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Lyngklip v. Credit Card Services

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

May 1, 2018

IAN LYNGKLIP, Plaintiff,
v.
CREDIT CARD SERVICES, JOSH DOE, EDUCARE CENTER SERVICES, EDUCATION MENTORING LLC, TAKEDOWN CONSULTING INC., ROSEMARY K. WANLASS, GUY G. GRITTON, and JONATHON GATES, Defendants.

          OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR VOLUNTARY CERTAIN DEFENDANTS, AND DISMISSING AS MOOT DEFENDANTS' MOTIONS TO DISMISS OR FOR SUMMARY JUDGMENT

          DAVID M. LAWSON United States District Judge

         Plaintiff Ian Lyngklip, an active consumers' rights attorney, has filed this case in his own name against several defendants for violating the federal Telephone Consumer Protection Act and its state law analog. Defendants Education Mentoring, Takedown Consulting, Rosemary K. Wanlass, and Guy G. Gritton responded with a motion to dismiss or for summary judgment, and followed that with a threatened motion for sanctions under Federal Rule of Civil Procedure 11. That apparently provoked the plaintiff's motion to voluntarily dismiss those defendants without prejudice. Those defendants oppose that motion, insisting that their motion to dismiss be decided and the case be dismissed with prejudice. They also want the plaintiff to pay their costs and attorney's fees, which amount to nearly $9, 000.

         There is one thing the parties agree on: these defendants should be dismissed from the case, at least for now. The defendants insist that the plaintiff's dismissal request should come at a price, because his actions have cost them dearly. But the account of the interactions between the plaintiff's attorney and the defendants' lawyer, set out below, shows that the plaintiff has acted quite reasonably; the authors of the bloated bill for attorney's fees are the defendants themselves, or perhaps their own attorney. The plaintiff may have the dismissal he seeks, and the defendants' requests for fees and costs will be denied. The defendants' motions to dismiss are moot.

         I.

         According to the amended complaint, on several occasions between 2015 and July 2017, Lyngklip received automatically-dialed calls from “Credit Card Services, ” a financial consulting service owned by Educare Center Services. The calls came to his personal cell phone from several phone numbers that disguised Credit Card Services's source phone number. Those calls conveyed a pre-recorded message about credit card rate reduction. Lyngklip answered some of those calls and spoke with agents at Credit Card Services in an apparent attempt to obtain information on the company and its operations.

         At some point during the time frame alleged, defendant Jonathon Gates, a senior financial advisor at Credit Card Services, provided the plaintiff with his department phone number: 866-456-1676. That phone number is associated with defendant Education Mentoring LLC, of which defendant Takedown Consulting, Inc. is a member. Defendant Rosemary Wanlass is the registered agent, member, and incorporator of Education Mentoring LLC, and defendant Guy Gritton is the registered agent, officer, incorporator, and director of Takedown Consulting. Other than alleging that Educare Center Services directs consumers to call phone number 866-456-1676 to speak to a senior financial advisor and that 866-456-1676 is the phone number for Education Mentoring LLC, there are no allegations in the amended complaint that directly pertain to defendants Education Mentoring LLC, Takedown Consulting, Inc., Wanlass, or Gritton.

         Lyngklip apparently conducted basic internet searches to link Education Mentoring to the 866-456-1676 number. The plaintiff's attorney, Sylvia Bolos, explained in her declaration that the Better Business Bureau website listed that number under Education Mentoring LLC's contact information. She also learned that the number was “active” and maintained by service provider VOIP Innovations. Bolos stated that she could not obtain information for VOIP without a subpoena.

         Attorney Marc Jerabek filed an appearance for defendants Education Mentoring, Takedown Consulting, Wanlass, and Gritton on November 1, 2017; the plaintiff agreed with him the next day to enlarge their response time. On November 7, 2017, Jerabek sent Bolos an email requesting that the plaintiff voluntarily dismiss the case against his clients with prejudice based on the absence of any factual allegations directed at them. The email noted that Jerabek was prepared to have his clients sign an affidavit that stated, among other information, that those defendants have not used the suspect phone number since Education Mentoring ceased business operations in 2014. Jerabek sent a follow-up email on November 12, asking if the plaintiff had any facts to support his claims against Jerabek's clients, and if not, requesting that the complaint be dismissed promptly.

         On November 13, Bolos responded that she would discuss the defendants' request with her client. She also asked if the defendants would sign a declaration and produce documents showing that they dissolved Education Mentoring and Takedown Consulting. Jerabek confirmed that his clients would sign such an affidavit, but he was not sure that any documentation of the dissolution existed. On November 15, Jerabek stated in an email that his clients were unsure whether the businesses were formally dissolved, and that it was possible that they merely did not pursue renewal of their registrations with the state. Jerabek once again asked Bolos whether Lyngklip would dismiss his clients based on an affidavit alone. The email indicated that the defendants would move forward with a motion under Rule 11.

         On November 28, Bolos responded via email to Jerabek, seeking any documentation of ceased operations that might verify the defendants' forthcoming affidavit. Bolos asked if the defendants had account closing documents from the telephone carrier to support their position that they have not used the phone number since 2014. In the event the defendants did not possess such documentation, Bolos requested a stipulation to subpoena records from the telephone carrier. In his reply email, Jerabek questioned the need for discovery, since no allegations in the complaint contradicted the defendants' position or applied to the defendants. He explained that his clients would not consent to discovery outside of the normal course in a federal suit.

         Apparently frustrated, Bolos reiterated her request for a stipulation to subpoena the telephone carrier's records, since the defendants were reluctant to furnish corporate dissolution paperwork or other documents that support their position. She noted that this solution should be appealing to the defendants, as the plaintiff would be doing the work to prove their defense. Bolos stated, “I'm willing to run this down, but I need more . . . . [W]hat support do your clients have?” She also asked for any suggestions that would allow both attorneys to meet their duties to their respective clients. That same day, the defendants sent Bolos their affidavit, which disclaimed their association with the subject telephone number and any of Credit Card Services's operations. The affidavit stated that Education Mentoring ceased business operations on March 24, 2014, and Takedown Consulting's registration with the State of Utah expired on June 27, 2013. It also noted that the defendants did not know who gained control of the phone number after they ceased operations. The affidavit did not include any supporting documentation.

         The attorneys apparently held a telephone conference on November 29. In an email memorializing their call, Bolos stated that she believed the amended complaint sufficiently alleged all elements of the federal and state claims, and sought Jerabek's feedback so that the plaintiff could file an amended pleading if necessary. Bolos also explained that she could not ethically recommend that her client dismiss the complaint against the defendants based on the affidavit alone. She noted that she did not want the defendants to incur further expenses defending this suit if they in fact were not proper parties, and suggested that in the time the defendants had to file a responsive pleading, the defendants should either stipulate to a subpoena to the telephone carrier, at the plaintiff's expense, or produce documents that establish the date on which the defendants terminated their account with the telephone carrier.

         Sometime thereafter, the attorneys agreed to draft a joint status report. On December 14 - a week after the defendants' responsive pleading was due - Jerabek emailed his revisions to their status report and represented that he would file it the next day. The email also stated that his clients were in the process of seeking documents from the telephone company. Bolos subsequently gave her consent to file the report. But instead, on December 15, the defendants filed their motion to dismiss and for summary judgment.

         On December 21, Jerabek's secretary electronically served on Bolos the defendants' motion for sanctions under Rule 11. The motion was not filed with the Court.

         On January 4, 2018, Bolos emailed Jerabek a proposed stipulated order of dismissal, which she believed would dismiss his clients from the lawsuit, moot their motion to dismiss, and moot their proposed motion for sanctions. Jerabek evidently did not respond, prompting a follow-up email from Bolos on January 5 with the same proposal. Jerabek responded to that email, explaining that he had not heard from his clients, but presumed that they would not agree to dismissal without prejudice and without attorney's fees. Bolos replied that dismissal without prejudice at this stage of the proceedings is common practice, and that by suggesting several ways of verifying that the defendants are no longer associated with the subject phone number, the ...


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