118 F. Supp. 3d 953
E.D. Mich.2015Background
- Earl D. Wilson defaulted on a mortgage; servicer Bayview referred the loan to Trott Law, P.C. for foreclosure and collection.
- Trott sent a debt-collection letter listing a $196,642.54 total including a line item labeled “Corporate Advance $1,944.89,” a phrase not used in the mortgage documents.
- Wilson requested debt validation and then sued under the FDCPA (15 U.S.C. §§ 1692e, 1692e(2)(A), 1692e(10), 1692f) and Michigan Collection Practices Act, alleging the term “corporate advances” concealed the nature of charges and misled consumers.
- Trott produced evidence (including deposition testimony) that the corporate-advance amount comprised attorney fees and property inspection fees—charges the mortgage authorizes under paragraphs 9 and 14.
- The court treated the motion as one for summary judgment and considered whether using the term “corporate advances” violated § 1692f (unconscionable collection) or § 1692e (false/deceptive practices).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether listing “corporate advances” violated § 1692f(1) (collection of amounts not authorized by the agreement) | Wilson: “Corporate advances” is not in the mortgage; Trott collected unauthorized fees. | Trott: Mortgage authorizes recovery of fees/costs (attorney fees, inspections); corporate advances simply aggregate authorized disbursements. | Granted for Trott: no § 1692f violation because the underlying charges were authorized by the mortgage. |
| Whether labeling fees as “corporate advances” violated § 1692e, § 1692e(2)(A), or § 1692e(10) (false, deceptive, or misleading representations) | Wilson: The term is a term-of-art absent from the mortgage and could materially mislead the least-sophisticated consumer about the character of the debt. | Trott: The statement was literally true and the amounts were valid; no material deception. | Denied for Trott as to § 1692e: factual dispute remains whether the term was materially misleading to the least-sophisticated consumer. |
| Whether summary judgment can be resolved as a matter of law on deception/materiality | Wilson: letter is misleading on its face (suggests per se deception). | Trott: literal accuracy and authorized nature of fees defeat § 1692e claim as a matter of law. | Court: Materiality is typically a fact question; jury could find the term misleading—summary judgment is inappropriate on § 1692e. |
| Whether Trott is a “regulated person” under Michigan Collection Practices Act (MCPA) | Wilson: MCPA applies to regulated persons; Trott is a law firm collecting on behalf of a client. | Trott: argued (via caselaw distinction) its activities were on behalf of Bayview and not in its own name. | Held: Trott is a regulated person under the MCPA; MCPA claim survives to the extent tied to remaining FDCPA § 1692e claim. |
Key Cases Cited
- Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6th Cir. 2009) (characterization of debt may be unusual but not deceptive where it does not materially mislead the least-sophisticated consumer)
- Gillie v. Law Office of Eric A. Jones, LLC, 785 F.3d 1091 (6th Cir. 2015) (§ 1692e violation assessed by least-sophisticated-consumer standard)
- Fields v. Wilber Law Firm, P.C., 383 F.3d 562 (7th Cir. 2004) (failure to disclose that substantial attorney fees were added can mischaracterize the debt and violate § 1692e)
- Buchanan v. Northland Group, Inc., 776 F.3d 393 (6th Cir. 2015) (FDCPA protects the reasonable unsophisticated consumer; plainly misleading statements resolved as matter of law)
- Donohue v. Quick Collect, Inc., 592 F.3d 1027 (9th Cir. 2010) (FDCPA targets materially misleading statements that impair consumer decisionmaking)
- Wahl v. Midland Credit Mgmt., 556 F.3d 643 (7th Cir. 2009) (mislabeling line items does not automatically violate § 1692f where underlying debt is authorized)