Wilson v. Trott Law, P.C.

118 F.Supp.3d 953

Earl D. WILSON, Plaintiff,

v.TROTT LAW, P.C., Defendant.

Case No. 15–10747.

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

Signed July 29, 2015.

Brian P. Parker, Brian P. Parker Assoc., Southfield, MI, for Plaintiff.

Richard Welke, Trott Law, P.C., Farmington Hills, MI, for Defendant.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS OR FOR SUMMARY JUDGMENT

DAVID M. LAWSON, District Judge.

Under the Fair Debt Collection Practices Act (FDCPA), "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Nor may the debt collector "use unfair or unconscionable means to collect or attempt to collect any debt." 15 U.S.C. § 1692f.

Plaintiff Earl D. Wilson fell behind on his mortgage. The note holder hired the Trott law firm to collect the debt. As part of its routine practice, the law firm sent Wilson a letter that itemized the various charges included in the total amount of $196,642.54, which Trott claimed was owing. One of the listed items was denominated "corporate advances," a term not used in any of the loan documents. In that category, Trott apparently lumped together certain charges such as property inspection fees and attorney fees and costs incurred when the plaintiff fell behind on his mortgage. Wilson says Trott's letter violated the two sections of the FDCPA mentioned above because the term "corporate advances" masked the nature of the charges, and he was unable to determine why and if he actually owed the money.

The defendant has filed a motion for summary judgment, arguing that its practice did not violate the FDCPA; the plaintiff disagrees. The Court heard oral argument on June 24, 2015, and now concludes that Trott's letter was not "unfair or unconscionable," because the mortgage actually requires the plaintiff to pay the charges Trott was attempting to collect. Therefore, there was no violation of section 1692f. However, a fact question remains whether the use in a collection letter of a term of art—"corporate advances"—unconnected to any corresponding term in the note or mortgage, is materially misleading and therefore runs afoul of section 1692e(2)(A) (which prohibits a "false representation of ... the character ... of any debt") or section 1692e(10) (which prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt"). Therefore, the Court will grant in part and deny in part the motion for summary judgment, and dismiss that part of the amended complaint that is based on 15 U.S.C. § 1692f.

I.

Plaintiff Earl D. Wilson, who now lives in Fenton, Michigan, obtained a loan on September 8, 2004 in the amount of $160,000 from Countrywide Home Loans, Inc. As security for the loan, he granted a mortgage on his home in Redford, Michigan to Countrywide and its successors and assigns. On March 17, 2011, the mortgage was assigned to The Bank of New York Mellon. The loan currently is serviced by non-party Bayview Loan Servicing, LLC. The plaintiff defaulted on the mortgage by failing to make regular monthly payments since November 1, 2010. Thereafter, Bayview retained defendant Trott Law, P.C., a law firm specializing in foreclosures located in Farmington Hills, Michigan to initiate foreclosure proceedings.

On November 6, 2014, the plaintiff received a letter from Bayview stating in part:

Dear EARL D WILSON:

This is a formal notice that the mortgage loan referenced above remains in default and the lender intends to foreclosure.

* * *

The loan is due for 11/1/2010 and subsequent payments, plus-late charges, fees and costs. As of today, the total delinquency and reinstatement amount is $63,897.79 which consists of the following:

Next Payment Due Date		11/1/2010
	Total Monthly Payments Due:		$59,207.62
	Late Charges:		$147.78
	Other Charges:	Uncollected NSF Fees:	$0.00
		Other Fees:	$0.00
		Corporate Advance Balances:	$0
		Unapplied Balance	($0.00)

TOTAL YOU MUST PAY TO CURE DEFAULT $63,897.79

Pl.'s Resp., Ex. 2. A month later, on December 8, 2014, the plaintiff received a letter from Trott stating:

THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT. ANY INFORMATION WE OBTAIN WILL BE USED FOR THAT PURPOSE.

* * *

Dear Borrower(s):

This office represents Bayview Loan Servicing, LLC. This matter was referred to this office to foreclose the mortgage. Under the terms of the mortgage, our client has elected to accelerate the total indebtedness due and owing under the mortgage. Because of interest, and other charges that may vary from day to day, the total amount due may differ depending on the day of payment.

As of the date on this letter the total indebtedness is:

Principal Balance	$146,778.82
	Unpaid Interest	$38,454.04
	Late Charges	$147.78
	Corporate Advance	$1,944.89
	Escrow Advance	$9,317.01

Total: $196,642.54

Am. Compl., Ex. 4.

The letter notified the plaintiff that he could request validation of the debt within 30 days; the plaintiff did so in a timely manner. The validation request stated:

Dear Trott:

You are seeking money from me for a debt amount I dispute. Please cease and desist until you validate and verify the debt

PURSUANT TO THE FDCPA, I WOULD LIKE THE FOLLOWING PROVIDED:

$ THE NAME AND ADDRESS OF THE ORIGINAL CREDIT;

$ VERIFICATION OF THE DEBT OWED TO BAYVIEW; AND

$ A COPY OF ANY VERIFICATION OF JUDGMENT IF IT EXISTS;

DO NOT THREATEN MY CREDIT. I DISPUTE THIS.

If you pass this on to other debt collectors, please advise them that I dispute this debt. Thank you for your immediate cooperation.

Earl D. Wilson

Def.'s Mot. Summ. J., Ex. E.

Trott responded to Wilson's request on January 7, 2015 with the following:

Dear Mr. Wilson:

My client, Bayview Loan Servicing, L.L.C., as servicing agent for The Bank of New York Mellon, as trustee of the CWALT 2004–24CB, has reviewed its records and hereby verifies that your debt is valid. In support of its validity I have enclosed a payment history for your loan.

The original credit to which you owed this debt was Countrywide Home Loans, Inc., 4500 Park Granada, Calbasas, California 91302.

Very truly yours,

TROTT LAW, P.C.

Def.'s Mot. Summ. J., Ex. F.

On March 2, 2015, the plaintiff filed a putative class action lawsuit alleging that the defendant violated the FDCPA and Michigan Collection Practices Act (MCPA). He filed an amended complaint on April 14, 2015. The plaintiff alleges that the defendant has a policy and practice of sending consumers, like the plaintiff, demands for "corporate advances" without defining what a corporate advance is in the debt collection letters. The plaintiff, noting that corporate advances are not referenced in his mortgage, believes that the defendant is either manufacturing the fees or billing for future costs in violation of 15 U.S.C. §§ 1692e, 1692e(2)(A), 1692f(1), and 1692e(10).

The plaintiff has withdrawn his motion to certify a class pending resolution of the defendant's potentially case-terminating motion. The defendant filed its motion styled in the alternative as a motion for judgment on the pleadings or motion for summary judgment. The defendant has attached various letters and documents to the motion that may extend beyond the pleadings themselves, and the plaintiff has filed affidavits and deposition testimony. Therefore, the Court will treat the motion as one for summary judgment. See Wysocki v. Int'l Bus. Mach. Corp., 607 F.3d 1102, 1104 (6th Cir.2010).

II.

Summary judgment is appropriate "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). A trial is required only when "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The parties have not seriously contested the basic facts of the case. Where the material facts are mostly settled, and the question before the court is purely a legal one, the summary judgment procedure is well suited for resolution of the case. See Cincom Sys., Inc. v. Novelis Corp.,

581 F.3d 431, 435 (6th Cir.2009).

However, the moving party must demonstrate the absence of a genuine dispute over a material fact before its motion for summary judgment can be granted. In making that assessment, "[t]he court must view the evidence and draw all reasonable inferences in favor of the non-moving party, and determine ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ " Alexander v. CareSource, 576 F.3d 551, 557–58 (6th Cir.2009) (quoting Anderson, 477 U.S. at 251–52, 106 S.Ct. 2505 ).

A.

Congress enacted the FDCPA to eliminate "abusive, deceptive, and unfair debt collection practices." 15 U.S.C. § 1692(a). "The Act prohibits a wide array of specific conduct, but it also prohibits, in general terms, any harassing, unfair, or deceptive debt collection practice, which enables ‘the courts, where appropriate, to proscribe other improper conduct which is not specifically addressed.’ " Currier v. First Resolution Inv. Corp., 762 F.3d 529, 533 (6th Cir.2014) (citing S.Rep. No. 95–382, at 4, 1977 U.S.C.C.A.N. 1695, 1698). As the Sixth Circuit has noted, "the FDCPA is ‘extraordinarily broad,’ crafted in response to what Congress perceived to be a widespread problem." Barany–Snyder v. Weiner, 539 F.3d 327, 333 (6th Cir.2008) (citing Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir.1992) ). "Courts use the ‘least sophisticated consumer’ standard, an objective test, when assessing whether particular conduct violates the FDCPA." Ibid. (citing Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 329 (6th Cir.2006) ). "The Act protects ‘all consumers,’ the ‘shrewd’ as well as the gullible, from practices that would mislead the ‘reasonable...