Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Gilbert v. Midland Funding LLC

Court of Appeals of Ohio, Third District, Hancock

December 23, 2019

CAITLIN GILBERT, PLAINTIFF-APPELLEE,
v.
MIDLAND FUNDING LLC ET AL., DEFENDANTS-APPELLANTS.

          Appeal from Hancock County Common Pleas Court Trial Court No. 2015-CV-94

          H. Toby Schisler for Appellants

          Ronald I. Frederick and Gregory S. Reichenbach for Appellee

          OPINION

          PRESTON, J.

         {¶1} Defendants-appellants, Midland Funding LLC ("Midland"), Midland Credit Management, Inc. ("Midland Credit"), and Encore Capital Group, Inc. ("Encore") (collectively "the Midland parties"), appeal the March 12, 2019 order of the Hancock County Court of Common Pleas granting plaintiff-appellee, Caitlin Gilbert's ("Gilbert"), motion for class certification. For the reasons that follow, we reverse.

         {¶2} The protracted history of this case begins on February 16, 2011, with a complaint filed by Midland against Gilbert in the Findlay Municipal Court. (See Doc. No. 1, Plaintiffs Ex. 1). In that case, Midland asserted that Gilbert had defaulted on an obligation to repay $1, 443.29-a debt Gilbert allegedly incurred using a credit card issued by HSBC Bank Nevada, N.A. ("HSBC"). (Id.). Midland claimed that it had purchased Gilbert's allegedly delinquent account from HSBC and that Gilbert had failed to make any payment toward satisfaction of the outstanding debt despite Midland's demand that she do so. (Id.). Although Midland apparently obtained proper service on Gilbert in May 2011, Gilbert failed to plead or otherwise defend against Midland's action. (Doc. No. 1, Plaintiff's Ex. 4). As a result, Midland filed a motion for default judgment, which the Findlay Municipal Court granted on July 6, 2011. (Id.). Gilbert did not appeal the Findlay Municipal Court's entry of default judgment, and she did not seek (and has not sought) to have the default judgment set aside by the Findlay Municipal Court. Gilbert eventually paid the sum due under the default judgment, though it is unclear whether she did so voluntarily or under threat of garnishment. (Doc. Nos. 1, 19).

         {¶3} On March 19, 2015, Gilbert filed a complaint against the Midland parties in the Hancock County Court of Common Pleas.[1] (Doc. No. 1). In her complaint, Gilbert averred that she was a resident of Montgomery County, Ohio, rather than Hancock County, Ohio, when Midland filed suit against her in the Findlay Municipal Court. (Id.). She further claimed that she "did not sign any written contract for the Alleged Debt in Hancock County." (Id.). Gilbert alleged that the Findlay Municipal Court therefore did not have jurisdiction to enter default judgment against her and that the default judgment entered against her is consequently void. (Id.). She contended that the Midland parties are not entitled to retain the money she paid to them in satisfaction of the default judgment. (See id.).

         {¶4} Gilbert asserted that the lawsuit filed against her in the Findlay Municipal Court was but one of a number of similar suits filed by the Midland parties. She alleged that the Midland parties "regularly file[] collection actions against Ohio residents in [county or municipal court jurisdictions] where the defendant does not live and did not sign a contract," thus resulting "in numerous void judgments being entered against class members in courts with no subject matter jurisdiction." (Id.). Gilbert claimed that the Midland parties' actions caused the "incorrect reporting of void judgments on class members' credit reports" and led to "class members' wages, bank accounts, and other valuable property being garnished and executed upon pursuant to void judgments, and payments by class members." (Id.). Accordingly, Gilbert sought to represent two classes of plaintiffs: the "Unjust Enrichment Class" and the "Collection Suit Defense Class."[2] (Id.). Gilbert requested that the trial court grant declaratory relief and a class-wide injunction prohibiting the Midland parties from (1) filing suit and obtaining judgments against class members in Ohio county and municipal court jurisdictions where class members do not reside and did not sign the contracts underlying their alleged debts and (2) executing on said judgments. (Id.). Gilbert also demanded (1) "[a]n order directing [the Midland parties] to cause judgments against class members to be vacated in the courts where the judgments were obtained, to cause certificates of judgment to be vacated in any courts in which they were filed, and to cause class members' credit reports to be corrected"; (2) "[a]ctual damages, including but not limited to, all amounts collected by [the Midland parties] on the debts of class members"; and (3) "[disgorgement and restitution, including but not limited to, all money garnished by [the Midland parties] on [their] judgments or otherwise obtained by executing on void judgments." (Id.).

         {¶5} On March 19, 2015, the same day that Gilbert filed her complaint, Gilbert filed a motion to consolidate her case with case number 2013-CV-459, Midland Funding LLC v. Cassandra Colvin ("Colvin "). (Doc. No. 11). On April 21, 2015, the Midland parties filed their answer to Gilbert's complaint. (Doc. No. 19). On May 21, 2015, the trial court ordered that Gilbert's case be consolidated with Colvin for purposes of discovery. (Doc. No. 26).

         {¶6} On July 31, 2018, Gilbert filed a motion for class certification. (Doc. No. 43). On August 21, 2018, the Midland parties filed their memorandum in opposition to Gilbert's motion for class certification. (Doc. No. 44). In addition to arguing that Gilbert could not satisfy the requirements of Civ.R. 23, the Midland parties contended that the Supreme Court of Ohio's decision in Lingo v. State, 138 Ohio St.3d 427, 2014-Ohio-1052, bars the trial court from even considering Gilbert's claims. (Id.). The Midland parties argued that Lingo precludes the trial court from entertaining Gilbert's claims because "the effect of the relief sought by Gilbert would require [the trial court] to make a determination that judgments entered by municipal [and county] courts against putative class members are void because those courts allegedly lacked jurisdiction to enter those judgments," and the trial court, as a court of common pleas, does not have jurisdiction to effectively vacate, as void, the judgments of municipal and county courts. (Id.).

         {¶7} On August 27, 2018, Gilbert filed her reply to the Midland parties' memorandum in opposition to her motion for class certification. (Doc. No. 45). On December 3, 2018, the Midland parties filed their supplemental memorandum in opposition to Gilbert's motion for class certification. (Doc. No. 49).

         {¶8} On March 12, 2019, the trial court granted Gilbert's motion for class certification. (Doc. No. 50). First, the trial court concluded that the Supreme Court of Ohio's decision in Lingo does not prohibit it from considering Gilbert's claims. (Id.). The trial court noted that while Gilbert's claims "require[] [the] Court to determine whether a judgment is void, it does not require [the] Court to actually declare the judgment void." (Id.). It observed that "[t]he distinction is fine, but critical," and it concluded that "[e]quity would authorize [it to] require [the Midland parties] to pay for any proven damages that have arisen from collection actions taken pursuant to void judgments or to cease collection actions against the same." (Id.).

         {¶9} The trial court then found that Gilbert met all seven requirements of Civ.R. 23 with respect to both of her proposed classes and certified the classes. (Id.). The first class, the "Collection Suit Defense Class," is defined as:

[A]ll individuals who have been sued in Ohio by [the Midland parties] at any time through the present:
a. where [the Midland parties were] awarded a judgment or where the suit has not been dismissed;
b. where the lawsuit was filed in a county or municipal court jurisdiction where the defendant did not reside at the time of the filing and did not sign the underlying contract while a resident of that county or municipal and/or county [court] jurisdiction; and
c. where the lawsuit was filed in a municipal or county court and not in a court of common pleas; and
d. where the lawsuit was filed in a county or municipal court jurisdiction, where that jurisdiction was not a location where payment was required to be made.

(Id.). The definition of the second class, the "Unjust Enrichment Class," is identical to the definition of the "Collection Suit Defense Class" except that the "Unjust Enrichment Class" includes only "individuals who have been sued in Ohio by Midland from March 18, 2009 to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.