Usry v. Equityexperts.org, 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)

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