Grimm v. GPG Processing, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

VERONICA GRIMM,

Plaintiff,

v. Civil Action 2:18-cv-1522

Judge James L. Graham

Magistrate Judge Chelsey M. Vascura

GPG PROCESSING, LLC, et al.,

Defendants.

REPORT AND RECOMMENDATION

Plaintiff, Veronica Grimm, moves for default judgment against Defendants, GPG

Processing, LLC, d/b/a/ Revenue Management Group, LLC (“RMG”), and Gregory Hopkins

(collectively, “Defendants”), for violations of the Fair Debt Collection Practices Act (“FDCPA”),

15 U.S.C. § 1692 et seq.; the Racketeering Influenced Corrupt Organizations Act (“RICO”), 18

U.S.C. §1961 et seq.; the Ohio Corrupt Practices Act (“OCPA”), R.C. § 2923.21 et seq.; and

Ohio common law. (ECF No. 22.) Plaintiff’s Motion for Default Judgment was referred to the

undersigned for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1). (ECF No.

22.) For the reasons that follow, it is RECOMMENDED that Plaintiff’s Motion for Default

Judgment be GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

Plaintiff resides in Steubenville, Ohio. (Am. Compl. at ¶ 4, ECF No. 3.) RMG is a debt

collector operating out of Buffalo, New York and Rochester, New York. (Id. at ¶ 5.) Gregory

Hopkins is the owner and principal officer of RMG. (Id. at ¶ 6.) Plaintiff alleges that Hopkins

“regularly directs the business practices of” RMG and that, at all times relevant to this action, he

acted either personally or through his employees. (Id.) She further asserts that Hopkins is liable

for all counts alleged against Defendant RMG. (Id.)

In 2016, Plaintiff discharged a payday loan in bankruptcy. (Id. at ¶ 12.) RMG contacted

Plaintiff about the payday loan debt in early 2018, and she explained that the debt had been

discharged in bankruptcy. (Id. at ¶¶ 11, 12.) Still, RMG insisted that the payday loan debt was

due and owing to RMG. (Id. at ¶ 12.)

RMG continued to call Plaintiff a few times each month and stated that Plaintiff had a

warrant out for her arrest due to her failure to pay on the debt. (Id. at ¶¶ 13, 14.) RMG accused

Plaintiff of “fraud” and threatened her with criminal prosecution and civil lawsuits. (Id. at ¶¶ 15,

16.) RMG also falsely stated that it had already filed lawsuits against Plaintiff. (Id. at ¶ 16.)

When Plaintiff informed RMG that she had not been served with papers regarding a lawsuit, it

“falsely told Plaintiff that under Ohio law, RMG was not required to serve her with any

complaints filed against her” and that it would proceed in the lawsuit without her. (Id. at ¶ 17.)

RMG had no intention to follow through with its threats of a lawsuit. (Id. at ¶ 18.)

Plaintiff was anxious about the threats and made payments towards the payday loan

totaling $1,116.88. (Mot. for Default J. at ¶ 2, ECF No. 22.) Specifically, she made payments to

RMG in the amount of $201.88 on February 13, 2018; $400.00 on February 13, 2018; and

$515.00 on April 26, 2018. (Am. Compl. at ¶¶ 19, 20, 26, ECF No. 3.) RMG continued to call

Plaintiff and state that the full balance of the loan was due and owing despite the fact that she

had made payments and that the loan had been discharged in bankruptcy. (Id. at ¶ 24, 27.) RMG

also continued to threaten Plaintiff with arrest, prosecution, and civil lawsuits. (Id. at ¶ 25.)

Further, RMG called Plaintiff’s relatives, informed them of the alleged debt, and told them that

Plaintiff had committed criminal check fraud. (Id. at ¶ 28.) Additionally, RMG never provided

Plaintiff with any written notices concerning the debt. (Id. at ¶ 33.) Plaintiff asserts that she

“refused to continue paying on the debt,” and “[i]n response, on information and belief, RMG

transferred Plaintiff’s account to Oconnor,” another debt collector. (Id. at ¶¶ 29-30.)

Plaintiff alleges that because of RMG’s actions, she felt anxious, was unable to sleep, had

her family life disrupted, and compulsively checked the police department’s website for warrants

in her name. (Mot. for Default J. at 3, ECF No. 22; Decl. of Pl., ECF No. 22-1.)

Plaintiff commenced this action on November 26, 2018. (ECF No. 1.) She filed her

Amended Complaint on December 6, 2018. (ECF No. 3.) The Clerk entered default against

RMG on February 20, 2019, and against Gregory Hopkins on April 4, 2019. (ECF Nos. 14, 19.)

All other Defendants have been dismissed from this case. (See Order, ECF No. 21; Notice, ECF

No. 4.) On April 24, 2019, Plaintiff moved for default judgment against Defendants RMG and

Hopkins on her claims under the FDCPA, RICO, OCPA, and Ohio common law. (ECF No. 22.)

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 55 provides that “when a party against whom a judgment

for affirmative relief is sought has failed to plead or otherwise defend, and the failure is shown

by affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a).

Subsequently, unless a claim is for a sum certain or a sum that can be made certain by

computation, plaintiff “must apply to the court for a default judgment.” Fed. R. Civ. P. 55(b).

“Even if a default has been entered against a party, it remains for the court to consider whether

the unchallenged facts constitute a legitimate cause of action, since a party in default does not

admit mere conclusions of law.” Anderson v. Johnson, No. 98-1931, 1999 WL 1023753, at * 2

(6th Cir. Nov. 4, 1999) (citing Quirindongo Pacheco v. Rolon Morales, 953 F.2d 15, 16 (1st Cir.

1992)). In considering a motion for default judgment, all “factual allegations of the complaint,

except those related to the amount of damages, will be taken as true.” Harris v. Cooley, No.

1:17-CV-540, 2019 WL 1573260, at *1 (S.D. Ohio Apr. 11, 2019). If the defaulting party is

found liable for the cause of action, that “does not resolve issues relating to damages.” Antione

v. Atlas Tucker, Inc. 66 F.3d 105, 111 (6th Cir. 1995). Under Federal Rule of Civil Procedure

55, if the amount of damages is unclear “the court may conduct hearings or make referrals” in

order to “determine the amount of damages.” Fed. R. Civ. P. 55(b)(2).

III. ANALYSIS

A. Fair Debt Collection Practices Act (FDCPA) Claims

Plaintiff first contends that Defendants violated the FDCPA. “The Fair Debt Collection

Practices Act generally prohibits a debt collector from using ‘any false, deceptive, or misleading

representation or means in connection with the collection of any debt.’” Grden v. Leikin Ingber

& Winters PC, 643 F.3d 169, 172 (6th Cir. 2011) (citing 15 U.S.C. § 1692e). “Section 1692k of

the statute allows the consumer to recover statutory or actual damages for violations of the Act.”

Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012). In order to establish

a claim under the FDCPA, “(1) plaintiff must be a ‘consumer’ as defined by the Act; (2) the

‘debt’ must arise[ ] out of transactions which are ‘primarily for personal, family or household

purchases;’ (3) defendant must be a ‘debt collector’ as defined by the Act; and (4) defendant

must have violated” the FDCPA’s prohibitions. Id. (citing Whittiker v. Deutsche Bank Nat’l

Trust Co., 605 F.Supp. 914, 926 (N.D. Ohio 2009)).

Here, Plaintiff has set forth sufficient facts to establish her claims under the FDCPA.

First, Plaintiff has shown that she is a “consumer” as defined by the Act. “The term ‘consumer’

means any natural person obligated or allegedly obligated to pay any debt.” 15 U.S.C. §

1692a(3). Plaintiff is a consumer because she is a natural person who is allegedly obligated to

pay a debt owed on a payday loan. She has also pled that the “debt,” i.e. the payday loan,

constitutes a debt used for personal purposes. (Am. Compl. ¶ 38, ECF No. 3.) Next, she

adequately pled that Defendants are “debt collectors” as defined by the FDCPA. A debt

collector is “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 FDCPA applies to Defendants RMG and Hopkins because

the principal purpose of their business is to collect debts and they use the instrumentalities of

interstate commerce to do so. 15 U.S.C. § 1692a(6); (see also Am. Compl. ¶¶ 36-37, ECF No.

3). Plaintiff also alleges sufficient facts to show that Defendants violated several provisions of

the FDCPA. The undersigned will consider Plaintiff’s allegations under the FDCPA in turn.

1. 15 U.S.C. § 1692c(b)

Plaintiff first alleges that Defendants violated 15 U.S.C. § 1692c(b), which provides as

follows:

Except as provided in section 1692b of this title, without the prior consent of the

consumer given directly to the debt collector, or the express permission of a court

of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment

judicial remedy, a debt collector may not communicate, in connection with the

collection of any debt, with any person other than the consumer, his attorney, a

consumer reporting agency if otherwise permitted by law, the creditor, the

attorney of the creditor, or the attorney of the debt collector.”

15 U.S.C. § 1692c(b). 15 U.S.C. § 1692b provides an exception if the communication is “for the

purpose of acquiring location information about the consumer,” but provides that a debt collector

shall “not state that such consumer owes any debt.” 15 U.S.C. § 1692b(2).

Here, Plaintiff sufficiently alleges that Defendants violated 15 U.S.C. § 1692c(b) when

they contacted her relatives and stated that she owed a debt. (Am. Compl. ¶¶ 41-42, ECF No. 3.)

The exception does not apply because Defendants had adequately located Plaintiff as

demonstrated by their frequent communications with her. Based on the allegations in the

Amended Complaint, none of the other exceptions apply. Plaintiff asserts that the natural

consequences of Defendants’ actions was to harass, worry, and embarrass her. (Id. at ¶ 42.) It is

therefore RECOMMENDED that the Court find Defendants liable for violation of 15 U.S.C. §

1692c(b).

2. 15 U.S.C. § 1692e(2)

Plaintiff also alleges that Defendants violated 15 U.S.C. § 1692e(2), which prohibits the

“false representation of the character, amount, or legal status of any debt.” 15 U.S.C. §

1692e(2)(A). “Whether a debt collector’s actions are false, deceptive, or misleading under §

1692e is based on whether the ‘least sophisticated consumer’ would be misled by defendant’s

actions.” Wallace, 683 F.3d at 326 (citations omitted).

Plaintiff alleges that Defendants violated § 1692e(2)(A) when their agent insisted that

Plaintiff owed a debt on the payday loan after the debt had been discharged in bankruptcy and

after she subsequently paid off the loan. (Am. Compl. ¶¶ 44-45, ECF No. 3.) Plaintiff alleges

that she informed Defendants that the loan had been discharged, but they continued to insist the

debt was due and owing. Additionally, Plaintiff alleges that Defendants misrepresented the

character and legal status of the debt when they falsely stated that she could be liable for

attorney’s fees. (Id. at ¶ 46.) Plaintiff was misled by Defendants’ representations, as she made

additional payments on the debt despite the fact that it was discharged in bankruptcy. She also

felt anxious, was unable to sleep, had her family life disrupted, and compulsively checked the

police department’s website for warrants in her name due to Defendants’ threats. (Mot. for

Default J. at 3, ECF No. 22; Decl. of Pl., ECF No. 22-1; Am. Compl. ¶ 46, ECF No. 3.)

Accordingly, it is RECOMMENDED that the Court find Defendants liable for a violation of 15

U.S.C. § 1692e(2).

3. 15 U.S.C. § 1692e(4)

Plaintiff alleges that Defendants violated 15 U.S.C. § 1692e(4), which prohibits the

“representation or implication that nonpayment of any debt will result in the arrest or

imprisonment of any person . . . unless such action is lawful and the debt collector or creditor

intends to take such action.” 15 U.S.C. § 1692e(4). Plaintiff alleges that Defendants violated §

1692e(4) when they threatened her with arrest and conviction for “check fraud” if she did not

make payments on the alleged debt. Because the debt had been discharged in bankruptcy, such

actions are unlawful. (Am. Compl. ¶ 18, ECF No. 3.) Further, Plaintiff alleges, upon

information and belief, that “RMG never had any real intention of filing civil suits or pressing

criminal charges against Plaintiff,” although she believed it did at the time. (Id.; Decl. of Pl. at ¶

3, ECF No. 22-1.) Defendants’ actions resulted in confusion, worry, and emotional distress for

Plaintiff. (Am. Compl. ¶¶ 48-49, ECF No. 3.) Accordingly, the undersigned RECOMMENDS

that the Court find Defendants liable for violation of 15 U.S.C. § 1692e(4).

4. 15 U.S.C. § 1692g

Plaintiff also asserts that Defendants violated 15 U.S.C. § 1692g(a). This section

provides that “[w]ithin five days after the initial communication with a consumer in connection

with the collection of any debt, a debt collector shall, unless the following information is

contained in the initial communication or the consumer has paid the debt, send the consumer

written notice . . .” 15 U.S.C. § 1692g(a). Plaintiff alleges that Defendants did not provide

proper notice within five days of the initial phone call. (Am. Compl. ¶ 51, ECF No. 3.) She

further alleges that the “natural consequence of Defendants’ inaction was to harass and oppress

Plaintiff and cause Plaintiff confusion, worry, and emotional distress.” (Id. at ¶ 52.) It is

therefore RECOMMEDED that the Court find Defendants liable for the violation of 15 U.S.C.

§ 1692g(a).

5. Summary of FDCPA Claims

In summary, the undersigned finds that Plaintiff has set forth sufficient facts to

demonstrate that Defendants are liable for violations of §§ 1692c(b), 1692e(2), 1692e(4), and

1692g(a) of the FDCPA. The undersigned therefore RECOMMENDS that the Court GRANT

IN PART Plaintiff’s Motion for Default Judgment and enter judgment in Plaintiff’s favor

regarding Defendants’ liability under the FDCPA. Plaintiff, however, has not clearly proven

damages. Accordingly, the undersigned RECOMMENDS that the Court DENY WITHOUT

PREJUDICE Plaintiff’s Motion for Default Judgment as it relates to damages under the FDCPA

and conduct an evidentiary hearing to determine the proper amount of damages.

B. Racketeer Influenced and Corrupt Organizations Act (RICO) Claim

Plaintiff next alleges a claim under RICO. “The civil RICO statute, 18 U.S.C. § 1964(c),

creates a cause of action for ‘[a]ny person injured in his business or property by reason of a

violation of [18 U.S.C. §] 1962.’” Aces High Coal Sales, Inc. v. Cmty. Bank & Tr. of W.

Georgia, 768 F. App’x 446, 453 (6th Cir. 2019). A plaintiff seeking to advance a civil RICO

claim “must plead the following elements: ‘(1) conduct (2) of an enterprise (3) through a pattern

(4) of racketeering activity.’” Moon v. Harrison Piping Supply, 465 F.3d 719, 723 (6th Cir.

2006) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)).

Here, Plaintiff has not set forth sufficient facts to plead elements (3) and (4) of her RICO

claim. “To establish a RICO violation under § 1962(c), a plaintiff must allege that the RICO

enterprise engaged in a ‘pattern of racketeering activity’ consisting of at least two predicate acts

of racketeering activity occurring within a ten-year period.” Moon, 465 F.3d at 723 (citing 18

U.S.C. § 1961(5)). Plaintiff alleges that Defendants committed the predicate acts of wire fraud

under 18 U.S.C. § 1343 and extortion under Ohio Revised Code § 2905.11. (Am. Compl. ¶¶ 93-

100, ECF No. 3.) Pursuant to 18 U.S.C. § 1343, a defendant may be liable for wire fraud as

follows:

Whoever, having devised or intending to devise any scheme or artifice to defraud,

or for obtaining money or property by means of false or fraudulent pretenses. . .,

transmits or causes to be transmitted by means of wire, radio, or television

communication in interstate or foreign commerce, any writings, signs, signals,

pictures, or sounds for the purpose of executing such scheme or artifice, shall be

fined under this title or imprisoned not more than 20 years.

18 U.S.C. § 1343. Ohio Revised Code § 2905.11 provides that a person is guilty of extortion if

he does the following:

(A) No person, with purpose to obtain any valuable thing or valuable benefit or to

induce another to do an unlawful act, shall do any of the following:

* * *

(4) Utter or threaten any calumny against any person;

(5) Expose or threaten to expose any matter tending to subject any

person to hatred, contempt, or ridicule, or to damage any person’s

personal or business repute, or to impair any person’s credit.

Ohio Rev. Code § 2905.11.

As a preliminary matter, Plaintiff has not sufficiently pled predicate acts of wire fraud.

When pleading the predicate act of wire fraud, a plaintiff must satisfy Federal Rule of Civil

Procedure 9(b)’s heightened pleading requirements, which requires a plaintiff to: “(1) specify the

statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where

and when the statements were made, and (4) explain why the statements were fraudulent.”

Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 2012) (citations

and internal quotation marks omitted); see also Moon, 465 F.3d at 723 (explaining that

“consistent with Rule 9(b), RICO plaintiffs must allege ‘the time, place and contents of the

misrepresentations’” (quoting Bender v. Southland Corp., 749 F.2d 1205, 1216 (1984))).

Here, Plaintiff fails to specify the dates and times at which she received the allegedly

fraudulent phone calls from Defendants. In the Amended Complaint, Plaintiff alleges that

“[e]arlier this year, RMG contacted Plaintiff by telephone regarding this payday loan,” and that

RMG “continued to call her a few times per month, each time threatening her with arrest.” (Am.

Compl. ¶¶ 11, 13, ECF No. 3.) Plaintiff makes similarly vague allegations regarding the phone

calls from Defendants throughout the Amended Complaint. (See Am. Compl. ¶¶ 11-29, ECF

No. 3.) Additionally, in her declaration, Plaintiff asserts, without explanation or detail, that for

“over two years” she has “been beaten down by the fear caused by the constant threats against

[her] over [her] debts.” (Decl. of Pl. ¶ 2, ECF No. 22-1.) Although Plaintiff provides the three

dates on which she wired money to RMG, she fails to specify any time or date on which

Defendants made allegedly fraudulent statements inducing such payment. Under these

circumstances, Plaintiff has not adequately pled predicate acts of wire fraud. See, e.g., Heinrich,

668 F.3d at 405 (finding that the plaintiff failed to sufficiently allege wire fraud where her

affidavit “does not include the date she received the allegedly fraudulent email from the

defendants”).

Plaintiff has, however, adequately plead at least two instances of extortion. In an effort to

get Plaintiff to pay on the alleged debt, Defendants threatened Plaintiff with arrest and called her

relatives stating that she had committed check fraud. Defendants continued to threaten Plaintiff

after she explained that the debt had been discharged in bankruptcy. (Am Compl. ¶¶ 11-12,

ECF No. 12.) Plaintiff asserts that she “was so scared of arrest that she made payment to RMG”

on February 13, 2018, in the amounts of $201.88 and $400.00. (Am. Compl. ¶¶ 19-20, ECF No.

3.) She alleges that again, on April 26, 2018, she was “scared of arrest and made a payment of

$515.00 to RMG.” (Id. at ¶ 26.) Defendants’ actions constitute extortion under Ohio Revised

Code § 2905.11.

Nonetheless, because Plaintiff failed to properly allege any predicate acts of wire fraud

and has only alleged three acts of extortion over a 2.5-month period, the undersigned is not

persuaded that Plaintiff has shown a pattern of racketeering activity. To establish a pattern of

racketeering activity under RICO, the plaintiff must show that the predicate acts are “related, and

that they amount to or pose a threat of continued criminal activity.” H. J. Inc. v. Northwestern

Bell Tel. Co., 492 U.S. 229, 239 (1989). This is called the “relationship plus continuity test.” Id.

The relationship prong of the test “is satisfied if the predicate acts have ‘the same or similar

purposes, results, participants, victims, or methods of commission, or otherwise are interrelated

by distinguishing characteristics and are not isolated events.’” Aces High Coal Sales, Inc., 768 F.

App’x at 454 (quoting H.J. Inc., 492 U.S. at 240 (quoting 18 U.S.C. § 3575(e))). Continuity of

the racketeering activity “is both a closed- and open-ended concept, referring either to a closed

period of repeated conduct, or to past conduct that by its nature projects into the future with a

threat of repetition.” H. J. Inc., 492 U.S. at 241. Here, the alleged predicate acts are related, as

they had the same or similar methods of commission and the common purpose of inducing

Plaintiff to pay on the alleged debt. Nevertheless, Plaintiff has not demonstrated continuity of

the racketeering activity.

First, Plaintiff’s allegations are insufficient to demonstrate a closed period of continuity.

“A closed period of continuity may be demonstrated ‘by proving a series of related predicates

extending over a substantial period of time.’” Moon, 465 F.3d at 724 (quoting H.J., Inc., 492

U.S. at 240). “Although there are no rigid rules regarding what amounts to ‘a substantial period

of time,’ racketeering activity lasting only ‘a few weeks or months and threatening no future

criminal conduct’ is insufficient.” Id. at 725 (citations omitted). Here, Plaintiff adequately pled

only three instances of extortion over a 2.5 month period, which is insufficient to demonstrate a

pattern of racketeering activity. Her allegations of wire fraud cannot establish a pattern because

she fails to set forth the dates on which the alleged wire fraud began and ended. The vague

allegations in the Amended Complaint appear to suggest that Defendants’ phone calls began in

early 2018 and that her “debt” was transferred to another company, Oconnor Corporation, in

November 2018. (Am. Compl. at ¶¶ 11, 30, ECF No. 3.) She has not provided the specific dates

or times of the calls, and also fails to allege the total number of threatening calls she received

from Defendants. This information should be available to Plaintiff, yet she did not provide it to

the Court. Instead, Plaintiff specifies only the three dates on which she made payments to RMG,

which does not shed light on the dates or consistency at which Defendants engaged in alleged

wire fraud. In short, Plaintiff has not alleged sufficient facts from which the undersigned could

conclude that Defendants engaged in a series of predicate acts over a substantial period of time.

Plaintiff likewise fails to allege facts demonstrating an open-period of continuity. “This

inquiry turns on whether the plaintiff has pleaded facts suggesting the threat of continued

racketeering activities projecting into the future.” Moon, 465 F.3d at 726. Open-ended

continuity may be pleaded by showing “‘a distinct threat of long-term racketeering activity,’ or

by showing ‘that the predicate acts or offenses are part of an ongoing entity’s regular way of

doing business.’” Id. at 726-27 (quoting H.J., Inc., 492 U.S. at 242). In her Amended

Complaint, Plaintiff alleges that, upon information and belief, RMG transferred her account to

Oconnor Corporation around November 2018. (Am. Compl. ¶¶ 29-30, ECF No. 3.) Thus, she

has not plausibly alleged a distinct threat of long-term racketeering activity from Defendants.

She also has not alleged that wire fraud and extortion are part of Defendants’ regular way of

doing business or that they have engaged in such practices with other debtors. Under such

circumstances, Plaintiff has not set forth sufficient facts demonstrating open-ended continuity.

In summary, Plaintiff fails to sufficiently allege a “pattern of racketeering activity.”

Accordingly, the undersigned RECOMMENDS that her Motion for Default Judgment be

DENIED as to her RICO claims.

C. Ohio Corrupt Practices Act (OCPA) Claim

Plaintiff also alleges a claim under the OCPA. The OCPA is modeled after the federal

RICO Act, State v. Beverly, 143 Ohio St.3d 258, 259, 37 N.E. 3d 116, 117 (Ohio 2015), and

provides in relevant part as follows: “No person employed by, or associated with, any enterprise

shall conduct or participate in, directly or indirectly, the affairs of the enterprise through a pattern

of corrupt activity or the collection of an unlawful debt.” Ohio Rev. Code § 2923.32(A)(1). In

order to prove a claim under the OCPA, Plaintiff must show “(1) that the conduct of the

defendant involves the commission of two or more specifically prohibited state or federal

criminal offenses, (2) that the prohibited criminal conduct of the defendant constitutes a pattern

of corrupt activity, and (3) that the defendant has participated in the affairs of an enterprise.”

Hall v. CFIC Home Mtg., 175 Ohio App. 587, 597, 888 N.E.2d 469, 477 (Ohio App. 2008). “In

view of these requirements, a plaintiff that fails to plead the elements necessary to establish a

RICO violation also fails to state a claim under the OCPA.” Ogle v. BAC Home Loans Servicing

LP, 924 F. Supp. 2d 902, 913 (S.D. Ohio 2013). Indeed, as with a federal RICO claim, the Ohio

Supreme Court has held that a “pattern of corrupt activity” under the OCPA “must include both a

relationship and continuous activity.” State v. Miranda, 2014-Ohio-451, ¶ 13, 138 Ohio St. 3d

184, 188, 5 N.E.3d 603, 607 (Ohio 2014) (citations and internal quotation marks omitted)

(emphasizing that the intent of the OCPA is “to criminalize the pattern of criminal activity, not

the underlying predicate acts”).

As set forth above, Plaintiff failed to sufficiently allege the predicate offenses of wire

fraud and to demonstrate a pattern of corrupt activity. Accordingly, Plaintiff has not alleged

facts showing that Defendants are liable under the OCPA. See Ogle, 924 F. Supp. 2d at 913

(finding plaintiffs failed to state a claim under the OCPA where they failed to plead the

necessary elements of a RICO claim). The undersigned therefore RECOMMENDS that

Plaintiff’s Motion for Default Judgment be DENIED as to her OCPA claims.

D. Invasion of Privacy Claim

Plaintiff next asserts a claim under Ohio common law for invasion of privacy. Invasion

of privacy under Ohio law is the “wrongful intrusion into one’s private activities in such a

manner as to outrage or to cause mental suffering, shame, or humiliation to a person of ordinary

sensibilities.” Housh v. Peth, 165 Ohio St. 35, 39, 133 N.E. 2d 340, 343 (Ohio 1956). In Housh,

the Ohio Supreme Court recognized that a “creditor has a right to take reasonable action to

pursue his debtor and persuade payment, although the steps taken may result to a certain degree

in the invasion of the debtor’s right of privacy.” Id. at 40. The Housh Court ultimately found

that the conduct of the creditor fell outside of the bounds of reasonable methods that may be

pursued to collect a debt. Id. at 41. The Ohio Supreme Court explained as follows:

The record shows that the defendant deliberately initiated a systematic campaign

of harassment of the plaintiff, not only in numerous telephone calls to the plaintiff

herself every day for a period of three weeks, some of which were late at night,

but also calls to her superiors over the telephone, informing them of the debt; that

she was called out of the classroom in the public schools where she was employed

three times within 15 minutes; that she lost a roomer at her rooming house

because of the repeated calls, and was threatened with loss of employment unless

the telephone calls ceased. The calls to the employer, and the rooming house,

were all part of the pattern to harass and humiliate the plaintiff and cause her

mental pain and anguish and cause her emotional disturbance for the purpose of

coercing her to pay the debt. The jury [h]ad a right to conclude that the defendant

committed such acts maliciously. As a result of the conduct of the defendant the

plaintiff became ill. In our opinion the conduct of the defendant falls outside the

bounds of reasonable methods which may be pursued in an effort to collect a debt,

and is actionable as an invasion of plaintiff’s right of privacy.’

Id. at 41.

Additionally, in addressing an invasion of privacy claim under Ohio law, the Sixth

Circuit has explained that

When considering whether a defendant’s telephone calls to the plaintiff are

offensive or outrageous enough to support an actionable claim of invasion of

privacy, Ohio courts have looked to a number of different factors, including the

number of calls, the content of the calls, the time of day that the calls were made,

and whether the calls were accompanied by other contacts with the plaintiff.

Charvat v. NMP, LLC, 656 F.3d 440, 453 (6th Cir. 2011).

Here, Plaintiff has sufficiently alleged facts demonstrating that Defendants are liable for

invasion of privacy. Defendants repeatedly called Plaintiff regarding a non-existent debt, as the

payday loan had been discharged in bankruptcy. Under such circumstances, it was unreasonable

for Defendants to continue to call Plaintiff a few times per month and threaten her with civil

litigation and criminal prosecution if she did not pay on the debt. Defendants’ actions are

particularly egregious because Plaintiff explained to RMG that the debt had been discharged in

bankruptcy. Further, RMG falsely told Plaintiff there was a warrant for her arrest, that she had

committed fraud, and that it had filed lawsuits against her. Additionally, Defendant RMG called

Plaintiff’s relatives and informed them of the alleged debt and stated that Plaintiff had committed

criminal check fraud. As a result of these actions, Plaintiff made payments on the non-existent

debt, felt anxious, was unable to sleep, had her family life disrupted, and compulsively checked

the police department’s website for warrants in her name. Although the number of calls and

times at which they were made is not clear, Defendants’ actions fall outside of the bounds of

reasonable conduct and constitute invasion of privacy. It is therefore RECOMMENDED that

the Court GRANT IN PART Plaintiff’s Motion for Default Judgment and enter judgment in

Plaintiff’s favor regarding Defendants’ liability for invasion of privacy. Because Plaintiff has

not adequately proven damages, the undersigned RECOMMENDS that the Court DENY

WITHOUT PREJUDICE Plaintiff’s Motion for Default Judgment as it relates to damages for

invasion of privacy and conduct an evidentiary hearing to determine the proper amount of

damages.

E. Defamation Claim

Plaintiff also asserts a defamation claim under Ohio common law. To prove defamation,

plaintiff must demonstrate the following elements:

(1) that a false statement of fact was made, (2) that the statement was defamatory,

(3) that the statement was published, (4) that the plaintiff suffered injury as a

proximate result of the publication, and (5) that the defendant acted with the

requisite degree of fault in publishing the statement.

Am. Chem. Soc’y v. Leadscope, Inc., 133 Ohio St. 3d 366, 389, 978 N.E. 2d 832, 852 (Ohio

2012) (quoting Pollock v. Rashid, 117 Ohio App. 3d 361, 368, 690 N.E. 2d 903, 908 (Ohio Ct.

App. 1996)).

Plaintiff has set forth facts demonstrating that Defendant RMG is liable for defamation.

First, Defendant RMG made a false statement about Plaintiff when it stated to Plaintiff’s

relatives that she had committed criminal check fraud. This statement is defamatory per se.

“Spoken words accusing a person of committing a crime are slanderous per se only if the crime

is one of moral turpitude.” Northeast Ohio Elite Gymnastics Training Ctr. v. Osborne, 183 Ohio

App.3d 104, 109, 916 N.E. 2d 484, 487 (Ohio App. 2009). Here, Defendant RMG falsely stated

that Plaintiff committed check fraud, a crime of moral turpitude. See Yeremin v. Holder, 738

F.3d 708, 714 (6th Cir. 2013) (“Crimes that involve deception or fraud consistently are held to

qualify as crimes involving moral turpitude.”). Next, Defendant RMG published the defamatory

statement when he stated it to Plaintiff’s relatives. See Strafford v. Jewelers Mut. Ins., 554 F.

App’x 360, 375 (6th Cir. 2014) (explaining that published means that the statement must have

been made to someone who is not the plaintiff). Plaintiff suffered injuries proximately caused by

RMG’s publication of the defamatory statement, as she alleges that it directly resulted in her

suffering humiliation in her family life. Finally, Defendant RMG acted with the requisite degree

of intent because it knowingly made such false statements to Plaintiff’s relatives. Accordingly, it

is RECOMMENDED that the Court GRANT Plaintiff’s Motion for Default Judgment as it

relates to liability against Defendant RMG for defamation. Because Plaintiff makes no

defamation allegations against Defendant Hopkins in her Amended Complaint, it is

RECOMMENDED that the Court DENY Plaintiff’s Motion for Default Judgment as to

Plaintiff’s defamation claim against Defendant Hopkins. It is further RECOMMENDED that

the Court DENY WITHOUT PREJUDICE Plaintiff’s request for damages for defamation at

this juncture and conduct an evidentiary hearing to determine the proper amount of damages.

IV. DISPOSITION

For the foregoing reasons, it is RECOMMENDED that Plaintiff’s Motion for Default

Judgment be GRANTED IN PART AND DENIED IN PART (ECF No. 22). It is

RECOMMENDED that the Court (1) ENTER DEFAULT JUDGMENT against Defendants

RMG and Hopkins, on liability only, for violation of the FDCPA and invasion of privacy; (2)

ENTER DEFAULT JUDGMENT against Defendant RMG, on liability only, for defamation;

(3) DENY WITHOUT PREJUDICE Plaintiff’s Motion for Default Judgment as it relates to

damages for violation of the FDCPA, invasion of privacy, and defamation and conduct an

evidentiary hearing to determine the proper amount of damages; and (4) DENY Plaintiff’s

Motion for Default Judgment as it relates to her RICO and the OCPA claims.

V. PROCEDURE ON OBJECTIONS

If any party objects to this Report and Recommendation, that party may, within fourteen

(14) days of the date of this Report, file and serve on all parties written objections to those

specific proposed findings or recommendations to which objection is made, together with

supporting authority for the objection(s). A Judge of this Court shall make a de novo

determination of those portions of the Report or specified proposed findings or recommendations

to which objection is made. Upon proper objections, a Judge of this Court may accept, reject, or

modify, in whole or in part, the findings or recommendations made herein, may receive further

evidence or may recommit this matter to the Magistrate Judge with instructions. 28 U.S.C.

§ 636(b)(1).

The parties are specifically advised that failure to object to the Report and

Recommendation will result in a waiver of the right to have the District Judge review the Report

and Recommendation de novo, and also operates as a waiver of the right to appeal the decision of

the District Court adopting the Report and Recommendation. See Thomas v. Arn, 474 U.S. 140

(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

/s/ Chelsey M. Vascura

CHELSEY M. VASCURA

UNITED STATES MAGISTRATE JUDGE