Underhill v. Best et al

Filing 38

ORDER ADOPTING REPORT AND RECOMMENDATION 33 ; Granting 17 ; overruling 35 ; signed by District Judge Paul L. Maloney (Judge Paul L. Maloney, cmc)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
JOHN H. UNDERHILL,
PLAINTIFF,
v.
STUART A. BEST,
GARY D. POPOVITS, &
BRANDT, PEZZETTI, VERMETTEN
& POPOVITS, P.C.,
DEFENDANTS.

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NO. 2:17-CV-154
HONORABLE PAUL L. MALONEY

ORDER
This matter is before the Court on Plaintiff John Underhill’s Objections to the Report
and Recommendation, which concluded that Defendant Stuart Best should be awarded
attorney’s fees in the amount of $9,528.10 under 28 U.S.C. § 1927.
A magistrate judge is not permitted to determine costs or fees, but may make a report
and recommendation to the district court on such issues. Massey v. City of Ferndale, 7 F.3d
506, 510–11 (6th Cir. 1993). After being presented with the Magistrate Judge's report and
recommendation, the district court must then conduct a de novo review of the findings and
issue an order as it sees fit. Id. at 510. The district court cannot simply “concur” in the
magistrate's findings, but it must conduct its own review in order to adopt the
recommendations. Id.
Section 1927 provides that “[a]ny attorney or other person admitted to conduct cases
in any court of the United States or any Territory thereof who so multiplies the proceedings

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in any case unreasonably and vexatiously may be required by the court to satisfy personally
the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.”
28 U.S.C. § 1927.
“A court may sanction an attorney under § 1927, even in the absence of bad faith,
when the attorney knows or reasonably should know that a claim pursued is frivolous, or that
his or her litigation tactics will needlessly obstruct the litigation of nonfrivolous claims.”

Gibson v. Solideal USA, Inc., 489 F. App’x 24, 31 (6th Cir. 2012) (citing Rentz v. Dynasty
Apparel Industries, Inc., 556 F.3d 389, 396 (6th Cir. 2009); Hall v. Liberty Life Assur. Co.
Of Boston, 595 F.3d 270, 275 (6th Cir. 2010)).
The magistrate judge found sanctions in appropriate in this matter because Underhill
knew or should have known that he was pursuing frivolous claims against Best. In fact, this
Court described Plaintiff’s claims as “wholly implausible” in granting the motion to dismiss.
The magistrate judge also discussed an FDCPA case from the Eastern District of Michigan
in which the court awarded sanctions. Mabbitt v. Midwestern Audit Serv., Inc., 2008 WL
1849620 (E.D. Mich. Apr. 23, 2008). There, the court found that the defendant “never
attempted to collect a debt; it simply notified [the plaintiff] that an outstanding balance was
transferred to her new account.” Id. at 3. The court also found that the plaintiff only received
one letter from the defendant and that the defendant did not use an abusive method to collect
the debt. Id. Based on these facts, the court held “that the FDCPA claims pursued by Plaintiff
were frivolous and that Plaintiff’s counsel knew or reasonably should have known this.” Id.
Therefore, the Mabbitt court determined that sanctions pursuant to § 1927 were warranted.

Id.

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The magistrate judge concluded that, like Mabbitt, sanctions were warranted because
Underhill received only two letters and one phone call from Best, and this Court had
determined that the communications were not animated by an intent to induce payment of
a debt. Further, Underhill had wholly failed to respond to Best’s arguments that his action
had not actually violated the FDCPA. Accordingly, the magistrate judge determined the
reasonable amount of attorney’s fees owed by using the lodestar method. Best’s counsel
attested to spending 31.9 hours working on this matter (22.5 to Attorney Hengeveld and 9.4
to Attorney Mitzel) and averred that the market rate for their work was $309 and $274
respectively, resulting in a total award of $9,528.10.
Underhill’s objections fail to present any developed argument as to how or why the
magistrate judge erred by recommending the Court grant sanctions in the amount of
$9528.10. For example, Underhill’s first objection, (A), generally asserts that the magistrate
judge erred by finding an award of sanctions proper because he did not act unreasonably or
vexatiously. Plaintiff develops no argument or analysis to support his position, and he fails to
address any of magistrate judge’s analysis or the the caselaw cited in support. This type of
conclusory objection is not entitled to de novo review.
Several of the objections (B, C, D, & F) relate to specific facts that do not bear on
whether Best violated the FDCPA or whether Underhill’s claims were frivolously pursued.
Objection (B) asserts that Lechner Construction agreed to a reduced payment to set off legal
services Underhill had previously rendered. This “fact” is not in the complaint or briefing.
Objection (C) asserts that Underhill never dealt with anyone named Mark Lechner (the
individual that signed the affidavit asserting that the insurance proceeds check to Lechner

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Construction had been fraudulently signed over). This assertion has no bearing on either the
underlying motion to dismiss or the motion for sanctions. Objection (D) proceeds in a similar
fashion, clarifying that Lechner Construction allegedly signed a waiver of its right to payment,
referring the Court to a rambling, 18-page narrative in the form of an affidavit that he filed in
response to the motion for sanctions. Once again, this has no bearing on Stuart Best’s actions
and certainly no bearing on the motion for sanctions. At best, it represents an attempt to
flesh out facts that were absent from Plaintiff’s complaint. Finally, in objection (F) Underhill
says the interpleader action was an action for a money judgment for a debt owned by
Underhill. Once again, Plaintiff has provided no legal argument or analysis for how the
characterization of the interpleader action affects the instant motion.
Objections (E), (H), and (I) are outright attempts to relitigate the motion to dismiss.
Underhill asserts that there was an additional contact between himself and Soo Co-Op and/or
Best that the Court should have taken into consideration. He asserts that he had a
conversation with someone at Soo Co-Op who told him that he needed to call Best to discuss
the debt he owed to it. This objection is frivolous for at least three reasons. First, Best does
not have vicarious liability under the FDCPA for what a Soo Co-Op employee told
Underhill. Second, this alleged contact is nowhere in the pleadings, and thus the Court could
not have considered it. Third, even taking this assertion to be true, it has no bearing on the
motion for sanctions.
Similarly in Objection (H), Underhill asserts that there was more than one contact by
phone that should have been considered for purposes of analyzing whether Best violated the
FDCPA—once again, an attempt at relitigating the motion to dismiss. But the Court has

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already noted that Underhill’s complaint was conspicuously devoid of mention of any phone
calls between Underhill and Best.
Plaintiff next insists in Objection (I) that the Court should have judicially estopped
Best from asserting that he was not operating as a debt collector because he has admitted as
much in a case pending in the Northern District of Ohio. This is a frivolous argument and
yet another attempt to relitigate the motion to dismiss. As the Court as already explained,
whether a defendant is acting as a debtor collector depends on a number of factors specific
to the relationship between the alleged debt collector and debtor—it is not a constant that can
be assumed from other, unrelated litigation. (See ECF No. 15 at PageID.125–126.)
Finally, Underhill objects to the magistrate judge’s use of a footnote to indicate that,
even after receiving an extension, Underhill did not timely file his response to the motion
for sanctions. The Court finds nothing objectionable about the objectively correct
observation—made without further comment—by the magistrate judge.
Thus, the Court ADOPTS the Report and Recommendation (ECF No. 33) as the
Opinion of the Court. Underhill’s Objections (ECF No. 35) are OVERRULED.
Defendant Stuart Best’s motion for sanctions (ECF No. 17) is GRANTED. The
Court ORDERS Plaintiff John H. Underhill to pay sanctions in the amount of $9,528.10 for
Best’s attorney’s fees in this matter.
IT IS SO ORDERED.
Date:

September 11, 2018

/s/ Paul L. Maloney
Paul L. Maloney
United States District Judge

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