Vanderkodde v. Mary Jane M. Elliott, P.C.

• Decision Date: 15 May 2018
• Docket Number: No. 1:17–cv–203,1:17–cv–203
• Citation: 314 F.Supp.3d 836
• Parties: Daniel VANDERKODDE, et al., Plaintiffs, v. MARY JANE M. ELLIOTT, P.C., et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

314 F.Supp.3d 836

Daniel VANDERKODDE, et al., Plaintiffs,

v.MARY JANE M. ELLIOTT, P.C., et al., Defendants.

No. 1:17–cv–203

United States District Court, W.D. Michigan, Southern Division.

Signed May 15, 2018

Kevin James Rogers, Phillip C. Rogers, Law Office of Phillip C. Rogers, Theodore J. Westbrook, Westbrook Law PLLC, Grand Rapids, MI, for Plaintiffs.

Eric M. Kociba, Theresa M. Asoklis, Collins Einhorn Farrell PC, Southfield, MI, David M. Schultz, Nabil G. Foster, Hinshaw & Culbertson LLP, Chicago, IL, C. Thomas Ludden, Karen A. Smyth, Lipson Neilson Cole Seltzer & Garin PC, Bloomfield Hills, MI, Aaron L. Vorce, Kyle Michael Asher, Theodore W. Seitz, Dykema Gossett PLLC, Lansing, MI, for Defendants.

OPINION AND ORDER GRANTING DEFENDANTS' MOTIONS TO DISMISS

Paul L. Maloney, United States District Judge

Plaintiffs accuse Defendants of violating the Fair Debt Collections Practices Act. There is a pending motion for class certification. But, the injuries alleged by Plaintiffs arise from orders issued by state courts. And, this Court lacks jurisdiction to consider claims that are functionally appeals of state court decisions.

The plaintiffs in this lawsuit were defendants in debt-collection lawsuits filed in state courts. In each state-court case, a judgment entered, which granted the state-court plaintiff prejudgment interest at a rate of 13%. Subsequently, the defendants in this lawsuit submitted, to state court clerks, requests for writs of garnishment that included post-judgment interest. In the requests for writs of garnishment, the defendants signed an affidavit attesting to the amount of judgment interest accrued to date. The plaintiffs, the defendants in the underlying state-court actions, assert that interest requested in the request for writs of garnishment was calculated at a rate not authorized by law. The plaintiffs contend that by making false, inaccurate, or misleading representations in the requests for writs of garnishment, the defendants violated the Fair Debt Collections Practices Act. Assuming the plaintiffs' accusations are accurate, the defendants may have collected tens or even hundreds of thousands of dollars in interest to which they were not entitled. Plaintiffs, however, were injured by underlying judgment or the writ itself, not by the allegedly false statement in the request for the writ. The plaintiffs' remedy was to file an objection or an appeal, not a federal lawsuit. Federal district courts do not have the authority to review allegedly erroneous judgments and orders rendered in the state courts. Therefore, this Court lacks subject-matter jurisdiction and two motions to dismiss (ECF Nos. 60 and 61) must be GRANTED.

I.

Defendants have filed two motions to dismiss for lack of subject-matter jurisdiction.¹ Defendant Mary Jane M. Elliott argues that this lawsuit is a collateral attack on the underlying judgments issued in state courts.² (ECF No. 60.) Defendant Berndt & Associates argues that this lawsuit is an appeal of the writs of garnishment, which are orders issued by the state courts.³ (ECF No. 61.) Both Defendants conclude that the Rooker – Feldman doctrine applies and this Court lacks jurisdiction over the claims. Defendants bring their motion under Rule 12(b)(1) of the Federal Rules of Civil Procedure. Having reviewed the motions, the record, and the relevant law, the matter will be resolved without a hearing. W.D. Mich. LCivR 7.3(d).

A.

When challenged by a motion filed under Rule 12(b)(1), the plaintiff bears the burden of establishing subject-matter jurisdiction. EEOC v. Hosanna–Tabor Evangelical Lutheran Church and Sch. , 597 F.3d 769, 776 (6th Cir. 2010) (citing Hollins v. Methodist Healthcare, Inc. , 474 F.3d 223, 225 (6th Cir. 2007) ). A motion to dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction may take the form of a facial challenge, which tests the sufficiency of the pleading, or a factual challenge, which contests the factual predicate for jurisdiction. See RMI Titanium Co. v. Westinghouse Elec. Corp. , 78 F.3d 1125, 1134 (6th Cir. 1996) (quoting Mortensen v. First Fed. Savings and Loan Ass'n , 549 F.2d 884, 890–91 (3d Cir. 1977) ); see also DLX, Inc. v. Kentucky , 381 F.3d 511, 516 (6th Cir. 2004) ; Ohio Nat'l Life Ins. Co. v. United States , 922 F.2d 320, 325 (6th Cir. 1990). In a facial attack, the court accepts as true all the allegations in the complaint, similar to the standard for a Rule 12(b)(6) motion. Ohio Nat'l Life Ins. Co. , 922 F.2d at 325. In a factual attack, the allegations in the complaint are not afforded a presumption of truthfulness and the district court weighs competing evidence to determine whether subject matter jurisdiction exists. Id. In this case, Defendants have made a factual challenge to the complaint. The court therefore will examine the complaint and the documents attached to determine if jurisdiction exists.⁴

B.

The Rooker – Feldman doctrine limits the jurisdiction of federal courts by limiting the power of federal courts from adjudicating appeals from or collateral attacks on state-court judgments and final orders. See Rooker v. Fidelity Trust Co. , 263 U.S. 413, 415–16, 44 S.Ct. 149, 68 L.Ed. 362 (1923) ; Dist. of Columbia Court of Appeals v. Feldman , 460 U.S. 462, 476, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983). "The Rooker – Feldman doctrine embodies the notion that appellate review of state-court decisions and the validity of state judicial proceedings is limited to the Supreme Court under 28 U.S.C. § 1257, and thus that federal district courts lack jurisdiction to review such matters." In re Cook , 551 F.3d 542, 548 (6th Cir. 2009) ; see Hall v. Callahan , 727 F.3d 450, 453 (6th Cir. 2013).

The doctrine applies to a narrow set of circumstances: "cases brought by state court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments." Exxon Mobil Corp. v. Saudi Basic Indus. Corp. , 544 U.S. 280, 284, 125 S.Ct. 1517, 161 L.Ed.2d 454 (2005). Following Exxon Mobil , the Sixth Circuit explained that the "rule of thumb" for the doctrine.

The inquiry then is the source of the injury the plaintiff alleges in the federal complaint. If the source of the injury is the state court decision, then the Rooker – Feldman doctrine would prevent the district court from asserting jurisdiction. If there is some other source of injury, such as third party actions, then the plaintiff asserts an independent claim.

McCormick v. Braverman , 451 F.3d 382, 393 (6th Cir. 2006) ; see Coles v. Granville , 448 F.3d 853, 858 (6th Cir. 2006) (explaining that Rooker – Feldman applies "only when a plaintiff complains of an injury from the state court judgment itself.").

II.

Plaintiffs have attached more than forty documents to the complaint, including the judgments against them and the subsequent requests for writs of garnishment.⁵ The requests for the writs were submitted on forms approved by the State Court Administrative Office (SCAO): MC–12 (period garnishment), MC–13 (nonperiodic garnishment) and MC–52 (income tax refund/credit). Blank spaces on the form allow the requesting party to identify the amount of the judgment and when the judgment issued, the amount of judgment interest accrued to date, the amount of post-judgment costs accrued to date, the total amount of post-judgment payments and credits to date, and the amount of the unsatisfied judgment now due. Below that information, the party requesting the writ must "declare that the statements above are true to the best of my information, knowledge and belief." A line is provided for a date and a signature.

In Michigan, the post-judgment interest rate to which a prevailing party is entitled depends on whether the judgment is rendered on a written instrument or on something else. With some limitations, generally when the judgment is rendered on a written instrument of indebtedness, and the instrument specified an interest rate, the judgment will accrue interest at the rate specified in the instrument.⁶ Mich. Comp. Laws § 600.6013(7). For other situations, the interest on money judgments is calculated at six-month intervals "at a rate of interest equal to 1% plus the average interest rate page at auctions of 5–year United States treasury notes during the 6 months immediately preceding July 1 and January 1." Id. § 600.6013(8). Generally, when the judgment rendered is not on a written instrument that specifies an interest rate, the interest is calculated in six-month intervals.

In the complaint, Plaintiffs identify the amount of post-judgment interest requested on each request for a writ of garnishment, which is supported by the documents attached to the complaint. Plaintiffs have not pleaded the precise interest rate used to calculate the requested amount of post-judgment interest. In the summary of the factual bases for their claims, Plaintiffs do allege that the amount of post-judgment interest owed and communicated to them by Defendants "exceeded the amount permitted by law." (E.g., Compl. ¶¶ 48, 75, 100, 133, and 167.) In the portion of the complaint where Plaintiffs outline their claims, Plaintiffs allege that the state-court judgments were not based on written instruments and the post-judgment interest identified on the requests for writs of garnishment was calculated at a rate higher than what the statute authorizes. (Id. ¶ 174–76.)

For the violations of the FDCPA, Plaintiffs seek several remedies. First, Plaintiffs seek a declaration that each defendant violated a provision of the FDCPA. (Compl. ¶ 213.) Second, Plaintiffs seek actual damages, statutory damages, costs and fees.

III.

The Court finds that the Rooker – Feldman doctrine applies and this Court lacks jurisdiction over Plaintiffs' FDCPA claims.

A.

For its motion, Defendant Mary Jane M. Elliott is correct that the sources of Plaintiffs' injuries are the underlying judgments, not the writs of garnishment. The...