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Grimm v. GPG Processing, LLC

United States District Court, S.D. Ohio, Eastern Division

August 15, 2019

GPG PROCESSING, LLC, et al., Defendants.

          James L. Graham Judge.



         Plaintiff, Veronica Grimm, moves for default judgment against Defendants, GPG Processing, LLC, d/b/a/ Revenue Management Group, LLC (“RMG”), and Gregory Hopkins (collectively, “Defendants”), for violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.; the Racketeering Influenced Corrupt Organizations Act (“RICO”), 18 U.S.C. §1961 et seq.; the Ohio Corrupt Practices Act (“OCPA”), R.C. § 2923.21 et seq.; and Ohio common law. (ECF No. 22.) Plaintiff's Motion for Default Judgment was referred to the undersigned for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1). (ECF No. 22.) For the reasons that follow, it is RECOMMENDED that Plaintiff's Motion for Default Judgment be GRANTED IN PART AND DENIED IN PART.

         I. BACKGROUND

         Plaintiff resides in Steubenville, Ohio. (Am. Compl. at ¶ 4, ECF No. 3.) RMG is a debt collector operating out of Buffalo, New York and Rochester, New York. (Id. at ¶ 5.) Gregory Hopkins is the owner and principal officer of RMG. (Id. at ¶ 6.) Plaintiff alleges that Hopkins “regularly directs the business practices of” RMG and that, at all times relevant to this action, he acted either personally or through his employees. (Id.) She further asserts that Hopkins is liable for all counts alleged against Defendant RMG. (Id.)

         In 2016, Plaintiff discharged a payday loan in bankruptcy. (Id. at ¶ 12.) RMG contacted Plaintiff about the payday loan debt in early 2018, and she explained that the debt had been discharged in bankruptcy. (Id. at ¶¶ 11, 12.) Still, RMG insisted that the payday loan debt was due and owing to RMG. (Id. at ¶ 12.)

         RMG continued to call Plaintiff a few times each month and stated that Plaintiff had a warrant out for her arrest due to her failure to pay on the debt. (Id. at ¶¶ 13, 14.) RMG accused Plaintiff of “fraud” and threatened her with criminal prosecution and civil lawsuits. (Id. at ¶¶ 15, 16.) RMG also falsely stated that it had already filed lawsuits against Plaintiff. (Id. at ¶ 16.) When Plaintiff informed RMG that she had not been served with papers regarding a lawsuit, it “falsely told Plaintiff that under Ohio law, RMG was not required to serve her with any complaints filed against her” and that it would proceed in the lawsuit without her. (Id. at ¶ 17.) RMG had no intention to follow through with its threats of a lawsuit. (Id. at ¶ 18.)

         Plaintiff was anxious about the threats and made payments towards the payday loan totaling $1, 116.88. (Mot. for Default J. at ¶ 2, ECF No. 22.) Specifically, she made payments to RMG in the amount of $201.88 on February 13, 2018; $400.00 on February 13, 2018; and $515.00 on April 26, 2018. (Am. Compl. at ¶¶ 19, 20, 26, ECF No. 3.) RMG continued to call Plaintiff and state that the full balance of the loan was due and owing despite the fact that she had made payments and that the loan had been discharged in bankruptcy. (Id. at ¶ 24, 27.) RMG also continued to threaten Plaintiff with arrest, prosecution, and civil lawsuits. (Id. at ¶ 25.) Further, RMG called Plaintiff's relatives, informed them of the alleged debt, and told them that Plaintiff had committed criminal check fraud. (Id. at ¶ 28.) Additionally, RMG never provided Plaintiff with any written notices concerning the debt. (Id. at ¶ 33.) Plaintiff asserts that she “refused to continue paying on the debt, ” and “[i]n response, on information and belief, RMG transferred Plaintiff's account to Oconnor, ” another debt collector. (Id. at ¶¶ 29-30.)

         Plaintiff alleges that because of RMG's actions, she felt anxious, was unable to sleep, had her family life disrupted, and compulsively checked the police department's website for warrants in her name. (Mot. for Default J. at 3, ECF No. 22; Decl. of Pl., ECF No. 22-1.)

         Plaintiff commenced this action on November 26, 2018. (ECF No. 1.) She filed her Amended Complaint on December 6, 2018. (ECF No. 3.) The Clerk entered default against RMG on February 20, 2019, and against Gregory Hopkins on April 4, 2019. (ECF Nos. 14, 19.) All other Defendants have been dismissed from this case. (See Order, ECF No. 21; Notice, ECF No. 4.) On April 24, 2019, Plaintiff moved for default judgment against Defendants RMG and Hopkins on her claims under the FDCPA, RICO, OCPA, and Ohio common law. (ECF No. 22.)


         Federal Rule of Civil Procedure 55 provides that “when a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and the failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Subsequently, unless a claim is for a sum certain or a sum that can be made certain by computation, plaintiff “must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b). “Even if a default has been entered against a party, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” Anderson v. Johnson, No. 98-1931, 1999 WL 1023753, at * 2 (6th Cir. Nov. 4, 1999) (citing Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir. 1992)). In considering a motion for default judgment, all “factual allegations of the complaint, except those related to the amount of damages, will be taken as true.” Harris v. Cooley, No. 1:17-CV-540, 2019 WL 1573260, at *1 (S.D. Ohio Apr. 11, 2019). If the defaulting party is found liable for the cause of action, that “does not resolve issues relating to damages.” Antione v. Atlas Tucker, Inc. 66 F.3d 105, 111 (6th Cir. 1995). Under Federal Rule of Civil Procedure 55, if the amount of damages is unclear “the court may conduct hearings or make referrals” in order to “determine the amount of damages.” Fed.R.Civ.P. 55(b)(2).

         III. ANALYSIS

         A. Fair Debt Collection Practices Act (FDCPA) Claims

         Plaintiff first contends that Defendants violated the FDCPA. “The Fair Debt Collection Practices Act generally prohibits a debt collector from using ‘any false, deceptive, or misleading representation or means in connection with the collection of any debt.'” Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 172 (6th Cir. 2011) (citing 15 U.S.C. § 1692e). “Section 1692k of the statute allows the consumer to recover statutory or actual damages for violations of the Act.” Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012). In order to establish a claim under the FDCPA, “(1) plaintiff must be a ‘consumer' as defined by the Act; (2) the ‘debt' must arise[ ] out of transactions which are ‘primarily for personal, family or household purchases;' (3) defendant must be a ‘debt collector' as defined by the Act; and (4) defendant must have violated” the FDCPA's prohibitions. Id. (citing Whittiker v. Deutsche Bank Nat'l Trust Co., 605 F.Supp. 914, 926 (N.D. Ohio 2009)).

         Here, Plaintiff has set forth sufficient facts to establish her claims under the FDCPA. First, Plaintiff has shown that she is a “consumer” as defined by the Act. “The term ‘consumer' means any natural person obligated or allegedly obligated to pay any debt.” 15 U.S.C. § 1692a(3). Plaintiff is a consumer because she is a natural person who is allegedly obligated to pay a debt owed on a payday loan. She has also pled that the “debt, ” i.e. the payday loan, constitutes a debt used for personal purposes. (Am. Compl. ¶ 38, ECF No. 3.) Next, she adequately pled that Defendants are “debt collectors” as defined by the FDCPA. A debt collector is “any 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). The FDCPA applies to Defendants RMG and Hopkins because the principal purpose of their business is to collect debts and they use the instrumentalities of interstate commerce to do so. 15 U.S.C. § 1692a(6); (see also Am. Compl. ¶¶ 36-37, ECF No. 3). Plaintiff also alleges sufficient facts to show that Defendants violated several provisions of the FDCPA. The undersigned will consider Plaintiff's allegations under the FDCPA in turn.

         1. 15 U.S.C. § 1692c(b)

         Plaintiff first alleges that Defendants violated 15 U.S.C. § 1692c(b), which provides as follows:

Except as provided in section 1692b of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise ...

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