Midland Funding LLC v. Brent, Case No. 3:08 CV 1434.

• Decision Date: 11 August 2009
• Docket Number: Case No. 3:08 CV 1434.
• Citation: 644 F.Supp.2d 961
• Parties: MIDLAND FUNDING LLC, Plaintiff, v. Andrea L. BRENT, Defendant.
• Court: U.S. District Court — Northern District of Ohio

Page 961

644 F.Supp.2d 961

MIDLAND FUNDING LLC, Plaintiff, v. Andrea L. BRENT, Defendant.

Case No. 3:08 CV 1434.

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

August 11, 2009.

Brian C. Block, Melissa A. Hager, Robert G. Knirsch, Javitch, Block & Rathbone, Cleveland, OH, Theodore W. Seitz, Dykema Gossett, Lansing, MI, for Plaintiff.

Dennis E. Murray, Sr., Donna Jean A. Evans, Murray & Murray, Sandusky, OH, for Defendant.

MEMORANDUM OPINION

KATZ, District Judge.

This matter is before the Court on two competing motions for summary judgment: (1) a motion for summary judgment filed by Defendant and Counterclaim Plaintiff Andrea Brent ("Brent") (Doc. 34) and (2) a motion for summary judgment filed jointly by original Plaintiff Midland Funding LLC ("Midland") and Counterclaim Defendant Midland Credit Management, Inc. ("MCM") (Doc. 35). Midland and MCM jointly filed a response opposing Brent's motion for summary judgment (Doc. 41). Brent filed a response opposing Midland and MCM's motion for summary judgment (Doc. 40). Both parties have filed replies in defense of their own motions for summary judgment (Docs. 42, 43). Midland and MCM filed a supplemental brief citing new authority (Doc. 47) and Brent responded to that brief (Doc. 48).

For the reasons stated herein, the Court finds the following: (1) Midland and MCM violated the Fair Debt Collection Protection Act (FDCPA) by attempting to collect a debt with a false affidavit; (2) there is a question of material fact as to whether Midland and MCM violated the FDCPA by attempting to collect interest at a higher rate than allowed by law; (3) Midland and MCM violated the Ohio Consumer Sales Protection Act (OCSPA) by attempting to collect a debt with a false affidavit; (4) there is a question of material fact as to whether Midland and MCM violated the OCSPA by attempting to collect interest at a higher rate than allowed by law; (5) Brent is not entitled to declaratory judgment or injunctive relief for the violations of the FDCPA; and (6) Brent is entitled to declaratory judgment and injunctive relief for the violations of the OCSPA.

Thus, Midland and MCM's motion for summary judgment (Doc. 35) is denied. Brent's motion for summary judgment (Doc. 34) is granted in part and denied in part. Further, Midland and MCM are enjoined under the OCSPA from using false affidavits in their attempts to collect debts.

I. BACKGROUND

Midland and its affiliated companies are in the business of purchasing written-off debt from credit-issuers and then pursuing collection of that debt in a variety of manners. The particular debt in question here is a credit card balance of $4,516.57 allegedly owed by Brent to a credit card issuer. The original credit card was issued by Associates National Bank ("Associates"), and then Citibank USA ("Citibank")¹ succeeded Associates in its interest. MCM, a company closely affiliated with Midland, purchased this debt from Citibank.

After MCM purchased the debt, MCM employed Midland to pursue collection of the amount owed on the card. MCM attempted to collect the debt by trying, unsuccessfully, to contact Brent by mail and phone. Next, MCM referred the matter to the law firm of Javitch, Block & Rathbone LLP ("JBR"), who, on April 17, 2008, filed a complaint against Brent in the Sandusky, Ohio Municipal Court to recover the amounts unpaid on the credit card.

Brent answered, denying the obligation to Citibank and Midland. She also counter-claimed against Midland for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692a et seq. ("FDCPA") and a state-law tort claim of intentional and/or negligent infliction of emotional distress. Brent also included MCM as a counterclaim defendant since MCM is the owner of the debt and contracted with Midland to collect it.

Brent requested that the Court certify two classes of similarly-situated people who have been subject to collection lawsuits filed by Midland. The first requested class is people who have been sued by Midland where a form affidavit was attached to the complaint. The second requested class is people who were sued by Midland beyond the statute of limitations. (Doc. 1 at 6). (See also Doc. 14, Motion for Class Certification filed by Brent on August 19, 2008).

On receipt of the counter-claim, Counterclaim Defendant Midland removed to the Northern District of Ohio, citing jurisdiction due to the counter-claim falling under a federal statute (namely, the FDCPA). (Doc. 1). MCM consented to the removal, and Brent did not object, making the removal proper.

On December 1, 2008 Brent filed an amended counterclaim against Midland and MCM. (Doc. 22). The amended counterclaim does four things: (1) refines the language of the FDCPA violation claims, (2) removes the tort-based negligent and/or intentional infliction of emotional distress claim, (3) adds a claim alleging violation of the Ohio Consumer Sales Protection Act, Ohio Rev.Code Ann. § 1345 et seq. (2008) ("OCSPA"), and (4) modifies the requested class certification to now include three classes.

Both parties have filed motions for summary judgment on the issues of the FDCPA and the OCSPA claims, which are before this Court now for decision. Importantly, the matter of the validity of the original debt is not at issue before this Court.

On March 31, 2009, this Court denied the motion for class certification with leave to refile after ruling on the dispositive motions. (Doc. 44).

II. STANDARD OF REVIEW

Summary judgment is appropriate where "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c). The Court views the evidence in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The moving party 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 the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The movant may meet this burden by demonstrating the absence of evidence supporting one or more essential elements of the non-movant's claim. Id. at 323-25, 106 S.Ct. 2548.

Once the movant meets this burden, the opposing party "must set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (quoting FED.R.CIV.P. 56(e)). The party opposing summary judgment cannot rest on its pleadings or merely reassert its previous allegations. It is not sufficient "simply [to] show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 586, 106 S.Ct. 1348. Rather, Rule 56(e) "requires the nonmoving party to go beyond the pleadings" and present some type of evidentiary material in support of its position. Celotex, 477 U.S. at 324, 106 S.Ct. 2548; see also Ciminillo v. Streicher, 434 F.3d 461, 464 (6th Cir.2006); Harris v. General Motors Corp., 201 F.3d 800, 802 (6th Cir.2000). Summary judgment must be entered "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. 2548.

"In considering a motion for summary judgment, the Court must view the facts and draw all reasonable inferences therefrom in a light most favorable to the nonmoving party." Williams v. Belknap, 154 F.Supp.2d 1069, 1071 (E.D.Mich.2001) (citing 60 Ivy Street Corp. v. Alexander, 822 F.2d 1432, 1435 (6th Cir.1987)). However, "`at the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter,'" Wiley v. U.S., 20 F.3d 222, 227 (6th Cir.1994) (quoting Anderson, 477 U.S. at 249, 106 S.Ct. 2505); therefore, "[t]he Court is not required or permitted . . . to judge the evidence or make findings of fact." Williams, 154 F.Supp.2d at 1071; Bultema v. United States, 359 F.3d 379, 382 (6th Cir.2004). The purpose of summary judgment "is not to resolve factual issues, but to determine if there are genuine issues of fact to be tried." Abercrombie & Fitch Stores, Inc. v. Am. Eagle Outfitters, Inc., 130 F.Supp.2d 928, 930 (S.D.Ohio 1999). Ultimately, this Court must determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52, 106 S.Ct. 2505; see also Atchley v. RK Co., 224 F.3d 537, 539 (6th Cir.2000).

III. DISCUSSION

The Fair Debt Collection Act, passed in 1978, was seen as a solution to "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices" and inadequate current laws. 15 U.S.C. § 1692(a), (b). Taken broadly, the act regulates the conduct of debt collectors and provides consumer protection, including a private right of action against debt collectors who violate the act. § 1692k. Section 1692e provides that "A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Section 1692f prohibits the use of "unfair or unconscionable means to collect or attempt to collect any debt."

The Ohio Consumer Sales Protection Act, first adopted by the state in 1980, provides for a significantly wider set of protections for consumers. Ohio Rev.Code Ann. § 1345.01 et seq. The act regulates suppliers in all sorts of consumer transactions, but has been widely held to include debt collection because...