Harper v. Weltman, Weinberg & Reis Co.

2019 Ohio 3093

CHARLES HARPER, ET AL., Plaintiffs-Appellants, v. WELTMAN, WEINBERG AND REIS CO., L.P.A., ET AL., Defendants-Appellees.

No. 107439

COURT OF APPEALS OF OHIO EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

August 1, 2019

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED

Civil Appeal from the Cuyahoga County Court of Common Pleas

Case No. CV-18-894696

Appearances:

Weltman, Weinberg & Reis Co., L.P.A., and Daniel A. Friedlander, for appellees.

Darryl E. Pittman & Associates, and Darryl E. Pittman, for appellants.

EILEEN T. GALLAGHER, P.J.:

{¶ 1} Plaintiffs-appellants, Charles Harper, et al. (collectively "appellants," individually "Charles" and "Bernadette"), appeal from the trial court's judgment granting the motion to dismiss filed by defendants-appellees, Weltman, Weinberg & Reis Co., L.P.A., et al. ("defendants"). Appellants raise the following assignment of error for review:

The trial court abused its discretion in dismissing the case because there were questions of fact which precluded the court from granting a motion to dismiss.

{¶ 2} After careful review of the record and relevant case law, we affirm the trial court's judgment.

I. Procedural and Factual History

{¶ 3} In May 2011, a complaint for cognovit judgment (the "Cognovit Complaint") was filed against Charles and others in Cuyahoga C.P. No. CV-11-756112. The Cognovit Complaint alleged that in March 2010, Charles Emerman, as trustee of the Charles Emerman Revocable Trust, loaned $63,374 to Donald Williams, Sr., Donald Williams, Jr., and Charles. Trustar Funding, L.L.C. ("Trustar") served as the loan servicer for Emerman, and thus, the cognovit note was between Trustar and the three borrowers. The note was secured by a mortgage on commercial property located at 22021 Euclid Avenue, Euclid, Ohio. The property was owned by Shepherd Group Realty and Development Corporation, a Georgia corporation that was owned and operated by Donald Williams, Sr.

{¶ 4} Judgment in that case was ultimately rendered in favor of Trustar and against Charles in the amount of $71,951.11. In February 2018, this court affirmed the trial court's judgment denying Harper's motion to vacate the cognovit judgment. Trustar Funding, L.L.C. v. Harper, 8th Dist Cuyahoga No. 105837, 2018-Ohio-495.

{¶ 5} In September 2017, defendants filed a complaint on behalf of Trustar in Cuyahoga C.P. No. CV-17-886346 (the "Fraudulent Conveyance Complaint") against Charles, Bernadette, and Gilmore Heights Dental Holdings, Ltd. In the Fraudulent Conveyance Complaint, Trustar stated that it was "the holder of an outstanding cognovit judgment rendered in the Cuyahoga Court of Common Pleas, under Case No. CV-11-756112 on May 25, 2011 against Charles W. Harper and others." In an effort to collect the outstanding judgment, Trustar sought a creditor's bill and set forth a fraudulent conveyance cause of action. Trustar alleged that Bernadette "holds, receives, [and] conceals income rightfully due [to Charles] * * * in an attempt to avoid payment of creditors' claims including that of [Trustar]." In January 2018, Trustar voluntarily dismissed the complaint.

{¶ 6} On March 16, 2018, appellants filed the complaint that is the subject of this appeal in Cuyahoga C.P. No. CV-18-107439 against the defendants, Weltman, Weinberg & Reis Co., L.P.A., and attorney Donald A. Mausar. The complaint alleged that by filing the Fraudulent Conveyance Complaint on behalf of Trustar, the defendants violated certain provisions of the federal Fair Debt Collection Practices Act, 15 U.S.C. 1692 ("FDCPA"), and the Ohio Consumer Sales Practices Act ("OCSPA"), R.C. 1345.01 et seq. Specifically, appellants alleged that because Trustar previously assigned the cognovit judgment to a third party in 2016, defendants filed the Fraudulent Conveyance Complaint while having knowledge that Trustar "had no interest whatsoever in the judgment being sued upon." Relevant to this appeal, the complaint incorporated the Fraudulent Conveyance Complaint by reference.

{¶ 7} In April 2018, defendants filed a Civ.R. 12(B)(6) motion to dismiss, arguing that appellants' complaint failed to state a claim upon which relief may be granted because the underlying debt did not arise from a "consumer transaction" as contemplated under the FDCPA or the OCSPA. Thus, defendants maintained that appellants' FDCPA and OCSPA claims fail as a matter of law because they "are definitionally invalid given that the [underlying] lawsuit was based on a commercial, not a consumer transaction." The motion to dismiss attached copies of the Cognovit Complaint, the Fraudulent Conveyance Complaint, and the underlying cognovit promissory note.

{¶ 8} In June 2018, the trial court issued a journal entry granting defendants' motion to dismiss. The court stated, in relevant part:

The court, in construing all factual allegations in the complaint as true and drawing all reasonable inferences in favor of Plaintiffs, finds that Plaintiffs' complaint fails to state a claim upon which relief may be granted.

{¶ 9} Appellants now appeal from the trial court's judgment.

II. Law and Analysis

{¶ 10} In their sole assignment of error, appellants argue the trial court erred by granting defendants' motion to dismiss. Appellants contend that its complaint "alleged facts sufficient to satisfy Ohio's notice pleading standard on all counts."

A. Standard of Review

{¶ 11} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim on which relief can be granted "is procedural and tests the sufficiency of the complaint." State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 548, 605N.E.2d 378 (1992), citing Assn. for Defense of Washington Local School Dist. v. Kiger, 42 Ohio St.3d 116, 117, 537 N.E.2d 1292 (1989). In order for a trial court to grant a motion to dismiss for failure to state a claim on which relief can be granted, it must appear "beyond doubt from the complaint that the plaintiff can prove no set of facts entitling her to relief." Grey v. Walgreen Co., 197 Ohio App.3d 418, 2011-Ohio-6167, 967 N.E.2d 1249, ¶ 3 (8th Dist.), citing LeRoy v. Allen, Yurasek & Merklin, 114 Ohio St.3d 323, 2007-Ohio-3608, 872 N.E.2d 254, ¶ 14.

{¶ 12} An appellate court employs "a de novo standard of review for motions to dismiss filed pursuant to Civ.R. 12(B)(6)." Grey at ¶ 3, citing Greeley v. Miami Valley Maintenance Contrs., Inc., 49 Ohio St.3d 228, 551 N.E.2d 981 (1990). Under de novo analysis, we are required to "accept all factual allegations of the complaint as true and draw all reasonable inferences in favor of the nonmoving party." Id. at ¶ 3, citing Byrd v. Faber, 57 Ohio St.3d 56, 565 N.E.2d 584 (1991). "Unsupported conclusions of a complaint[,] [however,] are not considered admitted and are not sufficient to withstand a motion to dismiss." State ex rel. Hickman v. Capots, 45 Ohio St.3d 324, 324, 544 N.E.2d 639 (1989), citing Schulman v. Cleveland, 30 Ohio St.2d 196, 283 N.E.2d 175 (1972).

{¶ 13} Given the litigation history of the parties involved in this case, it is necessary to note that when assessing a Civ.R. 12(B)(6) motion to dismiss, a trial court is not permitted to "take judicial notice of court proceedings in another case." NorthPoint Props. v. Petticord, 179 Ohio App.3d 342, 2008-Ohio-5996, 901 N.E.2d 869, ¶ 16 (8th Dist.), citing Campbell v. Ohio Adult Parole Auth., 10th Dist. FranklinNo. 97APE05-616, 1997 Ohio App. LEXIS 4829 (Oct. 28, 1997). Similarly, "'a trial court may not take judicial notice of prior proceedings in the court even if the same parties and subject matter are involved.'" Id., quoting First Michigan Bank & Trust Co. v. P. & S. Bldg., 4th Dist. Meigs No. 413, 1989 Ohio App. LEXIS 527 (Feb. 16, 1989). A trial court "may only take judicial notice of prior proceedings in the immediate case." Id., quoting In re LoDico, 5th Dist. Stark No. 2003-CA00446, 2005-Ohio-172, ¶ 94.

{¶ 14} With that said, however, courts may take judicial notice of judicial opinions and public records accessible from the internet. See, e.g., State ex rel. Everhart v. McIntosh, 115 Ohio St.3d 195, 2007-Ohio-4798, 874 N.E.2d 516, ¶ 8, 10. In addition, this court has previously stated that "'documents attached to or incorporated into the complaint may be considered on a motion to dismiss pursuant to Civ.R. 12(B)(6).'" Glazer v. Chase Home Fin. L.L.C., 8th Dist. Cuyahoga Nos. 99875 and 99736, 2013-Ohio-5589, ¶ 38, quoting NCS Healthcare, Inc. v. Candlewood Partners, L.L.C., 160 Ohio App.3d 421, 2005-Ohio-1669, 827 N.E.2d 797, ¶ 20 (8th Dist.); State ex rel. Crabtree v. Franklin Cty. Bd. of Health, 77 Ohio St.3d 247, 249, 673 N.E.2d 1281 (1997). In fact, the trial court may "review documents that were incorporated into the complaint, even if not attached to the complaint." Id., citing Irvin v. Am. Gen. Fin., Inc., 5th Dist. Muskingum No. CT2004-0046, 2005-Ohio-3523, ¶ 16, fn. 6; Fillmore v. Brush Wellman, Inc., 6th Dist. Ottawa No. OT-03-029, 2004-Ohio-3448.

{¶ 15} In this case, the trial court did not convert the motion to dismiss into a motion for summary judgment. Our review, therefore, is limited to the four corners of the complaint and to the documents attached or incorporated therein. Fillmore at ¶ 9.

B. The FDCPA and the OCSPA

{¶ 16} As stated, appellants' complaint alleged that defendants violated certain provisions of the OCSPA and FDCPA while attempting to collect a consumer debt on behalf of Trustar. Both the FDCPA, 15 U.S.C. 1692 et seq., and the OCSPA, R.C. 1345.01 et seq., are remedial statutes, intended to reach a broad range of conduct.

{¶ 17} The United States Congress enacted the FDCPA "to eliminate abusive debt collection practices by debt collectors, to ensure 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. 1692a.

{¶ 18} Under the FDCPA, a debt collector is prohibited from using "any false, deceptive, or...