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Thebert v. Potestivo & Associates, P.C.

United States District Court, E.D. Michigan, Southern Division

March 10, 2003

TIMOTHY A. THEBERT, Plaintiff,
v.
POTESTIVO & ASSOCIATES, P.C., and BRIAN A. POTESTIVO, Defendants.

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS [12]

          LAURIE J. MICHELSON U.S. DISTRICT JUDGE.

         Defendant Potestivo & Associates, P.C. is a law firm that, among other things, collects debts. Potestivo sent Plaintiff Timothy Thebert a letter stating that it would be commencing foreclosure proceedings on his house. Because the letter did not break down the total amount owed, Thebert believes the letter violated the Fair Debt Collection Practices Act. After Thebert disputed the debt, Potestivo sent a verification letter. Because the verification letter also did not adequately break down the amount owed, Thebert believes that this letter also violated the FDCPA. Potestivo proceeded to foreclose and, as Michigan law requires, published a foreclosure notice in a county newspaper. But foreclosure is debt collection, and so Thebert believes that this too violated the FDCPA.

         Thebert has thus filed this lawsuit alleging that Potestivo violated the FDCPA and Michigan's analog in numerous ways. Potestivo responds that none of Thebert's claims are plausible and asks this Court to dismiss Thebert's (amended) complaint. The Court agrees in part with Potestivo. But the Court finds that Potestivo has not shown that Thebert's claims that it violated 15 U.S.C. § 1692c(b), § 1692e, § 1692f, and § 1692g(b) are implausible. Accordingly, the Court will grant in part and deny in part Potestivo's motion.

         I.

         A.

         As Potestivo seeks to dismiss Thebert's complaint under Federal Rule of Civil Procedure 12(b)(6), the Court presents as fact the non-conclusory allegations of the complaint. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). The following also relies on documents attached to the complaint. See Bassett v. NCAA, 528 F.3d 426, 430 (6th Cir. 2008).

         In 2003, Thebert borrowed $125, 000 from non-party Standard Federal Bank, N.A. (See R. 12, PID 558.) He secured the loan with a mortgage on his home. (See R. 12, PID 564.) At some point (the complaint does not say when), Fay Servicing began servicing the loan. (See R. 11, PID 491.)

         On October 28, 2016, Thebert received a letter from Potestivo. The letter and two other documents are key to the claims in this case. So the Court reproduces them in some detail. The October 28, 2016 letter states:

Dear Timothy A. Thebert
THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT. ANY INFORMATION WE OBTAIN WILL BE USED FOR COLLECTING A DEBT. IF THE DEBT WAS DISCHARGED IN A BANKRUPTCY PROCEEDING, THIS NOTICE IS NOT AN ATTEMPT TO COLLECT THAT DEBT.
Please be advised that this office has been retained by Fay Servicing to commence proceedings to foreclose the mortgage securing the debt. Under the terms of the mortgage, our client has elected to accelerate the total debt due and owing under the mortgage. As of the date of this letter, the total amount of the debt is: $115, 267.00. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount shown above, an adjustment may be necessary after we receive your check, in which event we will inform you before depositing the check. The amount due must be tendered via certified funds. For further information, including an updated amount, please call 248-853-4400.
Wilmington Savings Fund Society, FSB . . . is the creditor to whom the debt is owed. Fay Servicing is the servicer of the debt on behalf of Wilmington Savings Fund Society, FSB . . . . The mortgage loan payments are made to the servicer.
Unless you dispute the validity of the debt, or any portion thereof, within thirty (30) days after receipt of this letter, we will assume that the debt is valid. If you notify our office in writing within the 30-day period that the debt, or any portion thereof, is disputed, we will obtain verification of the debt . . . and a copy of such verification . . . will be mailed to you. . . . Upon your written notice of dispute within said period, we must cease collection efforts until verification is mailed to you.

(R. 11, PID 491-92 (emphasis added).) The Court will refer to this October 28, 2016 letter from Potestivo to Thebert as the “Foreclosure Commencement Letter.”

         On November 28, 2016, Thebert sent an email to Potestivo disputing the debt. In the email, Thebert informed Potestivo that he had made monthly payments of $900 “for [the] entire 16 months” that Fay had been involved, that, since August 2015, he had disputed the amount owed but was never provided an accounting, and that he had made the same requests to the prior creditor or servicers. (R. 14, PID 727-28.) Thebert also claimed, “ZERO missed payments!!!” (R. 14, PID 728.) He concluded the email to Potestivo as follows: “Please get ACCURATE information from Fay. . . Good luck!!!” (R. 14, PID 728.) (Although Thebert's email is not attached to the amended complaint, the Court will consider it as both parties urge the Court to do so and because it is arguably central to Thebert's claims.)

         In response to Thebert's email, Potestivo sent the second of three documents primarily at issue in this case. In particular, on December 9, 2016, Potestivo wrote the following letter to Thebert:

VERIFICATION OF DEBT
THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT. ANY INFORMATION WE OBTAIN WILL BE USED FOR COLLECTING A DEBT. IF THE DEBT WAS DISCHARGED IN A BANKRUPTCY PROCEDDING [sic], THIS NOTICE IS NOT AN ATTEMPT TO COLLECT THAT DEBT.
Dear Timothy A. Thebert:
Please find this letter as a response to your written dispute of the debt, dated November 28, 2016. This communication serves as verification of the debt pursuant to the Fair Debt Collection Practices Act §809(b). Following is information obtained by us from the creditor in verification of the debt.
Loan Number: [redacted]
Borrower/Loan Obligor: Timothy A. Thebert, a Single Person
Origination Dated: March 10, 2003 Original Loan Amount: $125, 000.00
Original Lender: Standard Federal Bank N.A.
Mortgaged Property Address: [redacted] Spoon Ave., Madison Heights, MI 48071
Mortgagors: Timothy A. Thebert, a Single Person Mortgagee: Standard Federal Bank, N.A.
Mortgagee Address: PO BOX 3703, Troy, MI 48007-9981
Assignee: Wilmington Savings Fund Society, FSB . . . .
Assignee Address: 500 Delaware Avenue, 11th Floor, Wilmington, Delaware Attached please find a copy of the Note evidencing this debt, Mortgage, Assignment of Mortgage, Proof of Service and Payment History. Your correspondence has also been provided to your mortgage servicer for further review. If you have documentation showing that all payments have been made please provide that information to our office. If you would like a reinstatement letter please feel free to contact our office.

(R. 11, PID 505-06 (emphasis added); see also R. 12, PID 583-608.) The referenced “Payment History” showed transactions associated with Thebert's loan from August 2015 through November 2016. (See R. 11, PID 507-12.) The payment history also provided that the “Current Principal Balance” is stated as “106, 777.03.” (R. 11, PID 507.) The Court will refer to Potestivo's December 9, 2016 letter to Thebert as the “Debt Verification Letter.”

         On November 29, 2016-after Thebert sent his email but before Potestivo responded- Potestivo posted a foreclosure notice on the door frame of Thebert's house. (Under Michigan law, mortgages can be foreclosed by advertisement, which, as its name suggests, is a non-judicial foreclosure where the mortgagee advertises the sale of the mortgaged property.) The notice stated:

FORECLOSURE NOTICE
THIS FIRM IS A DEBT COLLECTOR ATTEMPTING TO COLLECT A DEBT. ANY INFORMATION WE OBTAIN WILL BE USED FOR COLLECTING A DEBT. IF THE DEBT WAS DISCHARGED IN A BANKRUPTCY PROCEEDING, THIS NOTICE IS NOT AN ATTEMPT TO COLLECT THAT DEBT. . . .
ATTN PURCHASERS: This sale may be rescinded by the foreclosing mortgagee for any reason. . . .
MORTGAGE SALE - Default has been made in the conditions of a certain mortgage made by:
Timothy A. Thebert, a Single Person
to
Standard Federal Bank, N.A., Mortgagee, dated March 10, 2003 . . . . Said mortgage was assigned to: Wilmington Savings Fund Society, FSB, . . . on which mortgage there is claimed to be due at the date hereof the sum of One Hundred Fifteen Thousand Two Hundred Sixty-Seven and No Cents ($115, 267.00) including interest 2.75% per annum.
Under the power of sale contained in said mortgage and the statute in such case made and provided, notice is hereby given that said mortgage will be foreclosed by a sale of the mortgaged premises, or some part of them, at public vendue, [sic] the Circuit ...

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