Smith v. Lerner, Sampson & Rothfuss, L.P.A.
658 F. App'x 268
| 6th Cir. | 2016Background
- In 2007 Smith took a mortgage from Capital One; Capital One recorded a mortgage and later sold the loan to Freddie Mac; Bank of America serviced the loan.
- Bank of America paid a county sewer assessment in 2009, allegedly increased Smith’s escrow payments, and stopped accepting payments in Jan. 2010.
- Bank of America (through counsel Lerner, Sampson & Rothfuss) filed a foreclosure in Geauga County on Jan. 19, 2010; an assignment and allonge representing Bank of America’s interest were filed the same day.
- State court entered default judgment of foreclosure Aug. 16, 2010; Smith did not appeal but later filed a Civ. R. 60(B) motion which the state court denied on May 14, 2013.
- Smith filed this federal suit on Oct. 15, 2014 asserting FDCPA and RICO claims and seven Ohio state-law claims; the district court dismissed the federal claims with prejudice (FDCPA as time‑barred; RICO on res judicata grounds) and declined supplemental jurisdiction over state claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDCPA claim is timely | Smith: limitations tolled or accrual occurred after later acts (assignment, bankruptcy filing); alternatively fraudulent concealment tolled the one‑year period | Defendants: FDCPA claim accrued Jan. 19, 2010 when foreclosure was filed; later filings were continuing effects and do not reset limitations; assignment was publicly filed | Court: FDCPA claim accrues on state suit filing (Jan. 19, 2010); Smith’s 2014 suit is time‑barred; fraudulent‑concealment tolling not pleaded/founded here |
| Whether bankruptcy objection/new filings create new FDCPA violations | Smith: Bank of America’s Jan. 6, 2014 bankruptcy objection was a separate violation within one year | Defendants: bankruptcy filing/proof of claim do not constitute new FDCPA violations but are continuing effects of initial suit | Court: Bankruptcy filing did not reset limitations; no separate FDCPA violation shown |
| Whether RICO claim is barred by claim preclusion (res judicata) | Smith: RICO partly alleges acts after foreclosure so claim may not have existed when state action was pending | Defendants: RICO arises from the same transaction (fraudulent assignment) and was a compulsory counterclaim in state foreclosure | Court: Majority elements of claim preclusion satisfied (final judgments, privity, same transaction); close on whether claim existed then but unnecessary to resolve because issue preclusion applies |
| Whether RICO claim is barred by issue preclusion (collateral estoppel) | Smith: RICO alleges a scheme and property injury that might post‑date the state court’s findings | Defendants: State court already found Bank of America was proper mortgagee; that determination precludes relitigation | Court: Issue preclusion applies — state court’s findings that Bank of America was the proper mortgagee are final and were actually decided; RICO barred |
Key Cases Cited
- Slorp v. Lerner, Sampson & Rothfuss, [citation="587 F. App'x 249"] (6th Cir.) (FDCPA claim accrues when deceptive debt‑collection lawsuit is initiated; later filings may be continuing effects)
- Ruth v. Unifund CCR Partners, 604 F.3d 908 (6th Cir. 2010) (equitable tolling and fraudulent‑concealment standards; courts disfavor extending statutes even a single day)
- Simmons v. Roundup Funding, LLC, 622 F.3d 93 (2d Cir. 2010) (proofs of claim in bankruptcy generally do not support FDCPA claims)
- Fillinger v. Lerner, Sampson & Rothfuss, [citation="624 F. App'x 338"] (6th Cir.) (discusses applicability of equitable tolling/fraudulent concealment under FDCPA)
- Boggs v. City of Cleveland, 655 F.3d 516 (6th Cir. 2011) (federal courts look to state law to determine preclusive effect of state judgments)
- Weiner v. Klais & Co., 108 F.3d 86 (6th Cir. 1997) (standard of review for Rule 12(b)(6) dismissals)
- Greenberg v. Life Ins. Co. of Va., 177 F.3d 507 (6th Cir. 1999) (pleading standards and de novo review on 12(b)(6) dismissal)