Edwards v. McCormick

• Decision Date: 30 March 2001
• Docket Number: No. C2-99-1343.,C2-99-1343.
• Citation: 136 F.Supp.2d 795
• Parties: Ruth EDWARDS, et al., Plaintiffs, v. Jack E. McCORMICK, Defendant.
• Court: U.S. District Court — Southern District of Ohio

136 F.Supp.2d 795

Ruth EDWARDS, et al., Plaintiffs, v. Jack E. McCORMICK, Defendant.

No. C2-99-1343.

United States District Court, S.D. Ohio, Eastern Division.

March 30, 2001.

Edward Alan Icove, Smith & Condeni Co., LPA, Cleveland, OH, Gary Michael Smith, Graham McClelland, Ransbottom, Dover, OH, for Plaintiffs.

Lawrence A. Sutter, Reminger & Reminger, Cleveland, OH, for Defendant.

OPINION AND ORDER

MARBLEY, District Judge.

This matter comes before the Court on Plaintiffs' Motion for Partial Summary Judgment on Claims under the Federal Debt Collection Practices Act and Ohio Consumer Sales Practices Act. Plaintiffs seek a finding that Defendant McCormick is liable as a matter of law for several statutory violations. For the following reasons, Plaintiffs' Motion is GRANTED in part and DENIED in part.

I. Causes of Action Asserted

Plaintiffs bring this action under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("FDCPA"), the Equal Credit Opportunity Act, 15 U.S.C. § 1691 ("ECOA"), and Ohio's Consumer Sales Practices Act, OHIO REV.CODE § 1345.01 ("OCSPA"). Plaintiff Ruth Edwards ("Plaintiff Edwards") is acting on her own behalf and on behalf of the estate of her deceased spouse, Thomas C. Edwards.¹

Plaintiffs allege that Mr. McCormick violated the FDCPA: (1) by failing to provide Plaintiffs with proper validation notices; (2) by demanding that Plaintiff Edwards pay debts she allegedly did not owe; (3) by threatening to take action that could not legally be taken, or that was not intended to be taken, in connection with the collection of debts; (4) by using false representations and deceptive means to attempt to collect a judgment; and (5) by sending an "unfair" collection letter. Plaintiffs further claim that Mr. McCormick acted as a "supplier" as defined by the OCSPA and knowingly committed unfair, deceptive and unconscionable acts and/or practices in violation of the OCSPA. Finally, Plaintiffs assert that each violation of the FDCPA also constitutes a violation of the OCSPA, relying primarily on Celebrezze v. United Research, Inc., 19 Ohio App.3d 49, 482 N.E.2d 1260 (1984), and State ex rel. Celebrezze v. Scandinavian Health Spa, Inc., No. CV863-1158, 1986 WL 363150 (Ohio C.P. March 31, 1986).

Defendant McCormick contends that the letter with the alleged misrepresentations² was sent to the Edwards family due to a clerical error, despite the procedures he had in place which were reasonably adapted to prevent such errors. Thus, Mr. McCormick seeks to interpose the bona fide error defense provided in the FDCPA with respect to Plaintiffs' federal claims.³ With respect to Plaintiffs' claim that he misrepresented the legal obligation of Mrs. Edwards to pay for medical services rendered to her husband, Defendant McCormick also challenges the assertion of Plaintiff Edwards that she was not legally responsible for the underlying debts in question.

II. Factual Background

Prior to his death, Mr. Edwards received medical treatment from the physicians and health care personnel of Hocking Valley Community Hospital ("Hocking Valley"). As of June 29, 1998, his outstanding balance was $7,058.88. On June 29, 1998, Physicians Credit Bureau ("PCB") contracted with Mr. McCormick, an attorney, to collect this debt on behalf of Hocking Valley. The "Uniform Attorney Forwarding Contract" sent by PCB to Defendant McCormick listed Ruth Edwards as the debtor. On August 27, 1998, PCB referred to Mr. McCormick an account in the amount of $4,069.81 owed by Mr. and Mrs. Edwards to Hocking Valley. This "Uniform Attorney Forwarding Contract" also listed Ruth Edwards as the debtor, and additionally noted on the letter's "Debtor's Employer" line: "property owned by Thomas C. Edwards." Treatment rendered to Mrs. Edwards accounted for $997.42 of this unpaid bill. At no point did Ruth Edwards ever sign as a financially responsible party for services rendered to Thomas Edwards, nor did Thomas Edwards so sign for services rendered to Ruth Edwards. On September 3, 1998, Mr. McCormick sent a letter to Mrs. Edwards which stated that the "total amount due and owing by [Mrs. Edwards to Hocking Valley was] $4069.81." The letter included the following language:

Unless you dispute the validity of this debt within thirty (30) days after receipt of this notice, the debt will be assumed to be valid. If you notify this office in writing within that thirty (30) period [sic] that the debt is disputed, verification of the debt will be obtained and mailed to you. Also, if the name and address of the original creditor is different from the creditor above, upon written request within the thirty (30) day period, you will be provided with the name and address of the original creditor.

Mrs. Edwards did not respond to the letter.

Mr. McCormick consolidated the $4,069.81 account with the $7,058.88 account and, on October 19, 1998, initiated a legal action against Plaintiffs seeking $11,128.69 for medical services and goods supplied on credit by Hocking Valley to Mr. and Mrs. Edwards. Mr. McCormick served Plaintiffs with the complaint on or about October 21, 1998. A default judgment was rendered against Plaintiffs. On December 14, 1998, a judgment lien was filed in the Hocking County Court of Common Pleas in favor of Hocking Valley, creating a lien on all of the Edwards's real property in the amount of $7,058.88 plus interest of ten percent per annum and the legal costs of the action.⁴

On or about December 16, 1998, Mr. McCormick sent a letter addressed to "Thomas C. and Ruth Edwards" to the Edwards residence which stated, in pertinent part:

On December 14, 1998 a judgement lien in the amount of $7,058.88 plus interest at 10% per annum and costs was filed in the Hocking County Court of Common Pleas in favor of [Hocking Valley]. This creates a lien on all real property in which either or both of you have an interest, and if foreclosed upon may result in the forced sale of those properties. If you wish to avoid this you must contact this office to arrange payment of this judgement.

Defendant McCormick asserted in his deposition that this letter is of a type Mr. McCormick uses to collect debts from business judgment creditors, and was sent to the Edwards residence as a result of a clerical or ministerial error made by his secretary, Lolita Denton. Ms. Denton testified in her deposition that she is unfamiliar with the type of letter at issue in this case and has no knowledge of other letters like it on file used to collect either consumer or commercial debts. Plaintiff Edwards did not make any payment arrangements in response to Mr. McCormick's letter regarding the judgment lien. Neither Mr. McCormick nor Hocking Valley took any action to foreclose on the Edwards's home prior to Hocking Valley's settling out of this case.

III. Analysis

The Court will first consider Plaintiffs' federal claims, and then will evaluate Plaintiffs' claims arising under the OCSPA.

A. FDCPA Claims

The FDCPA was designed "to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692. Where a debt collector's allegedly deceptive communication is involved, "a court must determine whether the least sophisticated consumer would be deceived by the collection agency's [communications] ...." Smith v. Transworld Sys., Inc., 953 F.2d 1025, 1028 (6th Cir. 1992) (internal quotations omitted). As a preliminary matter, the Court notes that attorney debt collectors engaged in litigation are subject to the strictures of the FDCPA. Heintz v. Jenkins, 514 U.S. 291, 294, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995). In the matter sub judice, Defendant McCormick does not dispute that he is a "debt collector" as contemplated by the FDCPA, because he is "a lawyer who `regularly' tries to obtain payment of consumer debts through legal proceedings." Lewis v. ACB Bus. Servs., Inc., 135 F.3d 389, 409 (6th Cir.1998) (citing Heintz, 514 U.S. at 291-94, 115 S.Ct. 1489).

In this case, Plaintiffs contend that Defendant McCormick violated 15 U.S.C. § 1692(g)(a) by not sending Mr. Edwards a validation notice for the $4,069.81 account and by sending neither Mr. Edwards nor Mrs. Edwards a validation notice for the $7,058.88 account. Plaintiffs also allege that Mr. McCormick violated subsections (2), (5) and (10) of § 1692e. Those subsections prohibit:

(2) The false representation of —

(A) the character, amount, or legal status of any debt; or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

. . . . .

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

. . . . .

(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

15 U.S.C. § 1692e(2), (5) & (10). Finally, Plaintiffs assert that Defendant McCormick's December 16 communication was an "unfair" collection letter, in violation of 15 U.S.C. § 1692f.

The FDCPA contains a bona fide error defense that can shelter a debt collector from liability arising out of actions which would otherwise violate the statute. 15 U.S.C. § 1692k(c).⁵ Under that defense, a debt collector cannot be held liable under the FDCPA "if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error." Id. In this case, Defendant McCormick claims that the protection offered by the bona fide error defense shields him from any liability to Plaintiffs.

1. Bona Fide Error Defense: 15 U.S.C. § 1692k(c)

There is a single mistake to which Defendant points as the bona fide error he seeks...