Miller v. Javitch, Block & Rathbone, Case No. 1:06cv828.

• Decision Date: 14 February 2008
• Docket Number: Case No. 1:06cv828.
• Parties: Peggy MILLER, Plaintiff, v. JAVITCH, BLOCK & RATHBONE, et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

534 F.Supp.2d 772

Peggy MILLER, Plaintiff, v. JAVITCH, BLOCK & RATHBONE, et al., Defendants.

Case No. 1:06cv828.

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

February 14, 2008.

Stephen R. Felson, Cincinnati, OH, Steven Charles Shane, Bellevue, KY, for Plaintiff.

Michael J. Chapman, Javitch Block & Rathbone LLP, Vincent P. Antaki, Reminger & Reminger Co. LPA, !Cincinnati, OH, Michael D. Slodov,"Javitch Block & Rathbone LLP, Cleveland, OH, for Defendants.

ORDER

MICHAEL R. BARRETT, District Judge.

This matter is before the Court pursuant to Plaintiffs motion for partial summary judgment (Doc. 48). Defendants filed a memorandum in opposition (Doc. 64) to which Plaintiff replied (Doc. 71). Also before the Court is Defendants' motion for summary judgment (Doc. 49). The United States of America, as intervenor, filed a memorandum in opposition limited to the unconstitutionality questions raised by Defendants (Doc. 69). Plaintiff also filed a memorandum in opposition (Doc. 72). Defendants filed a reply (Doc. 77). These matters are now ripe for review. Both motions will be addressed together.

I. Underlying Facts

Plaintiff, on behalf of herself and those similarly situated, has alleged that Defendants violated the Fair Debt Collection Practices Act ("FDCPA") by allegedly misrepresenting the status of debts in state court collection actions. In particular to Peggy Miller, Defendants represented Palisades Collection, LLC in a state court collection action against Ms. Miller (hereinafter the "state court complaint") (Doc. 1, Exh. A). The state court complaint alleged that money was due from Ms. Miller to Palisades on the "money loaned" on Ms. Miller's charge card debt. (Doc. 1, ¶ 11, Doc. 3, ¶ 12). No accounting was attached to the complaint. (See Doc. 1, Exh. A). Ms. Miller alleges that no money was loaned by Palisades and, in fact, the alleged debt attempted to be collected was from an open-ended credit card issued by Providian. (Id. ¶ 12). Plaintiff admits to having the credit card and that the debt went unpaid (Doc. 49, Exh. 3, p23). She also admits to receiving the terms and conditions that came with the credit card. (Id. at 26).

Plaintiff asserts that Defendants misrepresented the status of the debt to (1) avoid the procedural requirement that an accounting be attached to all "complaints on accounts" in violation of Ohio Civil Proce, dure Rule 10(D)(1); (2) to imply that funds were actually transferred to the debtor; and (3) to imply that Palisades was a holder in due course. Plaintiff claims that these alleged misrepresentations violate 15 U.S.C. § 1692e(2)(A), § 1692e(10) and § 1692e(12). Defendant denies these allegations.

II. Motion for Summary Judgment

A. Jurisdiction

The FDCPA specifically provides for federal jurisdiction over claims made pursuant to the Act, see 15 U.S.C. § 1692k(d), and the Court has federal question jurisdiction under 28 U.S.C. § 1331.

B. Standard of Review

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party has the burden of showing an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its burden of production, the non-moving party cannot rest on his pleadings, but must present significant probative evidence in support of his complaint to defeat the motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The mere existence of a scintilla of evidence to support the non-moving party's position will be insufficient; the evidence must be sufficient for a jury to reasonably find in favor of the non-moving party. Id. at 252, 106 S.Ct. 2505.

"In ruling on a motion for summary judgment (in other words, in determining whether there is a genuine issue of material fact), "[a] district court is not ... obligated to wade through and search the entire record for some specific facts that might support the nonmoving party's claim." InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir.1989), cert. denied, 494 U.S. 1091, 110 S.Ct. 1839, 108 L.Ed.2d 967 (1990); see also L.S. Heath &amp Son, Inc. v. AT & T Information Sys., Inc., 9 F.3d 561 (7th Cir.1993); Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 915 a. 7 (5th Cir.), cert. denied, 506 U.S. 882, in S.Ct. 98, 121 L.Ed.2d 59 (1992) ("Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment ..."). Thus, a court is entitled to rely, in determining whether a genuine issue of material fact exists on a particular issue, only, upon those portions of the verified pleadings, depositions, answers to interrogatories and admissions on Me, together with any affidavits submitted, specifically called to its attention by the parties." Beatty v. UPS, 267 F.Supp.2d 823, 829 (D.Ohio 2003).

C. Analysis

Congress enacted the Fair Debt Collection Practices Act "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. § 1692e. The Sixth Circuit has gone on to note that the FDCPA is "extraordinarily broad" and must be enforced as written, even when eminently sensible exceptions are proposed in the case of, an innocent or de minimis violation. See Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir.1992).

After the Court's ruling on Defendants motion to dismiss, the following Claims of Plaintiff, on behalf of herself and those similarly situated, remain: 15 U.S.C. §§ 1692e, 1692e(2), and 1692e(12). The relevant sections of 15 U.S.C. § 1692e are as follows:,

A debt collector may riot use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

. . .

(2) The false representation of — (A) the character, amount, or legal status of any debt; or

. . .

(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.

15 U.S.C. § 1692(e). To determine whether a debt collection practice is deceptive or misleading, that practice "must be viewed objectively from the standpoint of the `least sophisticated consumer.'" Gionis v. JaMtch, Block & Rathbone, 405 F.Supp.2d 856, 864 (S.D.Ohio 2005) citing Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir.1997). See also Lewis v. ACB Bus, Servs., Inc., 135 F.3d 389, 400 (6th Cir.1998). This standard "protects all consumers, the gullible as well as the shrewd." Id. citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993). "Although this standard protects naive consumers, it also `prevents liability for bizarre or idiosyncratic interpretations of collection notices, by preserving a quotient of reasonableness and presuming a basic level of understanding and willingness to read with care." Federal. Home Loan Mortgage Corp. v. Lamar, 503 F.3d 504, 509-510 (6th Cir.2007) citing Wilson v. Quadramed Corp., 225 F.3d 350, 354-55 (3rd Cir.2000) (internal citation omitted). The Court in Lamar went on to sate that "this standard assumes that a Validation Notice [or, as in this case, a state court complaint] is read in its entirety, carefully and with some elementary level of understanding." Id. at 510 citing Martinez v. Law Offices of David J. Stern, PA, 266 B.R. 523, 532 (Bankr.S.D.Fla.2001).

1. Violation of 15 U.S.C. § 1692e(2) and § 1692e(12).

The Defendants in the state court complaint alleged that "Plaintiff [Palisades Collection, LLC] acquired, for valuable consideration, all right, title and interest in and to [Miller's credit card debt] originally owed by [Miller] to ASTA II/Providian-03/NAT." (Doc. 49, Exh. 1, ¶ 1). Plaintiff asserts that this allegation is false or implies that the account has been turned over to an innocent purchaser for value and that it misrepresents the legal status of the debt in violation of 15 U.S.C. § 1692e(2) and 1692e(12).

In Hartman v. Asset Acceptance Corp., 467 F.Supp.2d 769, 779 (S.D.Ohio 2004), Chief Judge Beckwith found that a representation that a debt collector was a "holder in due course" was a violation of the 1692e(2) and (12) if the representation was, in fact, false and there could be no bona fide error defense. For purposes of ruling on the motion to dismiss, the Court found the language in the state court complaint to be analogous to that of a holder in due course. However, the Plaintiff has failed to point to any evidence that would support its claim. Plaintiff has presented no evidence that the statement is false, i.e. that Palisades Collection, LLC did not acquire, for valuable consideration, all right, title and interest in to Miller's credit card debt from ASTA II/Providian-03/NAT. However, Defendants have presented ample evidence that it did, in fact, purchase all right, title and interest to Miller's debt. Although the purchase price for Miller's debt was $189.25, a far cry from the amount owed on the Debt, the Court finds that the statement is not false and therefore, not a violation of 15 U.S.C. § 1692e(2) and 1692e(12). (See Doc. 49, Exh. 8¹).

2. Violation of 15 U.S.C. § 1692e

Plaintiff argues that the allegations in the state court complaint are misleading and violate § 1692e. Specifically, Plaintiff argues that the following phrases are misleading: "complaint' for money loaned"; "the owner of funds loaned on account number XXXX ...";...