The opinion of the court was delivered by: Gerald E. Rosen United States District Judge
OPINION AND ORDER GRANTING, IN PART, AND DENYING, IN PART, ROBERT REZNICK'S AND DUE PROCESS OF MICHIGAN'S MOTION FOR SUMMARY JUDGMENT
At a session of said Court, held in the U.S. Courthouse, Detroit, Michigan on September 30, 2008 PRESENT: Honorable Gerald E. Rosen United States District Judge
This is a multi-count action brought by Plaintiffs Ann Rodriguez and her 21-year-old daughter, Patricia Adams, seeking damages for alleged tortious acts of process servers in executing an Order to Seize Property issued by the 71-A District Court in Lapeer County, Michigan. The matter is presently before the Court on Defendants Robert Reznick's and Due Process of Michigan, Inc.'s Motion for Summary Judgment [Dkt. # 95]. There is also before the Court a motion filed by Plaintiffs complaining about the conduct of Defendant Robert Reznick and his attorneys during the course of discovery in this matter, which the Court construes as a motion for discovery sanctions.*fn1
Having reviewed and considered the parties' briefs and supporting evidence, the Court has determined that oral argument is not necessary. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(e)(2), this matter will be decided on the briefs. This Opinion and Order sets forth the Court's ruling.
II. PERTINENT FACTS PLAINTIFF ADAMS' DEFAULT ON HER CAR LOAN AND THE PROCEEDINGS TO COLLECT ON HER INDEBTEDNESS
Plaintiff Patricia Adams financed the purchase of a used car through Credit Acceptance Corporation ("CAC"). The car allegedly broke down shortly after the purchase and Plaintiff Adams ceased making payments on the note.
CAC thereafter retained the law firm of Weber & Olcese, PLC, and the firm filed suit against Plaintiff Adams to collect on the defaulted note in the 71-A District Court in Lapeer, Michigan on January 11, 2006. Adams did not answer the complaint and Weber & Olcese properly filed an application for default judgment and obtained a judgment on March 1, 2006.*fn2 On April 11 and May 10, 2006, the firm filed two requests for periodic garnishment that were issued and served on Plaintiff Adams' employers. The judgment not being satisfied by the garnishments, Weber & Olcese submitted a Request for Order to Seize Property (a/k/a "writ of execution") to the 71-A District Court. The writ of execution was filed and signed by the 71-A District Court Judge on August 17, 2006.
Weber & Olcese made the request for Order to Seize Property on a standard Michigan State Court Administrative Office ("SCAO") form. [See Defendants' Ex. 3.] Carol Anthony, a former Weber & Olcese employee, testified that she was the person who prepared the Request for Order to Seize Property form. Below the blank provided on the form for "Order to be Served By" is printed "Court officer/Deputy Sheriff." Ms. Anthony testified that although Weber & Olcese frequently utilized the services of Defendant Robert Reznick to execute seizure orders, she did not put his name in the "Order to be Served By" space on the form in this case. Instead, she circled "Deputy Sheriff" and also hand wrote "Deputy Sheriff" in the space provided. Ms. Anthony explained that while some courts are "open" courts and allow parties requesting the issuance of an Order to Seize Property to select their process servers themselves and fill in the name of the person they want to serve the Order, the 71-A District Court in Lapeer is a "closed" court and does not permit this.*fn3
DEFENDANTS McKENNA AND REZNICK'S APPOINTMENT AS COURT OFFICERS TO EXECUTE JUDGMENTS
Until some time in 2003 or 2004, the 71-A District Court required that all writs of execution be served by Deputy Sheriffs. [See Deposition of Robert McKenna, Defendants' Ex. 5, p. 70]. Hence, it was not uncommon for lawyers seeking writs of execution in Lapeer County to indicate that the order was to be served by a deputy sheriff. Id. at p. 74. The Sheriff's Department, however, decided some time in 2003 or 2004 that, due to lack of manpower, it was no longer able to do seizures or evictions. [Deposition of Gregory Wise, Plaintiff's Ex. K, p. 48.] The Lapeer District Court, therefore, decided to "privatize" the function, and took advantage of the Michigan Statutes and Court Rules allowing the court to appoint its own "Court Officers."*fn4 Id.; see also McKenna Dep. p. 70.
According to Defendant Robert McKenna, when Lapeer decided to privatize, he and Robert Reznick arranged a meeting with the Lapeer County Chief Judge, the Honorable Nick O. Holowka, whom McKenna and Reznick knew from Judge Holowka's time as a county prosecutor. (At that time, McKenna was a Michigan State Police Trooper and Reznick was a Lapeer County Deputy Sheriff.) They told the Judge that they were interested in applying to be Court Officers and Judge Holowka agreed to appoint them. [McKenna Dep. pp. 72-73.] They each obtained and presented a bond to the Court, signed an "Independent Contractor Agreement for Court Officer," see Plaintiffs' Ex. N, and they were appointed as Court Officers for the 71-A District Court approximately three weeks later. Id. at p. 73.
As provided in his Court Officer Agreement, McKenna received no salary or wages from the court. For his services, he was paid only the statutory fees as provided in M.C.L. §§ 552.23; 600.2555; and 600.2559. At the time, these statutes provided for payment of $27.00,*fn5 plus mileage, plus the actual and reasonable expense for seizing and storing any property seized, and a fixed percentage of any monetary seizure or the proceeds of any sale of property -- 7% of the first $5,000.00 and 3% of any amount exceeding the first $5,000.00.
McKenna testified that it was his understanding that in 2006, the 71-A District Court used a "rotation" system for assignment of seizure orders to the Court Officers for execution.*fn6 His own personal practice was to either personally pick up, or have his sonin-law, Defendant Kenneth Patterson, a sales person who was in Lapeer three or four times a day, pick up orders from the court for him to execute, and bring them to his home in Davison, Michigan. Id. at p. 109; see also Patterson Dep., Defendants' Ex. 6, pp. 34- 37.*fn7 McKenna would then endorse the orders and proceed with execution. One of the Orders Patterson picked up and delivered to McKenna was the Order to Seize Property to satisfy CAC's Judgment against Patricia Adams.*fn8
SERVICE OF THE ORDER TO SEIZE PROPERTY UPON PLAINTIFF ADAMS
At 8:30 p.m. on September 5, 2006, Defendants McKenna and Patterson served the Order to Seize Property on Patricia Adams at her home in North Branch, Michigan.*fn9
Ms. Adams claims that Defendants announced that they were sheriff's deputies and that they wanted to talk to her inside the house. [Adams' 11/1/07Affidavit, Plaintiffs' Ex. 3, ¶¶ 4 and 5.]*fn10 She alleges that, once inside the house, McKenna showed her the Order to Seize Property, id. ¶ 7, demanded money, and threatened to take all of the personal property in the house to satisfy her default judgment. Id. ¶¶ 8, 10.*fn11 Adams also claims that McKenna told her that "their boss, Rob Reznick, had instructed them to get some money to satisfy the debt." Id. ¶ 8. (As discussed below, McKenna and Reznick both deny that Reznick was McKenna's "boss." They both, in fact, testified, that Reznick played no part in executing the seizure order at issue in this case.) She further alleges that she and her three siblings were ordered to remain in the kitchen area of the house, and that McKenna and Patterson threatened to have them arrested if she did not give them some money. Id. ¶ 14.
Ultimately, Adams' 18-year-old boyfriend, Jacob Schlaud, appeared and gave Adams $200 he allegedly borrowed from his family to give to McKenna and Patterson.
Id. ¶ 18. Plaintiff claims that McKenna informed her that $200 was not enough. Id. at ¶ 18. Mrs. Rodriguez, who was not present when McKenna and Patterson had arrived at the house, then returned home and allegedly offered to give McKenna a post-dated check. Id. at 19. According to Adams, McKenna said he would "have to check with his boss, Mr. Reznick, before he could accept the offer of payment by post-dated check." Id. at 20. McKenna then allegedly called Reznick who supposedly instructed him to demand that the post-dated check be in the amount of $400. (As indicated, both McKenna and Reznick deny any participation on Reznick's part and further deny that any telephone call was ever made to him regarding the post-dated check payment of $400 or anything else concerning the execution. See McKenna Dep., p. 236.) Mrs. Rodriguez complied and made out a check dated the next day for $400, and gave it to the men. Id. at 22. McKenna, in turn, gave Adams a Receipt for Execution Against Property indicating the payment of $600 -- $400 by check and $200 in cash. See Plaintiffs' Ex. P. Ms. Adams also agreed in writing to make additional bi-weekly payments of $150 starting September 19, 2006 until the total Judgment is paid in full. Id.*fn12 McKenna and Patterson then left the house. Id. Later McKenna filled out, signed and subsequently filed with the court an SCAO Partial Payment Receipt form. [See Defendants' Ex. 8.]*fn13
DUE PROCESS OF MICHIGAN, INC.
Due Process of Michigan, Inc. ("DPM") was incorporated in 1993. Robert Reznick is listed as the company's registered agent in the records on file with the Michigan Department of Labor, Corporation Division. [Available on WESTLAW, Michigan Corporate Records & Business Registration (CORP-MI) Database.] Jeffrey Weber testified that he believed Mr. Reznick to be "an owner of Due Process." [Weber Dep., Plaintiffs' Ex. C, p. 101.] Ken Patterson testified that he knows DPM to be "Rob Reznick's company" and that it is "his business he runs for doing his court work." [Patterson Dep., Defendants' Ex. 6, p. 20.]
Robert McKenna's Independent Contractor Agreement with the 71-A District Court indicates that McKenna was "doing business as Due Process of Michigan, Inc." at the time of his appointment as a Court Officer. [See Plaintiffs' Ex. N.]*fn14 The Agreement lists the following as McKenna's business and home addresses and phone numbers:
(business address) P.O. Box 4148 (city, state, zip) Flint, MI 48504-0148 (business) 810-430-1111 (pager) 586-470-1335 (business fax) 810-530-3333 (home address) 5184 Oakhill Dr. (city, state, zip) Swartz Creek, MI 48473 (tax ID#) 38-3196050 [Plaintiff's Ex. N.] The Flint Post Office Box address listed as McKenna's business address on his Court Officer Agreement, however, is actually the address Robert Reznick uses for "Due Process of Michigan." [See Reznick Dep., Defendants' Ex. 10, pp. 186-87.] The business phone number is also that of DPM. [See Plaintiffs' Ex. P.] The pager number listed is Robert Reznick's pager number. [See Plaintiffs' Ex. P; see also Plaintiffs' Motion for Sanctions, Ex. 11.] As for the home address, McKenna testified that he lives in Davison, Michigan, not Swartz Creek. [See McKenna Dep., Defendants' Ex. 5, p. 109.] "5184 Oakhill Drive, Swartz Creek, Michigan" is Reznick's address. [See Corporate record of Due Process of Michigan, Inc., available on WESTLAW, Michigan Corporate Records & Business Registration (CORP-MI) Database.]
Gregory Wise testified that three Lapeer 71-A Court Officers are listed on the Court's approved Court Officer list under the heading "Due Process of Michigan" --Robert McKenna, Robert Reznick and Eric King. [Wise Dep., Pl.'s Mtn. to Join Defendants, Ex. 1, p. 23.] Wise testified,
I believe they all work for or under Due Process of Michigan. That's their business name. I don't know whether it is incorporated [or a] partnership , but that's the business name they use. . . .
* * * . . . [M]y understanding was that they do business as Due Process or are employees of Due Process, but the business name Due Process includes the three of them as individuals.
Wise also testified that all of the orders to seize property which may be assigned to either McKenna, Reznick or King are placed in a mailbox in the lobby of the first floor of the courthouse marked "Due Process." Id. at 42. Ken Patterson testified that the box in the Lapeer District Court from which he would pick up writs of execution for McKenna was labeled "Due Process." [Patterson Dep., p. 37.]
Notwithstanding the d/b/a reference in the Court Officer Agreement, the use of DPM's and Reznick's addresses and phone numbers, and the label on the mailbox in the 71-A District Court, Mr. McKenna testified he was not an employee of DPM or Robert Reznick.*fn15
Although he denied having any employer-employee relationship with DPM, McKenna did acknowledge that he had "a working relationship with Mr. Reznick," and admitted that he would on occasion "help [Reznick] out" with his [Reznick's] executions. [McKenna Dep., p. 148, 64.] He also explained that he routinely engaged Reznick's services for the paperwork entailed with his [McKenna's] executions,
A: He [Reznick]'s been in the business, he's established as far as record keeping, the bookkeeping and everything else. So what happens is I take the paperwork, I give it to Mr. Reznick, Mr. Reznick takes [the money I collected] and signs -- or makes out the check [for the amount of money I collected], sends it to the plaintiff's attorney, he keeps the paperwork, and then I pay him for those services.
Q: So on orders to seize property -- and I think you testified Mr.
Reznick never helps you to execute orders to seize property that have been assigned to you?
Q: However, when you take the money, you turn over 60 percent of the money to Mr. Reznick to do bookkeeping?
A: Forty percent to do bookkeeping.
Q: You give him 40 percent to do bookkeeping?
A: And to track payments. That's a big job right there, tracking payments.
Q: And to track payments. How does Mr. Reznick track payments?
A: The people that we do the writs on, if we put them on a payment plan, they are given -- they have to make bi-weekly payments of whatever we agree upon. Those bi-weekly payments are mailed to Rob Reznick at his post office box. He takes them, he logs them in, he sends the money on to the attorney and he keeps all [the records.] [McKenna Dep., pp. 148-49.]
Robert Reznick's testimony is consistent with McKenna's: A: I do the accounting and paperwork for Mr. McKenna when he does writs of execution. We run the money through Due Process of Michigan, send the checks to the plaintiff's attorney, and I am compensated for that.
Q: How much are you compensated for that?
A: Approximately 40 percent of the costs.
Q: And when you say 40 percent of the costs, what do you mean?
A: Mr. McKenna fills out a receipt on a writ of execution and fills in what the costs are, the service fee, the mileage fee, the percentage, whatever it was, the man hours, whatever additional expenses there are, and then they pay themselves out of that writ and then they turn the plaintiff's money and the 40 percent, what is left out of the costs, over to me. [Reznick Dep., Defendants' Ex. 10, pp. 56-57.]
Reznick testified that he provides bookkeeping and payment tracking services for a number of Court Officers and, in return, as with the arrangement with McKenna, he receives from them 40 percent of the statutory percentage. [Reznick Dep., Plaintiffs' Ex. H, pp. 160-162.]
On May 24, 2007, Plaintiffs Ann Rodriguez and Patricia Adams filed a 15-Count Verified Complaint for damages in the 71-A District Court in Lapeer, Michigan naming as party-defendants, Credit Acceptance Corporation, the financers of the car purchased by Plaintiff Adams; Weber & Olcese, PLC, the law firm retained by CAC;*fn16 Due Process of Michigan, Inc. and its owner, Robert J. Reznick; and Robert McKenna and Ken Patterson.*fn17 The case was timely removed to this Court on federal question grounds on June 15, 2007.
Plaintiffs allege in their Complaint that Ms. Rodriguez, Ms. Adams, and their entire family were "severely traumatized" by the conduct of Mr. McKenna and Mr. Patterson on September 5, 2006. Specifically, Plaintiffs complain that McKenna and Patterson "harassed, abused and oppressed" them in executing the Order the Seize Property. Plaintiffs allege that McKenna and Patterson "gained entry into the Rodriguez home by trickery and deceit by falsely causing Adams to believe that they were Sheriff's deputies on law enforcement business, threatened to confiscate furniture belonging to the non-debtor, Rodriguez, refused to leave the premises despite numerous requests to do so, and extorted money from non-debtors, Rodriguez and Schlaud, as a condition of leaving the premises and not wrongfully confiscating Rodriguez's personal property." [Second Amended Complaint, ¶ 50.] Plaintiffs further allege that Reznick, on behalf of Due Process, sent McKenna and Patterson to execute the Order to Seize as Due Process.
As theories of recovery, Plaintiffs allege a claim of violation of their civil rights under 42 U.S.C. § 1983 against all of the defendants (Count I); a claim of violation of the Michigan Consumer Protection Act, against all defendants (Count III);*fn18 claims of conspiracy in violation of 42 U.S.C. § 1985 (Count IV) and in violation of state law (Count V); state common law claims of trespass (Count VI), fraud (Count VII), abuse of process (Count VIII), false imprisonment (Count IX), intentional inflection of emotional distress (Count X), intrusion (Count XI), conversion of money (Count XII), and extortion and threats (Count XIII); violation of the Michigan Occupational Code (Count XIV); and violation of the Michigan Debt Collection Practices Act (Count XV). All of these state law claims in Counts III, and V-XV are asserted "Defendants, in their individual and representative capacities," collectively.
Defendants Robert Reznick and Due Process of Michigan now move for summary judgment on all of Plaintiffs' claims against them.
A. STANDARDS APPLICABLE TO MOTIONS FOR ...