Kurt C Nelson v. Safeguard Properties LLC
333244
| Mich. Ct. App. | Nov 9, 2017Background
- Kurt Nielson defaulted on his mortgage; CitiMortgage/servicer asked whether his home was vacant or occupied; Nielson said it was occupied.
- While Nielson was away, workers hired by Safeguard entered his home, changed locks, winterized plumbing, discarded food, removed some personal items, and left door hangers and letters identifying Safeguard and providing contact numbers.
- Nielson regained access after calling the number; Safeguard apologized in a letter and said securing was begun after an exterior inspection indicated vacancy but that work stopped once interior occupancy was discovered.
- Nielson sued Safeguard asserting FDCPA, MRCPA, MOC, MCPA and multiple tort claims (trespass, conversion, IIED, statutory trespass, invasion of privacy, etc.).
- The circuit court granted Safeguard summary disposition on all counts (C(10)); Nielson appealed focusing on FDCPA, MRCPA, MOC, and the trespass/conversion torts.
- The Court of Appeals affirmed dismissal of the statutory debt-collection claims but held that genuine factual disputes (agency, agency by estoppel, and concerted action) precluded summary disposition of the trespass and conversion claims and remanded those counts for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Safeguard is a "debt collector" under the FDCPA (15 U.S.C. §1692a(6)) | Safeguard indirectly attempted to collect debt by contacting borrowers, leaving door hangers and facilitating lender contact; its field services aim to prompt payment. | Safeguard is a mortgage field-services/property preservation company, not primarily in debt collection or enforcement of security interests. | Safeguard is not a debt collector under either FDCPA definition; summary dismissal affirmed. |
| Whether Safeguard is a "debt collector" under Michigan statutes (MRCPA, MOC) | Safeguard engaged in collection activities and thus fits MRCPA/MOC definitions. | MRCPA/MOC apply to direct collection; Safeguard did not directly collect or repossess accounts. | MRCPA and MOC claims fail; summary dismissal affirmed. |
| Whether Safeguard is vicariously liable for torts of workers who entered the home (agency; agency by estoppel) | Workers acted under Safeguard’s direction, used Safeguard materials, and were held out as Safeguard agents; Safeguard should be liable for trespass and conversion. | Safeguard used independent contractors and so cannot be held vicariously liable for their torts. | Genuine factual disputes exist about control/estoppel; summary dismissal of trespass and conversion was improper; remand for trial. |
| Whether plaintiff should be allowed to amend complaint to add negligence after discovery closed | Amendment necessary after Safeguard disclosed use of independent contractors; plaintiff sought to add negligence claim. | Amendment was untimely and prejudicial given closed discovery and witness lists. | Trial court did not abuse discretion in denying leave to amend due to plaintiff’s delay; denial affirmed. |
Key Cases Cited
- Zaher v. Miotke, 300 Mich. App. 132 (Mich. Ct. App. 2013) (standard of review for C(10) motions and summary disposition principles)
- West v. Gen. Motors Corp., 469 Mich. 177 (Mich. 2003) (summary disposition standard and genuine issue of material fact definition)
- Stanton v. City of Battle Creek, 466 Mich. 611 (Mich. 2002) (statutory interpretation reviewed de novo)
- Romine v. Diversified Collection Servs., Inc., 155 F.3d 1142 (9th Cir. 1998) (services that obtain debtor information for creditors can constitute indirect debt collection under the FDCPA)
- Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006) (distinguishing two FDCPA definitions of "debt collector," including enforcement-of-security-interests rule)
- Bailey v. Schaaf (On Remand), 304 Mich. App. 324 (Mich. Ct. App. 2014) (vicarious liability principles for principal-agent torts)