Usry v., LLC

Filing 78

ORDER denying without prejudice 77 Motion to Amend/Correct. Plaintiff is granted leave to file a new motion for class certification within 30 days of the date of this order. 61 Motion to Certify Class terminated. Signed by Chief Judge J. Randal Hall on 2/16/2018. (pts)

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IN THE UNITED STATES DISTRICT SOUTHERN DISTRICT COURT FOR THE OF GEORGIA AUGUSTA DIVISION * SARAH USRY and DANIEL DARNELL, on behalf of themselves and all others similarly situated, * l:16-cv-010 Plaintiffs, v. EQUITY EXPERTS.ORG, LLC d/b/a * EQUITY EXPERTS, * Defendant. * * * ORDER Before the Certification Plaintiffs Plaintiffs' Memorandum that Defendant Act ("FDCPA"), Practices usury is Supporting allege Collection Georgia and Court statute, O.C.G.A. § Motion of for Class Law. (Doc. 77.) violated 15 U.S.C. 7-4-2, the § when Fair 1692, it Debt and the sought to collect delinquent assessments on behalf of Georgia homeowners' associations. class is a Because the Court finds that Plaintiffs' fail-safe class, the proposed Court DENIES WITHOUT PREJUDICE 1 Plaintiffs' original Motion for Class Certification was filed as Document 61. The Court subsequently requested that Plaintiffs refile the motion to clarify conflicting record citations. Plaintiffs complied with the Court's request by refiling their motion as Document 77. Accordingly, the Clerk of Court SHALL TERMINATE Document 61. The Court will now treat Document 77 as Plaintiffs' Certification and Supporting Memorandum of Law. Motion for Class Plaintiffs' motion date motion for of class this and grants Plaintiffs leave certification within THIRTY to (30) file DAYS a new from the Order. I. Background The named the Ashbrooke 77, at Plaintiffs Georgia homeowners Property Owners Association 6-9.) members are From the years time period, more of their failures, Plaintiffs annual Defendant Ashbrooke's Usry and behalf. (Id. (Id. collection These Ashbrooke Darnell assessments. began ("Ashbrooke"). 2012-2015, an annual assessment of $115. belonging at failed at collection its During this to 9-11.) efforts (Doc. charged 9.) to pay Due against efforts one or to these them sparked on the present lawsuit. The covenant which governs the authorizes Ashbrooke to impose homeowners who fail to pay 5.) Ashbrooke may: (Doc. 77-1, assessment at "at the rate of an a number annual (3) of or (1) (2) subdivision penalties special charge eighteen percent the highest rate permitted by law"; late charge"; Ashbrooke against assessment. interest on the (18%) per annum or impose "a reasonable add interest and late charges to "the annual assessment to which [each] [l]ot is subject"; (4) "foreclose the lien of the delinquent assessment against the [l]ot"; (5) "bring an action at law against the [o]wner personally obligated to pay the delinquent assessments"; (6) and assess the homeowner for "all costs and attorney's fees which [Ashbrooke] pursuing any foreclosure or action at law. Consistent contracted with with assessments. Limited assessments of Defendant (Doc. Defendant was to its 77-3, June at of from the collection [Defendant's] Attorney, standard by fee collect contract to collect plus and distributed semi-annually." the record does not fee the as The that and pursuant delinquent costs outlined addendum which (Id.) include the delinquent any and all [Defendant], structure Ashbrook states [Ashbrooke], responsible party, charged to The "authorized on behalf of Powers abilities, 2013 1.) incur" (Id. at 8.) enforcement in shall is in updated contract cited in structure used at the time of signing. Ms. Usry failed to timely pay her 2013 annual assessment. On June 28, 2013, she received her first letter from Defendant. (Doc. 77-4, Defendant at was 599.) seeking behalf of Ashbrooke. her current balance days The letter informed Ms. to collect her delinquent (Id.) Usry that assessment on The letter then informed her that was $443.65, her balance but that if she did pay within thirty (Id. ) Over the next six months Defendant assessed the following fees against Ms. would be "at least not $838.65." Usry: Account Setup Fee Intent to Record Lien Package Lien Recording and Discharge Package $175.00 $95.00 $395.00 Constant Contact Service Package Pre-Foreclosure Package $750.00 $1,4 95.00 By December 2013, Ms. Usry "owed" Defendant a sum of $3,083.65. (Id. at letter she 618.) In stating her December current 2014, balance did not pay within ten days, $6,644.60." Mr. Defendant was sent $3,199.60, her balance Ms. but "may be Usry that at a if least (Id^_ at 600. ) Darnell suffered a similar experience. Mr. Darnell also failed to timely pay the 2013 annual assessment of $115.00. (Doc. 35, at 5.) He settled November 2013 for $1,351.00. Plaintiffs filed this his (Doc. class account 77, with Defendant in at 11.) action alleging that Defendant engaged in a standardized debt collection scheme that violated the FDCPA and Georgia usury laws. the allegation that Defendant Plaintiffs' charged claim rests upon the following fees directly to delinquent homeowners: Account Setup Fee: $175.00 Intent to Record a Lien Notice: $95.00 Recording of the Lien Notice: $395.00 Constant Contact Communication Package: Intent to Foreclose Notice: Post Intent to Foreclose Notice: $750.00 $1,495.00 $100.00 (monthly) Managing the Foreclosure Litigation Fee: $3,445.00 (Doc. 77, at "exorbitant, 6-7.) Plaintiffs unsubstantiated, argue that and bogus." these (Id. fees at 4.) are They complain that because the fees are not listed in "any of the covenants of any Georgia neighborhood for which Defendant provides collection services" (id. at 6), Defendant violates the FDCPA when it charges these fees directly to the homeowner, rather than the Plaintiffs, "false, relevant this homeowners' practice violates [and] association. misleading deceptive, the FDCPA According to because representation" it to uses collect the delinquent debt and is an "unfair or unconscionable means to collect claim the or attempt that fees to collect Defendant's "are actually fees debt." violate interest, charged under Georgia law." (Id. Georgia far in at 4.) usury excess of They also law because what can be (Id. at 17.) Plaintiffs ask this Court to certify a general class and three subclasses. (Id.) Plaintiffs define their general class as: All natural persons in Georgia to whom Equity Experts sent collection letters asserting claims for delinquent assessments, interest, and fees in violation of the FDCPA and the Georgia usury statute while residing in the State of Georgia (hereinafter the "General Class Members"). (Id.) Plaintiffs define their three subclasses as: All natural persons in Georgia to whom Equity sent collection communication seeking to collect interest or other sums not owed (hereinafter the Experts illegal "Illegal Interest Class Members). All natural persons in Georgia against whom Equity Experts has filed a lien and/or lawsuit asserting claims for delinquent assessments, interest, and fees while residing in the State of Georgia and against whom the lawsuit or lien remains pending the "Injunction Class Members"). and unpaid (hereinafter All natural persons in Georgia from whom Equity Experts received any payment arising from collection efforts of assessments by Equity Experts which included usurious interest charged in violation of the Georgia usury statutes and illegal fees charged in violation of the FDCPA while residing in the State of Georgia (hereinafter the "Unjust Enrichment Class Members"). (Id. at 3-4.) II. Discussion Defendant challenges Plaintiffs' on the (Doc. basis 68, that at 4.) they are proposed class definitions impermissible "fail-safe" classes. The Court agrees. "A fail-safe class is a class whose membership can only be ascertained by a determination of the merits of the case because the class is liability." 2012) . A putative defined In re terms Rodriguez, fail-safe class in class members of 695 is in the class Randleman v. (6th Cir. 2011) . certified because adverse and, from is 369-70 an bound by Ins. Co., 646 to "shields the because known a after the members determination of judgment." F.3d it The Court finds definitions that are all class liability." Store, 288 F.R.D. 45, 55 (S.D.N.Y. 2012) but "fail-safe" one whether 352 an and it is could Mazell only be v. Money (citations omitted). of because Plaintiffs' proposed "eligibility Commonwealth Land Title. Ins. Co., 264 F.R.D. Pa. 2010). 347, prevents class member" is "dependent upon a legal conclusion." v. they are class should not be defendants, of the the judgment. losing, not 'fail-safe' unfair it of (5th Cir. adverse by virtue of Title question judgment being entered against plaintiffs, unmanageable class 360, receiving "A proposed it F.3d therefore, Fidelity Nat. ultimate improper because Either the class members win or, not the as a Alberton 203, 207 (E.D. Membership in Plaintiffs' General Class depends upon Defendant asserted claims for delinquent assessments, interest, or fees usury statute." in Plaintiffs' "in violation of (Doc. 77, at 3 Illegal the FDCPA and the (emphasis added).) Interest Class depends Georgia Membership upon whether Defendant sought "to collect illegal interest or other sums not owed." (Id. (emphasis added).) And membership in Plaintiffs' Unjust Enrichment Class depends upon whether Defendant "received any payment [from the class member] arising from collection efforts of assessments by Equity Experts which included usurious interest charged in violation of the Georgia usury statutes and illegal fees charged in violation of the FDCPA while residing in the State of Georgia." therefore, cannot class definitions.2 The Court (Id. at 4 (emphasis added).) certify Plaintiffs' class The Court, using the proposed See Randleman, 646 F.3d at 352. recognizes that it may use its discretion to "revise a proposed class definition to avoid the problem of a fail-safe F.R.D. class." 68, exercise Campbell 74 (E.D. Me. this v. 2010). discretion and First Am. Title Ins. Co., 269 The Court, however, declines to instead grants Plaintiffs the opportunity to propose class definition(s) that avoid the fail safe problem. Plaintiffs' ConAgra motion Foods, 2 Because class, Accordingly, to Inc., the Court DENIES WITHOUT PREJUDICE certify 302 Plaintiffs' the F.R.D. umbrella proposed 537, 581 General class. See (CD. Cal. Class is a In re 2014) fail-safe the Court will not certify the lone subclass which was not fail-safe - the Injunction Class. (denying motion to certify class without prejudice and granting plaintiffs thirty days to "address the decencies noted" in the court's order). III. Conclusion The Court cannot certify Plaintiffs' it is a fail-safe should have the class. But, opportunity to the fix the Court DENIES WITHOUT PREJUDICE and grants Plaintiffs certification within leave THIRTY to (30) proposed class because Court the believes proposed Plaintiffs' file DAYS a new from Plaintiffs class. Thus, motion (doc. motion for the date of 77), class this Order. ORDER ENTERED at Augusta, February, Georgia, this /^^day of 2018. J. VRAOT5AL HALL; CHIEF JUDGE UNITEEy STATES DISTRICT COURT ^HERN DISTRICT OF GEORGIA

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