Badeen v. Par, Inc.
| Decision Date | 11 April 2013 |
| Docket Number | Docket No. 302878. |
| Citation | 300 Mich.App. 430,834 N.W.2d 85 |
| Parties | BADEEN v. PAR, INC. |
| Court | Court of Appeal of Michigan — District of US |
OPINION TEXT STARTS HERE
Xuereb Snow PC, Canton (by Joseph M. Xuereb and John R. Badeen), for plaintiffs.
Miller, Canfield, Paddock and Stone, P.L.C., Detroit (by Larry J. Saylor), for PAR, Inc.
Wienner & Gould, P.C., Rochester (by S. Thomas Wienner and Seth D. Gould), for PNC Bank, CenterOne Financial Services, LLC, and the M. Davis Co., Inc.
Law Offices of John J. O'Shea, PLC, Detroit (by John J. O'Shea), and Reed Smith, LLP (by Kim M. Watterson), for Bank of America, N.A.
Pepper Hamilton LLP, Southfield (by Matthew J. Lund and Adam A. Wolfe) for TD Auto Finance.
Debrincat, Padgett, Kobliska & Zick, Farmington Hills (by S. Thomas Padgett) for Santander Consumer U.S.A., Inc.
Boyle Burdett, Grosse Pointe Park (by Howard William Burdett, Jr.) for ASR Nationwide, LLC.
Myers Nelson Dillon & Shierk, PLLC (by James R. Bruinsma, Grand Rapids and Michael Farrell), for Nissan Motor Acceptance Corporation.
Warner Norcross & Judd LLP, Grand Rapids (by Aaron D. Lindstrom, Molly E. McManus, and Michael G. Brady, Southfield) for Fifth Third Bank.
Plunkett Cooney, Bloomfield Hills (by Jeffrey C. Gerish and Matthew J. Boettcher) for the Huntington National Bank.
Law Weathers (by Crystal L. Morgan and Leslie C. Morant, Grand Rapids) for Toyota Motor Credit Corporation, Remarketing Solutions, LLC, Renovo Services, LLC, and Diversified Vehicle Services, Inc.
Collins, Einhorn, Farrell & Ulanoff, Southfield (by Deborah Hebert and Kevin Moloughney) for Millennium Capital and Recovery Corporation.
Blanco Wilczynski, P.L.L.C., Troy (by Derek S. Wilczynski), for National Asset Recovery Corp.
Before: METER, P.J., and FITZGERALD and WILDER, JJ.
On appeal, plaintiffs argue that (1) the trial court erred when it struck plaintiffs' motion for class certification, (2) the trial court erred when it denied plaintiffs' motion to reinstate the class action allegations, and (3) the trial court erred when it granted summary disposition in favor of defendants. We affirm.
This case involves “forwarding companies” that contract with lending institutions to handle the collection services on delinquent accounts. After contracting with the lending institutions, these forwarding companies would in turn retain licensed repossession agents to carry out repossessions on behalf of the lenders. Plaintiffs allege that the forwarding companies themselves need to be licensed as “collection agencies,” and their failure to do so is the underlying basis for plaintiffs' lawsuit.
Plaintiff George Badeen, a licensed collection agency manager, owns plaintiff Midwest Recovery and Adjustment, Inc. (Midwest Recovery). Midwest Recovery is a licensed collection agency that is hired by automobile lenders to repossess financed vehicles whose owners have defaulted on their loans. In the past, automobile lenders would contract directly with repossession agents, like Midwest Recovery. However, more recently, lenders are contracting with forwarding companies. Apparently, repossession agents receive less money when hired by forwarding companies than when hired directly by lending institutions. Plaintiffs claim that this practice has caused them harm.
On April 5, 2010, plaintiffs filed a complaint against defendants, which include forwarding companies (the “forwarder defendants”) 1 and lending institutions (the “lending defendants”) 2. In count one of the complaint, plaintiffs sought certification of a class action, in which Badeen would represent the interests of all automobile repossession agencies and their owners who held a license to collect debts in Michigan in the preceding six years. In count two, plaintiffs sought an injunction prohibiting the forwarder defendants from violating the Occupational Code, MCL 339.101 et seq., by soliciting or performing collection activities in Michigan without a license. In count three, plaintiffs asserted a claim of civil conspiracy, alleging that the forwarder defendants and lender defendants “acted in concert to violate the Occupational Code.” In count four, plaintiffs alleged that the forwarder defendants intentionally interfered with plaintiffs' business relations with the lender defendants. In count five, plaintiffs alleged that the forwarder defendants intentionally interfered with plaintiffs' contracts with the lender defendants. In count six, plaintiffs asserted a claim of negligence per se against the forwarder defendants for breach of their statutory duty under the Occupational Code.
On May 14, 2010, plaintiffs filed an amended complaint, which differed only in the naming of a defendant (Remarketing Solutions was named in place of Manheim Recovery Solutions). On September 8, 2010, plaintiff filed a second amended complaint, which differed from the first amended complaint in several substantive ways. In count two of the second amended complaint, plaintiffs sought to enjoin the lender defendants from hiring unlicensed debt collectors. In count three, plaintiffs alleged that the forwarder defendants and the lender defendants acted in concert to violate both the Occupational Code and the Michigan regulation of collection practices act (MRCPA), MCL 445.251 et seq. In count six, plaintiffs alleged that the lender defendants also violated their statutory duty under the MRCPA. In two additional counts, plaintiffsalleged violations of the Occupational Code and the MRCPA. Several defendants filed answers to the complaint or amended complaints.
On July 21, 2010, PAR, Inc. (PAR), filed a notice of Badeen's failure to file a timely motion to certify a class pursuant to MCR 3.501(B), claiming that more than 91 days had lapsed from the date of the original complaint alleging a class action. Other defendants filed similar notices or joinders in the notice.
On July 30, 2010, Badeen filed a motion for class certification, arguing that he was a member of the proposed class; that the proposed class was numerous, making joinder impracticable; that common questions predominated; that his claims were typical of the class; that he would adequately assert and protect the class; and that a class action would be superior.
PAR filed a motion to strike Badeen's motion for class certification, contending that Badeen's motion was untimely. PAR argued that once it filed its notice, the class action allegations were deemed stricken as a matter of law and, as a result, Badeen needed to first seek leave of the court to reinstate his class action allegations before he was permitted to move for class action certification. Other defendants filed similar objections to the motion for class certification or concurrences in PAR's motion.
On August 11, 2010, Badeen filed a motion to strike the notices of failure to file a motion for class certification. In the brief in support of the motion, Badeen argued that the 91–day time limit provided in MCR 3.501(B) runs from the date of the filing of the most recent amended complaint containing class action allegations because the court rule uses the word “a,” not “the.” Alternatively, Badeen argued that the class action allegations should be reinstated because his attorney's “misconception of the court rule” constituted excusable neglect as permitted under the court rule.
On August 20, 2010, PAR filed a brief in opposition to Badeen's motion to strike. PAR argued that the 91–day time limit runs from the filing of the first complaint containing class action allegations based on the language and purpose of the rule. PAR further argued that misinterpretation of a court rule does not constitute excusable neglect.
On August, 25, 2010, the trial court held a hearing on the cross-motions to strike. The parties' arguments were consistent with their briefs, but defendants additionally argued that plaintiffs would not be prejudiced if the class action allegations were stricken. The trial court held that the 91–day time limit ran from the filing of the original complaint containing class action allegations and that plaintiffs' failure to timely file a motion for class certification did not constitute excusable neglect warranting reinstatement of the class action allegations. On September 13, 2010, the trial court entered an order granting PAR's motion to strike Badeen's motion for class certification and denying Badeen's motion to strike the notices of failure to file for class certification or to reinstate the class action allegations.
On October 6, 2010, both the forwarder defendants and the lender defendants moved for summary disposition pursuant to MCR 2.116(C)(8). Primarily, they argued that because forwarders are not collection agencies under the Occupational Code, all plaintiffs' claims necessarily fail. Plaintiffs responded by arguing, in part, that forwarders must be licensed because they solicit lenders to collect claims and are “indirectly” involved in collections.
After holding a hearing, the trial court entered an opinion and order on February 14, 2011, granting defendants' motions for summary disposition. The trial court found that the statutes at issue were unambiguous, that the forwarder defendants were not collection agencies, and that, therefore, plaintiffs failed to state a claim on which relief could be granted. Plaintiffs' appeal to this Court ensued.
We review issues of statutory interpretation de novo. Krohn v. Home–Owners Ins. Co., 490 Mich. 145, 155, 802 N.W.2d 281 (2011). This Court must begin by considering the language of the statute. Rambin v. Allstate Ins. Co., 297 Mich.App. 679, 684, 825 N.W.2d 95 (2012).
In interpreting a statute, a court's goal is to give effect to the Legislature's intent. A court may not construe a statute unless it is ambiguous; if the statute is unambiguous, the court will apply it as written. If a statute is...
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