Jerman v. Carlisle, McNellie, Rini, Kramer

• Decision Date: 20 June 2007
• Docket Number: No. 1:06 CV 1397.,1:06 CV 1397.
• Citation: 502 F.Supp.2d 686
• Court: U.S. District Court — Northern District of Ohio
• Parties: Karen L. JERMAN, Plaintiff, v. CARLISLE, McNELLIE, RINI, KRAMER & ULRICH, et al., Defendants.

502 F.Supp.2d 686

Karen L. JERMAN, Plaintiff, v. CARLISLE, McNELLIE, RINI, KRAMER & ULRICH, et al., Defendants.

No. 1:06 CV 1397.

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

June 20, 2007.

COPYRIGHT MATERIAL OMITTED

Edward A. Icove, Icove Legal Group, Cleveland, OH, O. Randolph Bragg, Horwitz, Horwitz & Associates, Chicago, IL, for Plaintiff.

George S. Coakley, James O'Connor, Jr., Reminger & Reminger, Cleveland, OH, for Defendants.

Memorandum and Opinion and Order

GAUGHAN, District Judge.

Introduction

This matter is before the Court upon defendants' Motion for Summary Judgment (Doc. 23). For the following reasons, the motion is GRANTED.

Facts

Plaintiff, Karen L. Jerman, filed this Class Action Complaint against defendants, Carlisle, McNellie, Rini, Kramer & Ulrich and Adrienne S. Foster. The Complaint alleges that on April 17, 2006, defendants filed a foreclosure action against plaintiff on behalf of Countrywide Home Loans, Inc. in the Ashtabula County Court of Common Pleas. Attached to the state court complaint was a form Notice Under the Fair Debt Collection Practices Act (hereafter, the form validation notice), which provided, among other things, "the debt described herein will be assumed to be valid by the Creditor's law firm, unless the debtor(s), or either one of them, within thirty (30) days after receipt of this notice, dispute, in writing, the validity of the debt or some portion thereof."

The Complaint sets forth two claims. Count One alleges a violation of the federal Fair Debt Collection Practices Act (FDCPA). Count Two alleges a violation under the Ohio Consumer Sales Practices Act (OCSPA). Both claims are premised on the allegation that the form validation notice is defective in two ways. First, representing to consumers that the debt will be assumed valid unless written dispute has been made violates 15 U.S.C. § 1692g which provides:

§ 1692g. Validation of debts

(a) Notice of debt; contents

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.

15 U.S.C. § 1692g(a)(3). Second, failing to make clear that the 30 days given to dispute the debt does not alter the 28 day deadline to answer the complaint constitutes language that "overshadows or contradicts other language informing a consumer of her rights" and, thus, violates the FDCPA.

Upon agreement of the parties, defendants filed a motion to dismiss to resolve solely whether representing to consumers that debts will be assumed valid unless a written dispute is made is a violation of 15 U.S.C. § 1692g and/or Ohio Consumer Sales Practices Act, R.C. § 1345.01 et seq. Thereafter, this Court issued its Memorandum of Opinion and Order concluding that defendants' form validation notice violates the FDCPA in so far as it states that disputes must be made in writing.

Subsequently, plaintiff filed her Amended Class Action Complaint: Unfair Debt Collection Practices which sets forth one claim for relief, namely that defendants violated § 1692g(a)(3) of the FDCPA by representing to consumers that the debt will be assumed valid unless a written dispute has been made and defendants violated § 1692e(10) by using false, deceptive, and/or misleading means and/or representations in connection with the collection of any debt.

This matter is now before the Court upon defendants' Motion for Summary Judgment.

Standard of Review

Summary Judgment is appropriate when no genuine issues of material fact exist and the moving party .is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citing Fed.R.Civ.P. 56(c)); see also LaPointe v. UAW, Local 600, 8 F.3d 376, 378 (6th Cir.1993). The burden of showing the absence of any such genuine issues of material facts rests with the moving party:

[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits," if any, which it believes demonstrates the absence of a genuine issue of material fact.

Celotex, 477 U.S. at 323, 106 S.Ct. 2548 (citing Fed.R.Civ.P. 56(c)). A fact is "material only if its resolution will affect the outcome of the lawsuit." Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

Once the moving party has satisfied its burden of proof, the burden then shifts to the nonmoving party. Federal Rule of Civil Procedure 56(e) provides:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of [his] pleadings, but [his response], by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is genuine issue for trial. If he does not respond, summary judgment, if appropriate, shall be entered against him.

The court must afford all reasonable inferences and construe the evidence in the light most favorable to the nonmoving party. Cox v. Kentucky Dep't. of Transp., 53 F.3d 146, 150 (6th Cir.1995) (citation omitted); see also United States v. Hodges Ray, Inc., 759 F.2d 557, 562 (6th Cir.1985). However, the nonmoving party may not simply rely on its pleading, but must "produce evidence that results in a conflict of material fact to be solved by a jury." Cox, 53 F.3d at 150.

Summary judgment should be granted if a party who bears the burden of proof at trial does not establish an essential element of his case. Tolton v. American Biodyne, Inc., 48 F.3d 937, 941 (6th Cir. 1995) (citing Celotex, 477 U.S. at 322, 106 S.Ct. 2548). Accordingly, "the mere existence of a scintilla of evidence in support of plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir.1995) (quoting Anderson, 477 U.S. at 252, 106 S.Ct. 2505 (1986)). Moreover, if the evidence is "merely colorable" and not "significantly probative," the court may decide the legal issue and grant summary judgment. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citation omitted).

Discussion

Defendants argue that they are entitled to summary judgment on three bases: (1) the foreclosure complaint was not an "initial communication" such as would trigger any rights under the FDCPA, (2) defendants' alleged mistake was unintentional and resulted from a bona fide error and (3) defendants are absolutely immune from liability because their actions were nothing more than an integral part of the judicial process.

(1) whether the foreclosure complaint was an "initial communication"

Defendants submit the affidavit of, defendant Adrienne S. Foster who avers the following. Ms. Foster is an associate with the law firm of Carlisle, McNellie, Rini, Kramer & Ulrich Co. L.P.A. She was assigned plaintiffs foreclosure matter at issue here. On April 20, 2006, plaintiff was served by certified mail with the foreclosure complaint which included the FDCPA validation notice. Foster had no other communication with plaintiff. On April 25, 2006, Foster received a correspondence from Attorney Edward A. Icove indicating that plaintiff disputed the debt alleged in the foreclosure complaint. On April 26, 2006, Foster contacted her client, Countrywide Home Loans, Inc., to obtain a verification of the debt. On May 4, 2006, Countrywide notified Foster that the loan had been paid in full. On May 5, 2006, Foster sent a judgment entry dismissing the foreclosure action to the Court for filing with a copy to Attorney Icove via facsimile. The judgment entry dismissing the foreclosure was filed with the Ashtabula County Court of Common Pleas on May 11, 2006. (Foster aff.)

Defendants argue that the foreclosure complaint did not constitute an initial communication under the FDCPA, thus triggering the validation rights under the Act.

Section 1692g(a) provides in relevant part:

(a) Notice of debt; contents

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —

(1) the amount of the debt (2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

As such, before validation rights under § 1692g(a) can be triggered, there must be an "initial communication" on the part of the debt collector. Other than a contact with plaintiff on April 13, 2006 by a representative of defendants to verify plaintiffs address and telephone number, the first (and only)...