Asset Acceptance Corp. v. Robinson

• Citation: 625 N.W.2d 804,244 Mich. App. 728
• Decision Date: 03 January 2001
• Docket Number: Docket No. 215158.
• Parties: ASSET ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. Othell ROBINSON, Defendant-Appellant.
• Court: Court of Appeal of Michigan (US)

625 N.W.2d 804

244 Mich. App. 728

ASSET ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. Othell ROBINSON, Defendant-Appellant.

Docket No. 215158.

Court of Appeals of Michigan.

Submitted January 3, 2001, at Detroit.

Decided March 2, 2001, at 9:05 a.m.

Murdoch J. Hertzog, St. Clair Shores, for the plaintiff.

UAW-Ford Legal Services Plan (by Terri J. Morency), Dearborn, for the defendant.

Before MARKEY, P.J., and McDONALD and MICHAEL J. KELLY, JJ.

PER CURIAM.

Defendant appeals as of right from an order granting plaintiff's motion for summary disposition in this debt collection action. We affirm in part and remand.

On appeal, a trial court's grant of summary disposition is reviewed de novo. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). This Court must review the record to determine whether the moving party was entitled to judgment as a matter of law. Morales v. Auto-Owners Ins. Co., 458 Mich. 288, 294, 582 N.W.2d 776 (1998); Phillips v. Deihm, 213 Mich.App. 389, 398, 541 N.W.2d 566 (1995). A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim. Spiek, supra, 337; Radtke v. Everett, 442 Mich. 368, 374, 501 N.W.2d 155 (1993). A court must rely on affidavits, pleadings, depositions, or any other documentary evidence in deciding whether a genuine issue of material fact exists. Rollert v. Dep't of Civil Service, 228 Mich.App. 534, 536, 579 N.W.2d 118 (1998). If the opposing party fails to present documentary evidence establishing the existence of a material factual dispute, the motion is properly granted. Smith v. Globe Life Ins. Co., 460 Mich. 446, 455-456, n. 2, 597 N.W.2d 28 (1999).

Defendant first contends that plaintiff did not have standing to bring this suit under the following provisions of the Michigan collection practices act (MCPA), M.C.L. § 339.901 et seq.; MSA 18.425(901) et seq.; that prohibit the following actions by a licensed collection agency:

(b) Furnishing legal advice, or otherwise engaging in the practice of law, or representing that the person is competent to do so, or to institute a judicial proceeding on behalf of another.

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(d) Employing or retaining an attorney to collect a claim. A licensee may exercise authority on behalf of a creditor to employ the service of an attorney if the creditor has specifically authorized the collection agency in writing to do so and the licensee's course of conduct is at all times consistent with a true relationship of attorney and client between the attorney and the creditor. After referral to an attorney, the creditor shall be the client of the attorney, and the licensee shall not represent the client in court. The licensee may act as an agent of the creditor in dealing with the attorney only if the creditor has specifically authorized the licensee to do so in writing.

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(f) Soliciting, purchasing, or receiving an assignment of a claim for the sole purpose of instituting an action on the claim in a court. [MCL 339.915a(b), (d), and (f); MSA 18.425(915a)(b), (d), and (f).]

Defendant maintains that plaintiff is a collection agency under the MCPA and has violated the above provisions. Plaintiff, on the other hand, contends that it is not a collection agency and purchased the debt in question outright and is not acting on behalf of a creditor.

A collection agency is defined as

a person directly or indirectly engaged in soliciting a claim for collection or collecting or attempting to collect a claim owed or due or asserted to be owed or due another, or repossessing or attempting to repossess a thing of value owed or due or asserted to be owed or due another arising out of an expressed or implied agreement. [MCL 339.901(b); MSA 18.425(901)(b).]

In the instant case, defendant purchased the vehicle from Repo Depo West, Inc. Repo Depo West, Inc., immediately sold defendant's account to Guardian National Acceptance Corporation (GNA). On June 27, 1997, plaintiff purchased defendant's account from GNA. The purchase agreement states that GNA conveyed all of its interests in the accounts to plaintiff for value.

This Court holds that plaintiff is not a collection agency as defined by the MCPA. The purchase agreement states that GNA conveyed all of its interest in defendant's account for valuable consideration. Moreover, the provisions of the MCPA clearly attempt to protect the debtor and the creditor from the potentially improper acts of a third-party collection agency.¹ Here, plaintiff is not acting for the benefit of GNA, or any other party, in its suit to collect on the debt. Therefore, plaintiff has standing to sue defendant on the outstanding debt. Defendant next contends that despite plaintiff's stance that it is not a collection agency under Michigan law, its actions are clearly prohibited by the MCPA. Specifically, as stated above, M.C.L. § 339.915a(f); MSA 18.425(915a)(f) provides that a licensee under the MCPA is prohibited from "soliciting, purchasing, or receiving an assignment of a claim for the sole purpose of instituting an action on the claim in a court." Defendant argues that because plaintiff purchased a delinquent account from GNA, and filed suit on the account, it must be subject to the MCPA. In support of this contention, defendant refers to the definition of creditor under the MCPA. Creditor is defined as

a person who offers or extends credit creating a debt or a person to whom a debt is owed or due or asserted to be owed or due. Creditor or principal shall not include a person who receives an assignment or transfer of a debt solely for the purpose of facilitating collection of the debt for the assignor or transferor. In those instances, the assignor or transferor of the debt shall continue to be considered the creditor or the principal for purposes of this article. [MCL 339.901(e); MSA 18.425(901)(e) (emphasis supplied).]

Thus, defendant argues that "an entity that receives a debt in default for the purpose of collecting the debt is not a creditor and is therefore a debt collector/collection agency subject to the act." However, this Court holds that, although plaintiff received an assignment or transfer of a debt, there is no evidence that plaintiff was "facilitating collection of the debt for the assignor or transferor" (GNA). MCL 339.901(e); MSA 18.425(901)(e). As noted, plaintiff purchased all interest in the account from GNA and cannot be acting on GNA's behalf in collecting the debt.

Defendant also argues that, under the Fair Debt Collection Practices Act (FDCPA), 15 USC 1692 et seq., plaintiff is a debt collector and is prohibited from suing on accounts it purchased after the debt was in default. Plaintiff concedes that it is a debt collector under the FDCPA. Defendant relies on the following provisions to support his argument:

The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another. [15 USC 1692a(4).]

The term "debt collector" means 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 USC 1692a(6).]

As noted, GNA sold all of its rights and interests in defendant's debt and thus plaintiff cannot collect the debt on behalf of GNA. In Kimber v. Federal Financial Corp., 668 F.Supp. 1480 (M.D.Ala., 1987), the United States District Court addressed the issue whether an entity that purchases a debt in default is a debt collector or a creditor under the FDCPA. The court held, under analogous facts, that despite the defendant's argument that it was not collecting the debt for another, "Congress merely intended that the debts should have originally belonged to another and that the creditor was therefore in effect a third-party or independent creditor." Kimber, supra, at 1485 (emphasis in original). The court held that even though FFC collects debts for itself, it is still a debt collector within the meaning of §§ 1692a(4) and 1692a(6) of the Act, because the corporation regularly collects debts and debt collection is the principal purpose, and because the debts the corporation collects were already in default when they were assigned to the corporation and thus the corporation falls within the assignee exception to the definition of creditor. [Kimber, supra, at 1486.]

The Kimber court went on to hold that because the defendant was subject to the FDCPA as a debt collector, it had violated several of the protective provisions under the FDCPA. Kimber, supra, at 1488-1489.

In the instant case, plaintiff concedes, and we agree, that it is a debt collector under the FDCPA. However, defendant does not allege how, if at all, plaintiff has violated any of the protective provisions of the FDCPA. 15 USC 1692i provides:

(a) Venue

Any debt collector who brings any legal action on a debt against any consumer shall—

(1) in the case of an action to enforce an interest in real property securing the consumer's obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or

(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity—

(A) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the commencement of the action.

(b) Authorization of Actions

Nothing in this subchapter shall be construed to authorize the bringing of legal actions by debt collectors.

Although the statute is not the model of legislative clarity, this Court holds that the statute allows the filing of suit on an outstanding debt. In fact, the Kim...