Shafer v. Karric Square Props., LLC, Case No. 2:17-cv-1098

LEV SHAFER, et al., Plaintiffs, v. KARRIC SQUARE PROPERTIES, LLC, et al., Defendants.

Case No. 2:17-cv-1098

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO EASTERN DIVISION

March 21, 2019

Chief Magistrate Judge Elizabeth P. Deavers

OPINION AND ORDER

Defendant Karric Square Properties, LLC ("Karric") obtained a judgment against Plaintiffs following default on an agreed judgment entry establishing a payment plan. Thereafter, that judgment was placed with Defendant Finance System of Green Bay, Inc. ("FSGB") for collection. Following collection efforts by FSGB, Plaintiffs filed this action, asserting claims for alleged violations under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681, et seq. and state-law claims for defamation. With the consent of the parties (ECF No. 11), 28 U.S.C. § 636(c), this matter is before the Court for consideration of Karric's Motion for Summary Judgment (ECF No. 16) and Motion for Judicial Notice (ECF No. 23). For the reasons that follow, the Motion for Summary Judgment is GRANTED and the Motion for Judicial Notice is DENIED AS MOOT.

I.

A. The Premises, Lease, and Assignment

Karric is the present owner of real property located at 5803-5807 Karric Square Drive, Dublin, Ohio 43014 ("the Premises"). (Declaration of Sheila Sanders, ECF No. 16-1 ("Sanders Declaration"), ¶ 2.)¹ On or about September 19, 1997, Karric's predecessor owner, Borror Realty Company, entered into a lease agreement ("the Lease") with Dr. Susan E. Richards for lease of the Premises. (Id. at ¶ 3; ECF No. 16-1 at PAGEID ## 162-84 (copy of the Lease).) The Lease provided for, inter alia, the recovery of attorney's fees and costs under certain circumstances. (Lease, ECF No. 16-1 at PAGEID # 177.)

Following a series of assignments not relevant to the matters presently before the Court, on or about September 1, 2014, Karric and Natural Health Chiropractic, Inc. entered into the "Lease Assignment, Consent, Assumption, Release, and Amendment Agreement" ("the Assignment") through which Natural Health Chiropractic, Inc. assigned the leasehold interest in the Premises to Deal Breakers, LLC ("Deal Breakers"). (Sanders Declaration, ¶ 3; ECF No. 16-1 at PAGEID ## 185-92 (copy of the Assignment).) The Assignment provides in relevant part as follows: "Assignee [Deal Breakers] hereby accepts such assignment and assumes all of Assignor's [Natural Health Chiropractic, Inc.] rights, duties, obligations and liabilities as tenant under the Lease, whether arising before, on or after the Effective Date [September 1, 2014]." (Assignment, ECF No. 16 at PAGEID # 186.) Plaintiffs Lev Shafer and Oleg Razuvayev personally guaranteed the Assignment. (Id. at PAGEID # 189.)

B. The 2015 State Court Action and the Agreed Judgment Entry

Sometime thereafter, Deal Breakers defaulted under the Lease. (Sanders Declaration, ¶ 3.) Karric filed an action in the Franklin County Court of Common Pleas ("the State Court") against Deal Breakers and the instant Plaintiffs, Case Number 15 CV 003249, seeking unpaid rent in the amount of $46,501.08, plus additional rent, late fees, interest, and other applicable fees as set forth in the Lease and the Assignment ("the 2015 State Court Action"). (Id. at ¶ 4.)

Karric, Deal Breakers, and instant Plaintiffs Shafer and Razuvayev, all represented by legal counsel, thereafter resolved the matter in the State Court Action through an Agreed Judgment Entry. (Id.) On July 2, 2015, the State Court entered the Agreed Judgment Entry (id.), which provides as follows:

NOW COMES, Plaintiff Karric Square Properties, LLC and Defendants Deal Breakers, LLC, Lev Shafer, and Oleg Razuvayev ("Defendants"), through counsel, who now represent to the Court that this case has been settled and compromised and that Defendants, jointly and severally, agree to confess judgment in the amount of $46 ,501.08, plus interest at the rate of 18% per annum from March 1, 2015, attorney's fees of $1,736.43, collection costs, court costs, interest at the statutory rate from the date of judgment, and any attorney's fees arising from Defendants' breach of this Agreed Judgment Entry.

As an accommodation to Defendants, Plaintiff has agreed that it will accept Twenty One Thousand and 00/100 Dollars ($21,000.00) as settlement in full of its judgment payable as follows: Three Hundred and 00/100 Dollars ($300.00) per week beginning on or before Monday, July 13, 2015, and on or before the subsequent Monday of each week thereafter until the sum of Twenty One Thousand and 00/100 Dollars ($21,000.00) is fully paid which will satisfy this judgment in full.

Plaintiff agrees that it will not cause any executions to issue against Defendants, other than Certificates of Judgment to be filed, as long as Defendants make each and every payment as agreed upon herein. Should Defendants default however, Plaintiff is free to execute at will and without notice. If Defendants comply with the terms of this agreement, Plaintiff shall issue satisfactions of this judgment to Defendants for filing.

The Court having no objection to the settlement agreement and terms therein, does hereby ADJUDGE, ORDER, AND DECREE that judgment is granted against Defendants Deal Breakers, LLC, Lev Shafer, and Oleg Razuvayev, jointly and severally, in the amount of $46,501.08, plus interest at the rate of 18% per annum from March 1, 2015, attorney's fees of $1,736.43, collection costs, court costs, interest at the statutory rate from the date of judgment, and any attorney's fees arising from Defendants' breach of this Agreed Judgment Entry and that the settlement agreement, the terms, and the payment plan incorporated herein is hereby CONFIRMED.

SO ORDERED.

(Agreed Judgment Entry, ECF No. 16-1, PAGEID ## 193-94 (emphasis in the original).)

C. Default and Collection Efforts

On or about February 1, 2016, Deal Breakers and the instant Plaintiffs Shafer and Razuvayev defaulted on their obligations under the Agreed Judgment Entry. (Sanders Declaration, ¶ 4.)² Karric had an agreement with FSGB "for collection efforts for delinquent accounts for a number of tenants, including but not limited to" Plaintiffs Shafer and Razuvayev. (Id. at ¶ 5.) Karric furnished to FSGB a copy of the Agreed Judgment Entry (ECF No. 16-1, PAGEID ## 193-94), a document entitled "Tenant Listing Sheet" (id. at PAGEID # 197), and a copy of Midland's ledger reflecting Deal Breakers' transactions (id. at PAGEID ## 198-02.) (Sanders Declaration, ¶ 6.) This was the only information that Karric provided to FSGB. (Id.) The Tenant Listing Sheet, printed on FSGB letterhead, identifies, inter alia, Karric as the creditor, instant Plaintiffs Shafer and Razuvayev as the tenants, and the Property's address. (Tenant Listing Sheet, ECF No. 16, PAGEID # 197.) The Tenant Listing Sheet identifies the "Amount of Judgment Past Due" as $16,235.00. (Id.) A section entitled "Comments" on the Tenant Listing Sheet includes the following language: "Since they defaulted on the judgment payment arrangements - can we collect the full amount originally due of $46,501.08?" (Id.) The ledger Karric provided to FSGB reflects an ending balance of $16,235. (ECF No. 16-1 at PAGEID # 202.)

In a letter addressed to Deal Breakers dated September 2, 2016, FSGB, identifying itself as a debt collection agency, advised that Deal Breakers' creditor was Karric and the account number referred to the State Court Action, No. 15-cv-3249. (ECF No.19-1 at PAGEID # 280.) FSGB further advised that the principal amount due was $41,736.08 and the interest was $11,320.20, for a balance due of $53,056.28. (Id.) FSGB also advised Deal Breakers as follows:

Your creditor [Karric] has placed your bill for collection. . . . As of the date of this letter, you owe $53056.28. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check. For further information, write to the above address or call 920-431-2121.

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing that you dispute the debt within 30 days from receiving this notice, this office will: obtain verification of the debt or obtain a copy of the judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

(Id.)

D. The Present Action

Plaintiffs Shafer and Razuvayev (who were Defendants in the 2015 State Court Action) originally filed the present action in the Court of Common Pleas for Franklin County, Ohio, on April 16, 2015, which was removed to this Court on December 15, 2017, on the basis of federal question jurisdiction, 28 U.S.C. § 1331. (ECF No. 1.) Plaintiffs Shafer and Razuvayev assert federal claims for alleged violations of the FCRA and state law claims for defamation against Karric and FSGB. (ECF No. 5.)

Karric has moved for summary judgment on all claims asserted against it. (ECF No. 16.)³ Plaintiffs oppose Karric's Motion (ECF No. 19) and Karric has filed a reply memorandum (ECF No. 21). On January 15, 2019, the State Court issued a Decision and Entry denying the motion of instant Plaintiffs Shafer and Razuvayev and Deal Breakers for relief from judgment and declaratory relief, which is the subject of Karric's Motion for Judicial Notice (ECF No. 23), and which Plaintiffs have opposed (ECF No. 25). Karric has filed a reply. (ECF No. 26.)

II.

Under Federal Rule of Civil Procedure 56, "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "The moving pa...