Opinion
Case No. 18-cv-2008
06-22-2020
Adia A. WASHINGTON, Plaintiff, v. WEINBERG MEDIATION GROUP, LLC, et al., Defendants.
Eric D. Coleman, Nathan C. Volheim, Sulaiman Law Group, Lombard, IL, Taxiarchis Hatzidimitriadis, Consumer Law Partners, Chicago, IL, for Plaintiff. Anthony J. Gingo, Michael J. Palumbo, Gingo Palumbo, Independence, OH, Brendan H. Little, Lippes Mathias Wexler Friedman, Buffalo, NY, for Defendants. Weinberg Mediation Group, LLC, Amherst, NY, pro se.
Eric D. Coleman, Nathan C. Volheim, Sulaiman Law Group, Lombard, IL, Taxiarchis Hatzidimitriadis, Consumer Law Partners, Chicago, IL, for Plaintiff.
Anthony J. Gingo, Michael J. Palumbo, Gingo Palumbo, Independence, OH, Brendan H. Little, Lippes Mathias Wexler Friedman, Buffalo, NY, for Defendants.
Weinberg Mediation Group, LLC, Amherst, NY, pro se.
ORDER
James G. Carr, Sr. U.S. District Judge
This case arises under the Fair Debt Collection Practices Act (FDCPA or the Act), 15 U.S.C. § 1692 et seq.
Plaintiff Adia Washington asserts that defendant JTM Capital Management, LLC ("JTM") is a debt collector and is vicariously liable for co-defendant Weinberg Mediation Group, LLC's violations of the Act. Weinberg Mediation Group (Weinberg), a debt collection agency, failed to answer plaintiff's complaint, resulting in default judgment for the plaintiff. (Doc. 16).
Pending is JTM's motion for summary judgment. (Doc. 19). Plaintiff opposed the motion (Doc. 24) and JTM filed a reply in support (Doc. 27).
For the reasons that follow, I grant defendant's motion.
Background
On July 19, 2018, plaintiff received a collection letter from Weinberg attempting to collect a purported debt owed to JTM. (Doc. 26, Exh. A, pgID 409). The letter identified Mid America Bank and Trust as the original lender and JTM as the current creditor. Id. Plaintiff also spoke with a Weinberg representative about the debt. (Doc. 26, pgID 407).
Plaintiff filed a complaint against Weinberg and JTM on August 31, 2018 alleging violations of the FDCPA, §§ 1692e and 1692g.
JTM buys debts, specializing in "delinquent account receivables management for a variety of industries." (Doc. 21, pgID 181). It purchases outstanding debts directly from the original creditors (Id. 180) and outsources the collection of those debts to third-party law firms and debt collectors. (Doc. 25, pgID 402). JTM's agreement with Weinberg, the third-party debt collector, required it to abide by all applicable laws, including the FDCPA, in its collection efforts. (Id. 403). JTM owns the debt and does not make telephone calls or send collection letters to debtors. (Id. 402).
Nonetheless, plaintiff claims that JTM is a debt collector under the FDCPA and is vicariously liable for Weinberg's violations of the Act. JTM argues that it is a creditor, and thus, not subject to the FDCPA.
Standard
Summary judgment is appropriate under Fed. R. Civ. P. 56 if the moving party shows that there are no genuine disputes of material fact and that the moving party is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
If the moving party meets its initial burden, the nonmoving party must show some competent evidence of a genuine dispute as to a material fact in order to defeat summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
I view the evidence in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In addition, I draw all reasonable inferences in favor of the nonmoving party, Hostettler v. College of Wooster , 895 F.3d 844, 852 (6th Cir. 2018), and accept the evidence of the nonmoving party as true. Eastman Kodak Co. v. Image Tech. Serv. , 504 U.S. 451, 456, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992).
Discussion
Congress enacted the FDCPA when it found "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors." 15 U.S.C. § 1692(a). The purpose of the Act is 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."
The Sixth Circuit has noted that the Act is "extraordinarily broad" and the court must enforce the Act as written, even when parties propose eminently sensible exceptions to its provisions. See Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir. 1992).
The FDCPA defines a creditor as "any person who offers or extends credit creating a debt or to whom a debt is owed. § 1692a(4) (emphasis supplied). The Act specifically excludes "any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another." Id.
The Act defines a debt collector as:
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.
The term includes any creditor who, in the process of collecting his own debts, uses any name other than his own to indicate that a third person is attempting to collect such debts. Id.
According to the Senate Report, 95-382, the Act's formal legislative history, Congress intended the term "debt collector" to cover "all third persons who regularly collect debts for others." S. Rep. 95-382, 1977 U.S.C.C.A.N. 1695 (Emphasis supplied).
The Act, moreover, expressly states that the term "debt collector" does not include "any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity ... concerns a debt which was not in default at the time it was obtained by such person." 15 U.S.C. § 1692a(6)(F)(iii).
The Sixth Circuit has found that the term "debt collector," as used in the Act, does not include creditors of the consumer. Montgomery v. Huntington Bank, 346 F.3d 693, 698 (6th Cir. 2003).
JTM asserts that it is a creditor, not a debt collector. Plaintiff does not claim JTM is not a creditor, but rather, argues that a creditor can simultaneously be a debt collector. Plaintiff cites to Tepper v. Amos Fin., LLC, 898 F.3d 364, 371 (3rd Cir. 2018) for support: "Suffice it to say that ... an entity that satisfies both [creditor and debt collector] is within the Act's reach."
This contention is directly contrary to binding Sixth Circuit precedent that holds that the terms "creditor" and "debt collector" are mutually exclusive as to a specific debt. See Bridge v. Ocwen Federal Bank, FSB, 681 F.3d 355, 359 (6th Cir. 2012).
Plaintiff urges me to reject this precedent and hold, as has the Third Circuit, that even if a person meets the statutory definition of "creditor" as an entity owed the debt, it may still qualify as a debt collector under the Act. Tepper, supra.
JTM acquired plaintiff's account from Mid-American Bank & Trust, the original creditor. The parties agree that 1) JTM purchases debt from original creditors; 2) JTM outsources collection efforts on those debts to third-party collection agencies and law firms; 3) JTM does not contact, speak to, or send letters to debtors; and 4) JTM requires that the third-party debt collector abide by the FDCPA.
Based on the plain language of the Act, JTM is a creditor—an entity to whom the debt is owed. As the owner of the debt that plaintiff owes, JTM cannot also be considered a debt collector with respect to that debt. Therefore, plaintiff is not able to establish that JTM is a debt collector and JTM is entitled to summary judgment as a matter of law.
Conclusion
Defendant JTM has shown that it deserves judgment as a matter of law.
It is, therefore, hereby
ORDERED THAT defendant's motion for summary judgment (Doc. 19) be, and the same hereby, is granted.
So ordered.