United States District Court, W.D. Michigan, Northern Division
John H. Underhill, Plaintiff,
Stuart A. Best, Gary D. Popovits, & Brandt, Pezzetti, VErmetten & Popovits, P.C., Defendants.
L. MALONEY UNITED STATES DISTRICT JUDGE
damage is no joke-in this case, a faulty sump pump spawned a
$20, 000 insurance claim, an interpleader suit brought in
state court, and this suit for violation of the Fair Debt
Collection Practices Act.
John Underhill is a consumer and homeowner, and he suffered
water damage to his basement. Luckily, his homeowner's
insurance policy covered the damage, and his insurer issued a
check made out to Underhill and his mortgagor, Soo Co-Op
Credit Union. Underhill endorsed the check and deposited it
with Soo Co-Op.
selected an entity called Lechner Construction to perform the
necessary repairs to his basement. However, Underhill asserts
that Lechner Construction did not perform as agreed, so he
chose to terminate the arrangement, and he did not have the
company “reconstruct” the basement. After that,
he says that he agreed with Lechner Construction for the
payment of a lesser amount for its already-performed work.
9, 2017, Underhill told Soo Co-Op to issue a cashier's
check to Lechner Construction for $17, 135.96 to pay for the
repairs. At some point in this process, Underhill also called
Soo Co-Op and told it to apply a portion of the insurance
proceeds as his July mortgage payment.
cashier's check never made it to Lechner
Construction's account. Mark Lechner signed an affidavit
averring that the check had been fraudulently signed over to
Underhill and that Lechner Construction had never been paid
for any of its work. The company also refused to execute a
waiver for its lien on Underhill's home. Underhill
asserts that Lechner Construction was not licensed and
insured pursuant to Michigan law, so it was not entitled to
any proceeds for its work.
of going to Lechner Construction, the check was deposited in
Underhill's account at mBank. But as a result of the
alleged forgery, mBank reversed the deposit and issued a
check back to Soo Co-Op Credit union and placed a
stop-payment on the check. The full amount of the check was
no longer in Underhill's account, so mBank withdrew what
it could from Underhill's account ($6, 063.22) and
charged him for the remaining $11, 072.74.
taking these steps, mBank filed an interpleader complaint in
state court, naming Underhill, Lechner Construction, and Soo
Co-Op as defendants. Essentially, mBank did not know who owed
what, and it wanted the court to resolve the issue.
Co-Op retained Defendant Stuart Best to represent it in
resolving issues arising out of Underhill's insurance
claim, including the interpleader action. In that capacity,
Best allegedly called Underhill once and wrote two letters to
him that form the basis for this Fair Debt Collection
letter dated July 14, 2017, Best wrote to Underhill to advise
him that Soo Co-Op had retained him. He informed Underhill of
the circumstances leading to his retention-as has been
summarized above. And Best informed Underhill that the
remaining funds in escrow at Soo Co-Op would not be applied
as a payment on his mortgage because of the outstanding
issues in the interpleader suit. Best also wrote that the
funds would remain in escrow until a full waiver of lien and
completion certificate was issued by Lechner Construction.
Best concluded the letter by informing Underhill that,
because the escrow funds could not be used as a mortgage
payment, his July payment was past due. Best closed the
letter by indicating that Underhill could expect Soo Co-Op to
continue to communicate with him about his mortgage payments,
but that “any other communication regarding this matter
is to be directed to me. I will address all issues as to the
check insurance proceeds as well as the release and waver
[sic] of the lien.” Best wrote a second letter to
Underhill on August 31, 2017, again addressing the funds
remaining in escrow at Soo Co-Op. This time, Best wrote to
inform Underhill that the amount of money that did not
pertain to Lechner's repair bill or the previous
attempted mortgage payment was considered insurance proceeds
relating to Underhill's loss of personal property. Best
instructed Underhill to complete an attached form releasing
Soo Co-Op from liability for releasing the funds and
indicated that the funds would be released upon its receipt.
now brings claims against Best under the Fair Debt Collection
Practices Act. He alleges Best violated the Act in the
(A) Claiming that the Plaintiff is indebted to the credit
union in the amount of the check attached as ex.
"A", in violation of 15 USC §1692e(2)(A), for
falsely representing the "character",
"amount" and/or "legal status" of a debt
because there is no "debt" because the credit union
has, at most, a security interest to protect,
"Lechner" cannot claim it/he/she is owed any money
as a matter of law AND there cannot be a "debt"
arising out of the Plaintiff's own insurance proceeds AND
the credit union does not have legal standing to even be
involved in a dispute between the Plaintiff and
"Lechner" because "Lechner" does not
exist as ANY legal entity;
(B) Falsely claiming that the Plaintiff committed a crime or
other conduct, based simply on the bald allegations of a 3rd
party, simply to disgrace the Plaintiff, in ...