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Roe v. Roosen, Varchetti & Oliver, PLLC

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

June 19, 2019

ANGELA D. ROE, Plaintiff,
ROOSEN, VARCHETTI & OLIVER, PLLC, et al., Defendants.



         Plaintiff Angela Roe brought this suit against Defendants Roosen, Varchetti & Oliver, PLLC, (“Roosen”) and Credit Acceptance Corporation (“Credit Acceptance”) for submitting a writ of garnishment to her employer, which included the social security number of the actual debtor who shared her same name, in alleged violation of the Fair Debt Collection Practices Act (“FDCPA”) and under Michigan law. Now before the court is Plaintiff's motion to amend her Complaint. Also pending is the matter of whether this action should be dismissed for Plaintiff's lack of standing which has been thoroughly briefed. For the reasons set forth below, this court has Article III subject matter jurisdiction over the First Amended Complaint, Plaintiff's motion to amend (Doc. 15) shall be GRANTED IN PART and DENIED IN PART such that Plaintiff may proceed with all claims except for her 15 U.S.C. § 1692d claim.

         I. Factual Background

         Roosen is a collection agency, and Credit Acceptance is an auto finance company which provides automobile loans. Credit Acceptance obtained a judgment against a debtor other than the Plaintiff with the same name of Angela Roe. On October 9, 2018, Defendants filed a request for a writ of garnishment in Michigan's 91st Judicial District. The garnishee was identified as National Realty Centers, Inc. (“National Realty”). Plaintiff works for National Realty as a real estate agent on a commission basis. The writ was served on National Realty on October 30, 2018. National Realty sent a copy of its garnishee disclosure form to Plaintiff on October 31, 2018. According to Plaintiff, receipt of the garnishee disclosure form caused her to be extremely confused and emotionally distressed. She tried to speak to Defendants about the debt, but when she could not provide the correct verifying information, namely the social security number, they would not speak to her.

         On November 13, 2018, Plaintiff filed this lawsuit. One week before the suit was filed, on November 6, 2018, her employer learned that Plaintiff was not the debtor named Angela Roe identified in the writ, and submitted an amended garnishee disclosure form to Defendants. Plaintiff's wages were never garnished. Plaintiff did not learn of the amended garnishee disclosure form until February 25, 2019. Plaintiff alleges she refrained from selling real estate during this time period for fear her wages would be garnished.

         Plaintiff's original Complaint alleges that Defendants violated 15 U.S.C. §§ 1692e and 1692f, and Michigan's Occupational Code, M.C.L. § 339.915(f)(ii). In her First Amended Complaint, Plaintiff pleads these same FDCPA claims, but also seeks to add claims for alleged violations of § 1692c(b) and § 1692d. Plaintiff also seeks to add claims under the Michigan Collection Practices Act, M.C.L. §§ 445.252(e)(i)(n)(q). In opposition to Plaintiff's motion to amend, Defendants argue all of the FDCPA claims should be dismissed for failure to state a claim. For the reasons set forth below, Plaintiff's motion to amend shall be granted in part as to §§ 1692e, 1692f and 1692d and denied in part and Plaintiff's claim under § 1692d. The parties have not addressed the supplemental state law claims; thus, the court does not do so either.

         II. Analysis

         A. Article III Standing

         As a threshold matter, the court must determine whether Plaintiff has Article III standing to bring this action. Standing requires three elements. “First, the plaintiff must have suffered an injury in fact - an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Macy v. GC Servs. Ltd. P'ship, 897 F.3d 747, 752 (6th Cir. 2018) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992)). “Second, there must be a causal connection between the injury and the conduct complained of - the injury has to be fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court.” Id. (quoting Lujan, 504 U.S. at 560-610). “Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Id. (quoting Lujan, 504 U.S. at 561). Also, a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Spokeo. Inc. v. Robins, 136 S.Ct. 1540, 1549 (2016).

         In assessing whether Plaintiff has Article III standing, the court is mindful that the Sixth Circuit has determined that the FDCPA is an extraordinarily broad statute. Currier v. First Resolution Inv. Corp., 762 F.3d 529, 533 (6th Cir. 2014). Through the enactment of the FDCPA, “Congress addressed itself to what it considered to be a widespread problem, and to remedy that problem it crafted a broad statute.” Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir. 1992). The Sixth Circuit has noted that the FDCPA should be applied broadly according to its terms. Bridge v. Ocwen Fed. Bank, FSB, 681 F.3d 355, 362 (6th Cir. 2012). Defendants argue that the FDCPA was designed to address solely “abusive” debt collection practices, and is not meant to address cases of mistaken identity as is the case here. But the legislative history of the FDCPA reveals that Congress was concerned with cases of mistaken identity and debt collectors trying to recover from the wrong persons. Specifically, a Senate Report states that the purpose of the Act's debt verification is to “eliminate the recurring problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.” S. Rpt. 95-382 at 4 reprinted in 1977 U.S.C.C.A.N. 1695, 1699. A House report noted Congressional intent to regulate collection activities based on either “mistaken identity or mistaken facts.” H.R.REP. No. 131, at 8.

         Defendants rely on Lyshe v. Levy, 854 F.3d 855 (6th Cir. 2017) for the proposition that Plaintiff lacks standing. In Lyshe, the Sixth Circuit found that plaintiffs had not alleged concrete harm sufficient to establish standing. Id. at 861. In that case, plaintiffs' alleged FDCPA violations arose when defendants attempted to collect plaintiffs' debt in state court, and misrepresented that plaintiffs' discovery responses needed to be sworn and notarized, when in fact they did not. Id. at 860. The Sixth Circuit found that the procedural violation alleged - a violation of state law procedure not required under the FDPCA - was not the type of harm the FDPCA was designed to prevent. Id. Here, by contrast, the challenged conduct involves Defendants' attempt to garnish the wages of the wrong person, which is the very type of abuse the FDPCA was enacted to curb.

         Defendants also argue that because they included the correct social security number on the writ, Plaintiff's employer is solely responsible for any harm to Plaintiff. Defendants have cited no authority in support of this proposition, and the court is aware of none. In a related context, the Eighth Circuit held that serving plaintiff's attorney with discovery requests on extinguished debt amounts to concrete injury as representations to a consumer's attorneys routinely come to the consumer's attention. Demarais v. Gurstel Chargo, P.A., 869 F.3d 685, 690 (8th Cir. 2017). Similarly, service of a writ of garnishment on an employer is likely to come to the employee's attention, just as it did here.

         Defendants also cite to Kujawa v. Palisades Collection, LLC, 614 F.Supp.2d 788, 792 (E.D. Mich. 2008) and Williams v. Web Equity Holdings, LLC, No. 13-CV-13723, 2014 WL 3845952 at *4 (E.D. Mich. Aug. 5, 2014). But neither of those cases discussed Article III standing at all. Kujawa addressed claims pursuant to defendants' motion for summary judgment under the “least sophisticated consumer” standard, which this court will discuss below when it considers whether Plaintiff has satisfied the plausible claim requirement under Rule 12(b)(6). Moreover, Williams involved a motion to dismiss for failure to state a claim, not a challenge to Article III standing.

         Here, the conduct alleged was Defendants' act of serving a writ of garnishment on Plaintiff's employer, which included the correct social security number of the actual debtor whose name was the same as Plaintiff's. Although Plaintiff's wages were never garnished, Plaintiff claims she suffered emotional distress, refrained from selling real estate so her wages would not be garnished, contacted an attorney, and suffered embarrassment because her employer was led to believe she owed a debt that had been reduced to judgment. (Doc. 15-2 at ¶¶ 26, 32, 37-40). Although the plausibility of these claims may be addressed under Rule ...

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