Brown et al v. Tax Ease Lien Servicing, LLC et al

Filing 24

MEMORANDUM OPINION signed by Senior Judge Charles R. Simpson, III on 11/20/2015, re 5 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Lien Data Services, LLC; Tax Ease Lien Investments 1, LLC; Blue Grass Abstract, LLC; Phil Migi covsky; and Tax Ease Lien Servicing, LLC; 7 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Billy W. Sherrow, and Sherrow, Sutherland & Associates, PSC; and 18 MOTION to Dismiss filed by Richard Eric Craig, and Hayden Craig & Grant, PLLC.cc:counsel (RLK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
PLAINTIFFS

JAMES BROWN, et al.

v.

CIVIL ACTION NO. 3:15-CV-00208-CRS

TAX EASE LIEN SERVICING, LLC, et al.

DEFENDANTS

MEMORANDUM OPINION
This matter is before the Court on three motions to dismiss for failure to state a claim.
Defendants Tax Ease Lien Servicing, LLC (“TELS”), Tax Ease Lien Investments 1, LLC
(“TELI”), Blue Grass Abstract, LLC (“BGA”), Lien Data Services, LLC (“LDS”), and Philip S.
Migicovsky (collectively, the “Tax Ease Defendants”) filed the first motion to dismiss.
Defendants Sherrow, Sutherland & Associates, PSC (“SSA”) and Billy W. Sherrow
(collectively, the “Sherrow Defendants”) filed the second motion to dismiss.
Hayden Craig & Grant, PLLC and Richard Eric Craig (collectively, the “Craig
Defendants”) filed the third motion to dismiss. Together, the Court refers to the Tax Ease
Defendants, Sherrow Defendants, and Craig Defendants as the “Defendants.”
Plaintiffs James Brown (“Brown”), Theresa Cambron (“Cambron”), Philip Leigh
(“Leigh”), and Emil Walther III (“Walther”) filed a response to each motion.
The Court will grant in part and deny in part Defendants’ motions to dismiss as follows:
Count 1 – Racketeering Influenced and Corrupt Organizations Act
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 The Court will deny all Defendants’ motions to dismiss all Plaintiffs’ RICO claims.
Count 2: Declaration of Rights
 The Court will grant all Defendants’ motions to dismiss Plaintiffs Theresa Cambron,
Philip Leigh, and James Brown’s declaratory judgment claims.
 The Court will deny all Defendants’ motions to dismiss Plaintiff Emil Walther’s
declaratory judgment claim.
Count 3: Injunctive Relief
 The court will grant all Defendants’ motions to dismiss all Plaintiffs’ injunctive relief
claims.
Count 4: KRS § 446.070 – Negligence Per Se
 The Court will grant all Defendants’ motions to dismiss all Plaintiffs’ KRS § 446.070
claims relying on KRS § 134.490 and KRS §§ 134.990(11)(a)(1)-(2).
 The Court will grant Phil Migicovsky’s motion to dismiss all Plaintiffs’ KRS
§ 446.070 claims.
 The Court will deny all Defendants’ motions to dismiss all Plaintiffs’ remaining KRS
§ 446.070 claims relying on KRS § 134.452.
Count 5: Fraud
 The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiffs James Brown,
Theresa Camron, and Philip Leigh’s fraud claims against TELS.
 The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiff Emil
Walther’s fraud claim against TELI.
 The Court will grant Tax Ease Defendants’ motion to dismiss all Plaintiffs’ fraud
claims against Phil Migicovsky.
 The Court will grant Richard Eric Craig’s motion to dismiss Plaintiffs Emil Walther
and Theresa Cambron’s fraud claims.
 The Court will deny all Defendants’ motions to dismiss all Plaintiffs’ remaining fraud
claims.
Count 6: Fraudulent Inducement
 The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiffs James Brown,
Theresa Camron, and Philip Leigh’s fraudulent inducement claims against TELS.
 The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiff Emil
Walther’s fraudulent inducement claim against TELI.
 The Court will grant Tax Ease Defendants’ motion to dismiss all Plaintiffs’ fraudulent
inducement claims against Phil Migicovsky.
 The Court will grant Richard Eric Craig’s motion to dismiss Plaintiffs Emil Walther
and Theresa Cambron’s fraudulent inducement claims.
 The Court will deny all Defendants’ motions to dismiss all Plaintiffs’ remaining
fraudulent inducement claims.
Count 7: Kentucky Consumer Protection Act (“KCPA”)
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

The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiffs James Brown
and Theresa Camron’s KCPA claims against TELS.
 The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiff Emil
Walther’s KCPA claim against TELI.
 The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiffs’ KCPA
claims against Phil Migicovsky.
 The Court will deny all Defendants’ motions to dismiss Plaintiffs’ remaining KCPA
claims.
Count 8: Unjust Enrichment
 The Court will deny Sherrow Defendants’ motion to dismiss all Plaintiffs’ unjust
enrichment claims.1
The Court will also dismiss Hayden Craig & Grant, PLLC from this action.
BACKGROUND
The factual and procedural background of this case is lengthy and complex. Instead of
reciting that history, the Court incorporates Magistrate Judge Dave Whalin’s recent findings of
fact.2 Findings of Fact, Conclusions of Law, and Recommendation, ECF No. 21.
As an initial matter, Craig Defendants now move, unopposed, to dismiss the nowdissolved Hayden Craig & Grant, PLLC from this action. Craig Mot. Dismiss 2, ECF No. 18.
The Court will dismiss Hayden Craig & Grant, PLLC from this action.
First, the Court will address all Defendants’ affirmative defense of waiver and the issues
of fraud and fraudulent inducement. Second, the Court will address the Racketeering Influenced
and Corrupt Organizations Act (“RICO”) claims. Third, the Court will address the Kentucky
Consumer Protection Act (“KCPA”) claims. Fourth, the Court will consider the KRS § 446.070
claims. Fifth, the Court will address the declaration of rights claims. Sixth, the Court will address
the injunctive relief claims. Finally, the Court will address the unjust enrichment claims.
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Tax Ease and Craig Defendants did not move to dismiss Plaintiff’s unjust enrichment claims.
The Court notes it has substituted Denise Puckett, in her capacity as executrix, in place of Defendant Theresa
Cambron. Substitution Order, May 14, 2014, ECF No. 20. For ease and continuity of discussion, this Court will
refer to Executrix Puckett as “Cambron.”

2

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STANDARD
When evaluating a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court must
determine whether the complaint alleges “sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (internal quotation marks omitted). A
claim is plausible if “the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly,
550 U.S. at 556). Although the complaint need not contain “detailed factual allegations,” “a
plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”
Twombly, 550 U.S. at 555 (internal quotation marks and alteration omitted).
The pleading standard for fraud claims is heightened under Fed. R. Civ. P. 9. The party
asserting fraud “must state with particularity the circumstances constituting fraud or mistake.”
Fed. R. Civ. P. 9(b).
In evaluating a motion to dismiss for failure to state a claim, the Court does not consider
facts or additional documents included in a response to the motion that are not alleged in the
pleadings. See Weiner v. Klais and Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997). The Court may
consider evidence outside of the pleadings under Fed. R. Civ. P. 12(d). If the Court does so, the
appropriate standard of review is under Fed. R. Civ. P. 56. The Court declines Plaintiffs’
invitation to consider information outside the pleadings under this different standard. See Pls.’
Resp. Sherrow Defs.’ Mot. Dismiss 7, ECF No. 11.

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DISCUSSION
Defendants move to dismiss Plaintiffs’ claims for failure to state a claim on which relief
can be granted. The Court will assess each in turn as it applies to each group of Defendants.3
1. Waiver, Fraud, and Fraudulent Inducement
1.a. Tax Ease Defendants – Waiver, Fraud, and Fraudulent Inducement
Dismissal of a claim under Fed R. Civ. P. 12(b)(6) on the basis of an affirmative defense,
such as waiver, is proper “where the undisputed facts conclusively establish an affirmative
defense as a matter of law.” Estate of Barney v. PNC Bank, Nat. Ass’n, 714 F.3d 920, 926 (6th
Cir. 2013) (citations omitted). Waiver is the “voluntary and intentional surrender or
relinquishment of a known right, or an election to forego an advantage which the party at his
option might have demanded or insisted upon.” Conseco Fin. Serv. Corp. v. Wilder, 47 S.W.3d
335, 344 (Ky. 2001). A party can expressly waive a known right or impliedly waive the right
through conduct. Id. A court will not infer a waiver of rights lightly. Id.
Tax Ease Defendants argue that Plaintiffs waived all rights to challenge fees and charges
paid to resolve Plaintiffs’ unpaid taxes. See Tax Ease Defs.’ Mot. Dismiss 10-17, ECF No. 5-1.
Based on the undisputed facts, Tax Ease Defendants fail to conclusively establish an affirmative
defense of waiver as a matter of law.4
Tax Ease Defendants argue that Plaintiffs waived any right to challenge the fees and
charges when Plaintiffs received “detailed, line-item breakdown[s]” of the fees and charges,
declined to question or challenge the demanded amounts, and then either (i) entered into a
3

Sherrow and Craig Defendants adopt the arguments included in Tax Ease Defendants’ motion to dismiss. See
Sherrow Defs.’ Mot. Dismiss 3, ECF No. 7-1; Craig’s Mot. Dismiss 3, ECF No. 18. To the extent these Defendants
adopt Tax Ease Defendants’ motion, the discussion and resolution of that motion applies to Sherrow and Craig
Defendants’ motions.
4
As the Court finds these Defendants cannot successfully assert the affirmative defense of waiver, the Court will not
address Plaintiffs’ estoppel argument.

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forbearance agreement, (ii) voluntarily agreed to pay, or (iii) entered into an agreed judgment on
the payment with either TELS or TELI, respectively. Tax Ease Defs.’ Mot. Dismiss 11, ECF No.
5-1. Plaintiffs allege Tax Ease Defendants committed fraud when misrepresenting fees and
charges which Plaintiffs relied upon to their detriment. Third Am. Compl. 35, ¶¶ 182-85.
As waiver is the relinquishment of a known right, fraud is an exception to the affirmative
defense of waiver. The Court finds Plaintiffs pleaded facts sufficiently to allege fraud with
regard to BGA and LDS. Further, the Court finds Plaintiffs pleaded sufficient facts to allege
fraud as to Plaintiff Walther’s claims against TELS. Likewise, the Court finds that Plaintiffs’
pleaded sufficient facts to allege fraud as to Plaintiffs Brown, Cambron, and Leigh’s claims
against TELI.
The Court finds Plaintiffs pleaded insufficient facts to allege fraud with regard to
Migicovsky. Additionally, the Court finds Plaintiffs pleaded insufficient facts to allege fraud as
to Plaintiff Walther’s claim against TELI. Further, the Court finds Plaintiffs pleaded insufficient
facts to allege fraud as to Plaintiffs Brown, Cambron, and Leigh’s claims against TELS.
A claim of fraud in Kentucky requires “(1) that the declarant made a material
representation to the plaintiff, (2) that this representation was false, (3) that the declarant knew
the representation was false or made it recklessly, (4) that the declarant induced the plaintiff to
act upon the misrepresentation, (5) that the plaintiff relied upon the misrepresentation, and (6)
that the misrepresentation caused injury to the plaintiff.” Flegles, Inc. v. TruServ Corp., 289
S.W.3d 544, 549 (Ky. 2009). A plaintiff’s reliance upon the misrepresentation must be
“reasonable” or “justifiable.” Id.; see also Restatement (Second) of Torts § 537 (1977).

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Further, Plaintiffs may maintain a viable claim, under Kentucky law, based on a theory of
civil conspiracy. See Hogan v. Goodrich Corp., 2006 WL 2056586 (W.D. Ky. Mar. 1, 2006)
(relying on Davenport’s Adm’x v. Crummies Creek Coal Co., 184 S.W.2d 887 (Ky. 1945)). Civil
conspiracy requires: “1) an agreement or combination, 2) that is unlawful or corrupt, 3) entered
into by two or more persons, 4) for the purpose of accomplishing an unlawful goal.” Ellington v.
Fed. Home Loan Mortgage Corp., 13 F. Supp. 3d 723, 730 (W.D. Ky. 2014) (citations and
quotations omitted); see also, James v. Wilson, 95 S.W.3d 875, 897 (Ky. Ct. App. 2002) (noting
that a “proponent must show an unlawful/corrupt combination or agreement between the alleged
conspirators to do by some concerted action an unlawful act”). Under Kentucky law, “when a
complaint involves multiple defendants, each defendant's role must be particularized with respect
to their alleged involvement in the fraud.” James T. Scatuorchio Racing Stable, LLC v. Walmac
Stud Mgmt., LLC, 941 F. Supp. 2d 807, 822 (E.D. Ky. 2013) (citing Coffey v. Foamex, L.P., 2
F.3d 157, 161–62 (6th Cir.1993)) (internal quotations omitted) (emphasis added).
Tax Ease Defendants move to dismiss all Plaintiffs’ fraud claims in whole or part under
Fed. R. Civ. P. 12(b)(6) on three grounds: (1) Plaintiffs cannot assert reasonable reliance on the
alleged misrepresentations; (2) Plaintiffs fail to allege specific fraudulent acts of each Tax Ease
Defendant; and (3) Plaintiffs do not allege BGA, LDS, or Migicovsky made misrepresentations.
First, Plaintiffs’ Third Amended Complaint states that Tax Ease Defendants, acting
together, mailed fee breakdowns to Plaintiffs that Tax Ease Defendants asserted were legally
owed. 5-12, ¶¶ 17-50, ECF No. 1-1. These fees included administration fees, attorneys’ fees, and
title search fees. Id. Plaintiffs allege these representations were false because the amounts
Defendants claimed were owed did not actually or reasonably reflect the services being charged
as statutorily required. Id. Defendants argue that even if Plaintiffs alleged sufficient facts for the
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other elements of fraud, Plaintiffs cannot maintain they reasonably relied on the
misrepresentations because they had “ample opportunity to evaluate all amounts sought, to
question any fee, charge, or other amount sought, or to seek additional support for any specific
amount, fee, or charge identified.” Tax Ease Defs.’ Mot. Dismiss 13-15, ECF No. 5-1.
Based on Plaintiffs’ allegations, the Court concludes Plaintiffs’ reliance was reasonable.
Indeed, it appears implausible to expect that Plaintiffs would be able to uncover without
significant efforts and expert assistance the alleged conduct, which Plaintiffs allege included
“bogus” attorney’s fees and an additional $300 charged for title searches above the “actual or
reasonable” cost. See Third Am. Compl. 6-12, ¶¶ 25-50, ECF No. 1-1. These Plaintiffs would not
easily be able to uncover these alleged facts and, therefore, this Court infers from Plaintiffs’
allegations that they relied on Tax Ease Defendants’ representations “in making payments to the
[Tax Ease] Defendants” and that such reliance would not be unreasonable under the
circumstances alleged. Id. at 35, ¶ 184.
Although Tax Ease Defendants also argue that Plaintiffs fail to allege that Walther
individually alleged reliance, Tax Ease Defs.’ Mot. Dismiss 13, ECF No. 5-1, Plaintiffs do plead
that TELS sent letters to Walther with “bogus” attorney’s fees and subsequently entered into a
settlement agreement, which Walther has paid and continues to pay, based on the fees outlined in
those letters. Third Am. Compl. 27-28, ¶¶ 139-43, ECF No. 1-1. This Court finds these are
sufficient facts to support the pleaded conclusion that “Defendants’ representations to … Mr.
Walther … constituted fraud” and Walther relied upon these representations “in making
payments to the TELS Defendants.” Third Am. Compl. 35, ¶¶ 183-85. The Court concludes that
Tax Ease Defendants have not established that Plaintiffs waived any rights associated with the
charges and fees.
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Tax Ease Defendants also argue that Plaintiffs do not allege specific fraudulent acts of
each Tax Ease Defendant or misrepresentation by BGA, LDS, or Migicovsky.
Plaintiffs allege these entities acted together in furtherance of the underlying fraud. Id. at
5, ¶ 17. Plaintiffs allege that TELS and TELI committed fraud and fraudulent inducement against
all Plaintiffs. Id. at 35, ¶¶ 182-185. Plaintiffs allege that TELS and TELI share a common
principle place of business and sole manager, and use the same attorneys and companies, BGA
and LDS – which are also located in the same principle place of business with the same sole
manager – to implement the same scheme to defraud property owners by charging various
unreasonable and non-actual fees. Id. at 3-4, 21-28, ¶¶ 8-12, 104-143. TELS, however, only
directly interacted with Walther and TELI only directly interacted with Brown, Cambron, and
Leigh. Id. at 21-28, ¶¶ 104-143.
These pleaded allegations are insufficient for this Court to infer that TELS and TELI,
respectively, were involved in pursuing each other’s alleged unlawful goals. While each
company may have been aware of the others’ conduct based on the alleged facts, Plaintiffs did
not allege sufficient facts to plead with particularity that each company gave the other substantial
assistance in pursuing the other’s fraudulent acts. Therefore, this Court will dismiss Plaintiff
Walther’s fraud and fraudulent inducement claims against TELI. The Court will also dismiss
Plaintiffs Brown, Cambron, and Leigh’s fraud and fraudulent inducement claims against TELS.
Plaintiffs further allege BGA unreasonably added approximately $300 to the cost of title
searches it paid approximately $106 for a subcontractor to perform. See Third Am. Compl. 6-7,
¶¶ 25-28, ECF No. 1-1. Plaintiffs allege this additional cost did not represent any actual
additional work, but allowed TELS and TELI to charge a higher price, which violated the

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statutory ban of unreasonable and non-actual fees. Id. Assuming these pleaded factual allegations
are true, the increased charge for a title search service that does not represent any reasonable or
actual expense can be plausibly viewed as an action pursuant a common plan to fraudulently
charge statutorily impermissible fees. As Plaintiffs allege TELS and TELI made particular
misrepresentations of unreasonable and non-actual fees and charges in letters to Plaintiffs that
constitute fraud, BGA’s claimed participation by padding its cost is a proper basis for liability
under a theory of civil conspiracy. Therefore, this Court will deny these Defendants’ motion to
dismiss the fraud and fraudulent inducement claims against BGA.
Plaintiffs also allege that LDS “pretend[ed]” to use lawyers by sending letters purporting
to be from those lawyers, but without any legal oversight, in order to obtain the maximum
amount of fees under the statutory scheme. See id. at 8-11, ¶¶ 35-45. These pre-litigation costs,
according to Plaintiffs, were unreasonable and not actual, because lawyers were not directly
involved in any letter writing activity. Id. Assuming these pleaded allegations as true, LDS’
alleged involvement in fabricating unreasonable and non-actual attorney’s fees pursuant a
common design with TELS and TELI to charge unreasonable and non-actual fees would be in
violation of the statutory requirement. This constitutes a proper basis for liability under a theory
of civil conspiracy. Therefore, this Court will deny these Defendants’ motion to dismiss the fraud
and fraudulent inducement claims against LDS.
Finally, Plaintiffs allege Migicovsky committed fraud due to his involvement with TELS,
TELI, BGA, and LDS. Plaintiffs’ only specific allegations in the complaint concerning
Migicovsky are that he “controls TELS, TELI, BGA, and LDS and their business transactions in
Kentucky either as a manager or sole manager of those entities, and was the organizer of TELS
and TELI in Kentucky.” Id. at 4, ¶ 12. These allegations are insufficient for this Court to
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plausibly infer Migicovsky’s involvement through a civil conspiracy in TELS or TELI’s alleged
fraudulent acts. Plaintiffs must plead more than conclusory allegations of involvement in a
scheme or conspiracy to defraud. See Twombly, 550 U.S. at 555. Therefore, this Court will
dismiss the fraud and fraudulent inducement claims against Migicovsky.
Accordingly, and for the reasons stated, this Court finds Tax Ease Defendants have not
conclusively established based on undisputed facts that Plaintiffs knowingly and voluntarily
waived any rights associated with the charges and fees. The Court will grant Tax Ease
Defendants’ motion to dismiss the fraud and fraudulent inducement claims against Migicovsky.
The Court will also grant Tax Ease Defendants’ motion to dismiss Plaintiff Walther’s fraud and
fraudulent inducement claims against TELI. The Court will grant Tax Ease Defendants’ motion
to dismiss Plaintiffs Brown, Cambron, and Leigh’s fraud and fraudulent inducement claims
against TELS. The Court will deny Tax Ease Defendants’ motion to dismiss all remaining fraud
and fraudulent inducement claims.
1.b. Sherrow Defendants – Waiver, Fraud, and Fraudulent Inducement
In addition to incorporating Tax Ease Defendants’ arguments, Sherrow Defendants argue
that the Court should dismiss Plaintiffs’ fraud and fraudulent inducement claims because: (1)
Plaintiffs did not rely on Sherrow Defendants’ letters to Plaintiffs’ detriment, so this Court
should dismiss Plaintiffs’ fraudulent inducement claim; and (2) Sherrow Defendants’ attorney’s
fees were below the statutory maximum, and therefore objectively reasonable and actual.
Sherrow Defendants argue that the Court should dismiss Plaintiffs’ fraudulent
inducement claim because Plaintiffs were not “spur[red] to action” by these Defendants’ letters.
Sherrow Defs.’ Mot. Dismiss 7, ECF No. 7-1. According to Sherrow Defendants, the only
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fraudulent acts Plaintiffs allege on behalf of SSA or Sherrow are that Sherrow Defendants sent
letters including pre-litigation attorney’s fees to Plaintiffs. Id. These Defendants argue that
Plaintiffs only entered into agreements to pay with TELS or TELI after receiving letters from
attorneys other than Sherrow Defendants. Id. As the Plaintiffs are required to plead with
particularity in alleging fraud, if the Plaintiffs did not plead sufficient facts to allege they relied
on the Sherrow Defendants’ letters, the Court should dismiss the fraudulent inducement claim.
Id.
Plaintiffs allege these “representations have been made to some or all members of the
Class, and have been relied upon in making payments to the TELS Defendants.” Third Am.
Compl. 35, ¶ 186, ECF No. 1-1. Particularly, Plaintiffs’ complaint alleges Sherrow Defendants’
letters notify property owners the total amount owed, including Sherrow’s pre-litigation
attorney’s fees. Sherrow Letters, Ex. 11, ECF No. 1-1. The letters state the bill is a tax lien on the
property and the amount is subject to change if not settled before a set date. Id.
Plaintiffs alleged reasonable reliance on representations, including those of Sherrow
Defendants. As this is the only additional argument Sherrow Defendants make in regard to
Plaintiffs’ fraudulent inducement claim, the Court will deny Sherrow Defendants’ motion to
dismiss that claim.
In regard to Plaintiffs’ fraud claim, Sherrow Defendants argue that if their representations
to Plaintiffs included attorney’s fees below the statutory maximum, then Plaintiffs have not
sufficiently alleged a fraud claim. Sherrow Defs.’ Mot. Dismiss 7-12, ECF No. 7-1. While
equivocating reasonable with maximum may quickly fill Sherrow Defendants’ coffers with
unearned fees, the Kentucky statute requires these Defendants actually provide reasonable

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service in exchange for payment. KRS § 134.452 requires attorney’s fees to be actual and
reasonable in addition to capping the maximum amount third-party purchasers may seek in prelitigation attorney’s fees. “[T]he statute as written does not automatically bestow upon a thirdparty purchaser whatever fees and costs it claims.” Tax Ease Lien Servicing, LLC v. Smith, 2014
WL 7013251, at *4 (Ky. Ct. App. Dec. 12, 2014). Reasonable attorney’s fees are imposed “based
upon the facts, circumstances, and documentation provided,” id., “with a view to common sense
realism.” In re Citizens Fidelity Bank & Trust Co., 550 S.W.2d 569, 570 (Ky. App. 1977).
Sherrow Defendants misinterpret the statute when construing “reasonable” to mean any
fees up to the statutory maximum regardless of the services rendered. If this was the proper
interpretation, it would render “reasonable” mere surplusage. See Freeman v. Quicken Loans,
Inc., 132 S. Ct. 2034, 2043 (2012) (noting that “the canon against surplusage merely favors that
interpretation which avoids surplusage”). These Defendants further contort the statutory
construction when asserting that the only basis for a fraudulent act premised on a knowing
violation of KRS § 134.452 is if “reasonable” is an objective factor; and then arguing that the
only objective reading of reasonable would be any fee not exceeding the statutory cap. Sherrow
Defs.’ Mot. Dismiss 7-12, ECF No. 7-1. Courts routinely apply objective analysis in determining
what is reasonable in accord with common sense in the particular context. See, e.g., United States
v. Easley, 942 F.2d 405, 411 (6th Cir. 1991) (discussing the application of an “objective
reasonable person standard”). In this fraud context, Plaintiffs must prove the knowing violation
of the “reasonable” standard.
Sherrow Defendants argue that the fees charged are actual and reasonable. First, these
Defendants argue they charged less than the statutory maximum per letter and therefore charged
reasonable fees. Sherrow Defs.’ Mot. Dismiss 9, ECF No. 7-1.Whether these Defendants charge
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the statutory maximum or not has no impact on whether the fees charged were reasonable.
Reasonable, as discussed above, has independent meaning apart from whether the attorney has
charged more than the statutory maximum.
Sherrow Defendants also argue that Plaintiffs conceded the fees were reasonable when
agreeing to settlement agreements. Id. This is a reiteration of Tax Ease Defendants’ waiver
argument this Court found lacks a sufficient basis. See discussion supra § 1.a.
Defendants offer no other argument why the pre-litigation attorney’s fees are reasonable
or why this Court should dismiss Plaintiffs’ fraud claims. Plaintiffs’ have claimed that these fees
were not reasonable because the letters sent to various Plaintiffs “are nearly identical in format to
the other collection letters,” are “inflated by up to 900%,” and are “based on work done by LDS”
and not that of an attorney. Third Am. Compl. 9-11, ¶¶ 36-45, ECF No. 1-1. These are sufficient
factual allegations, accepted as true, “to state a claim to relief that is plausible on its face.” Iqbal,
556 U.S. at 678.5
The Court will deny Sherrow Defendants’ motion to dismiss Plaintiffs’ fraud and
fraudulent inducement claims.
1.c. Defendant Craig – Waiver, Fraud, and Fraudulent Inducement
Beyond Tax Ease Defendants’ motion, Craig argues that Plaintiffs fail to allege any
connection between Craig and a scheme to “mislead or defraud” Cambron or Walther. Craig’s
Mot. Dismiss 4, ECF No. 18. Craig did not represent Tax Ease Defendants in matters relating to
Plaintiffs Walther or Cambron. Id. Plaintiffs fail to meet their burden to plead Craig’s particular

5

The Court need not address whether the fees were “actual” under KRS § 134.452 as pleading only unreasonable
fees is sufficient to state a claim.

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fraudulent actions involving Walther and Cambron, or Craig’s direct or indirect involvement
with TELS or TELI that would constitute sufficient facts to find civil conspiracy in regard to
those underlying fraudulent acts.
The Court will grant Craig’s motion to dismiss to the extent it pertains to Plaintiffs
Walther and Camron’s claims of fraud and fraudulent inducement. The Court will deny Craig’s
motion to dismiss Plaintiffs’ remaining claims of fraud and fraudulent inducement.
2. Racketeering Influenced and Corrupt Organizations Act
2.a. Tax Ease Defendants – Racketeering Influenced and Corrupt Organizations Act
A claim brought under the RICO Act (18 U.S.C. § 1962(c)) requires: “(1) conduct (2) of
an enterprise (3) through a pattern (4) of racketeering activity.” Heinrich v. Waiting Angels
Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 2012). If plaintiff alleges fraud as a basis for a
RICO claim, “there must be proof of misrepresentations or omissions which were reasonably
calculated to deceive persons of ordinary prudence and comprehension.” Id. While a plaintiff
does not need to prove his reliance on a defendant’s fraudulent acts, he must prove that the
fraudulent conduct is both a “but for” and proximate cause of the alleged injury. Hemi Group,
LLC v. City of New York, 559 U.S. 1, 9 (2010); Heinrich, 668 F.3d at 404-05. Proximate cause
for a RICO allegation requires proof of “some direct relation between the injury asserted and the
injurious conduct alleged.” Hemi Group, 559 U.S. at 9.
Plaintiffs allege Defendants, acting as an association-in-fact, used the mails and interstate
wires to send fraudulent letters to further a fraudulent scheme that is part of an ongoing tax
certificate delinquency collection business. As this is a claim of mail and wire fraud, Plaintiffs

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must allege sufficient facts that would show the use of the mail or wire in furtherance of a
scheme to defraud and an injury those actions caused.
Tax Ease Defendants’ sole argument in moving to dismiss the RICO claim is that even if
Plaintiffs could prove every other element of the RICO claim, Plaintiffs cannot establish any
reliance on the notices or payoff letters because their choice “not to avail themselves of the
opportunity to question the fees” “negates their ability to claim reliance.” Tax Ease Defs.’ Reply
Supp. Mot. Dismiss 9, ECF No. 12. If Plaintiffs cannot show reliance, according to these
Defendants, Plaintiffs cannot allege sufficient facts to establish causation. Tax Ease Defs.’ Mot.
Dismiss 19, ECF No. 5-1.
This argument mirrors these Defendants’ reasonable reliance position in regard to waiver,
fraud, and fraudulent inducement. See discussion supra § 1.a. The Court incorporates that
discussion here and will deny Tax Ease Defendants’ motion to dismiss Plaintiffs’ RICO claims.
2.b. Sherrow Defendants – Racketeering Influenced and Corrupt Organizations Act
Beyond incorporating Tax Ease Defendants’ motion, Sherrow Defendants fail to cite to a
single legal authority relating to RICO in their argument to dismiss Plaintiffs’ claims. Sherrow
Defendants do refer to Count I, the RICO claim, when discussing Counts I-V and VIII generally.
Sherrow Defendants argue that the claims should be dismissed as Plaintiffs could not have relied
on Sherrow Defenants’ particular mailed letters and that the fees included on those letters were
actual and reasonable attorney’s fees. Sherrow Defs.’ Mot. Dismiss 8, ECF No. 7-1. These
Defendants do not elaborate on (1) why this lack of reliance, which is not a required element for
a RICO claim, should prompt the Court to dismiss the claim; or (2) how the legal validity of
particular acts impact the RICO structure or the RICO enterprise’s other acts.
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The Court will deny Sherrow Defendants’ motion to dismiss Plaintiffs’ RICO claims.
2.c. Defendant Craig – Racketeering Influenced and Corrupt Organizations Act
Beyond incorporating Tax Ease Defendants’ motion, Defendant Craig fails to develop a
sufficient legal argument to dismiss Plaintiffs’ RICO claims. Craig fails to cite to a single legal
authority in his argument to dismiss Plaintiffs’ claims and only mentions the RICO claims once:
“Not a single word in the … complaint … alleges that … the Craig Defendants had any
connection to Camron or Walther. Not a single word indicating or even insinuating that Craig
committed any act of mail or wire fraud which might give rise to allege RICO liability …
committed or attempted to defraud Cambron or Walther, etc.” Craig’s Mot. Dismiss 5, ECF No.
18. Craig argues Plaintiffs do not allege any connection between Craig and Cambron and
Walther, but fails to elaborate on how this lack of association impacts the RICO structure or why
it should prompt this Court to dismiss Plaintiffs’ RICO claims against Craig.
The Court will deny Craig’s motion to dismiss Plaintiffs’ RICO claims.
3. Kentucky Consumer Protection Act
3.a. Tax Ease Defendants – Kentucky Consumer Protection Act
The Kentucky Consumer Protection Act (“KCPA”) “is remedial legislation enacted to
give consumers broad protection from illegal acts.” Arnold v. Microsoft Corp., 2000 WL
36114007, at *7 (Ky. Cir. Ct. July 21, 2000). To assert a KCPA cause of action, Plaintiffs must
allege that Defendants engaged in “[u]nfair, false, misleading, or deceptive acts or practices in
the conduct of any trade or commerce,” KRS § 367.170(1), and that Plaintiffs were persons who
purchase[d] … services primarily for personal, family or household purposes and thereby

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suffer[ed] … ascertainable loss of money or property, real or personal.” Id. § 367.220(1).
Kentucky courts have stressed that the “Kentucky legislature created a statute which has the
broadest application in order to give Kentucky consumers the broadest possible protection for
allegedly illegal acts. In addition, KRS § 446.080 requires that the statutes of this
Commonwealth are to be liberally construed.” Stevens v. Motorists Mut. Ins. Co., 759 S.W.2d
819, 821 (Ky. 1988).
The KCPA creates a restricted private right of action. The Court must determine whether
when property owners pay third-party purchasers for KRS § 134.452 fees, those purchasers
provide “services” under the KCPA. This is a question of first impression in Kentucky. The
Court must predict how Kentucky’s highest court would decide the issue based on available
information. See Dinsmore Instrument Co. v. Bombardier, Inc., 199 F.3d 318, 320 (6th Cir.
1999).
Tax Ease Defendants argue that “TELS and TELI are not selling or leasing anything”
and that “enforcing and resolving legal obligations of the delinquent taxpayers” does not
constitute a “commercial setting.” Tax Ease Defs.’ Reply Supp. Mot. Dismiss 10, ECF No. 12.
These Defendants, however, are not engaged in a public service. Indeed, based on the
allegations, these Defendants are operating a business venture providing a variety of services for
statutorily permissible fees.
The statutory framework that allows TELS and TELI to purchase certificates of
delinquency describes third-party purchasers buying these certificates as investments. See, e.g.,
KRS § 134.129 (describing registration requirements for those that “invest[] or plan[] to invest”
over certain amounts in purchasing certificates of delinquency). In entering into a forbearance

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agreement or agreed judgment, Plaintiffs paid these defendants more than owed taxes and
statutory interest. Defendants paid for pre-litigation legal services, title search services, and a
processing fee for administrative services associated with paying the amount owed in a particular
way. See id. § 134.490(5) (noting that the fee charged covers administrative processing costs of
providing a payment plan). These additional services that the Kentucky statute allows third-party
purchasers to collect from property owners are bases to recoup an investment and are not part of
the owed taxes.
Liberally construing the relevant statutes, this Court finds that Kentucky’s highest court
would determine that when property owners pay third-party purchasers for KRS § 134.452 fees,
those purchasers provide “services” under the KCPA.
Tax Ease Defendants also argue that all Defendants cannot allege claims against both
TELS and TELI, or allege a purchase or lease from BGA, LDS, or Migicovsky. The discussion
in Section 1.a concerning civil conspiracy liability applies here. As discussed in that Section,
TELS and TELI were only directly involved with certain Plaintiffs. Plaintiffs’ pleaded
allegations are insufficient for this Court to plausibly infer that TELS and TELI, respectively,
were involved in pursuing each other’s alleged illegal designs. The Court will grant these
Defendants’ motion to dismiss Plaintiff Walther’s KCPA claim against TELI. The Court will
also grant these Defendants’ motion to dismiss Plaintiffs Brown and Cambron’s KCPA claims
against TELS.
Also discussed in Section 1.a, this Court finds that Plaintiffs have alleged sufficient facts
that BGA’s and LDS’ involvement in furtherance of the fraudulent scheme, which includes this

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underlying KCPA violation, forms a basis for liability under a theory of civil conspiracy. The
Court will deny these Defendants motion to dismiss the KCPA claims against BGA and LDS.
Likewise, Plaintiffs have not alleged sufficient facts for this Court to infer Migicovsky’s
involvement through a civil conspiracy. The Court will grant Tax Ease Defendants’ motion to
dismiss the KCPA claims as they relate to Defendant Migicovsky.
Accordingly, and for the reasons stated, the Court will grant in part and deny in part Tax
Ease Defendants’ motion to dismiss the KCPA claims. The Court will grant these Defendants’
motion to dismiss Plaintiff Walther’s KCPA claim against TELI. The Court will also grant these
Defendants’ motion to dismiss Plaintiffs Brown and Cambron’s KCPA claims against TELS.
Furthermore, the Court will grant Tax Ease Defendants’ motion to dismiss the KCPA claims as
they relate to Defendant Migicovsky. The Court will deny Tax Ease Defendants motion to
dismiss the remaining KCPA claims.
3.b. Sherrow Defendants – Kentucky Consumer Protection Act
Beyond incorporating Tax Ease Defendants’ motion, Sherrow Defendants do not cite a
single legal authority relating to the KCPA. Sherrow Defendants do state that “the Plaintiff’s
[sic] have not pleaded reliance sufficient to support a claim against SSA and Mr. Sherrow on
Counts VI [fraudulent inducement] and VII [KCPA] since those Counts relate exclusively to the
circumstances surrounding the entrance of each Plaintiff into their respective settlement
agreements.” Id. at 7. Reliance is not a required element of a claim under the KCPA nor is a
fraudulent practice. A qualifying Plaintiff must allege “[u]nfair, false, misleading, or deceptive
acts or practices in the conduct of any trade or commerce.” KRS § 367.170(1). It is irrelevant

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whether Plaintiffs were “spur[red] into action” by these Defendants’ letters. Sherrow Defs.’ Mot.
Dismiss 7, ECF No. 7-1.
The Court will deny Sherrow Defendants’ motion to dismiss the KCPA claims.
3.c. Defendant Craig – Kentucky Consumer Protection Act
Craig adopts and recites without any additional argument Tax Ease Defendants’ motion
to dismiss as it pertains to Plaintiffs’ KCPA claims. The Court will deny Craig’s motion to
dismiss as it pertains to these claims.
4. KRS § 446.070
4.a. Tax Ease Defendants – KRS § 446.070
Under KRS § 446.070, “A person injured by the violation of any statute may recover
from the offender such damages as he sustained by reason of the violation.” The statute,
Kentucky’s codification of the negligence per se doctrine, applies when the alleged offender
violates a Kentucky statute that provides no remedy for the aggrieved party and the victim is
within the class of persons the statute intended to protect. See St. Luke Hosp., Inc. v. Straub, 354
S.W.3d 529, 534 (Ky. 2011); Thompson v. Breeding, 351 F.3d 732, 737 (6th Cir. 2003). “The
statute must have been specifically intended to prevent the type of occurrence that took place,
and the violation must have been a substantial factor in causing the result.” Hargis v. Baize, 168
S.W.3d 36, 46 (Ky. 2005).
Tax Ease Defendants argue that the statutes Plaintiffs identify do not exist to prevent
injury, and thus cannot include Plaintiffs within a class of persons the statutes intend to protect.
Tax Ease Defs.’ Mot. Dismiss 28, ECF No. 5-1. The first statute, KRS § 134.452, among other
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things, sets limitations on the amount third-party purchasers may collect for pre-litigation
attorneys’ fees. The statute further limits these fees to only “actual reasonable fees incurred” up
to a set amount based on the amount “paid for a certificate of delinquency.” Id. According to
Defendants, this statute creates substantive rights concerning acceptable fees and expenses thirdparty purchasers of certificates of delinquency may collect.
The Court, however, agrees with Plaintiffs that these provisions are also intended to
protect property owners subject to collection by limiting the amount those owners can owe thirdparty purchasers. In charging fees that are not actual or reasonable, the most obvious victim is
the individual erroneously paying those fees. Capping the fees protects property owners from
overcharging.
Defendants also argue KRS §§ 134.990(11)(a)(1)-(2) do not provide a basis for recovery
under KRS § 446.070. KRS §§ 134.990(11)(a)(1)-(2) outline penalties for knowingly demanding
costs or fees in excess of those in KRS § 134.452 and for failing to properly provide required
notices.6 The statute penalizes a failure to comply with other statutes. According to these
Defendants, this statute does not impose any duty and does not intend to protect any class of
persons. Rather, the statute sets out penalties for violating other statutory duties. Plaintiffs argue
that third-party purchasers violate the statute when charging fees not authorized in KRS
§ 134.452.
The Court agrees with Defendants that KRS §§134.990(11)(a)(1)-(2) do not themselves
impose a duty that intentionally protects Plaintiffs. A Defendant does not violate KRS
6

KRS §§ 134.990(11)(a)(1)-(2) state: “Any third-party purchaser who knowingly: 1. Demands costs or fees in
excess of those permitted by KRS 134.452; 2. Fails to send notices as required by KRS 134.490, or to include in the
notices the information required by KRS 134.490…. shall be subject to a fine of not less than one hundred dollars
($100) nor more than two hundred fifty dollars ($250) for the first offense, and for the second and any subsequent
offenses, shall be fined not less than two hundred fifty dollars ($250) nor more than five hundred dollars ($500).”

22

§§ 134.990(11)(a)(1)-(2), but violates one of the corresponding statutes, such as KRS § 134.452,
and then KRS §§ 134.990(11)(a)(1)-(2) dictates the penalty for violating the other statute. A
failure to pay the penalty would not harm Plaintiffs in this case. The harm Plaintiffs suffer would
be due to a demand of excess fees in violation of KRS § 134.452. The harm associated with not
paying statutorily defined penalties in another section, however, would at most harm the
Commonwealth.
Lastly, KRS § 134.490 sets forth various notice, data collection, and record-keeping
requirements for third-party purchasers of certificates of delinquency, as well as payment plan
criteria. Plaintiffs fail to identify in their complaint which provisions of the statute Defendants
allegedly violated. Regardless, Defendants correctly conclude that “a failure to send any
particular notice or to collect or preserve certain data or records could not have injured any
Plaintiff.” Tax Ease Defs.’ Mot. Dismiss 30, ECF No. 5-1. A failure to comply with these
requirements would suspend any interest accrual or fees until proper notice resumed. See KRS
§ 134.490(3)(e). Instead of injuring Plaintiffs, this would actually benefit the property owners as
it would limit third-party purchasers’ statutory recovery.7
Tax Ease Defendants also assert that Plaintiffs cannot allege a statutory violation by
BGA, LDS, or Migicovsky as these defendants are not third-party purchasers, which is required
for a violation of KRS § 134.452. The discussion in Section 1.a concerning civil conspiracy
liability applies here.
As discussed in Section 1.a, this Court finds that Plaintiffs have alleged sufficient facts
that BGA’s and LDS’ involvement in furtherance of the fraudulent scheme, which includes this
7

The Court notes that Plaintiffs failed to address KRS § 134.490’s basis for a KRS § 446.070 claim in their response
to Tax Ease Defendants’ motion to dismiss.

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underlying KRS § 446.070 violation, forms a basis for liability under a theory of civil liability.
Likewise, Plaintiffs have not alleged sufficient facts for this Court to plausibly infer
Migicovsky’s involvement through a civil conspiracy.
The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiffs’ KRS § 446.070
claims to the extent they rely on KRS § 134.490 and KRS §§ 134.990(11)(a)(1)-(2). The Court
will also dismiss the Plaintiffs’ KRS § 446.070 claims against Defendant Migicovsky. The Court
will deny Tax Ease Defendants’ motion to dismiss as it pertains to Plaintiffs’ remaining KRS
§ 446.070 claims.
4.b. Sherrow Defendants – KRS § 446.070
Beyond Tax Ease Defendants’ motion to dismiss, Sherrow Defendants do not cite a
single legal authority relating to Plaintiffs’ KRS § 446.070 claims. While Sherrow Defendants do
mention “Count IV,” which is Plaintiffs’ KRS § 446.070 claim, these Defendants do so in the
context of discussing Counts I-V and VIII generally. Sherrow Defendants argue that these claims
should be dismissed as Plaintiffs could not have relied on Sherrow Defendants’ particular mailed
letters and that the fees included on those letters were for actual and reasonable attorney’s fees.
Id. at 8. Sherrow Defendants make no effort to elaborate how these arguments impact Plaintiffs’
pleaded KRS § 446.070 claim.
The Court will dismiss Plaintiffs’ KRS § 446.070 claims to the extent they rely on KRS
§ 134.490 and KRS §§ 134.990(11)(a)(1)-(2). The Court will deny these Defendants’ motion to
dismiss Plaintiffs’ KRS § 446.070 claims to the extent they rely on KRS § 134.452.
4.c. Defendant Craig – KRS § 446.070

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Craig merely adopts and recites without any additional argument Tax Ease Defendants’
motion to dismiss as it pertains to Plaintiffs’ KRS § 446.070 claims. This Court will dismiss
Plaintiffs’ KRS § 446.070 claims to the extent they rely on KRS § 134.490 and KRS
§§ 134.990(11)(a)(1)-(2). The Court will deny Craig’s motion to dismiss Plaintiffs’ KRS
§ 446.070 claims to the extent they rely on KRS § 134.452.
5. Declaration of Rights
5.a. Tax Ease Defendants – Declaration of Rights
The Court has broad discretion under both the Kentucky Declaratory Judgment Act, KRS
Chapter 418, and the Federal Declaratory Judgment Act, 28 U.S.C.A. § 2201, to declare the
rights of parties in order to terminate the uncertainty or controversy prompting the action. See
Mammoth Medical, Inc. v. Bunnell, 265 S.W.3d 205 (Ky. 2008). KRS § 418.040 allows a court
to enter a binding declaration of rights “wherein it is made to appear that an actual controversy
exists.” The federal Declaratory Judgment Act states that in a “case of actual controversy within
its jurisdiction, ... any court of the United States, ... may declare the rights and other legal
relations of any interested party seeking such declaration.” 28 U.S.C. § 2201(a). The Court must
abstain from awarding declaratory judgment, however, under state or federal law, when
adjudicating allegations of injuries arising from past conduct or to “secure a determination of
substantive rights involved in a pending suit.” Id. Regardless which act the Court acts upon, the
result is the same.
Plaintiffs’ complaint seeks a declaration that “Defendants are not entitled to collect the
fees and charges they have demanded under the liens they assert against Class member’s [sic]
real property and that the accrual of all interest and fees have been suspended.” Third Am.
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Compl. 33-34, ¶ 168, ECF No. 1-1. Defendants argue Plaintiffs are not entitled to declaratory
relief because “every Plaintiff purports to seek declaratory relief regarding fees and charges that
they already paid to TELS or TELI.” Tax Ease Defs.’ Mot. Dismiss 18, ECF No. 5-1. It is
undisputed Cambron and Leigh have completed all payments on their payment plans. As these
allegations concern past conduct, the Court will dismiss Plaintiffs Cambron and Leigh’s claims
for declaration of rights.
Plaintiffs argue Brown and Walther still owe fees and charges to TELS or TELI under the
Plaintiffs’ respective payment plans. See Resp. Tax Ease Defs.’ Mot. Dismiss 29, ECF No. 9.
Plaintiffs’ complaint, however, only alleges sufficient evidence that Walther still owes fees and
charges to TELS. Third Am. Compl. 26, ¶ 143, ECF No. 1-1. Plaintiffs’ complaint lacks any
factual allegation that Brown still owes TELI fees or charges and includes allegations that Brown
“paid the TELS Defendants under the forbearance agreement” and that the Tax Ease Defendants
“collected” the pre-litigations attorney’s fees. Id. at 23, ¶¶ 116-17.
The Third Amended Complaint failed to plead sufficient facts that Brown still owes TELI
fees or charges. The Court will grant Tax Ease Defendants’ motion to dismiss Plaintiffs’ claim
for a declaration of rights as it applies to Brown.
The Court agrees with Plaintiffs that they have alleged sufficient facts for a claim of
declaration of rights with regard to Plaintiff Walther. While Walther has experienced alleged past
harm, Plaintiffs also allege future harmful conduct toward Walther in the form of continuing to
pay alleged illegal payments to TELS. Id. at 28, ¶ 143. As these future payments do not
constitute past conduct, the Court will deny Defendants’ motion to dismiss the declaration of
rights claim as it applies to Walther.

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5.b. Sherrow Defendants – Declaration of Rights
Beyond Tax Ease Defendants’ motion to dismiss, Sherrow Defendants do not cite a
single legal authority relating to Plaintiffs’ declaration of rights claims. While Sherrow
Defendants do mention “Count II,” which is Plaintiffs’ declaration of rights claim, these
Defendants do so in the context of discussing Counts I-V and VIII generally. Sherrow
Defendants argue that these claims should be dismissed as Plaintiffs could not have relied on
Sherrow Defendants’ particular mailed letters and that the fees included on those letters were for
actual and reasonable attorney’s fees. Sherrow Defs.’ Mot. Dismiss 8, ECF No. 7-1. Sherrow
Defendants make no effort to elaborate how these arguments impact Plaintiffs’ declaration of
rights claims.
Based on the adoption of Tax Ease Defendants’ motion to dismiss, the Court will dismiss
Plaintiffs’ claims for a declaration of rights to the extent they apply to Plaintiffs Cambron, Leigh,
and Brown. The Court will deny Defendants’ motion to dismiss the declaration of rights claims
to the extent they apply to Walther.
5.c. Defendant Craig – Declaration of Rights
As Craig merely adopts and recites without any additional argument Tax Ease
Defendants’ motion to dismiss as it pertains to the declaratory judgment claims, this Court will
dismiss Plaintiffs’ claims for a declaration of rights to the extent they apply to Plaintiffs
Cambron, Leigh and Brown, and deny Craig’s motion to dismiss the declaration of rights claims
to the extent they apply to Walther.
6. Injunctive Relief

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“‘Injunctive relief’ is not a cause of action, it is a remedy.” Thompson v. JPMorgan
Chase Bank, N.A., 563 F. App’x 440, 442 n.1 (6th Cir. 2014) cert. denied, 135 S. Ct. 494, 190 L.
Ed. 2d 362 (2014) reh’g denied, 135 S. Ct. 1171, 190 L. Ed. 2d 927 (2015). As a claim for
injunctive relief is a misnomer and appropriately pleaded as relief for a particular claim, the
Court dismisses Plaintiffs’ “claim” for injunctive relief as it pertains to all Defendants.
7. Unjust Enrichment8
7.a. Sherrow Defendants – Unjust Enrichment
Sherrow Defendants fail to develop a sufficient legal argument to establish granting their
motion to dismiss Plaintiffs’ unjust enrichment claims. Sherrow Defendants fail to cite to a
single legal authority relating to unjust enrichment in their argument to dismiss Plaintiffs’ claims
and only mention “Unjust Enrichment” in the recitation of Plaintiffs’ claims. Sherrow Defs.’
Mot. Dismiss 5, ECF No. 7-1.
Sherrow Defendants’ entire explicit reference to the claims is: “The Plaintiffs make no
effort to elucidate the nature of the unjust enrichment beyond making a passing reference to ‘the
averments of all previous passages,’ which, it is clear, make claim[s] based purely in alleged
fraudulent conduct.” Id. Although Sherrow Defendants do refer to Count VIII, the unjust
enrichment claim, when discussing Counts I-V and VIII generally, they argue that these claims
should be dismissed as Plaintiffs could not have relied on Sherrow Defendants’ particular mailed
letters and that the fees included on those letters were for actual and reasonable attorney’s fees.
Id. at 8. These Defendants do not elaborate on how this argument would impact a claim of unjust
enrichment.

8

Only Sherrow Defendants moved for this Court to dismiss Plaintiffs’ claim alleging unjust enrichment.

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The Court will deny Sherrow Defendants’ motion to dismiss as it pertains to Plaintiffs’
unjust enrichment claims.
A separate order will be entered in accordance with this opinion.

November 20, 2015

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