Midland Funding, LLC v. Colvin

• Decision Date: 28 February 2022
• Docket Number: 5-21-04
• Citation: 185 N.E.3d 660
• Parties: MIDLAND FUNDING, LLC, Plaintiff-Appellant, v. Cassandra COLVIN, et al., Defendants-Appellees.
• Court: Ohio Court of Appeals

185 N.E.3d 660

MIDLAND FUNDING, LLC, Plaintiff-Appellant,

v.Cassandra COLVIN, et al., Defendants-Appellees.

NO. 5-21-04

Court of Appeals of Ohio, Third District, Hancock County.

Date of Decision: February 28, 2022

H. Toby Schisler, Cincinnati, for Appellant

Ronald L. Frederick, Cleveland, for Appellee

SHAW, J.

{¶1} Plaintiffs/counterclaim-defendants-appellants, Midland Funding LLC ("Midland"), Midland Credit Management ("Midland Credit") and Encore Capital Group, Inc. ("Encore"), collectively (the "Midland parties"), appeal the January 19, 2021 judgment of the Hancock County Common Pleas Court granting the motion for class certification filed by defendant/counterclaim-plaintiff-appellee, Cassandra Colvin ("Colvin").

Background

{¶2} Midland is a "debt collector" as defined in 15 U.S.C. § 1692a(6) of the Federal Debt Collection Practices Act ("FDCPA"). Generally, Midland purchases consumer debt from other entities and attempts to collect it. Midland operates throughout the United States and it has filed thousands of collection actions in Ohio alone.¹

{¶3} On April 22, 2013, Midland filed a complaint against Colvin in the Hardin County Municipal Court alleging that Colvin had defaulted on a Chase Bank credit-card account, that Midland had purchased Colvin's delinquent account from Chase Bank, and that, despite Midland's informal efforts to collect the amount owed, Colvin failed to pay the balance due.

{¶4} Attached to the complaint was Colvin's former Chase account summary showing Colvin's address as "7850 US Route 30 #30" in "Forest, OH 45843-8845." (Doc. No. 8). The Village of Forest, Ohio, is located in Hardin County.² In the complaint that Midland filed in the Hardin County Municipal Court, Midland requested judgment against Colvin in the amount of $950.60 along with other related relief.³

{¶5} On June 5, 2013, Colvin filed a motion to dismiss Midland's complaint alleging that she "lives in Hancock County, Ohio, and has never lived in Hardin County, Ohio." (Emphasis added.) (Id. ) Colvin contended that while the Village of Forest was located in "the Northwest corner of Hardin County," her actual residence was outside of Forest, in Hancock County. (Doc. No. 115). Further, Colvin noted that Midland "made no allegation that there was any contract signed in Hardin County, or any other connection to Hardin County." (Id. ) Colvin thus argued that the Hardin County Municipal Court did not have subject-matter jurisdiction over Midland's action because Midland's action did not have a territorial connection to the court. On June 14, 2013, Midland filed a memorandum in opposition to Colvin's motion to dismiss citing the fact that Colvin's listed address on her Chase account was in Forest, Ohio, and the action had been filed in Hardin County, where Forest was located.

{¶6} On June 27, 2013, the Hardin County Municipal Court issued its ruling on Colvin's motion to dismiss determining that Colvin "at all times relevant lived in Hancock County, Ohio" and that "there does not appear to be any nexus to the territory over which [the Hardin County Municipal Court] has jurisdiction." (Doc. No. 8). However, the Hardin County Municipal Court did not dismiss Midland's action outright; rather, the court transferred Midland's action to the Findlay Municipal Court at Midland's cost.

{¶7} On September 3, 2013, after the case had been transferred to the Findlay Municipal Court, Colvin filed a combined answer to Midland's complaint, counterclaim against Midland, and third-party complaint adding third-party defendants-appellees, Midland Credit and Encore, as third-party defendants.⁴ In her counterclaim and third-party complaint, Colvin alleged that the Midland parties violated FDCPA provision 15 U.S.C. § 1692i(a) when Midland filed suit against her in the Hardin County Municipal Court because she did not reside within the territorial jurisdiction of the Hardin County Municipal Court at the time Midland filed its complaint and she did not sign the contract underlying her alleged debt to Chase Bank within the territorial jurisdiction of the Hardin County Municipal Court.⁵

{¶8} Colvin further maintained that the Midland parties "regularly file[ ] collection actions against Ohio residents in counties where the defendant does not live and did not sign a contract, including * * * instances where [the Midland parties] used the city or village of defendants’ postal address without determining the physical location of the address," in violation of the FDCPA. (Doc. No. 8). Accordingly, Colvin asserted claims on behalf of a class of plaintiffs who were injured by the Midland parties’ alleged violations of the FDCPA. Colvin referred to this class of plaintiffs as the "FDCPA Class." (Id. ) Colvin requested a declaration that the Midland parties violated the FDCPA when they brought suit against class members in improper venues, actual and statutory damages as provided for by 15 U.S.C. § 1692k(a)(1)-(2)⁶ , and costs of the action and reasonable attorney's fees as provided for by 15 U.S.C. § 1692k(a)(3).

{¶9} Due to the fact that the amount of recovery Colvin was seeking exceeded the jurisdictional limit of the Findlay Municipal Court the case was subsequently transferred to the Hancock County Common Pleas Court.

{¶10} On November 7, 2013, the Midland parties filed their joint answer to Colvin's counterclaim and third-party complaint.

The answer was amended December 5, 2013.⁷

{¶11} In March 2015, Colvin moved to consolidate her case with case number 2015-CV-94, Caitlin Gilbert v. Midland Funding LLC ("Gilbert"). See Gilbert v. Midland Funding, L.L.C. , 3d Dist. Hancock No. 5-19-11, 2019-Ohio-5295, 2019 WL 7049635, ¶ 5. On May 21, 2015, the trial court ordered that Colvin's case be consolidated with Gilbert for purposes of discovery.

{¶12} On February 22, 2016, with leave of the trial court, Colvin filed an amended counterclaim/third-party complaint. On March 4, 2016, the Midland parties filed their answer to Colvin's amended counterclaim/third-party complaint.

{¶13} On June 1, 2017, Colvin filed a motion for class certification pursuant to Civ.R. 23. Colvin sought to certify a class defined as:

a. All persons who have been sued in Ohio Courts by [the Midland parties] from April 22, 2012 until the time this class is certified;

b. where the address on the face of the complaint and/or the address at which the Defendant was served are not within the geographical limits of the court where the suit was filed; or

c. where [the Midland parties] filed suit in a court where the contract was not signed; and

d. the debt alleged by [the Midland parties] was incurred for personal, family or household use.

(Doc. No. 106). On June 22, 2017, the Midland parties filed their memorandum in opposition to Colvin's motion for class certification.

{¶14} On June 12, 2018, the trial court filed an entry analyzing Colvin's motion for class certification. The trial court set forth the appropriate legal authority, including the 7 requirements for class certification under Civ.R. 23, which all had to be satisfied in order for a class action to proceed. Cullen v. State Farm Mut. Auto. Ins. Co. , 137 Ohio St.3d 373, 2013-Ohio-4733, ¶ 16, 999 N.E.2d 614 ; Hamilton v. Ohio Sav. Bank , 82 Ohio St.3d 67, 71, 694 N.E.2d 442 (1998). These 7 requirements include the following:

(1) an identifiable class must exist and the definition of the class must be unambiguous; (2) the named representatives must be members of the class; (3) the class must be so numerous that joinder of all members is impracticable; (4) there must be questions of law or fact common to the class; (5) the claims or defenses of the representative parties must be typical of the claims or defenses of the class; (6) the representative parties must fairly and adequately protect the interests of the class; and (7) one of the three Civ.R. 23(B) requirements must be met.

Hamilton at 71, 694 N.E.2d 442, citing Civ. R. 23(A) and (B) ; Warner v. Waste Mgt. , Inc. , 36 Ohio St.3d 91, 521 N.E.2d 1091 (1988).⁸

{¶15} In conducting its analysis on the class certification issue, the trial court first concluded that the proposed class definition was identifiable and unambiguous (satisfying requirement 1), that Colvin was a member of the proposed class (satisfying requirement 2), and that the proposed class was sufficiently numerous with over 150 purported examples of people who could be class members (satisfying requirement 3). Thus the trial court found that the first 3 of the 7 class requirements were met.

{¶16} However, in proceeding to address the "commonality," "typicality," and "adequacy-of-representation" requirements (numbers 4-6 above, respectively), the trial court determined that there were significantly different questions of law and fact between Colvin and the proposed class members. The trial court reasoned that Colvin's suit was transferred to the correct jurisdiction unlike other potential class members, that Colvin had not had a judgment rendered against her unlike other class members, and that Colvin was only seeking statutory damages, whereas some potential class members might be entitled to actual damages as well. Based on these issues, the trial court found that the proposed class did not meet all the requirements for certification, failing requirements 4, 5, and 6. The trial court thus denied Colvin's motion for class certification, never reaching the 7th requirement for certification due to its finding that requirements 4 through 6 were not met.

{¶17} Colvin appealed the trial court's denial of class certification to this Court in Midland Funding LLC v. Colvin , 3d Dist., 2019-Ohio-5382, 151 N.E.3d 130 (" Colvin I ") arguing that the trial court abused its discretion by determining that the "commonality," "typicality," and "adequacy-of-representation" requirements were not met in this matter. We analyzed each requirement in turn, first determining that Colvin met the "commonality" requirement because, "provided that the Midland partie...