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Hagy v. Demers & Adams, LLC

United States District Court, Sixth Circuit

September 23, 2013

James R. Hagy, III, et al., Plaintiffs,
Demers & Adams, LLC, et al., Defendants.


TERENCE P. KEMP, Magistrate Judge.

This matter is before the Court on the motion for reconsideration filed by Defendants Demers & Adams, LLC and David J. Demers ("the Law Firm Defendants"). (Doc. #105). Plaintiffs James R. Hagy, III, on behalf of himself and Patricia R. Hagy[1] ("the Hagys") have filed an opposition to the motion. (Doc. #106). For the reasons set forth below, the motion for reconsideration will be denied. (Doc. #105).

I. Background

The background of this case has been set forth in previous orders of this Court and will not be set forth in great detail here. Briefly, for purposes of the current motion, this case arises from a foreclosure action initiated by the Law Firm Defendants on behalf of Green Tree against the Hagys. The Hagys allege that, after the foreclosure action was filed, they signed a warranty deed in lieu of foreclosure, which the parties agreed would prevent any attempt to collect a deficiency balance remaining after the sale of the collateral. The Hagys claim that after the warranty deed in lieu of foreclosure was executed, Green Tree began contacting them by telephone for the collection of an alleged deficiency. Accordingly, on June 15, 2011, the Hagys filed this case against the Law Firm Defendants and Green Tree alleging violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§1692, et seq., the Ohio Consumer Sales Practices Act ("OCSPA"), O.R.C. §§1345.01 et seq., and common law invasion of privacy.

The Hagys' claims against the Law Firm Defendants arising under the OCSPA are the sole claims at issue in this Opinion and Order. In those claims, the Hagys allege that the Law Firm Defendants knowingly committed unfair, deceptive, and unconscionable acts and/or practices in violation of O.R.C. §§1345.02 and/or 1345.03, and they are therefore entitled to relief under O.R.C. §1345.09. (Amend. Compl., #18, ¶¶28-31). On February 5, 2013, this Court issued an Opinion and Order granting the Hagys' partial motion for summary judgment on the OCSPA claims. (Doc. #95 at 16-19). It is this ruling that is the subject of the pending motion for reconsideration.

II. Standard of Review

The Law Firm Defendants request that the Court reconsider the portion of its February 5 Opinion and Order relating to the OCSPA claims in light of a recent decision by the Ohio Supreme Court, namely Anderson v. Barclay's Capital Real Estate, Inc., Slip Opinion No. 2013-Ohio-1993, decided May 14, 2013. The Law Firm Defendants do not, however, cite to any Federal Rule of Civil Procedure in making the motion.

In their response, the Hagys urge this Court to consider the Law Firm Defendants' motion as having been brought under Fed.R.Civ.P. 59(e), which provides that "[a] motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment." According to the Hagys, the "Law Firm Defendants' motion, filed approximately three and a half months after the Court issued judgment in this matter" should be denied as "untimely and forfeited on appeal." (Doc. #106 at 3-5).

The Court disagrees and finds that the motion has not been brought pursuant to Fed.R.Civ.P. 59(e). Rather, the motion seeks reconsideration of an interlocutory order and, as such, it is not untimely. As the United States Supreme Court has observed, "every order short of a final decree is subject to reopening at the discretion of the judge." Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp. , 460 U.S. 1, 12, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The Court of Appeals for the Sixth Circuit has likewise observed that "[d]istrict courts have inherent power to reconsider interlocutory orders and reopen any part of a case before entry of a final judgment." Mallory v. Eyrich , 922 F.2d 1273, 1282 (6th Cir. 1991) (citing Marconi Wireless Tel. Co. v. United States , 320 U.S. 1, 63 S.Ct. 1393, 87 L.Ed. 1731 (1943)). Accordingly, a district court may modify, or even rescind, interlocutory orders. See John Simmons Co. v. Grier Bros. Co. , 258 U.S. 82, 88, 42 S.Ct. 196, 66 L.Ed. 475 (1922).

Although Fed.R.Civ.P. 59(e) does not supply the power nor the standard for deciding whether to reconsider an interlocutory order, courts have generally applied criteria that respect the need to grant some measure of finality to even interlocutory orders and which discourage the filing of endless motions for reconsideration. Thus, "[a] federal district court has inherent power over interlocutory orders and may modify, vacate, or set aside these orders when it is consonant with justice to do so.'" Rottmund v. Continental Assurance Co. , 813 F.Supp. 1104, 1107 (E.D. Pa. 1992)(citing United States v. Jerry , 487 F.2d 600, 605 (3d Cir. 1973)). "Because of the interest in finality, however, courts should grant motions for reconsideration sparingly." Id . This Court will therefore consider the motion for reconsideration to determine whether it is "consonant with justice" to grant the requested relief, and it will grant relief only if the prior decision appears clearly to be legally or factually erroneous.

III. Discussion

As noted above, the Law Firm Defendants' motion for reconsideration is based upon the Ohio Supreme Court's recent decision in Anderson v. Barclay's Capital Real Estate, Inc., Slip Opinion No. 2013-Ohio-1993, decided May 14, 2013. In that case, the Ohio Supreme Court addressed whether the OCSPA applies to the servicing of residential mortgage loans. The Court held that the servicing of a borrower's residential mortgage loan does not constitute a "consumer transaction" as defined in O.R.C. §1345.01(A) because, inter alia, there is no "transfer of an item of goods, a service, a franchise, or an intangible, to an individual." Id. at ¶15. The Court also found that an entity which services residential mortgage loans does not engage in the business of effecting or soliciting consumer transactions and, as such, it is not a "supplier" as defined in O.R.C. §1345.01(C). Id. at ¶32.

Applying the decision in Barclay's to the instant case, the Law Firm Defendants assert that the Hagys' allegations, which arise from mortgage servicing, do not involve a consumer transaction, and neither they nor Green Tree are suppliers for purposes of the statute. The Law Firm Defendants argue:

If Green Tree is neither a supplier nor engaged in a consumer transaction under the [O]CSPA, then nothing Law Firm Defendants did on Green Tree's behalf would qualify either. If anything, Law Firm Defendants were further removed from the Hagys than Green Tree. Law Firm Defendants supplied no service to the Hagys and did nothing ...

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