Bedee v. Fulton, Friedman & Gullace, LLP et al

Filing 36

OPINION AND ORDER granting 28 Defendant's Motion for Summary Judgment; denying 29 Plaintiff's Motion for Summary Judgment. Signed by District Judge Marianne O. Battani. (BThe)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

BRIAN BEDEE,
Plaintiff,
v.

CASE NO. 2:13-cv-11182

ASSET ACCEPTANCE, LLC,

HON. MARIANNE O. BATTANI

Defendants.
_________________________________/
OPINION AND ORDER GRANTING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT AND DENYING
PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT
Before the Court is Plaintiff Brian Bedee’s Motion for Summary Judgment (Doc.
29) and Defendant Asset Acceptance, LLC’s Motion for Summary Judgment (Doc. 28).
Bedee filed a complaint, alleging that Defendants Fulton, Friedman & Gullace, LLP
(“Fulton”) and Asset Acceptance, LLC (“Asset”) violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and state law when they failed to
stop collection activities after Bedee requested validation of the debt. For the reasons
stated below, Defendant Asset’s motion is GRANTED and Bedee’s motion is DENIED.
I.

STATEMENT OF FACTS
Asset purchases charged-off accounts from credit originators and other sellers.

It owns a delinquent account in Bedee’s name. On July 19, 2012, Asset sent a notice
(“First Notice”) to Bedee advising him that Asset owned the Account and notifying him
that he had thirty days from receipt of the letter to dispute the validity of the debt.
Bedee did not respond to this notice.

Thereafter, Asset retained Fulton as counsel to pursue the claim against Bedee.
On November 16, 2012, Fulton, acting as legal counsel for Asset, sent another notice
(“Second Notice”) to Bedee advising him that Asset owned the Account, and that he had
thirty days to dispute the validity of the debt.
According to Bedee, almost immediately after receiving the Second Notice he
responded by writing a note at the bottom of the notice and mailing it to Fulton. He
wrote: “I am not responsible for your assumption, send validation of entire debt.” Bedee
asserts he sent the letter by regular mail.
Fulton asserts that it did not receive the letter until February 12, 2013 when
Bedee answered the January 2013 lawsuit Fulton filed on behalf of Asset to collect on
the Account. Bedee attached his request for more information as an exhibit to his
Answer.
On March 18, 2013, Bedee filed suit in this Court against Asset and Fulton
alleging violations of the FDCPA and state law. In his complaint, Bedee alleges that he
responded to the Fulton notice with his handwritten notice in December 2012. (Doc.
No. 28, Ex. At 51-58). Bedee does not allege that he communicated with Asset or
requested validation of the debt from Asset. Instead, Bedee asserts that Defendants
violated federal and state law by failing to respond to his request before filing the state
court action.
On May 24, 2013, Bedee dismissed Fulton with prejudice from this lawsuit. (Doc.
No. 16).

In exchange, Bedee received $1,000 from Fulton, with additional funds

(approximately $5,000) going to Bedee’s counsel. In addition, Bedee dismissed all of

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the state claims against Asset. Now before the Court are the parties’ cross-motions for
summary judgment.
II.

STANDARD OF REVIEW
Summary judgment is appropriate only when there is “no genuine dispute as to

any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a).

The central inquiry is “whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so one-sided that one party
must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52
(1986). Rule 56 mandates summary judgment against a party who fails to establish the
existence of an element essential to the party's case and on which that party bears the
burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
III.

ANALYSIS
Bedee argues that Asset violated the FDCPA when it failed to respond to his

request for validation of the debt and unlawfully filed a lawsuit in state court. Although
Bedee settled with Fulton, he asserts that the settlement does not affect Asset’s liability.
In addition, he claims Asset is liable for additional damages because the settlement did
not delineate a specific amount as statutory damages under the FDCPA, which are only
recoverable up to $1,000 per action. See Wright v. Fin. Serv. of Norwalk, 22 F.3d 647,
651 (6th Cir. 1994) (noting that “Congress intended to limit ‘other damages’ to $1,000
per proceeding, not to $1,000 per violation”). Instead, he seeks actual damages arising
from the stress and emotional toll suffered in defending himself in the state court action.
Asset argues the settlement agreement with Fulton bars Bedee’s remaining
claims because Bedee did not respond to the First Notice sent by Asset. In other

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words, Bedee is seeking to hold Asset vicariously liable for Fulton’s failure to respond to
Bedee’s request for validation of the debt.

Although Asset raised several other

arguments in its briefs, the Court concludes this issue is dispositive.
The FDCPA requires that a debt collector send written notice of the amount of
the debt, the name of the creditor, and other information to the consumer. 15 U.S.C. §
1692g(a). If the consumer requests verification of the debt within thirty days of the
written notice, the debt collector must mail the information to the consumer.

§

1692g(a)(4). A failure to send verification of the debt constitutes a violation of the
FDCPA.
It is undisputed that Asset is a “debt collector” as prescribed in the FDCPA, §
1692a(6), and that Bedee did not respond to the First Notice sent by Asset. (Doc. 29,
Ex. A). Rather, Bedee responded to the Second Notice sent by Fulton on behalf of
Asset. It is also undisputed that Bedee settled with Fulton and dismissed it from the
lawsuit. Contrary to Bedee’s assertion that he is not bringing his claim under a vicarious
liability theory, he is clearly proceeding against Asset based on the Second Notice sent
by Fulton.
Generally, “a valid release of an agent for tortious conduct operates to bar
recovery against the principal on a theory of vicarious liability, even though the release
specifically reserves claims against the principal.” Theophelis v. Lansing Gen. Hosp.,
424 N.W.2d 478, 481 (Mich. 1988) (citations omitted). The same reasoning applies if
there is no signed release of the agent, and the agent is merely dismissed with
prejudice.

See Al-Shimmari v. Detroit Med. Ctr., 731 N.W.2d 29, 38 (Mich. 2007)

(holding that “dismissal of the claims against defendant [agent] operates as an

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adjudication on the merits . . . [and] the remaining defendants cannot be held vicariously
liable for [agent’s] acts”).
Here, Bedee seeks to hold Asset vicariously liable for Fulton’s failure to send
verification of the debt. Bedee admits that he did not respond to Asset’s First Notice,
and therefore, there is no other basis to proceed against Asset.

Indeed, Asset

committed no separate violation of the FDCPA independent of Fulton’s conduct.
Consequently, there is no genuine issue of material fact and Bedee’s claim is precluded
by the dismissal of Fulton from the action.
IV.

CONCLUSION
Accordingly, Defendant Asset’s motion is GRANTED and Bedee’s motion is

DENIED.
IT IS SO ORDERED.
s/Marianne O. Battani
MARIANNE O. BATTANI
UNITED STATES DISTRICT JUDGE

DATE: February 18, 2014
CERTIFICATE OF SERVICE
I hereby certify that on the above date a copy of this Order was served upon all
parties of record via the Court’s ECF Filing System.
s/Bernadette M. Thebolt
Case Manager

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