882 F.3d 616 (6th Cir. 2018), 17-3696, Hagy v. Demers & Adams

Docket Nº:17-3696
Citation:882 F.3d 616
Opinion Judge:SUTTON, Circuit Judge.
Party Name:James R. HAGY, III, Plaintiff-Appellee, v. DEMERS & ADAMS; David J. Demers, Defendants-Appellants, Patricia R. Hagy, Plaintiff, Green Tree Servicing, LLC; Kevin Winehold; ProAssurance Casualty Company, Defendants.
Attorney:Adam J. Bennett, COOKE DEMERS LLC, New Albany, Ohio, for Appellant. Edward A. Icove, ICOVE LEGAL GROUP, LTD., Cleveland, Ohio, for Appellee. Adam J. Bennett, David J. Demers, COOKE DEMERS LLC, New Albany, Ohio, for Appellant. Edward A. Icove, ICOVE LEGAL GROUP, LTD., Cleveland, Ohio, Kristen Finz...
Judge Panel:Before: SUHRHEINRICH, SUTTON, and BUSH, Circuit Judges.
Case Date:February 16, 2018
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
SUMMARY

The Hagys took a loan to purchase a mobile home and property on which to park it. In 2010, they defaulted. Green Tree initiated foreclosure. Hagy called Green Tree’s law firm, Demers & Adams, wanting to settling the claim. Demers sent a letter containing a Warranty Deed in Lieu of Foreclosure, stating, “In return for [the Hagys] executing the Deed … Green Tree has advised me that it will waive... (see full summary)

 
FREE EXCERPT

Page 616

882 F.3d 616 (6th Cir. 2018)

James R. HAGY, III, Plaintiff-Appellee,

Patricia R. Hagy, Plaintiff,

v.

DEMERS & ADAMS; David J. Demers, Defendants-Appellants,

Green Tree Servicing, LLC; Kevin Winehold; ProAssurance Casualty Company, Defendants.

No. 17-3696

United States Court of Appeals, Sixth Circuit

February 16, 2018

Argued: January 31, 2018

Rehearing En Banc Denied March 21, 2018

Page 617

[Copyrighted Material Omitted]

Page 618

Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:11-cv-00530— Terence P. Kemp, Magistrate Judge.

ARGUED:

Adam J. Bennett, COOKE DEMERS LLC, New Albany, Ohio, for Appellant.

Edward A. Icove, ICOVE LEGAL GROUP, LTD., Cleveland, Ohio, for Appellee.

ON BRIEF:

Adam J. Bennett, David J. Demers, COOKE DEMERS LLC, New Albany, Ohio, for Appellant.

Edward A. Icove, ICOVE LEGAL GROUP, LTD., Cleveland, Ohio, Kristen Finzel Lewis, SOUTHEASTERN OHIO LEGAL SERVICE, New Philadelphia, Ohio, for Appellee.

Before: SUHRHEINRICH, SUTTON, and BUSH, Circuit Judges.

OPINION

SUTTON, Circuit Judge.

David Demers, an attorney, sent a letter on behalf of his client to the attorney for James and Patricia Hagy. The letter indicated that the Hagys would not have to pay the balance on their loan and that the lender would not pursue any other remedies against the Hagys. That seemed like good news for the Hagys. Little did Demers know that this epistle would lead to six years (and counting) of litigation against him and his firm for violating the Fair Debt Collection Practices Act. Because the complaint failed to identify a cognizable injury traceable to Demers (and his firm) and because Congress cannot override this baseline requirement of Article III of the U.S. Constitution by labeling the violation of any requirement of a statute a cognizable injury, we must dismiss the appeal and, with it, the underlying case.

I.

In 2002, James and Patricia Hagy took out a loan to purchase a mobile home and some property on which to park it. In 2010, they defaulted on their loan payments. Green Tree Servicing, a mortgage

Page 619

servicing company, initiated foreclosure proceedings against the Hagys.

Patricia Hagy called the law firm that represented Green Tree, the star-crossed Demers & Adams, with hopes of settling the claim. It worked. On June 8, 2010, David Demers sent the Hagys a letter containing a Warranty Deed in Lieu of Foreclosure. " In return for [the Hagys] executing the Deed," the letter said, " Green Tree has advised me that it will waive any deficiency balance." R. 18-3 at 1. The Hagys executed the Deed on June 24, 2010. And on June 30, 2010, Demers sent another letter, this time to the Hagys’ attorney, James Sandy. That letter confirmed receipt of the executed Deed and reaffirmed that " Green Tree will not attempt to collect any deficiency balance which may be due and owing after the sale of the collateral." R. 18-5 at 1. Three weeks later, Green Tree dismissed the foreclosure complaint against the Hagys.

What seemed to end the dispute did not.

Green Tree began calling the Hagys to collect the debt that they no longer owed. James Hagy protested that he " didn’t have to pay anything else" in light of the Deed. R. 67 at 26. Green Tree realized it had made a mistake and agreed that the Hagys owed nothing more.

In 2011, the Hagys sued Green Tree and one of its employees (Kevin Winehold), and Demers and his law firm (Demers & Adams), in federal court. They claimed that the phone calls and letters violated the Fair Debt Collection Practices Act and the Ohio Consumer Sales Practices Act.

Green Tree and Winehold, the phone callers, moved to stay the proceedings and compel arbitration. The district court granted the motion, and this set of contestants eventually resolved their dispute through arbitration.

Demers and his law firm, the letter writers, moved to dismiss the claims against them. The court dismissed the Hagys’ federal claim based on the June 8 letter because it was time-barred. But it refused to dismiss the Hagys’ Ohio claims based on the June 8 letter as well as their federal and Ohio claims based on the June 30 letter.

After discovery, Demers and the Hagys each moved for summary judgment. In 2013, the district court ruled for the Hagys, reasoning that Demers’ June 30 letter to Sandy " fail[ed] to disclose" that it was a " communication ... from a debt collector" in violation of the federal law. 15 U.S.C. § 1692e(11). Believing that the Ohio law incorporates the federal requirements, the court ruled that Demers also violated the Ohio statute by failing to make the § 1692e(11) disclosure in the June 8 and June 30 letters and by failing to provide the notice required by § 1692g(a) " [w]ithin five days [of] the initial communication with [the] consumer." R. 95. All told, the court awarded the Hagys $1,800 in statutory damages, $312 in costs, and $74,196 in attorney’s fees against Demers and his law firm.

Over the next three years, the Hagys (successfully) filed two supplemental complaints and Demers (unsuccessfully) tried to appeal the district court’s non-final summary judgment decision. Meanwhile, Demers asked the district court to reconsider its decision in light of Anderson v. Barclay’s Capital Real Estate, Inc., 136 Ohio St.3d 31, 989 N.E.2d 997 (2013), and Spokeo, Inc. v. Robins, __ U.S. __, ...

To continue reading

FREE SIGN UP