Sohi v. Diversified Adjustment Serv., Inc.

PAUL SOHI, Plaintiff, v. DIVERSIFIED ADJUSTMENT SERVICE, INC., Defendant.

Civil Action No. 1:15-cv-563

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION

May 10, 2016

Beck with, J.

Litkovitz, M.J.

ORDER AND REPORT AND RECOMMENDATION

I. Introduction

This matter is before the Court on the following motions brought by defendant Diversified Adjustment Service, Inc. (Diversified) and plaintiff Paul Sohi: (1) defendant's motion for partial judgment on the pleadings (Doc. 15), which is unopposed; (2) defendant's motion to compel (Doc. 17), which is unopposed; (3) defendant's motion for summary judgment on all claims (Doc. 18), plaintiff's response in opposition to the motion (Doc. 21), defendant's reply in support of the motion (Doc. 23), defendant's supplemental reply in support of the motion (Doc. 26), and plaintiff's sur-reply memorandum (Doc. 27); (4) plaintiff's motion to strike affidavits submitted by defendant in support of the motion for summary judgment and plaintiff's motion for sanctions (Doc. 22) and defendant's opposing memorandum (Doc. 24); (5) plaintiff's motion for leave to file memorandum in opposition to defendant's motion for summary judgment with supporting affidavit, motion for leave to file motion to strike affidavits of Doug Alcorn and Peter M. Jirik, and motion for sanctions against defendant's counsel (Doc. 28) and defendant's response in opposition (Doc. 29); plaintiff's motion to dismiss the complaint without prejudice (Doc. 30), defendant's response in opposition (Doc. 31), and plaintiff's reply in support of the motion (Doc. 34); and (6) defendant's motion for attorney fees (Doc. 31) and plaintiff's opposing memorandum (Doc. 34).

Plaintiff originally filed the pro se complaint in this action in the Hamilton County, Ohio Court of Common Pleas on July 30, 2015. (Doc. 4). The complaint presents claims for violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seq., and the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq. Defendant Diversified removed the action to this Court under the Court's federal question jurisdiction, 28 U.S.C. § 1331. (Doc. 1). The complaint alleges that defendant willfully and maliciously "inputted a debt to plaintiff" that was not plaintiff's debt; defendant failed to "timely correct" the error after being notified of it and "published said obligation with various credit reporting agencies"; defendant "falsely reported to credit agencies about an account that is in dispute"; and defendant's actions have damaged plaintiff's credit rating, caused him financial hardship by placing his personal financial transactions in jeopardy, and caused him embarrassment in the community. (Doc. 4). Plaintiff claims that defendant's acts of publishing this allegedly false information and failing to correct it violate the FDCPA. (Count II). Plaintiff further alleges that defendant's acts of reporting a paid account as a "Collection Account" debt of an individual violates the FCRA. (Count III).¹

II. Plaintiff's requests for oral argument

Plaintiff requests oral argument on several of the pending motions. The legal and factual issues involved in this case are not complex and they have been fully briefed. Pursuant to Rule 7.1 of the Local Rules of the United States District Court for the Southern District of Ohio, the Court therefore finds that oral argument is not "essential to the fair resolution" of this case and plaintiff's request for same is denied. S.D. Ohio Civ. R. 7.1(b)(2).

III. Plaintiff's motion to dismiss the complaint without prejudice (Doc. 30)

On March 23, 2016, plaintiff filed a motion to dismiss the complaint without prejudice. (Doc. 30). Defendant opposes dismissal of the lawsuit without prejudice. (Doc. 31). Defendant notes that it filed a motion for judgment on the pleadings in November 2015 and a motion for summary judgment in January 2016 seeking to dismiss plaintiff's claims on the merits, and both motions remain pending. (Docs. 15, 18). Defendant contends that plaintiff's claims lack merit and should be dismissed with prejudice. In addition to dismissal of the lawsuit with prejudice, defendant seeks an award of attorney fees and costs under the FDCPA, 15 U.S.C. § 1692k(a)(3), on the grounds plaintiff has continued this action against defendant in bad faith and for purposes of harassment.

In support of his motion to dismiss the complaint without prejudice, plaintiff alleges he has meritorious claims under the FDCPA and FCRA. (Doc. 34). Plaintiff denies he has pursued this litigation in bad faith or for the purpose of harassing defendant. He alleges that defendant has taken action to delay this case, and he claims defendant's counsel acted in bad faith by facilitating perjury by affiant Jirik.

Rule 41 governs the voluntary and involuntary dismissal of civil actions. Fed. R. Civ. P. 41. Rule 41 (a)(2) provides that if the plaintiff's motion for voluntary dismissal is filed after the defendant serves either an answer or a motion for summary judgment, or without the defendant's consent, then the action may be dismissed "only by court order, on terms that the court considers proper." Fed. R. Civ. P. 41(a)(2). "[T]he purpose of Rule 41(a)(2) is to protect the nonmovant . . . from unfair treatment." Jones v. W. Reserve Transit Auth., 455 F. App'x 640, 643 (6th Cir. 2012) (quoting Bridgeport Music, Inc. v. Universal-MCA Music Pub., Inc., 583 F.3d 948, 953(6th Cir. 2009)). The Court must consider whether the non-movant "would suffer plain legal prejudice" as the result of a dismissal without prejudice. Id. (quoting Bridgeport Music, Inc., 583 F.3d at 953) (citations and internal quotation marks omitted). The factors to be considered in making this determination are "the defendant's effort and expense of preparation for trial, excessive delay and lack of diligence on the part of the plaintiff in prosecuting the action, insufficient explanation for the need to take a dismissal, and whether a motion for summary judgment has been filed by the defendant." Id. (quoting Graver by Grover v. Eli Lilly and Co., 33 F.3d 716, 718 (6th Cir. 1994) (citations omitted)). The mere possibility that the nonmovant would face a second lawsuit is an insufficient basis for finding "plain legal prejudice" resulting from the dismissal. Id.

Plaintiff's motion for voluntary dismissal without prejudice should be denied. This case has been pending for approximately eight months. During that time, defendant has expended considerable time and effort in defending this lawsuit. Defendant filed an answer in September 2015 (Doc. 6), a motion for judgment on the pleadings in November 2015 (Doc. 15), and a motion for summary judgment in January 2016 (Doc. 18). Defendant has engaged in discovery and filed a motion to compel in December 2015. (Doc. 17). Plaintiff has not been diligent in prosecuting the action. Plaintiff did not respond to either the motion for judgment on the pleadings or the motion to compel. Moreover, plaintiff did not provide an explanation in his cursory motion to dismiss for why dismissal of the lawsuit without prejudice is warranted at this juncture. Plaintiff only vaguely alludes to a lack of "[p]ublic confidence in the legal profession" and "unchecked rampant misconduct[] of certain lawyers currently practicing in the legal profession." (Doc. 30 at 1). Plaintiff makes no specific allegations related to this lawsuit.

The balance of factors weighs overwhelmingly in favor of a finding that plaintiff is not entitled to have this action dismissed without prejudice. Dismissal of the lawsuit without prejudice at this stage would result in "plain legal prejudice" to defendant. Jones, 455 F. App'x at 643. Plaintiff's motion to dismiss the case without prejudice (Doc. 30) should be denied. Instead, defendant's motions for partial judgment on the pleadings and for summary judgment should be granted, and plaintiff's claims should be dismissed with prejudice on the merits.²

IV. Defendant's motion for partial judgment on the pleadings (Doc. 15)

Defendant moves for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c) on Count III of the complaint, which presents a claim under the FCRA. Defendant contends that plaintiff has failed to state a claim for relief under the relevant provisions of the FCRA.

A Rule 12(c) motion for judgment on the pleadings is governed by the same standard applicable to a motion to dismiss the complaint under Fed. R. Civ. P. 12(b)(6). D'Ambrosia v. Marino, 747 F.3d 378, 383 (6th Cir.), cert. denied, 135 S. Ct. 758 (2014). The reviewing court must construe the complaint in the light most favorable to the nonmoving party and accept all well-pled factual allegations as true. Id. The complaint must contain "either direct or inferential allegations respecting all material elements necessary for recovery under a viable legal theory" to survive the motion. Id. (quoting Philadelphia Indem. Ins. Co. v. Youth Alive, Inc., 732 F.3d 645, 649 (6th Cir. 2013) (citation and internal quotation marks omitted)). The Court "need not accept as true legal conclusions or unwarranted factual inferences, and conclusory allegations or legal conclusions masquerading as factual allegations will not suffice." Id. (quoting Terry v. Tyson Farms, Inc., 604 F.3d 272, 275-76 (6th Cir. 2010) (citation and quotation marks omitted)). "[A]plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Republic Bank & Trust Co. v. Bear Stearns & Co., Inc., 683 F.3d 239, 246-47 (6th Cir. 2012) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). "Rather, '[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face."" Id. at 247 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

Plaintiff alleges in the...