating that there is ample authority to support the proposition that a litigant who is not a party to a mortgage assignment lacks standing to challenge that assignment).
This Court recognizes that in Livonia Properties, the Court stated:
Id. The Court found, however, that the plaintiff was not at risk of paying twice because the defendant established it held the original note by producing copies and the original note. Id.
Here, Plaintiff has presented no evidence that anyone other than MERS or its assignees claim to hold the Note or claim to be the servicer of the Mortgage. His "mere conjecture that he could at some point be subject to double liability is not sufficient to withstand a motion brought pursuant to Federal Rule of Civil Procedure 56." Cable, 2012 WL 2374236, at *4, 2012 U.S. Dist. LEXIS 87092, at *10-11. Accordingly, because MERS and Deutsche Bank "ratified the assignment by their subsequent conduct in honoring its terms," and there is nothing in the record to suggest Plaintiff was subject to double liability on the debt, Plaintiff lacks standing to challenge the assignment of the Mortgage.
Even if Plaintiff had standing to challenge the assignment of the Mortgage from MERS to Deutsche Bank, Plaintiff's FDCPA claims still fail as a matter of law.
In support of his allegations that Defendants violated § 1692e and § 1692f of the FDCPA, Plaintiff contends that, under Michigan Law, an assignment of a mortgage without the note is a nullity. (Dkt. 22, Pl.'s Resp. To Def. Mot. Summ. J. at 2) (citing McKeighan v. Citizens Commercial & Sav. Bank of Flint, 302 Mich. 666, 5 N.W.2d 524, 526 (Mich.1942))
In Bakri v. Mortgage Electronic Registration System, No. 297962, 2011 WL 3476818 (Mich.Ct.App. Aug. 9, 2011), the Michigan Court of Appeals held that "[b]ecause plaintiff granted defendant MERS the power to assign the mortgage, the assignment of the mortgage to [the foreclosing bank] was valid." Bakri, 2011 WL 3476818 at *4. The Sixth Circuit recently approved Bakri in Hargrow v. Wells Fargo Bank, N.A., No. 11-1806, 2012 WL 2552805, at *3 (6th Cir. July 3, 2012). The Court in Hargrow reasoned that "the initial premise [of Bakri] that the proper assignee of a mortgage retains the same rights as the original mortgagee remains valid." Id. The Sixth Circuit also found that:
Id.
Here, as in Hargrow, the Mortgage clearly establishes that MERS was the original mortgagee and that Plaintiff granted MERS the power to assign the Mortgage. (Dkt. 20, Def. Mot. Summ. J., Ex. B.) The Mortgage states, "Borrower does hereby mortgage, warrant, grant and convey to MERS (solely as nominee for Lender and Lender's successors and assigns) and to the successors and assigns of MERS, with power of sale, the following described property...." (Id.) The assignment was recorded in the St. Clair County Registry of Deeds on November 19, 2010, creating a clear record chain of title for the Mortgage. Thus, the assignment of the Mortgage to Deutsche Bank was valid in all respects.
As such, the claims that Defendants violated Sections 1692e and 1692f of the FDCPA because the Mortgage assignment was invalid fail as a matter of law.
Plaintiff alleges that Defendants violated Section 1692g(b) by not "providing verification of the debt" and "by attempting to collect" after Plaintiff informed Defendants that he was disputing the debt. (Dkt. 15, Am. Compl. ¶ 79.)
Section 1692g(b) of the FDCPA provides:
15 U.S.C. § 1692g(b). Courts in this District have found that § 1692g(b) requires "`nothing more than the debt collector confirming in writing that the amount being demanded is what the [mortgagee] is claiming is owed.'" Mabry v. Ameriquest Mortg. Co., No. 09-12154, 2010 WL 1052353, at *4 n. 1 (E.D.Mich. Feb. 24, 2010) (quoting Rudek v. Frederick J. Hanna & Assocs., P.C., No. 08-288, 2009 WL 385804, at *2 (E.D.Tenn. Feb. 17, 2009)); see also Smith v. MERS, No. 10-12508, 2012 WL 1963605, at *2 (E.D.Mich. May 9, 2012) adopted by Smith v. MERS, No. 10-12508, 2012 WL 1963604 (E.D.Mich. May 31, 2012). Furthermore, debt collectors "have no duty to forward `copies of bills of other detailed evidence of the debt.'" Smith, 2012 WL 1963605 at *2 (quoting Rudek, 2009 WL 385804 at *3 (quoting Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir.1999))).
Plaintiff alleges that Defendants violated Section 1692d(4) of the FDCPA by advertising the foreclosure sale of the Property on four separate occasions. (Id. at ¶ 51.) While not specifically discussed in their brief, Defendants appear to contend that this conclusory allegation does not state a claim. (Dkt. 20, Def. Mot Summ. J. at 9-11.) Section 1692d of the FDCPA provides that
15 U.S.C. § 1692d. There is nothing in the Amended Complaint or the record that establishes Defendants placed the advertisements to coerce payment rather than to initiate foreclosure and comply with the requirements for a non-judicial foreclosure. Plaintiff has not provided any case law that simply advertising a foreclosure sale multiple times constitutes a violation of the FDCPA. As such, there is an absence of evidence supporting this claim. Plaintiff cannot rely on mere speculation to support his claim. See Celotex, 477 U.S. at 325, 106 S.Ct. 2548. Hence, this Court recommends that Defendants' Motion for Summary Judgment/Dismissal be granted as to Plaintiff's Section 1692d(4) claim.
Plaintiff alleges that Defendants Trott & Trott and their individual employees form a "collection agency" as the term is defined in the Michigan Occupational Code ("MOC"), Mich. Comp. Laws § 339.901(b), and that Defendants violated the MOC. (Dkt. 15, Am. Compl. ¶ 81-82.) The MOC provides:
Mich. Comp. Laws § 339.901(b) (emphasis added). Thus, attorneys and law firms engaged in collection activities on behalf of clients, such as Trott here, are not "collection agencies" under the MOC. See McKeown v. Mary Jane M. Elliott P.C., No. 07-12016-BC, 2007 WL 4326825, at *9 (E.D.Mich. Dec. 10, 2007.) (holding that defendant law firm was not a "collection agency" under MOC when it attempted to collect on behalf of its client a consumer debt owed by plaintiffs). Consequently, Plaintiff's claims that Defendants violated the MOC fails as a matter of law.
The Michigan Collection Practices Act ("MCPA") is similar to the MOC and is intended "to regulate the collection practices of certain persons" that meet the statutory definition of "regulated person." Mich. Comp. Laws §§ 445-445.252. Defendants maintain that Plaintiff's claims under the MCPA must fail as a matter of law because Defendants do not meet the statutory definition of "regulated person." (Dkt. 20, Def. Mot. For Summ. J. at 16.)
The MCPA provides:
Mich. Comp. Laws § 445.251(g). Defendants maintain that they are not a "regulated person" under the statute because they were not handling a claim in their own name but on behalf of BACHLS. (Dkt. 20, Def. Mot For Summ. J. at 15-16.) Defendants rely on Stolicker v. Muller, Muller, Richmond, Harms, Myers, & Sgroi, P.C., No. 1:04-733, 2005 WL 2180481, at *7 (W.D.Mich. Sept. 9, 2005), in which the court held that a law firm which filed a lawsuit against a debtor on behalf of a bank and in the bank's own name for defaulting on credit card payments, was not a "regulated person" under the MCPA. Id. As Plaintiff points out in his Response, this reasoning has been rejected. In Misleh v. Timothy E. Baxter & Associates, 786 F.Supp.2d 1330 (E.D.Mich.2011), the Court stated:
Misleh, 786 F.Supp.2d at 1337. The Court went on to hold that the defendant law firm and its employees "fit squarely within the definition of a regulated person." Id. at 1338 (internal quotation marks and citations omitted). Likewise here, the Court finds that the Defendant law firm and its employees "fit squarely within the definition of a regulated person" under the MCPA Id. at 1338.
Plaintiff, however, does not allege that Defendants violated any specific provision of the MCPA.
Plaintiff's Amended Complaint also includes a count of Conversion, alleging that Defendants "exerted wrongful control over [the Note] in an attempt to gain possession of the [Note]." (Dkt. 15, Am. Compl. ¶ 91.) Conversion is "any distinct act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein." Kama v. Wells Fargo Bank, No. 10-10514, 2010 WL 4386974, at *3 (E.D.Mich. Oct. 29, 2010) (internal citations omitted). Here, the Mortgage makes clear that the Note was the property of Countrywide and its assignees. (Dkt. 20, Def. Mot. Summ. J., Ex. B.) The Note represents an obligation of the Plaintiff rather than property of the Plaintiff. Thus, Defendants are entitled to judgment as a matter of law on Plaintiff's conversion claim.
Lastly, Plaintiff alleges, in the same count, that Defendants committed constructive fraud and have been unjustly enriched. (Dkt. 15, Am. Compl. ¶ 97-100.) This Court finds that Defendants are entitled to summary judgment on both claims.
In order establish a claim of fraud, Plaintiff must prove that:
Plaintiff's claim of constructive fraud is based on his argument that the assignment of the Mortgage was invalid and Defendants knew it to be invalid. (Dkt. 15, Am. Compl. ¶ 97.) As discussed, the argument regarding the validity of the assignment has no legal or factual merit and thus, Defendants are entitled to summary judgment on Plaintiff's constructive fraud claim.
A claim of unjust enrichment requires that Defendants received a benefit from Plaintiff to which they were not entitled. Barber v. SMH (US), Inc., 202 Mich.App.366, 509 N.W.2d 791, 796 (Mich. App.1993). Plaintiff has not presented any evidence that Defendants received such a benefit. In his Response to Defendants' Motion for Summary Judgment, Plaintiff merely states, "Absent validation of the debt, Defendant as well as BAC[HLS] and Harborview will be unjustly enriched by foreclosing on Plaintiff's home for a debt that was not owed to BAC[HLS] or Harborview." (Dkt. 22, Pl.'s Resp. To Def. Mot. Summ. J. at 23 (emphasis added).) Not only is the claim based on speculation, but the record establishes that the debt was validated. Thus, summary judgment is warranted on the unjust enrichment clam as well.
For the foregoing reasons, this Court
The parties to this action may object to and seek review of this Report and Recommendation within fourteen (14) days of service of a copy hereof as provided for in 28 U.S.C. § 636(b)(1). Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Frontier Ins. Co. v. Blaty, 454 F.3d 590, 596 (6th Cir.2006); United States v. Sullivan, 431 F.3d 976, 984 (6th Cir. 2005). The parties are advised that making some objections, but failing to raise others, will not preserve all the objections a party may have to this Report and Recommendation. McClanahan v. Comm'r of Soc. Sec., 474 F.3d 830 (6th Cir.2006) (internal quotation marks omitted); Frontier, 454 F.3d at 596-97. Objections are to be filed through the Case Management/Electronic Case Filing (CM/ECF) system or, if an appropriate exception applies, through the Clerk's Office. See E.D. Mich. LR 5.1. A copy of any objections is to be served upon this magistrate judge but this does not constitute filing. See E.D. Mich. LR 72.1(d)(2). Once an objection is filed, a response is due within fourteen (14) days of service, and a reply brief may be filed within seven (7) days of service of the response. E.D. Mich. LR 72.1(d)(3), (4).
August 6, 2012
