The opinion of the court was delivered by: Judge Algenon L. Marbley
This matter is before the Court on Plaintiffs' Motion for Partial Summary Judgment; (2) Defendant Ward D. Coffman III's ("Coffman"), Motion for Summary Judgment; and (3) Defendant Kathy Dickerson's/D.B.S. Collection Agency's ("Dickerson") Motion for Summary Judgment.*fn1
In this case, Plaintiffs seek to recover based on (1) the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"); (2) the Ohio Consumer Sales Practices Act, Ohio Revised Code § 1345.01 et seq. ("OCSPA"); (3) common law fraud; (4) the Ohio Pattern of Corrupt Activities Act, Ohio Revised Code § 2923.31 et seq. ("OPCA"); and (5) 42 U.S.C. § 1983. Now, Plaintiffs request partial summary judgment as to Defendants' liability under the FDCPA and the OCSPA. Defendant Coffman and Defendant Dickerson each request summary judgment on all claims in Plaintiff's Complaint.
For the following reasons, the Court GRANTS in part and DENIES in part Plaintiffs' Motion for Partial Summary Judgment, DENIES Coffman's Motion for Summary Judgment, and DENIES Dickerson's Motion for Summary Judgment.
On April 28, 1982, Mary Jane Slaughter ("Ms. Slaughter") registered the fictitious name "D.B.S. Collection Agency" (or "D.B.S.") with the Ohio Secretary of State. Ms. Slaughter renewed the registration in February 1997, thereby extending the validity of the registration until February 2002. Ms. Slaughter then transferred D.B.S. and the right to use that fictitious name to Michael Slaughter ("Mr. Slaughter") on August 10, 1998. The transfer was handled by Coffman, an attorney. At that time, Mr. Slaughter did not register with the Ohio Secretary of State the transfer of the right to use the fictitious name "D.B.S. Collection Agency" or his ownership of the business operating under that name.
After the transfer to Mr. Slaughter, Defendants continued to collect consumer debts under the name, and on behalf of, D.B.S. Defendants succeeded in collecting some of those debts by regularly commencing and maintaining actions for debt collection in various Ohio courts. After prevailing in such actions, Defendants collected and executed the judgments that they were awarded, sometimes through the use of garnishment and attachment of debtors' property. Plaintiffs allege that Defendants' debt collection activities customarily involved the use of the mails, telephones, and interstate facilities for data transmission.
On March 1, 1999, Mr. Slaughter transferred D.B.S. and the right to use its fictitious name to Dickerson. The transfer was handled by Coffman. At that time, Dickerson did not register with the Ohio Secretary of State either the transfer of the right to use the fictitious name "D.B.S. Collection Agency" or her ownership of the business operating under that name.
Plaintiffs allege that after the transfer from Mr. Slaughter, Defendants continued regularly to collect consumer debts under the name "D.B.S. Collection Agency." Just as they had prior to this second transfer, Defendants collected some debts after commencing, maintaining, and prevailing on actions that they filed in various Ohio courts, and then executing on the judgments that they were awarded, including through the regular use of garnishment and attachment.
1. Coffman's Representation of D.B.S.
In 1996, Ms. Slaughter sought legal assistance from Coffman in assuring that her sole proprietorship, D.B.S., complied with the FDCPA, the primary federal law regulating her debt collection business. Coffman initially assigned an employee, Mr. Randy Godard, Esq., to advise Ms. Slaughter.
In early 1997, Coffman began signing complaints naming D.B.S. as the sole plaintiff in civil debt collection actions filed against consumers in at least two Zanesville, Ohio area state courts. Until approximately the end of November 2002, Coffman signed the complaints initiating DBS' debt collection lawsuits. During the five-year period of his representation for DBS, Defendant Coffman also appeared for D.B.S. occasionally on bankruptcy, foreclosure, or subrogation matters where D.B.S. was trying to protect or collect a judgment or lien obtained in one of these collection suits. All of the litigation Coffman handled for D.B.S. was consumer collection litigation.
These debt collection suits, mostly filed in Muskingum County, used a standard civil complaint supplemented with a specially prepared "exhibit A," listing the debts D.B.S. claimed were owed it. Both the complaint and "exhibit A" were always drawn up for Coffman's signature by D.B.S. The complaint form Coffman signed to commence these lawsuits for D.B.S. remained substantively unchanged throughout the five-year period that he filed such cases for D.B.S.*fn2 Between 1997 and November 2002, Coffman recovered judgment for D.B.S. on approximately 500 lawsuits commenced with this standard complaint.
D.B.S. filed debt collection lawsuits routinely as a general business practice. None of D.B.S.'s clients -- Orthopaedic Associates, Perry County Family Practice, Muskingum Emergency Physicians, Prime Care, Podiatric Associates, and others -- used their own attorneys to collect debts. Instead, they sent their debts to D.B.S. Furthermore, D.B.S. only filed a debt collection lawsuit against a person when that person did not voluntarily pay what D.B.S. claimed was owed it. D.B.S. filed suit specifically to gain the power to garnish the wages of debtors.
While many debtors would pay the amount D.B.S. claimed it was owed after being served with a lawsuit to avoid garnishment, the lawsuits that proceeded would end often in D.B.S. taking default judgment. Prior to 2002, D.B.S. filed many garnishments and it also filed some bank attachments.
D.B.S.'s standard complaint predicated its claims against debtors who would not voluntarily pay what D.B.S. claimed was owed it on six standard allegations:
(1) that D.B.S. was the only plaintiff party;
(2) that D.B.S., a "debt collection agency," had taken assignment of the debts sued on from original creditors;
(3) that the debtor now "owe[s] to Plaintiff [D.B.S.]" all debts listed in the "exhibit A" complaint attachment;
(4) that D.B.S. was itself entitled to demand and recover judgment;
(5) that judgment could be entered against all debtors listed in the complaint jointly, and for all debts listed; and
(6) that the court's judgment should include "[c]court filing fees in the amount of Sixty Dollars ($60.00), together with interest at the maximum legal rate from the date of judgment, for costs and for attorney fees."
2. D.B.S.'s Debt Collection Lawsuit Against the Fosters
On November 3, 2000, Defendants commenced a civil action under the name "D.B.S. Collection Agency" against the Fosters jointly in the Zanesville, Ohio Municipal Court to collect consumer debts that the Fosters allegedly owed to various third-party creditors. Within a few days after receiving service of the complaint by certified mail, Mr. Foster called D.B.S. and spoke to Dickerson. Mr. Foster alleges that Dickerson told him that D.B.S. had the right to garnish his wages for $600 to $700 bi-weekly and Mrs. Foster's earnings for another $200 to $300 per month. Mr. Foster explained that such payments would be financially impossible for his family. He proposed, instead, that the parties arrange a $500 per month payment plan to end the lawsuit. The Fosters claim that at the end of the telephone conversation, Mr. Foster believed that he and Dickerson had agreed upon a $500 per month payment plan, in exchange for Dickerson's dismissing the suit she had filed against the Fosters in municipal court.*fn3 Pursuant to Mr. Foster's understanding of the conversation, he paid D.B.S. a $500 installment check on November 17, 2000.
D.B.S. did not dismiss the civil action filed against the Fosters in municipal court. On January 4, 2001, without prior notice to Plaintiffs, Dickerson prepared and filed court documents on behalf of D.B.S. for a default judgment against the Fosters.*fn4 Dickerson did not inform the court that she had any intervening telephone conversation with Mr. Foster. The municipal court judge signed the default judgment entry that Dickerson submitted.
After obtaining the default judgment, Dickerson attached the Fosters' household checking account by sending the court orders directly to their bank, without providing notice of such action to the Fosters. Both Mr. and Mrs. Foster are employed and participate in a direct deposit program with their employers, such that their paychecks go directly into their bank accounts. Consequently, Dickerson's attachment froze the Fosters' cash assets without prior notice to them. As a result, the Fosters allege that they were left without funds for basic necessities, and that outstanding checks that they previously had written were dishonored. The Fosters also allege that Dickerson failed to schedule a court hearing on the ex parte attachment of their bank account within the time required by law,*fn5 thus causing them further economic and emotional loss.*fn6
On January 25, 2001, the Fosters notified Defendants that the attachment of their bank account was void ab initio and that Dickerson, who regularly signs pleadings in civil actions under the name D.B.S., was illegally practicing law. The Fosters based their allegations on the fact that the records of the Ohio Secretary of State at that time showed the lawful owner and registrant of D.B.S. to be Mary Jane Slaughter. Dickerson appeared before the Zanesville Municipal Court on January 25, 2001 to oppose the release of her attachment on the Fosters' bank account. She informed the court that she owned D.B.S. pursuant to the transfer from Mr. Slaughter in March 1999. The municipal court discharged the attachment.
On February 23, 2001, the municipal court heard evidence on the Fosters' motion to vacate the default judgment entered against them. Coffman appeared as counsel for D.B.S., and Dickerson testified on behalf of D.B.S. During the hearing, Dickerson testified that she had not registered her ownership or use of the name "D.B.S. Collection Agency" with the Secretary of State.
On March 2, 2001, Mr. Slaughter registered the August 10, 1998 transfer of ownership of D.B.S. to him from Ms. Slaughter. At the same time, Dickerson registered the March 1, 1999 transfer of ownership of the "D.B.S. Collection Agency" business and name to her from Mr. Slaughter. Both filings and registrations were prepared by Coffman, who thereafter filed copies of the registrations with the municipal court. The business address listed for D.B.S. on Dickerson's application for registration listed the same address for D.B.S. that had been registered by Ms. Slaughter in 1997.
On March 28, 2001, the municipal court ordered the January 4, 2001 default judgment vacated because, at the time judgment was entered, D.B.S. and Dickerson lacked the legal capacity to commence or maintain a civil action under the name "D.B.S. Collection Agency" due to the lack of proper registration. The municipal court also recognized that, pursuant to her March 2, 2001 registration, Dickerson now had legal capacity, and stated that the action brought by Dickerson could remain pending in the municipal court.
Based on the foregoing series of events, the Fosters filed a Complaint with this Court on May 30, 2001 (the "Complaint"), on behalf of themselves and all others similarly situated. In the Complaint, Plaintiffs sought to recover based on (1) the FDCPA, 15 U.S.C. § 1692 et seq.; (2) the OCSPA, Ohio Revised Code § 1345.01 et seq.; (3) common law fraud; (4) the OPCA, Ohio Revised Code § 2923.31 et seq.; (5) negligence; and (6) 42 U.S.C. § 1983.
In an Order dated March 8, 2002, this Courtgranted in part and denied in part Defendants D.B.S. and Dickerson's Motion for Judgment on the Pleadings. Pursuant to that Order, the OCSPA and negligence claims were dismissed. Pursuant to an Opinion and Order dated March 25, 2002, this Court granted the Plaintiffs' Motion to Certify a Class under Rule 23(b)(3), while denying Plaintiffs' Motion to Certify a Class under Rule 23(b)(2).The Court certified a class defined as,
All persons named as a party defendant in any Ohio civil action filed between August 10, 1998 and March 1, 2001, in which "D.B.S. Collection Agency" was the named Plaintiff.
The Court also certified a subclass defined as,
All such persons as to whom one or more of the defendants did or will engage in any debt collection activity thereto on or after March 2, 2001.
On February 20, 2003, after Defendants' petition to the Sixth Circuit for leave to appeal the classcertification Order was denied, this Court granted Plaintiffs' Motion for an Order to Approve and Issue Class Notice.
On March 6, 2003, the Court issued two Orders. The Court granted in part Plaintiffs' Motion for Reconsideration of the March 8, 2002 Opinion and Order on Defendants D.B.S. and Dickerson's Motion for Judgment on the Pleadings, reinstating Plaintiffs' claims under the OCSPA. The Court also granted in part and denied in part Defendant Coffman's Motion for Judgment on the Pleadings, dismissing the negligence claim but not the OCSPA claim as to Defendant Coffman.
In an Opinion and Order dated December 16, 2003, the Court granted Plaintiffs' Motion to Amend the Class Definition. Following that ruling, the Court adopted Plaintiffs' proposed definition for the certified class and subclass:
All persons named as a party defendant in any Ohio civil action filed with "D.B.S. Collection Agency" as the named plaintiff by alleged assignment at any time prior to November 30, 2002; and/or all such persons as to whom one or more of the defendants did or will engage in any debt collection activity in relation thereto on or after March 2, 2001.
On February 16, 2005, the Fosters moved for partial summary judgment on behalf of themselves and the certified class on the FDCPA and OCSPA claims. Defendant Coffman and Defendant Dickerson each filed memoranda contra, and the Fosters filed a reply memorandum.
On August 15, 2005, Defendant Coffman and Defendant Dickerson each moved for summary judgment on all remaining claims against them in the Complaint. Plaintiffs filed memoranda contra to each motion for summary judgment. Furthermore, the Court heard oral argument on these motions on June 5, 2006. Accordingly, the parties' cross-motions for summary judgment are ripe for decision.
The standard of review for cross-motions for summary judgment does not differ from the standard applied when a motion is filed by only one party to the litigation. Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991) ("The fact that both parties have moved for summary judgment does not mean that the court must grant judgment as a matter of law for one side or the other; summary judgment in favor of either party is not proper if disputes remain as to material facts. Rather, the court must evaluate each party's motion on its own merits. . . .") (citations omitted).
Summary judgment is appropriate "[i]f the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). "[S]ummary judgment will not lie if the dispute is about a material fact that is 'genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (concluding that summary judgment is appropriate when the evidence could not lead the trier of fact to find for the non-moving party).
In evaluating motions for summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). In the case of cross-motions, the Court must "tak[e] care in each instance to draw all reasonable inferences against the party whose motion is under consideration." Taft, 929 F.2d at 248. The movant has the burden of establishing that there are no genuine issues of material fact, which may be accomplished by demonstrating that the non-moving party lacks evidence to support an essential element of its case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Barnhart v. Pickrel, Schaeffer & Ebeling Co., 12 F.3d 1382, 1388-89 (6th Cir. 1993). Significantly, in responding to a motion for summary judgment, however, the non-moving party "may not rest upon its mere allegations . . . but . . . must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P.56(e); see Celotex, 477 U.S. at 324; Searcy v. City of Dayton, 38 F.3d 282, 286 (6th Cir. 1994).
The non-moving party must present "significant probative evidence" to show that there is more than "some metaphysical doubt as to the material facts." Moore v. Philip Morris Cos., 8 F.3d 335, 339-40 (6th Cir. 1993). Furthermore, the mere existence of a scintilla of evidence in support of the non-moving party's position will not be sufficient; there must be evidence on which the jury could reasonably find for the non-moving party. Copeland v. Machulis, 57 F.3d 476, 479 (6th Cir. 1995) (citing Anderson, 477 U.S. at 252).
The primary legal basis for Plaintiffs' suit against Defendants arises under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692e and 1692f.*fn7 The FDCPA was designed to "eliminate abusive debt collection practices by debt collectors, to insure 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. § 1692(e). Under the FDCPA, a "debt collector" is defined as "[a]ny person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly, or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). As a preliminary matter, the Court notes that attorney debt collectors engaged in litigation are subject to the strictures of the FDCPA. Heintz v. Jenkins, 514 U.S. 291, 294 (1995).
Plaintiffs allege that Defendants are debt collectors who violated 15 U.S.C. § 1692e in various ways. Section 1692e provides in pertinent part:
A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the ...