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Sebestyen v. Leikin, Ingber & Winters, P.C

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

March 27, 2015

CAROLYN A. SEBESTYEN, Plaintiff,
v.
LEIKIN, INGBER & WINTERS, P.C., and PAUL M. INGBER, Defendants.

OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND DENYING PLAINTIFF'S MOTION FOR CLASS CERTIFICATION WITHOUT PREJUDICE

PATRICK J. DUGGAN, District Judge.

Prompted by a debt collection notice she received, Plaintiff Carolyn A. Sebestyen filed this lawsuit under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p, against Defendants Leikin, Ingber & Winters, P.C. ("LIW") and Paul M. Ingber ("Ingber") (collectively, "Defendants") on December 20, 2013. In addition to seeking class relief, Plaintiff's Complaint requests statutory damages, as well as attorney's fees, costs, and expenses.

Less than two months after Plaintiff instituted the present action, Defendants made Plaintiff an offer of judgment pursuant to Federal Rule of Civil Procedure 68. Plaintiff did not accept the offer and subsequently filed a class certification motion pursuant to Rule 23. Approximately one month after Plaintiff filed her Rule 23 motion, Defendants filed a motion to dismiss under Rule 12(b)(1) or, in the alternative, a motion for summary judgment pursuant to Rule 56.[1] These two motions, which have been fully briefed and were the subject of a motion hearing on December 8, 2014, are presently before the Court.

For the reasons that follow, the Court concludes that Defendants' Rule 68 offer of judgment rendered this action moot. Accordingly, under O'Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567 (6th Cir. 2009), the Court shall enter judgment in Plaintiff's favor in accordance with the terms set forth in Defendants' offer, and dismiss the case as moot. The Court retains jurisdiction over the present dispute in the event the parties cannot agree on the costs and fees to be paid under the Rule 68 offer. Because Plaintiff's individual and class claims are moot, the Court denies Plaintiff's motion for class certification without prejudice.

I. FACTUAL AND PROCEDURAL BACKGROUND

LIW is a Michigan professional service corporation engaged in the business of collecting consumer debts. (Compl. ¶ 4.) Ingber is an attorney who regularly files debt collection lawsuits against consumers.[2] ( Id. ¶ 5.) On January 26, 2013, LIW sent Plaintiff a demand letter seeking to collect an alleged debt ("Notice").[3] ( Id. ¶ 13.) The Notice, which was signed by Ingber, states that Plaintiff owes a debt to William Beaumont Hospital in the amount of $6, 839.35.[4] ( Id. ¶¶ 14-15.)

The portion of the Notice to which Plaintiff objects provides: "This debt will be assumed to be valid unless you dispute the validity of the debt or any portion thereof, within 30 days after you receive this letter." (Notice, Defs.' Mot. Ex. A, ECF No. 15-1.) As Plaintiff alleges in her Complaint, this statement does not comport with the statutory requirement that a debt collection notice must contain "a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the by the debt collector. " (Compl. ¶ 20 (quoting 15 U.S.C. § 1692g(a)(3) (emphasis added)).)

The crux of Plaintiff's lawsuit is that the omission of the phrase "by the debt collector" renders the language susceptible to misinterpretation by the "least sophisticated consumer." See Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 592 (6th Cir. 2009). For instance, without the inclusion of the "by the debt collector" phrase, "it is possible that the consumer would not know that the debt collector is the only entity entitled to assume the validity of the debt, or that the collection is based on a temporary fiction that the debt is valid." (Pl.'s Resp. 8.)

As relief for the purported FDCPA violation, Plaintiff requests that the Court enter judgment in favor of Plaintiff and the putative class, and against LIW and Ingber, and seeks the following relief:

a. An Order certifying this class action lawsuit;
b. Statutory Damages pursuant to 15 U.S.C. § 1692k;
c. Attorney's fees, litigation expenses and costs of the instant suit; and
d. Such other or further relief as the Court deems proper.

(Compl.)

On February 14, 2014, Defendants served Plaintiff with an offer of judgment ("Offer") pursuant to Federal Rule of Civil Procedure 68. (2/14/14 Offer, Defs.' Mot. Ex. B, ECF No. 15-2.) This Offer "allows judgment to be taken against Defendants and in favor of Plaintiff on the following terms:"

1. Defendants shall pay Plaintiff the total amount of Two Thousand One and 00/100 Dollars ($2, 001.00) in full and final satisfaction of any and all ...

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