Scott v. Trott Law, P.C.
ORDER Denying 67 Defendant's Motion for Judgment on the Pleadings as Moot. Signed by District Judge Denise Page Hood. (MacKay, K)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
CASE NO. 16-13734
HON. DENISE PAGE HOOD
TROTT LAW, P.C.,
ORDER DENYING DEFENDANT’S MOTION FOR JUDGMENT ON THE
PLEADINGS AS MOOT [#67]
On October 20, 2016, Plaintiff Kevin Scott (“Scott”) filed a pro se Complaint
against Defendant Trott Law, P.C. (“Trott”) alleging Violation of the Fair Debt
Collection Practices Act (“FDCPA”) (Count 1), Violation of the Real Estate
Settlement Procedures Act (Count 2), Unreasonable Collection Efforts under M.C.L.
§ 339.918(e)(2) (Count 3), Fraud and Misrepresentation (Count 4), Intentional
Infliction of Emotional Distress (Count 5), and Violation of Civil Rights under 42
U.S.C. § 1981 (Count 6). On January 26, 2017, Trott filed a Motion for Summary
Judgment / Dismissal. (Doc # 18) The Court granted Trott’s Motion as to all Counts
on June 22, 2017. (Doc # 54) The Court notes that while the docket does not reflect
exactly when this happened, Scott secured counsel, Jan J. Rubinstein, after the Court
granted Trott’s Motion but before or on the date when Scott filed his Notice of
Appeal on January 12, 2018. (Doc # 58) On January 11, 2019, the Sixth Circuit
reversed this Court’s summary judgment with respect to only Scott’s FDCPA claim.1
(Doc # 61)
On May 17, 2019, Trott filed a Motion for Judgment on the Pleadings. (Doc
# 67) A Response and Reply have been filed. (Doc # 69; Doc # 70) This Motion is
currently before the Court and a hearing on this Motion was held on July 10, 2019.
Scott filed this action arising from ongoing proceedings to foreclose the
Mortgage, dated April 26, 2004, on his residence in Farmington Hills, Michigan. On
September 27, 2016, Trott initiated a foreclosure by advertisement by sending a Fair
Debt Letter to Scott stating the amount of the Debt. The letter indicates that Trott is
a debt collector attempting to collect a debt, that Trott represents Bank of America,
N.A. (“BANA”), and that this matter was referred to Trott to foreclose Scott’s
Mortgage. (Doc # 1, Pg ID 30) The letter identifies Fannie Mae as the owner of the
debt and BANA as the servicer of the debt. Id. The letter indicates that BANA has
elected to accelerate the total indebtedness due and owing under the Mortgage,
The Sixth Circuit determined that Trott violated the FDCPA by continuing collection activities
after receiving Scott’s Dispute Letter. Scott v. Trott Law, P.C., 760 F. App'x 387, 394 (6th Cir.
$180,131.05. Id. The letter breaks down the total amount due and owing, indicating
amounts owed for principal balance, unpaid interest, late charges, allowable
advances, less escrow balance, escrow advance, and NSF fees. Id. The letter further
Unless you notify this office within thirty (30) days after receiving this
notice that you dispute the validity of this debt, or any portion thereof,
this office will assume this debt is valid. If you notify this office in
writing within thirty (30) days after receiving this notice that you
dispute the validity of this debt, this office will obtain verification of
the debt or a copy of the judgment, if applicable, and mail a copy of
such verification or judgment to you. If you request, in writing, within
thirty (30) days after receiving this notice, this office will provide you
with the name and address of the original creditor, if different from the
current creditor. Id.
Trott sent another letter to Scott on October 7, 2016. Id. at 32. This letter
notified Scott that, under the power of sale contained in the Mortgage, the Mortgage
will be foreclosed by a sale of the mortgaged premises on November 8, 2016. Id.
The letter also states that the redemption period shall be 12 months from the date of
the sale, unless determined abandoned, in which case the redemption period shall be
30 days from the date of the sale. Id.
Trott additionally took three actions on October 5, 2016. First, Trott arranged
a sheriff’s sale for a Foreclosure of Mortgage by Advertisement with an auction date
of November 8, 2016. Pursuant to Michigan law, Mich. Comp. Laws § 600.3208,
Trott prepared a Notice of Mortgage Foreclosure Sale (“Notice”) that was to be
posted on the premises of Scott’s home and published for four consecutive weeks in
a newspaper in the county of Scott’s residence and stated the date of sale and amount
of outstanding mortgage debt.
Second, Trott contacted a local newspaper to
schedule the home posting and the four publications of the Notice for October 7, 14,
21, and 28 of 2016. The newspaper had the Notice posted on the premises on
October 14, 2016. Third, Trott mailed a copy of the Notice to Scott.
On October 8, 2016, Scott sent a certified letter to Trott disputing the validity
of the debt and claiming that he provided certain checks, each in the amount of
$2,888.98, to attorneys at Maddin Hauser representing BANA in his previous action,
Case No. 12-12864. Id. at 34. An Affidavit of Scott also indicates that these
attorneys were given checks that were to be given to BANA in the amount of
$2,888.98, and that “all of the missing checks were given to the Attorneys.” Id. at
41. The Affidavit does not specify how many alleged missing checks there are. Id.
According to the Complaint, BANA misrepresented the total amount due as
$115,946.31 in September 2016.
Id. at 10.
Scott asserts that he only owes
approximately $65,995.52. Id. The Complaint alleges that Scott is “current”
because all checks were given to attorneys at Maddin Hauser, and that Trott refused
to verify the debt. Id. The Complaint further alleges that Trott fraudulently initiated
the foreclosure process.
On October 5, 2016, Maddin Hauser sent a letter to Scott in response to his
various e-mails. Id. at 36. Maddin Hauser’s letter indicates that Maddin Hauser is
no longer involved in this matter and that “[a]ny and all checks that my office
received from you were either returned to you or forwarded on to our client.” Id.
Maddin Hauser sent a second letter to Scott on October 6, 2016 indicating that they
did not represent him and that they have no additional personal knowledge regarding
the location of his checks. Id. at 38. After commencement of this action, the
foreclosure sale of the mortgaged premises scheduled for November 8, 2016 was
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(c) authorizes parties to move for judgment
on the pleadings “[a]fter the pleadings are closed—but early enough not to delay
trial.” Fed. R. Civ. P. 12(c). Motions for judgement on the pleadings are analyzed
under the same standard as motions to dismiss under Rule 12(b)(6). See Warrior
Sports, Inc. v. Nat’l Collegiate Athletic Ass’n, 623 F.3d 281, 284 (6th Cir. 2010).
“For purposes of a motion for judgment on the pleadings, all well-pleaded material
allegations of the pleadings of the opposing party must be taken as true, and the
motion may be granted only if the moving party is nevertheless clearly entitled to
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court
explained that “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment]
to relief’ requires more than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do. Factual allegations must be enough to
raise a right to relief above the speculative level . . . .” Id. at 555. A plaintiff’s
factual allegations, while “assumed to be true, must do more than create speculation
or suspicion of a legally cognizable cause of action; they must show entitlement to
relief.” LULAC v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (emphasis in
original) (citing Twombly, 550 U.S. at 555). “To state a valid claim, a complaint
must contain either direct or inferential allegations respecting all the material
elements to sustain recovery under some viable legal theory.” Bredesen, 500 F.3d
at 527 (citing Twombly, 550 U.S. at 562).
When deciding a 12(c) motion for judgment on the pleadings, as a general
rule, matters outside the pleadings may not be considered unless the motion is
converted to one for summary judgment under Fed. R. Civ. P. 56. See Weiner v.
Klais & Co., 108 F.3d 86, 88 (6th Cir. 1997). The Court may, however, consider
“the Complaint and any exhibits attached thereto, public records, items appearing in
the record of the case, and exhibits attached to defendant’s motion to dismiss so long
as they are referred to in the Complaint and are central to the claims contained
therein.” Id. at 89.
Trott argues that the Court should grant the instant Motion due to the Supreme
Court’s findings in Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019),
which the Supreme Court issued on March 20, 2019—a little more than two months
after the Sixth Circuit issued its Opinion regarding this case. Trott claims that
because of Obduskey, the Court should not allow Scott to proceed with his remaining
FDCPA claim since this case is premised on it engaging in a nonjudicial statutory
In response, Scott makes two arguments for the Court to consider. First, Scott
contends that Trott’s argument fails because Trott violated 15 U.S.C. § 1692f(6),
which according to Obduskey, makes Trott liable for violating the FDCPA even
though it engaged in a nonjudicial statutory foreclosure.3
The Supreme Court determined in Obduskey that a business engaged in no more than nonjudicial
foreclosure proceedings is not a “debt collector” under the FDCPA, except for the limited purpose
of 15 U.S.C. § 1692f(6). Obduskey, 139 S. Ct. at 1038.
15 U.S.C. § 1692f(6) explains that debt collectors are prohibited from:
(6) Taking or threatening to take any nonjudicial action to effect dispossession or
disablement of property if-(A) there is no present right to possession of the property claimed as
collateral through an enforceable security interest;
(B) there is no present intention to take possession of the property; or
According to Scott, Trott’s conduct makes it liable for violating 15 U.S.C. §
1692f(6). Scott asserts that as an initial matter, Trott is a debt collector because it
has held itself out to be a debt collector in its email signature and letterhead, during
oral argument, and throughout its pleadings.4 Additionally, Scott claims that Trott
is a debt collector since it engaged in security-interest enforcement through its
ownership of other entities—which perform perquisites to foreclosures pursuant to
Michigan law—and had an incentive to produce 1,000 foreclosure notices per month
for a sum of $500,000. Scott further contends that Trott had no “present right to
possession of the property at issue through an enforceable security interest” under §
1692f(6). (Doc # 69, Pg ID 30) In support of this argument, Scott cites to the Sixth
Circuit’s Order, in which the Sixth Circuit said in a footnote that “had Scott’s
property been sold, the purchaser would not have valid title to the property because
Trott had no such title to convey.”5 (Doc # 61)
(C) the property is exempt by law from such dispossession or disablement.
The term “debt collector” under the FDCPA has been defined as
any person who uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another.
15 U.S.C. § 1692a(6).
The Court notes that the Sixth Circuit went on to say in that footnote that “a buyer receives
voidable title where there is a defect in the notice of a foreclosure sale under Mich. Comp. Laws
§ 600.3208.” Scott, 760 F. App'x at 393 n.5 (citing Jackson Inv. Corp. v. Pittsfield Products, Inc.,
162 Mich App. 750, 755-56 (Mich. Ct. App. 1987)). Further, the Sixth Circuit said that it would
Trott’s reply to Scott’s first response is that even if Trott characterized itself
as a debt collector, that does not conclusively prove that Trott was in fact a debt
collector for FDCPA purposes. Trott cites to the Sixth Circuit case Lewis v. ACB
Bus. Servs., Inc., 135 F.3d 389, 399 (6th Cir. 1998), in which the court found that
even though a debt collector sent a letter to a debtor that stated at the bottom of the
letter that the debt collector was attempting to collect a debt, the letter was not then
transformed into an unlawful demand for payment. Trott claims that the court in
Lewis also determined that such a statement regarding the debt an entity tries to
collect is required by the FDCPA, and the failure to include that type of a disclaimer
is a violation of the FDCPA. See 15 U.S.C. § 1692e(11). Trott additionally contends
that it cannot be held to its previous declarations regarding its status as a debt
collector because when it admitted to being a debt collector, its proclamations were
in accordance with the Sixth Circuit’s determination that it was one. See Glazer v.
Chase Home Fin. LLC, 704 F.3d 453,462 (6th Cir. 2013) (finding that “debt
collectors” that engage in nonjudicial action are subject to the FDCPA). However,
Trott claims that since Obduskey became binding law, Trott should now be able to
argue that it is not a debt collector under the FDCPA.
be obvious that a legal dispute, as evidenced by the dispute letter, would have made the title to the
property voidable. Id.
Scott’s second argument is that the Court should allow him to amend his initial
Complaint. Scott claims that due to the significant changes in the law, he should be
permitted to present facts to assist him with proving his remaining FDCPA claim.
Scott asserts that if he is not allowed to amend his Complaint, he would be subject
to significant injustices as Obduskey altered definitions under the FDCPA that are
directly applicable to this case. Scott contends that the Court should consider the
fact that his amended complaint would be filed with the assistance of counsel as he
filed his initial Complaint on a pro se basis. Finally, Scott asserts that if the Court
were to allow him to amend his Complaint, the parties could both engage in
meaningful discovery and proceed with the understanding that this Court will defer
Trott argues to the contrary. Trott alleges that in addition to the fact that Scott
has not filed a motion seeking leave to amend or attached a proposed amended
pleading in accordance with E.D. Mich. LR 15.1, Scott’s amended complaint would
be futile. Trott contends that Scott’s amended complaint would be futile because
Scott’s rebuttal to the instant Motion is based on the Sixth Circuit’s erroneous
notation that a purchaser who received the subject property as a result of the
foreclosure sale would have received voidable title. Trott says that the Sixth
Circuit’s commentary was “misplaced” since Obduskey is now controlling authority,
and under Obduskey, Trott cannot be defined as a debt collector. Trott asserts that
because it is not a debt collector, Trott could not have violated the FDCPA, and the
Sixth Circuit’s footnote from its Order is consequently irrelevant.
The Court will first address Scott’s request to amend his Complaint. In a case
where a responsive pleading has been filed, a party may amend its pleading only
with the written consent of the opposing party or by leave of the Court. Fed. R. Civ.
P. 15(a)(2). Defendant opposes Plaintiff’s request, so it is within the Court’s
discretion whether to grant Plaintiff’s request to amend his Complaint. Pursuant to
Rule 15(a)(2), “leave shall be freely given when justice so requires.” The factors a
court is to consider when determining whether to permit a plaintiff to file an
amended complaint are:
(1) the delay in filing the motion,
(2) the lack of notice to the other party,
(3) bad faith by the moving party,
(4) repeated failure to cure deficiencies by previous amendments,
(5) undue prejudice to the opposing party, and
(6) futility of the amendment.
Wade v. Knoxville Utilities Bd., 259 F.3d 452, 460 (6th Cir. 2001); Perkins v. Am.
Elec. Power Fuel Supply, Inc., 246 F.3d 593, 605 (6th Cir. 2001). A district court
may deny a plaintiff leave to amend his complaint when the proposed amendment
would be futile. See, e.g., Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 569 (6th
Cir. 2003) (citing Foman v. Davis, 371 U.S. 178 (1962)).
Pursuant to Fed. R. Civ. P. 15(a)(2), the Court finds that justice requires that
Scott have the opportunity to amend his Complaint since there is new law governing
his claim. Both parties acknowledge that Obduskey may alter the Court’s analysis
of Scott’s claim and at least one other court has granted similar plaintiffs’ request to
amend their complaint in light of Obduskey. See Eastman v. NPL Capital, LLC, No.
17-CV-03074-RBJ, 2019 WL 1596142, at *1 (D. Colo. Apr. 15, 2019). The Court
finds that Scott did not act in bad faith and an amendment in this instance would not
be futile since it would give him the opportunity to present new facts and make
additional arguments that he did not provide to the Court previously due to the
change in law. Further, the Court does not believe that Trott will be unfairly
prejudiced if Scott is allowed to amend his Complaint, and contrarily, the additional
time afforded to both parties could very well benefit Trott.
The Court also notes that it does not find Trott’s arguments in opposition to
Scott’s request to be persuasive. First, the fact that Scott has not filed a motion
seeking leave to amend or attached a proposed amended pleading pursuant to E.D.
Mich. LR 15.1 is irrelevant as E.D. Mich. LR 15.1 states that “[f]ailure to comply
with this Rule is not grounds for denial of the motion.” Next, Trott’s contention that
Scott’s reliance on the Sixth Circuit’s footnote from its Order is misplaced and
therefore makes his request to amend his Complaint futile, is unsupported by the
facts in this case at this time. Trott is essentially claiming that the Sixth Circuit’s
footnote was inaccurate because Trott is conclusively not considered a debt
collector. The facts do not decisively indicate that such a contention is true.
Therefore, because at this stage, the Court is not able to adequately determine
whether Trott was a debt collector or violated 15 U.S.C. § 1692f(6), Scott’s request
to amend his Complaint is not futile and is therefore granted.
IT IS HEREBY ORDERED that Defendant Trott Law, P.C.’s Motion for
Judgment on the Pleadings (Doc # 67) is DENIED AS MOOT.
IT IS FURTHER ORDERED that Plaintiff Kevin Scott’s request to amend his
Complaint is GRANTED.
IT IS FURTHER ORDERED that Plaintiff Kevin Scott will have thirty days
from the date of the entry of this order to file an amended complaint.
IT IS FURTHER ORDERED that Plaintiff’s counsel, Jan J. Rubinstein, will
have fourteen days from the date of the entry of this order to file his notice of
s/Denise Page Hood
DENISE PAGE HOOD
DATED: August 15, 2019
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