Shafer et al v. Karric Square Properties, LLC et al

Filing 30

OPINION AND ORDER granting 16 Motion for Summary Judgment; finding as moot 23 Motion for Judicial Notice. Judgment in favor of Defendant Karric Square Properties, LLC on Plaintiffs' claims against it. Signed by Magistrate Judge Elizabeth Preston Deavers on March 21, 2019. (jlk)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
LEV SHAFER, et al.,
Plaintiffs,
Case No. 2:17-cv-1098
v.

Chief Magistrate Judge Elizabeth P. Deavers

KARRIC SQUARE PROPERTIES,
LLC, et al.,
Defendants.
OPINION AND ORDER
Defendant Karric Square Properties, LLC (“Karric”) obtained a judgment against
Plaintiffs following default on an agreed judgment entry establishing a payment plan.
Thereafter, that judgment was placed with Defendant Finance System of Green Bay, Inc.
(“FSGB”) for collection. Following collection efforts by FSGB, Plaintiffs filed this action,
asserting claims for alleged violations under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C.
§ 1681, et seq. and state-law claims for defamation. With the consent of the parties (ECF No.
11), 28 U.S.C. § 636(c), this matter is before the Court for consideration of Karric’s Motion for
Summary Judgment (ECF No. 16) and Motion for Judicial Notice (ECF No. 23). For the reasons
that follow, the Motion for Summary Judgment is GRANTED and the Motion for Judicial
Notice is DENIED AS MOOT.
I.
A.

The Premises, Lease, and Assignment
Karric is the present owner of real property located at 5803–5807 Karric Square Drive,

Dublin, Ohio 43014 (“the Premises”). (Declaration of Sheila Sanders, ECF No. 16-1 (“Sanders
Declaration”), ¶ 2.)1 On or about September 19, 1997, Karric’s predecessor owner, Borror
Realty Company, entered into a lease agreement (“the Lease”) with Dr. Susan E. Richards for
lease of the Premises. (Id. at ¶ 3; ECF No. 16-1 at PAGEID ## 162–84 (copy of the Lease).)
The Lease provided for, inter alia, the recovery of attorney’s fees and costs under certain
circumstances. (Lease, ECF No. 16-1 at PAGEID # 177.)
Following a series of assignments not relevant to the matters presently before the Court,
on or about September 1, 2014, Karric and Natural Health Chiropractic, Inc. entered into the
“Lease Assignment, Consent, Assumption, Release, and Amendment Agreement” (“the
Assignment”) through which Natural Health Chiropractic, Inc. assigned the leasehold interest in
the Premises to Deal Breakers, LLC (“Deal Breakers”). (Sanders Declaration, ¶ 3; ECF No. 16-1
at PAGEID ## 185–92 (copy of the Assignment).) The Assignment provides in relevant part as
follows: “Assignee [Deal Breakers] hereby accepts such assignment and assumes all of
Assignor’s [Natural Health Chiropractic, Inc.] rights, duties, obligations and liabilities as tenant
under the Lease, whether arising before, on or after the Effective Date [September 1, 2014].”
(Assignment, ECF No. 16 at PAGEID # 186.) Plaintiffs Lev Shafer and Oleg Razuvayev
personally guaranteed the Assignment. (Id. at PAGEID # 189.)
B.

The 2015 State Court Action and the Agreed Judgment Entry
Sometime thereafter, Deal Breakers defaulted under the Lease. (Sanders Declaration, ¶

3.) Karric filed an action in the Franklin County Court of Common Pleas (“the State Court”)
against Deal Breakers and the instant Plaintiffs, Case Number 15 CV 003249, seeking unpaid

Ms. Sanders is the asset manager for Midland Management, LLC (“Midland”), which
performs management services for Karric. (Id. at ¶ 1.)
1

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rent in the amount of $46,501.08, plus additional rent, late fees, interest, and other applicable
fees as set forth in the Lease and the Assignment (“the 2015 State Court Action”). (Id. at ¶ 4.)
Karric, Deal Breakers, and instant Plaintiffs Shafer and Razuvayev, all represented by
legal counsel, thereafter resolved the matter in the State Court Action through an Agreed
Judgment Entry. (Id.) On July 2, 2015, the State Court entered the Agreed Judgment Entry (id.),
which provides as follows:
NOW COMES, Plaintiff Karric Square Properties, LLC and Defendants
Deal Breakers, LLC, Lev Shafer, and Oleg Razuvayev (“Defendants”), through
counsel, who now represent to the Court that this case has been settled and
compromised and that Defendants, jointly and severally, agree to confess judgment
in the amount of $46 ,501.08, plus interest at the rate of 18% per annum from March
1, 2015, attorney’s fees of $1,736.43, collection costs, court costs, interest at the
statutory rate from the date of judgment, and any attorney’s fees arising from
Defendants’ breach of this Agreed Judgment Entry.
As an accommodation to Defendants, Plaintiff has agreed that it will accept
Twenty One Thousand and 00/100 Dollars ($21,000.00) as settlement in full of its
judgment payable as follows: Three Hundred and 00/100 Dollars ($300.00) per
week beginning on or before Monday, July 13, 2015, and on or before the
subsequent Monday of each week thereafter until the sum of Twenty One Thousand
and 00/100 Dollars ($21,000.00) is fully paid which will satisfy this judgment in
full.
Plaintiff agrees that it will not cause any executions to issue against
Defendants, other than Certificates of Judgment to be filed, as long as Defendants
make each and every payment as agreed upon herein. Should Defendants default
however, Plaintiff is free to execute at will and without notice. If Defendants
comply with the terms of this agreement, Plaintiff shall issue satisfactions of this
judgment to Defendants for filing.
The Court having no objection to the settlement agreement and terms
therein, does hereby ADJUDGE, ORDER, AND DECREE that judgment is granted
against Defendants Deal Breakers, LLC, Lev Shafer, and Oleg Razuvayev, jointly
and severally, in the amount of $46,501.08, plus interest at the rate of 18% per
annum from March 1, 2015, attorney’s fees of $1,736.43, collection costs, court
costs, interest at the statutory rate from the date of judgment, and any attorney’s
fees arising from Defendants’ breach of this Agreed Judgment Entry and that the
settlement agreement, the terms, and the payment plan incorporated herein is
hereby CONFIRMED.

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SO ORDERED.
(Agreed Judgment Entry, ECF No. 16-1, PAGEID ## 193–94 (emphasis in the original).)
C.

Default and Collection Efforts
On or about February 1, 2016, Deal Breakers and the instant Plaintiffs Shafer and

Razuvayev defaulted on their obligations under the Agreed Judgment Entry. (Sanders
Declaration, ¶ 4.)2 Karric had an agreement with FSGB “for collection efforts for delinquent
accounts for a number of tenants, including but not limited to” Plaintiffs Shafer and Razuvayev.
(Id. at ¶ 5.) Karric furnished to FSGB a copy of the Agreed Judgment Entry (ECF No. 16-1,
PAGEID ## 193–94), a document entitled “Tenant Listing Sheet” (id. at PAGEID # 197), and a
copy of Midland’s ledger reflecting Deal Breakers’ transactions (id. at PAGEID ## 198–02.)
(Sanders Declaration, ¶ 6.) This was the only information that Karric provided to FSGB. (Id.)
The Tenant Listing Sheet, printed on FSGB letterhead, identifies, inter alia, Karric as the
creditor, instant Plaintiffs Shafer and Razuvayev as the tenants, and the Property’s address.
(Tenant Listing Sheet, ECF No. 16, PAGEID # 197.) The Tenant Listing Sheet identifies the
“Amount of Judgment Past Due” as $16,235.00. (Id.) A section entitled “Comments” on the
Tenant Listing Sheet includes the following language: “Since they defaulted on the judgment
payment arrangements – can we collect the full amount originally due of $46,501.08?” (Id.)
The ledger Karric provided to FSGB reflects an ending balance of $16,235. (ECF No. 16-1 at
PAGEID # 202.)
In a letter addressed to Deal Breakers dated September 2, 2016, FSGB, identifying itself
as a debt collection agency, advised that Deal Breakers’ creditor was Karric and the account
number referred to the State Court Action, No. 15-cv-3249. (ECF No.19-1 at PAGEID # 280.)

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Plaintiffs concede that they “failed to make payments[.]” (ECF No. 19 at 2.)
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FSGB further advised that the principal amount due was $41,736.08 and the interest was
$11,320.20, for a balance due of $53,056.28. (Id.) FSGB also advised Deal Breakers as follows:
Your creditor [Karric] has placed your bill for collection. . . . As of the date of this
letter, you owe $53056.28. Because of interest, late charges, and other charges that
may vary from day to day, the amount due on the day you pay may be greater.
Hence, if you pay the amount shown above, an adjustment may be necessary after
we receive your check. For further information, write to the above address or call
920-431-2121.
Unless you notify this office within 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 that you dispute the debt within 30
days from receiving this notice, this office will: obtain verification of the debt or
obtain a copy of the judgment and mail you a copy of such judgment or verification.
If you request this office in writing within 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.)
D.

The Present Action
Plaintiffs Shafer and Razuvayev (who were Defendants in the 2015 State Court Action)

originally filed the present action in the Court of Common Pleas for Franklin County, Ohio, on
April 16, 2015, which was removed to this Court on December 15, 2017, on the basis of federal
question jurisdiction, 28 U.S.C. § 1331. (ECF No. 1.) Plaintiffs Shafer and Razuvayev assert
federal claims for alleged violations of the FCRA and state law claims for defamation against
Karric and FSGB. (ECF No. 5.)
Karric has moved for summary judgment on all claims asserted against it. (ECF No.
16.)3 Plaintiffs oppose Karric’s Motion (ECF No. 19) and Karric has filed a reply memorandum
(ECF No. 21). On January 15, 2019, the State Court issued a Decision and Entry denying the

3

FSGB has moved for judgment on the pleadings and for summary judgment. (ECF Nos.

12, 15.)
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motion of instant Plaintiffs Shafer and Razuvayev and Deal Breakers for relief from judgment
and declaratory relief, which is the subject of Karric’s Motion for Judicial Notice (ECF No. 23),
and which Plaintiffs have opposed (ECF No. 25). Karric has filed a reply. (ECF No. 26.)
II.
Under Federal Rule of Civil Procedure 56, “[t]he court shall grant summary judgment if
the movant shows that 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 moving party has the initial
burden of proving that no genuine issue of material fact exists, and the court must draw all
reasonable inferences in the light most favorable to the nonmoving party.” Stansberry v. Air
Wisconsin Airlines Corp., 651 F.3d 482, 486 (6th Cir. 2011) (internal quotations omitted); cf.
Fed. R. Civ. P. 56(e)(2) (providing that if a party “fails to properly address another party’s
assertion of fact” then the Court may “consider the fact undisputed for purposes of the motion”).
“Once the moving party meets its initial burden, the nonmovant must ‘designate specific
facts showing that there is a genuine issue for trial.’” Kimble v. Wasylyshyn, 439 F. App’x 492,
495–96 (6th Cir. 2011) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)); see also
Fed. R. Civ. P. 56(c) (requiring a party maintaining that a fact is genuinely disputed to “cit[e] to
particular parts of materials in the record”). “The nonmovant must, however, do more than
simply show that there is some metaphysical doubt as to the material facts, . . . there must be
evidence upon which a reasonable jury could return a verdict in favor of the non-moving party to
create a genuine dispute.” Lee v. Metro. Gov’t of Nashville & Davidson Cnty., 432 F. App’x
435, 441 (6th Cir. 2011) (internal quotation marks and citations omitted). “When a motion for
summary judgment is properly made and supported and the nonmoving party fails to respond

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with a showing sufficient to establish an essential element of its case, summary judgment is
appropriate.” Stansberry, 651 F.3d at 486 (citing Celotex, 477 U.S. at 322–23).
III.
Plaintiffs assert claims for defamation, libel, and slander. (ECF No. 5 at ¶¶ 22–29.)
“Under Ohio law, ‘defamation occurs when a publication contains a false statement ‘made with
some degree of fault, reflecting injuriously on a person’s reputation, or exposing a person to
public hatred, contempt, ridicule, shame or disgrace, or affecting a person adversely in his or her
trade, business or profession.’” Kontar v. American Geophysical Union, No. 16-3491, 2017 WL
3402078, at *2 (6th Cir. Jan. 5, 2017) (quoting Jackson v. City of Columbus, 117 Ohio St. 3d
328, 331 (2008)). “The manner of publication distinguishes slander, i.e., ‘spoken defamatory
words,’ from libel, i.e., ‘written or printed defamatory words.’” Kontar, 2017 WL 3402078, at
*2 (quoting Lawson v. AK Steel Corp., 121 Ohio App.3d 251, 256 (Ohio Ct. App. 1997)).
When the plaintiff is a private figure, “the elements of a defamation claim, whether
libel or slander, are ‘(a) a false and defamatory statement concerning another; (b)
an unprivileged publication to a third party; (c) fault amounting at least to
negligence on the part of the publisher; and (d) either actionability of the statement
irrespective of special harm or the existence of special harm caused by the
publication.’”
Id. (quoting Harris v. Bornhorst, 513 F.3d 503, 522 (6th Cir. 2008) (internal citations omitted)).
“To survive a motion for summary judgment in a defamation action, the plaintiff must make a
sufficient showing of the existence of every element essential to his or her case.” Cummerlander
v. Patriot Preparatory Acad. Inc., 86 F. Supp. 3d 808, 829 (S.D. Ohio 2015) (citing Daubenmire
v. Sommers, 156 Ohio App.3d 322 (Ohio Ct. App. 2004).
Here, Plaintiffs specifically allege as follows:
23. Defendants Karric Square and Finance System [FSGB] have negligently
published false and misleading statements regarding the financial obligations of the
plaintiffs.
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24. Defendant Karrie Square negligently published false and misleading statements
regarding the nature, amount, and terms of plaintiffs’ obligations to Finance
System, among others.
25. Defendant Finance System published false and misleading statements regarding
the nature, amount, and terms of plaintiffs’ obligations to credit reporting agencies,
among others.
26. The defendants knew or should have known that the statements were false at
the time the statements were published.
27. Defendants were at least negligent in not reviewing the four corners of the
settlement agreement which was reduced to an Agreed Judgment Entry before
publishing false information regarding the terms of the debt.
28. The statements constitute defamation per se as they have affected the plaintiffs
injuriously in their trade or profession.
29. The defendants did not possess a privilege to publish these false statements.
(ECF No. 5 at ¶¶ 22–29.)
Karric contends that federal law preempts Plaintiffs’ defamation claim. (ECF No. 16 at
5–6; ECF No. 21 at 4–5.) Karric also contends that even if the defamation claim was not
preempted, Plaintiffs have failed to establish that the statements were false and defamatory, that
there was an unprivileged publication to a third party, and that there was special harm. (ECF
Nos. 16, 19.)
A.

Preemption
Karric argues that 15 U.S.C. § 1681h(e) of the FCRA preempts Plaintiffs’ defamation

claim. (ECF No. 16 at 5–6; ECF No. 21 at 4–5.) Section 1681h(e) provides as follows:
Except as provided in sections 1681n and 1681o of this title, no consumer may
bring any action or proceeding in the nature of defamation, invasion of privacy, or
negligence with respect to the reporting of information against any consumer
reporting agency, any user of information, or any person who furnishes information
to a consumer reporting agency, based on information disclosed pursuant to section
1681g, 1681h, or 1681m of this title, or based on information disclosed by a user
of a consumer report to or for a consumer against whom the user has taken adverse
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action, based in whole or in part on the report except as to false information
furnished with malice or willful intent to injure such consumer.
Therefore, in order to fall within the Section 1681h(e), a claim must be based on
information disclosed pursuant to Sections 1681g, 1681h, or 1681m, or “based on information
disclosed by a user of a consumer report to or for a consumer against whom the user has taken
adverse action, based in whole or in part on the report except as to false information furnished
with malice or willful intent to injure such consumer.” Id.; see also Barry v. Experian Info. Sol.,
Inc., No. 2:16-cv-09515, 2018 WL 3341785, at *8 (S.D. W.Va. July 6, 2018) (stating that the
court must first determine whether the claim falls within the scope of § 1681h(e)) (citations
omitted). Sections 1681g and 1681h apply only to consumer reporting agencies, which Karric is
not. 15 U.S.C. §§ 1681a (defining “consumer reporting agency” as any person who, for
monetary fees, dues, or on a cooperative nonprofit basis, regularly engages “in whole or in part
in the practice of assembling or evaluating consumer credit information or other information on
consumers for the purpose of furnishing consumer reports to third parties, and which uses any
means or facility of interstate commerce for the purpose of preparing or furnishing consumer
reports”), 1681g, 1681h; see also Barry, 2018 WL 3341785, at *8 (stating that Sections 1681g
and 1681h apply to consumer reporting agencies) (citations omitted). Section 1681m applies
only to “users taking adverse actions on [the] basis of information contained in consumer
reports[.]” 15 U.S.C. § 1681m.
In this case, Karric is not a user of consumer reports as to Plaintiffs under Section 1681m.
Karric did not furnish Plaintiffs’ credit reports nor did it take adverse action based on
information contained in such reports. As previously noted and as set forth in more detail below,
Karric relied on the Agreed Judgment Entry, Tenant Listing Sheet, and ledger. Because the
allegations against Karric do not fall within the scope of Section 1681h(e), this section of the
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FCRA does not preempt Plaintiff’s defamation claim as to Karric. Accordingly, the Court need
not and does not consider whether Karric acted with malice or willful intent.
B.

False and defamatory
Having concluded for purposes of the present motions that Section 1681h(e) does not

preempt Plaintiffs’ defamation claim, the Court next considers the substance of Plaintiffs’ claim.
As set forth above, Karric provided FSGB with the Agreed Judgment Entry, the Tenant Listing
Sheet, and ledger regarding Deal Breakers’ transactions. (Sanders Declaration, ¶ 6.) Karric
contends that the information reflected in these documents is true. (Id. at ¶¶ 6–7 (citing
information provided); ECF No. 16 at 4; ECF No. 21 at 1–2.) Plaintiffs disagree, arguing that
the Agreed Judgment Entry “states that Karric Square will accept ‘($21,000.00) as settlement in
full of its judgment,’ with no clear indication that the full amount would become due in the event
of default, or even what would constitute default.” (ECF No. 19 at 2.) However, as previously
discussed, the Agreed Judgment Entry specifically provides as follows:
NOW COMES, Plaintiff Karric Square Properties, LLC and Defendants
Deal Breakers, LLC, Lev Shafer, and Oleg Razuvayev (“Defendants”), through
counsel, who now represent to the Court that this case has been settled and
compromised and that Defendants, jointly and severally, agree to confess judgment
in the amount of $46,501.08, plus interest at the rate of 18% per annum from March
1, 2015, attorney’s fees of $1,736.43, collection costs, court costs, interest at the
statutory rate from the date of judgment, and any attorney’s fees arising from
Defendants’ breach of this Agreed Judgment Entry.
(ECF No. 16-1 at PAGEID # 193.) The Agreed Judgment Entry also detailed that Karric agreed
to accept a lesser amount ($21,000) as settlement in full of its judgment pursuant to a payment
plan and that Karric “will not cause any executions against Defendants, other than Certificates of
Judgment to be filed, as long as Defendants make each and every payment as agreed upon
herein. Should Defendants default, however, Plaintiff is free to execute at will and without

10

notice.” (Id.) The terms of the Agreed Judgment Entry therefore address what happens in the
event of default.4
Moreover, in its discovery responses, Karric explained the amount due at specific times
under the Agreed Judgment Entry, including following Plaintiffs’ default:
5. What amount does Karric Square Properties, LLC claim to be currently due and
owing to it from Plaintiffs or Deal Breakers, LLC. Delineate between principal,
interest, and other amounts allegedly owing.
Answer: $46,501.08, plus interest at the rate of 18% per annum from
March 1, 2015, attorney’s fees of $1,736.43, collection costs, court costs, and
interest at the statutory rate of judgment.
6. What amount does Karrie Square Properties, LLC claim was due and owing by
Plaintiffs or Deal Breakers, LLC on September 2, 2016. Delineate between
principal, interest, and other amounts allegedly owing.
Answer: Prior to default (and accounting for all payments made)
Defendants owed a total of $16,234.00. As of September 2, 2016, Defendants
owed a total of $46,501.08, plus interest at the rate of 18% per annum from
March 1, 2015, attorney’s fees of $1,736.43, collection costs, court
costs, and interest at the statutory rate of judgment.
(ECF No. 19 at PAGEID # 282 (emphasis in original).)
While Plaintiffs now apparently dispute that the Agreed Judgment Entry provides that the
full amount of the debt (rather than the reduced amount of $21,000) was due upon their default,
the terms of the Agreed Judgment Entry speak for themselves. To the extent that Plaintiffs
attack some of the terms of the Agreed Judgment Entry (see, e.g., id. at 4 (complaining, inter
alia., that neither Karric nor FSGB “took into consideration the discrepancies within the Agreed
Judgment Entry as it related to which appropriate interest rate was to be applied”), the record
reflects that Plaintiffs were represented by counsel at the time of the settlement agreement in the

While Plaintiffs now suggest that it is not clear “what would constitute default[,]”
Plaintiffs concede that they “failed to make payments” under the Agreed Judgment Entry. (ECF
No. 19 at 2.)
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State Court Action and the Agreed Judgment Entry. (Sanders Declaration, ¶ 4 (averring Deal
Breakers and instant Plaintiffs Shafer and Razuvayev were represented by counsel); Agreed
Judgment Entry, ECF No. 16-1 at PAGEID # 193 (same).) If Plaintiffs, however, seek to vacate
or alter the Agreed Judgment Entry itself, that position is also unavailing as “[f]ederal district
courts do not stand as appellate courts for decisions of state courts.” Hall v. Callahan, 727 F.3d
450, 453 (6th Cir. 2013) (explaining that the Rooker-Feldman doctrine precludes federal courts
from exercising jurisdiction over a claim alleging error in a state court decision) (citing, inter
alia Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); Dist. of Columbia Court of Appeals v.
Feldman, 460 U.S. 462 (1983)).
Plaintiffs argue, however, that Karric must have provided false information because the
Tenant Listing Sheet reflected “a past due amount of $16,000 . . . [which] is vastly different than
the amount reported to the credit reporting bureaus, and the response to Karric from FSGB which
mentions pursuing $46,501 from the Agreed Judgment Entry” and because neither Defendant
“took into consideration the amount the Plaintiffs had paid to Karric when pursuing the
$46,501.48 from the Agreed Judgment Entry.” (ECF No. 19 at 4.) Plaintiffs’ argument is not
well taken. As a preliminary matter, the uncontroverted Sanders Declaration establishes that no
representative of Karric furnished information relating to Plaintiffs (or Deal Breakers) to a credit
reporting agency. (Sanders Declaration, ¶ 8.) Next, Plaintiffs’ assertion that the Tenant Listing
Sheet apparently contains false information because it reflects differing amounts (see Tenant
Listing Sheet, ECF No. 16-1 at PAGEID # 197 (compare “Amount of Judgment Past Due
$16,235.00[,]” with “Comments[:] Since they defaulted on the judgment payment arrangements
– can we collect the full amount originally due of $46,501.06?”) and failed to account for
payments made by Plaintiffs is also unavailing. As previously discussed, $16,235.00 was the

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amount Plaintiffs owed (accounting for all of Plaintiffs’ payments) prior to default (see ledger,
ECF No. 16-1 at PAGEID # 202), while $46,501.08 was the amount Plaintiffs confessed to and
owed under the Agreed Judgment Entry (plus interest of 18% annum, attorney’s fees, collection
costs, and court costs). (ECF No. 16-1 at PAGEID ## 193–94; ECF No. 19 at PAGEID # 282.)
Plaintiffs have provided no evidence establishing that the Tenant Listing Sheet contains false
information.
Plaintiffs also contend that the Agreed Judgment Entry “does not indicate when the 18%
per annum would be calculated from in the event the Plaintiffs ‘defaulted.’” (ECF No. 19 at 2.)
Plaintiff’s argument is not well taken. The Agreed Judgment Entry specifically states that the
18% per annum rate will run from March 1, 2015, and that the statutory rate of interest would
begin to run from the date of judgment, namely, July 2, 2015. (ECF No. 16-1 at PAGEID ##
193–95.)
In short, there is no evidence in the record that Plaintiffs did not confess to judgment in
the amount of $46,501.08 (plus interest, attorney fees, collection costs, and court costs) or that
Karric provided false information under the terms of the Agreed Judgment Entry. Having failed
to show that Karric provided false information, Plaintiffs cannot establish a claim of defamation.
See Cummerlander, 86 F. Supp. 3d at 829 (stating that a plaintiff must make a sufficient showing
of the existence of every element essential to a defamation claim in order to survive summary
judgment).
C.

Special harm
Even if Karric’s statements were false and were published without privilege, Plaintiffs

have still failed to establish another element of their defamation claim, special harm. Plaintiffs
contend on summary judgment that special harm “is not at issue because the credit reporting

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bureaus having obtained evidence from FSGB and Karric involving the alleged debt undoubtedly
hinders the Plaintiffs from obtaining business loans, personal financing, and will continue to do
so for the indefinite future.” (ECF No. 19 at 3.)
Plaintiffs’ argument is not well taken. “Defamation falls into two categories, defamation
per quod or per se. In defamation per quod, a publication is merely capable of being interpreted
as defamatory and the plaintiff must allege and prove damages. Defamation per se occurs if a
statement, on its face, is defamatory.” Kendel v. Local 17-A United Food and Commercial
Workers, 835 F. Supp. 2d 421, 433 (N.D. Ohio 2011) (internal citations omitted)). A publication
is actionable per se and a plaintiff need not show special harm if it contains the following: “‘(1)
written statements which falsely charge the plaintiff with the commission of a crime, or (2) oral
declarations which falsely charge the plaintiff with the commission of a crime involving moral
turpitude which subjects the offender to infamous punishment[.]’” Shepard v. Griffin Servs.,
Inc., No. 19032, 2002 WL 940110, at *9 (Ohio Ct. App. May 10, 2002) (citations omitted).
“[W]hether a statement is defamatory per se is a question of law for the trial court to determine.”
Northeast Ohio Elite Gymnastics Training Ctr., Inc. v. Osborne, 183 Ohio App. 3d 104, 112
(Ohio Ct. App. 2009) (citations omitted).
Here, Plaintiffs’ Complaint alleges that Karric’s statements “constitute defamation per se
as they have affected the plaintiffs injuriously in their trade or profession.” (ECF No. 5 at ¶ 28.)
However, nothing in the Agreed Judgment Entry, Tenant Listing Sheet, or ledger falsely charges
Plaintiffs with “the commission of a crime involving moral turpitude which subjects the offender
[Plaintiffs] to infamous punishment[.]” Shepard, 2002 WL 940110, at *9 (internal quotation
marks and citations omitted); see also Agreed Judgment Entry, ECF No. 16-1 at PAGEID ##
193–94; Tenant Listing Sheet, id. at PAGEID # 197; ledger, id. at PAGEID ## 198–202; ECF

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No. 19 at 3 (implicitly conceding in opposing summary judgment that their claim is defamation
per quod as they assert special harm exists as they are “undoubtably hinder[ed] . . . from
obtaining business loans, personal financing, and will continue to do so for the indefinite
future”). Accordingly, Karric’s statements do not constitute defamation per se. Northeast Ohio
Elite Gymnastics Training Ctr., Inc., 183 Ohio App. 3d at 109.
In the absence of defamation per se, Plaintiffs must prove special damages. Id. “Special
damages are damages of such a nature that they do not follow as a necessary consequence of the
[complained injury].” Id. (internal quotation marks and citations omitted). As previously
discussed, Plaintiffs simply assert without evidentiary support that special damages are not at
issue because “the credit reporting bureaus having obtained evidence from FSGB and Karric
involving the alleged debt undoubtedly hinders the Plaintiffs from obtaining business loans,
personal financing, and will continue to do so for the indefinite future.” (ECF No. 19 at 3.)
Plaintiffs’ unsupported assertions are insufficient to show special damages and withstand
summary judgment. Jones v. City of Franklin, 677 F. App’x 279, 282 (6th Cir. 2017)
(“Additionally, conclusory allegations, speculation, and unsubstantiated assertions are not
evidence, and are not sufficient to defeat a well-supported motion for summary judgment. . . .
Therefore, in order to defeat summary judgment, the party opposing the motion must present
affirmative evidence to support its position[.]”) (internal citations omitted).
For all of these reasons, Karric is entitled to summary judgment on Plaintiffs’ defamation
claim.

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D.

FCRA
Plaintiffs also allege that Karric violated the FCRA as follows:
31. Karric Square and Finance System [FSGB] have furnished information relating
to a [sic] plaintiffs to a consumer reporting agency while knowing or having
reasonable cause to believe that the information is inaccurate.
32. Karric Square and Finance System [FSGB] have negligently and recklessly
violated various provisions of the Fair Credit Report Act.

(ECF No. 5 at ¶¶ 31–32.) Although not cited in the Complaint, when opposing summary
judgment, Plaintiffs refer to 15 U.S.C. § 1681s-2(b) as the basis for their cause of action. (ECF
No. 19 at 8.)
“The FCRA exists ‘to ensure fair and accurate credit reporting, promote efficiency in the
banking system, and protect consumer privacy.’” Boggio v. USAA Federal Sav. Bank, 696 F.3d
611, 614 (6th Cir. 2012) (quoting Safeco Ins. Co. v. Burr, 551 U.S. 47, 52 (2007)). “The FCRA
imposes liability on both consumer reporting agencies and furnishers of information to those
agencies for willful or negligent violations under the FCRA.” Shaw v. Equifax Info. Sols., Inc.,
204 F. Supp. 3d 956, 959 (E.D. Mich. 2016) (citing Nelski v. Trans Union, LLC, 86 F. App’x
840, 844 (6th Cir. 2004)). “To that end, § 1681s-2 is designed to prevent ‘furnishers of
information’ from spreading inaccurate consumer-credit information.” Boggio, 696 F.3d at 614.
As set forth above, a “consumer reporting agency” is defined as
any person which, for monetary fees, dues, or on a cooperative nonprofit basis,
regularly engages in whole or in part in the practice of assembling or evaluating
consumer credit information or other information on consumers for the purpose of
furnishing consumer reports to third parties, and which uses any means or facility
of interstate commerce for the purpose of preparing or furnishing consumer reports.
15 U.S.C. § 1681a(f). “While § 1681s-2 does not define ‘furnisher,’ courts have defined the
term as ‘any entity which transmits information concerning a particular debt owed by a particular
customer to consumer reporting agencies.’” LaBreck v. Mid-Mich Credit Bur., No. 1:16-cv16

1160, 2016 WL 6927454, at *2 (W.D. Mich. Nov. 28, 2016) (quoting Carney v. Experian Info.
Sol., Inc., 57 F. Supp. 2d 496, 501 (W.D. Tenn. 1999)); see also Dominguez v. Capital One,
N.A., No. 16-12896, 2017 WL 3097801, at *2 (E.D. Mich. June 27, 2017) (same) (citations
omitted), adopted by 2017 WL 3085779 (E.D. Mich. July 20, 2017).
While the FCRA does not create a private cause of action for a violation of Section
1681s-2(a), “a consumer may recover damages for a willful violation of 15 U.S.C. § 1681s2(b).” Ogle v. BAC Home Loans Serv. LP, 924 F. Supp. 2d. 902, 912 (S.D. Ohio 2013). “To
bring a claim against a furnisher of information under § 1681s–2(b), the plaintiff must ‘show that
the furnisher received notice from a consumer reporting agency, not the plaintiff, that the credit
information is disputed’” and that “upon receiving this notice, the furnisher of information acted
with a ‘reckless disregard’ in performing its duties under § 1681s–2(b)[.]” Id. (internal citations
omitted).
Here, as previously discussed, Karric has submitted uncontroverted evidence that no
representative of Karric furnished information relating to Plaintiffs or Deal Breakers to a credit
reporting agency. (Sanders Declaration at ¶ 8.) Plaintiffs nevertheless assert that “Karric had
constructive notice of the disputes with the debts with FSGB because FSGB was the agent of
Karric” and that Karric thereafter “made no effort to provide accounting for the alleged debts.”
(ECF No. 19 at 8.) Plaintiffs, however, do not explain or cite to evidence in the record to support
their argument. This conclusory and speculative assertion is therefore insufficient to oppose
summary judgment. See Kyle-Eiland v. Neff, 408 F. App’x 933, 943 (6th Cir. 2011) (explaining
that the summary judgment standard “does not require that all bald assertions, opinions, or even
genuinely held beliefs asserted by the nonmoving party be adopted wholeheartedly by a court,
even when such assertions are completely unsupported by the record”); Shockley v. Corr.

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Healthcare Cos., Inc., No. 1:16cv599, 2018 WL 1565614, at *7 (S.D. Ohio Mar. 30, 2018)
(“Conclusory allegations are not evidence and are not adequate to oppose a motion for summary
judgment.”); cf. Mitchell v. Toledo Hosp., 964 F.2d 577, 584 (6th Cir. 1992) (“It is now quite
well-established that, in order to withstand a motion for summary judgment, the party opposing
the motion must present ‘affirmative evidence’ to support his/her position; a mere ‘scintilla of
evidence’ is insufficient.”) (citations omitted). Accordingly, Karric is entitled to summary
judgment on Plaintiffs’ FCRA claim.
Finally, having concluded that Karric’s Motion for Summary Judgment is meritorious,
Karric’s Motion for Judicial Notice is moot and the Court need not address it.
IV.
For the foregoing reasons, Karric’s Motion for Summary Judgment (ECF No. 16) is
GRANTED and Karric’s Motion for Judicial Notice (ECF No. 23) is DENIED AS MOOT.
The Clerk is DIRECTED to enter judgment in favor of Defendant Karric Square Properties,
LLC on Plaintiffs’ claims against it.
IT IS SO ORDERED.

Date: March 21, 2019

/s/ Elizabeth A. Preston Deavers
ELIZABETH A. PRESTON DEAVERS
CHIEF UNITED STATES MAGISTRATE JUDGE

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