Rodriguez v. Hirshberg Acceptance Corp.

• Decision Date: 21 April 2022
• Docket Number: 356368
• Parties: KATHRYN M. RODRIGUEZ, Plaintiff-Appellant, v. HIRSHBERG ACCEPTANCE CORP. and MODERN FINANCIAL SERVICES CORP., Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

KATHRYN M. RODRIGUEZ, Plaintiff-Appellant,
v.
HIRSHBERG ACCEPTANCE CORP. and MODERN FINANCIAL SERVICES CORP., Defendants-Appellees.

No. 356368

Court of Appeals of Michigan

April 21, 2022

Ionia Circuit Court LC No. 2020-034471-CZ

Before: Ronayne Krause, P.J., and Murray and O'Brien, JJ.

Ronayne Krause, P.J.

In this putative class action involving allegations of unfair debt collection practices arising out of a miscalculation of postjudgment interest, plaintiff appeals as of right the trial court's order granting summary disposition in favor of defendants, Hirshberg Acceptance Corp. (HAC) and Modern Financial Services Corp. (MFSC), under MCR 2.116(C)(4) (lack of subject-matter jurisdiction) and (C)(8) (failure to state a claim upon which relief could be granted). We affirm.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

In 1995, plaintiff used a credit card issued by non-party First National Bank of Omaha (FNBO) to purchase what she believes was a grill, incurring a financial obligation of approximately $900. She did not fully repay her financial obligation for that purchase; on appeal, she implies that she was unable to do so because she suffered certain medical disabilities. She stopped making payments entirely in 2002. At some point, FNBO assigned the debt to non-party LHR, Inc. On February 2, 2007, LHR assigned the debt to HAC. On September 7, 2007, HAC sued plaintiff in the 64^th District Court, in Ionia County. HAC contended that the written contract was in plaintiff's possession or lost, so it did not attach a copy of any written contract. Instead, it attached an affidavit from its vice president, who calculated the unpaid balance of plaintiff's debt to be $6, 241.20. HAC sought a judgment against plaintiff in that amount, plus interest, fees, and costs. Plaintiff did not respond to the complaint, and HAC obtained a default judgment against plaintiff. Thereafter, HAC obtained numerous writs of garnishment to collect the amount owed

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under the default judgment. Each writ of garnishment indicated that postjudgment interest was being added to the debt.

In 2018, plaintiff filed a putative class action complaint against HAC in the United States District Court for the Western District of Michigan. Plaintiff alleged that HAC violated the Fair Debt Collection Practices Act (FDCPA), 15 USC 1692 et seq., and the Michigan Regulation of Collection Practices Act (RCPA), MCL 445.251 et seq., by overstating how much plaintiff owed and by impermissibly inflating HAC's costs and the amount of interest it charged. Following a procedural error, the federal action was dismissed with prejudice. Plaintiff thereafter filed a putative class action complaint in the Ionia Circuit Court, much of which was substantively identical to her prior federal complaint. However, plaintiff added MFSC as a defendant on the general theory that HAC and MFSC were inextricably intertwined entities, a claim that defendants also violated the Michigan Occupational Code, MCL 339.101 et seq., and claims seeking declaratory and injunctive relief. Defendants responded by removing the case to federal court. The federal court dismissed the FDCPA claims under the doctrine of res judicata, declined to exercise supplemental jurisdiction over the state-law claims, and remanded the case back to the trial court.

Defendants then moved for summary disposition of plaintiff's class actions claims. Pursuant to MCR 2.116(C)(8) (failure to state a claim), defendants argued that MCR 3.501(A)(5) precluded "actions" based on claimed violations of statutes that permitted recovery of statutory damages in lieu of actual damages, and "actions" were defined by MCR 2.101 as synonymous with lawsuits. Defendants further argued that because the RCPA and the Occupational Code both permit recovery of statutory damages, and neither contains a provision explicitly permitting class actions, plaintiff's class action claims must be dismissed irrespective of the fact that she also sought injunctive relief, declaratory relief, and actual damages. Defendants reasoned that plaintiff's remaining claims were for, at the most, less than $3, 000 and therefore far below the Circuit Court's jurisdictional minimum amount of $25, 000.^[1] Defendants therefore concluded that plaintiff's individual claims should be dismissed pursuant to MCR 2.116(C)(4) (lack of subject-matter jurisdiction). Plaintiff contended that defendants' motion was procedurally improper, MCR 3.501(A)(5) was inapplicable because she was not seeking statutory damages exclusively, and MCR 3.501(A)(5) was an unconstitutional violation of separation of powers. Lastly, plaintiff argued the trial court was required to maintain jurisdiction over her individual claims, either under MCR 3.501(B)(3)(e) following its refusal to certify her class action, or because she could prove individual damages over $25, 000.

After hearing the parties' oral arguments and considering their briefs, the trial court agreed with defendants. The trial court entered an order dismissing plaintiff's class action allegations with prejudice and dismissing plaintiff's individual claims for lack of subject-matter jurisdiction. This appeal followed.

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II. STANDARDS OF REVIEW

A grant or denial of summary disposition is reviewed de novo on the basis of the entire record to determine if the moving party is entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich. 109, 118; 597 N.W.2d 817 (1999). A motion brought under MCR 2.116(C)(8) should be granted only where the complaint is so legally deficient that recovery would be impossible even if all well-pleaded facts were true and construed in the light most favorable to the non-moving party. Id. at 119. Only the pleadings may be considered when deciding a motion under MCR 2.116(C)(8). Id. at 119-120. "A motion for summary disposition under MCR 2.116(C)(4) tests the trial court's subject-matter jurisdiction." Mays v Governor, 506 Mich. 157, 180; 954 N.W.2d 139 (2020). Questions of jurisdiction are reviewed de novo as questions of law, and in deciding a motion under MCR 2.116(C)(4), the court should consider the documentary evidence submitted by the parties. Henry v Laborers' Local 1191, 495 Mich. 260, 273; 848 N.W.2d 130 (2014).

The interpretation and application of statutes, constitutional issues, rules, and legal doctrines is reviewed de novo. Estes v Titus, 481 Mich. 573, 578-579; 751 N.W.2d 493 (2008); Toll Northville LTD v Twp of Northville, 480 Mich. 6, 10-11; 743 N.W.2d 902 (2008). "When interpreting statutes, our obligation is to discern and give effect to the Legislature's intent as expressed in the statutory language," with the presumption that unambiguous language should be enforced as written. Gladych v New Family Homes, Inc, 468 Mich. 594, 597; 664 N.W.2d 705 (2003). Although "statutes must be construed to prevent absurd results, injustice, or prejudice to the public interest," Rafferty v Markovitz, 461 Mich. 265, 270; 602 N.W.2d 367 (1999), the" 'absurd result' rule" may only be applied where statutory language is already found to be ambiguous, Gilbert v Second Injury Fund, 463 Mich. 866, 867; 616 N.W.2d 161 (2000), or possibly where it is "quite impossible that the...