United States District Court, N.D. Ohio
Christina Fabec, On behalf of herself and all Similarly-situated consumers, Plaintiff,
Debt Management Partners, LLC, et al., Defendants.
MEMORANDUM OPINION AND ORDER
A. BARKER, U.S. DISTRICT JUDGE.
pending are the following motions: (1) Joint Motion to
Dismiss (Doc. No. 59) filed by Defendants Capital Management
Holdings, LLC (“CMH”) and Debt Management
Partners, LLC. (“DMP”); (2) Motion for Sanctions
(Doc. No. 60) filed by former counsel for Plaintiff Christina
Fabec; and (3) Defendant CMH's Cross Motion to Strike and
for Sanctions (Doc. No. 61.) Also pending are the following
discovery-related motions and papers: (1) Plaintiff Christina
Fabec's Motion for Discovery pursuant to Fed.R.Civ.P.
56(d) (Doc. No. 48); (2) Defendant Capital Management
Holdings, LLC's Motion for Protective Order (Doc. No.
51); (3) the Motion to Compel Discovery for Sanctions Hearing
filed by former counsel for Plaintiff Christina Fabec (Doc.
No. 75); (4) Defendant Debt Management Partners, LLC's
Motion to Strike Motion to Compel or for leave to file a
Supplemental Position Paper Instanter (Doc. No. 76); and (5)
the Position Papers filed by Defendants CMH and DMP (Doc.
Nos. 73, 74.)
following reasons, Defendants' Joint Motion to Dismiss
(Doc. No. 59) is GRANTED. The Motion for Sanctions filed by
former counsel for Plaintiff Christina Fabec (Doc. No. 60)
and the Cross Motion to Strike and for Sanctions by Defendant
CMH (Doc. No. 61) are DENIED. All remaining motions (Doc.
Nos. 48, 51, 75, 76) are denied as moot.
5, 2018, Plaintiff Christina Fabec filed a class action
complaint in the Cuyahoga County Court of Common Pleas
against Defendants DMP and CMH, on behalf of herself and a
purported nationwide class of similarly situated consumers,
asserting claims for violation of the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq, (the
"FDCPA"); the Telephone Consumer Protection Act, 47
U.S.C. § 227, et seq., ("TPCA"),
Ohio's Consumer Sales Practices Act, O. R.C. § 1345,
et seq. ("CSPA") and state law claims of
Invasion of Privacy and Civil Conspiracy. (Doc. No. 1-1.)
Defendant DMP removed the action to this Court on July 6,
2018. (Doc. No. 1.)
moved for class certification on March 5, 2019, which both
Defendants opposed. (Doc. Nos. 30, 32, 33.) On May 29, 2019,
then-assigned District Judge Donald Nugent denied the motion
The Court has thoroughly and exhaustively reviewed Ms.
Fabec's Motion for Class Certification, along with
related briefing and exhibits. Based on the limited discovery
that has been exchanged by the Parties, it is unclear whether
class certification is appropriate relative to any of Ms.
Fabec's statutory claims and, at this time, there are
factual disputes which speak to the merits of Ms. Fabec's
individual claims and the class certification issue which may
only be properly addressed with the benefit of additional
discovery. Accordingly, the Motion for Class Certification
filed by Plaintiff, Christina Fabec, is hereby DENIED. The
question of whether or not class certification is appropriate
may be revisited by the Parties at a later date if warranted.
(Doc. No. 42.) Judge Nugent conducted a status conference the
next day, during which he (1) instructed Defendant DMP to
file a motion for summary judgment by June 28, 2019 regarding
the issue of agency, and (2) held discovery between Plaintiff
and DMP in abeyance. (Doc. No. 43.) The Court determined,
however, that discovery should commence as between Plaintiff
and Defendant CMH and set a discovery deadline of August 30,
28, 2019, Defendant DMP filed its Motion for Summary
Judgment. (Doc. No. 45.) On July 9, 2019, Plaintiff filed a
“Memorandum in Opposition to Motion for Summary
Judgment and, Alternatively, Motion for Discovery Pursuant to
Fed.R.Civ.P. 56(d).” (Doc. No. 48.) Therein, Plaintiff
argued DMP is not entitled to judgment in its favor with
respect to the issue of agency. Plaintiff also asserted that
both Defendants had impeded discovery throughout the course
of the instant action and requested the opportunity to
“complete full discovery in this matter in accordance
with the civil rules before judgment could be considered
against her.” (Id. at p. 14.) In particular,
Plaintiff requested that the Court “lift its stay of
discovery with respect to DMP to allow her to conduct
discovery to properly supplement her opposition to the
5, 2019, this matter was re-assigned to the undersigned
pursuant to General Order 2019-13.
thereafter, on July 19, 2019, Defendant CMH filed a Motion
for Protective Order. (Doc. No. 51.) Therein, CMH sought to
prevent Plaintiff from taking several depositions in New
York, including the deposition of CMH President, Daniel
D'Elia. (Id.) Plaintiff opposed the motion.
(Doc. No. 52.)
29, 2019, the Court issued an Order as follows:
Upon careful review, the Court finds additional discovery is
warranted. Accordingly, Defendant DMP's Motion for
Summary Judgment (Doc. No. 45) and Plaintiff's Motion to
Strike Affidavits (Doc. Nos. 47) are denied without prejudice
subject to refiling after the close of discovery. The Court
has further determined that mediation would be fruitful at
this time and hereby refers this matter to Magistrate Judge
Baughman to conduct a mediation conference within the next 30
days. All discovery is stayed pending mediation. If this
matter does not settle, the Court will conduct a telephonic
status conference with lead counsel shortly thereafter.
Plaintiff's Motion for Discovery (Doc. No. 48) and
Defendant Capital Management Holdings, LLC.'s Motion for
Protective Order (Doc. No. 51) are held in abeyance at this
time and will be revisited after mediation proceedings have
(Doc. No. 53.) A mediation conference was conducted on
September 10, 2019. (Doc. Nos. 58.) The parties were not able
to reach an agreement during the conference. (Id.)
September 16, 2019, Defendants CMH and DMP filed a Joint
Motion to Dismiss the instant action with prejudice. (Doc.
No. 59.) Therein, Defendants assert that “following the
court-ordered mediation in this case . . ., the parties
themselves conferred directly and settled this case without
counsel.” (Doc. No. 59-1.)
thereafter, on September 20, 2019, counsel for Plaintiff
filed a Motion for Sanctions. (Doc. No. 60.) Therein, counsel
argued that “CMH has gone behind the back of
Plaintiff's counsel and, surreptitiously, contacted Ms.
Fabec.” (Id.) Counsel maintained that CMH
“induced Ms. Fabec to secretly accept a settlement
offer without the advice of counsel” and has thereby
“driven a wedge between Ms. Fabec and her
counsel.” (Id.) Counsel stated that, on
September 13, 2019, Ms. Fabec's husband “called
Plaintiff's counsel to inform them that their services
were no longer needed.” (Id. at p. 2.) Counsel
asserted that CMH's “coercive conduct is an affront
to the judicial process and warrants sanctions, ”
including an Order (1) requiring CMH to pay Plaintiff's
Counsel's attorneys' fees and costs; (2) compelling
CMH to produce “overdue discovery” identifying
class members; and (3) allowing amendment of the Complaint to
substitute a new class representative. (Id. at pp.
CMH responded by filing a Brief in Opposition and
Cross-Motion to Strike and for Sanctions. (Doc. No. 61.) CMH
argues as follows:
Ultimately, in frustration, one of CMH's principals, Mr.
Dan D'Elia, contacted plaintiff's husband and offered
to settle all plaintiff's claims against both defendants
for the sum of $10, 000. Mr. Fabec asked why Mr. D'Elia
would offer so much monev. Mr. D'Elia responded that Mrs.
Fabec had rejected all defendants' previous offers, $6,
000 in August, 2018 and a higher number in August, 2019, so
Mr. D'Elia thought he would offer a little more. Mr.
Fabec then asked what previous offers Mr. D' Elia was
talking about because neither he nor his wife, the plaintiff,
had ever heard about any offers having been made.
Mr. D'Elia told Mr. Fabec the first offer to settle was
made at the beginning of the lawsuit back in August 2018 and
the amount was $6, 000. By text message, Mr. Fabec told Mr.
D'Elia that the Fabecs had never been told about that
offer. By text message, Mr. Fabec informed Mr. D'Elia
that the Fabecs would ‘probably' have taken the $6,
000 offer and settled then had they known about the offer. At
one point, Mr. Fabec informed Mr. D'Elia by text message
that Mr. Fabec had called one or another of the Fabec
attorneys and asked whether any offers to settle had been
made by defendants because he and his wife wanted the matter
concluded and the attorney said, ‘no.'
Mr. Fabec also told Mr. D'Elia that Mr. Fabec had both of
the Fabec attorneys on the telephone at the same time and
told those attorneys . . . [that] the Fabecs were going to
take Mr. D'Elia's offer and the services of Messrs.
Fine and Frederick were no longer required.
(Id. at pp. 2-4) (citations omitted). At some point
that day, Mr. D'Elia contacted CMH's attorney herein,
Dean Hoover, and informed him that the parties had reached a
settlement. (Id. at p. 4.) Mr. D'Elia asked Mr.
Hoover for “a simple way to document the
settlement.” (Id.) Mr. Hoover provided Mr.
D'Elia with a “form of endorsement” that Mr.
D'Elia could handwrite on the back of the check given to
Ms. Fabec, which included a release of “all claims I
made or could have made in this lawsuit.”
(Id.) Subsequently, Mr. D'Elia forwarded to Mr.
Hoover a copy of the check that had been negotiated by Ms.
Fabec, “which was accepted and cashed in full
satisfaction of all her claims against CMH and CMP.”
Opposition/Cross-Motion, CMH argues the Motion for Sanctions
filed by former counsel for Ms. Fabec should be stricken
because they were discharged by Ms. Fabec on September 13,
2019 and, therefore, had no authority to file the Motion on
her behalf. (Id. at p. 5-7.) CMH further asserts
that “the Motion is based on the false legal premise
that CMH did something wrong when its principal decided to
talk settlement with plaintiff's husband and/or that
CMH's counsel did something wrong in providing
‘legalistic language' for his client's
use.” (Id. at p. 8.) CMH maintains that it did
nothing to undermine plaintiff's relationship with her
former counsel, arguing “the attorneys did that to
themselves when [they] . . . failed to inform the Fabecs of
settlement offers made by defendants.” (Id. at
p. 12.) Lastly, CMH asks the Court to impose sanctions on
Plaintiff's former counsel. CMH asserts that
Plaintiff's former counsel, Messrs. Frederick and Michael