Newman v. Trott & Trott, P.C.
889 F. Supp. 2d 948
E.D. Mich.2012Background
- Plaintiff Todd C. Newman sued Trott & Trott P.C. and associated attorneys over alleged FDCPA/MCPA violations related to foreclosure of his property in Michigan.
- Plaintiff borrowed $320,000 in 2006 to purchase real property at 7637 Arnold Road, Ira Township, Michigan; MERS held the mortgage as nominee for lender and successors.
- MERS assigned the mortgage to Deutsche Bank as Trustee for Harborview Mortgage Loan Trust; assignment recorded January 7, 2011, with attorneys Ford and Krurel drafting/signing.
- Plaintiff sent multiple Qualified Written Requests seeking debt verification and proof of authority to service/collect on the loan; Defendants issued various response letters referencing reinstatement or payoff amounts.
- Plaintiff alleged the Mortgage assignment was invalid for lack of note transfer and argued Defendants were not proper debt collectors; Defendants moved for summary judgment.
- Judge recommended granting Defendants’ summary judgment and dismissing the Amended Complaint; many claims were viewed as lacking standing or merit under FDCPA and Michigan statutes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA debt collector status of Trott & Trott | Trott is a debt collector enforcing debt; letters show FDCPA compliance intent. | Trott acts to foreclose security interest, not to collect debts; not a debt collector for most FDCPA provisions. | Trott not a debt collector for non-1692f(6) purposes; dismissal recommended. |
| Validity of Mortgage assignment to Deutsche Bank | Assignment invalid if Harborview Trust does not exist or Note was not assigned. | MERS authorized assignment; trust existence and Note ownership properly evidenced; no standing to challenge. | Assignment valid; FDCPA claims based on invalid assignment rejected. |
| Section 1692g verification requirements | Defendants did not verify the debt after dispute; demanded verification. | Letters provided debtor name, property, lender, and payoff; sufficient verification. | Sufficient verification under 1692g(b); no violation found. |
| State-law claims under MOC/MCPA/Conversion/Constructive Fraud/Unjust Enrichment | Defendants violated MOC and MCPA; conversion and fraud claims remain. | Attorneys handling claims for clients fall outside collection agency; no conversion; claims duplicative of FDCPA. | MOC/MCPA claims fail; conversion and constructive fraud undisputed; unjust enrichment rejected. |
| Standing to challenge assignment and impact on FDCPA claims | Plaintiff may challenge assignment to avoid double liability. | Nonparty to assignment lacks standing; ratification by conduct shows no standing issue. | Plaintiff lacks standing to challenge the assignment; FDCPA claims fail on merits. |
Key Cases Cited
- Montgomery v. Huntington Bank, 346 F.3d 693 (6th Cir. 2003) (FDCPA applicability to debt collectors and security-interest enforcement)
- Hargrow v. Wells Fargo Bank, N.A., F.3d (6th Cir. 2012) (Bakri affirmed; proper assignee retains rights of original mortgagee)
- Bakri v. Mortgage Electronic Registration System, 2011 WL 3476818 (Mich. Ct. App. 2011) (Debt assignment validity when MERS has power to assign mortgage)
- Livonia Properties Holdings, LLC v. 12840-12976 Farmington Road Holdings, LLC, 399 F. App’x 97 (6th Cir. 2010) (Standing to challenge assignments; nonparty to assignment lacks standing)
- Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir. 1999) (FDCPA verification purposes and debt collector definitions)
- Carpenter v. Longan, 73 U.S. (6 Wall.) 271 (1872) (Note and mortgage inseparability; assignment issues)