# Woodard v. O'Brien

> District Court, S.D. Ohio · November 13, 2019

URL: https://www.frixlaw.com/law-library/cases/10374238

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** November 13, 2019
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

SHOVON WOODARD, :
: Case No. 2:18-CV-1523
Plaintiff, :
: CHIEF JUDGE ALGENON L. MARBLEY
v. :
: Magistrate Judge Vascura
KEVIN JOHN O'BRIEN, et al., :
:
Defendants. :

OPINION & ORDER
This matter is before the Court on the Motion to Dismiss brought by Defendants Kevin
John O’Brian and Kevin O’Brien & Associates Co. L.P.A. (ECF No. 8). Defendants move this
court to dismiss Plaintiff’s complaint arguing that Plaintiff’s claims are time barred, and in the
alternative, that she fails to state a claim upon which relief may be granted. Plaintiffs responded
arguing that she has stated a plausible claim under the DFCPA. (ECF No. 10). Defendants has
filed a reply. (ECF No. 12). For the reasons outlined below, this Court DENIES Defendant’s
Motion to Dismiss.
I. BACKGROUND
Ms. Woodard lost her wallet at some point prior to March 18, 2011. (ECF No. 1 at ¶ 14).
On March 18, 2011 someone presented a personal check made out in her name to Columbus
Checkcashers in Franklin County Ohio. Id. at ¶ 15. She alleges she had nothing to with this
attempt to cash the check. Id. at ¶¶ 14-16. On July 10, 2015, Defendants filed a civil complaint
against Ms. Woodward on behalf of Columbus Checkcashers for fraud, alleging that the check
had been dishonored and attempting to collect damages, costs, and attorney fees. (Id. at ¶¶ 19-21,
ECF No. 8 at 2). In April of 2016, the Franklin County Municipal Court awarded a default
judgment against Ms. Woodard. (ECF No. 1 at ¶ 22). On November 29, 2017, Ms. Woodard
learned that Mr. O’Brien had misrepresented himself as having the authority to bring the suit
when he did not. Id. at ¶ 28. Ms. Woodard petitioned the court to vacate the default judgment on
July 24, 2018. Id. at ¶ 26. Days before the judgement was vacated, Columbus Checkcashers also
successfully moved the Municipal Court to disqualify Mr. O’Brien from representing Columbus

Checkcashers. Id. at ¶ 25. On November 26, 2018 Ms. Woodard brought suit against Mr.
O’Brien and his firm alleging that they violated the Fair Debt Collection Practices Act
(“FDCPA”) by instituting the lawsuit on behalf of Columbus Cashcheckers when they had no
authority to do so. (ECF No. 1). Defendants brought this motion to dismiss arguing that Ms.
Woodard’s claim is time barred and, in the alternative, that she does not state a claim because the
dishonored check at issue was endorsed as a counterfeit, and “money owed or allegedly owed as
a result of a tort or theft . . . does not constitute a ‘debt’ for purposes of the FDCPA.” (ECF No. 8
at 3).
II. STANDARD OF REVIEW

The Court may dismiss a cause of action under Federal Rule of Civil Procedure 12(b)(6)
for “failure to state a claim upon which relief can be granted.” Such a motion “is a test of the
plaintiff's cause of action as stated in the complaint, not a challenge to the plaintiff's factual
allegations.” Golden v. City of Columbus, 404 F.3d 950, 958-59 (6th Cir. 2005). The Court must
construe the complaint in the light most favorable to the non-moving party and must accept
plaintiff’s allegations as true. Stratton v. Portfolio Recovery Assocs., LLC, 770 F.3d 443, 446
(6th Cir. 2014), as amended (Dec. 11, 2014); Total Benefits Planning Agency, Inc. v. Anthem
Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008). If more than one inference may be
drawn from an allegation, the Court must resolve the conflict in favor of the plaintiff. Mayer v.

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Mylod, 988 F.2d 635, 638 (6th Cir. 1993). The Court cannot dismiss a complaint for failure to
state a claim “unless it appears beyond doubt that the plaintiff can prove no set of facts in support
of his claim which would entitle him to relief.” Id. The Court is not required, however, to
accept as true mere legal conclusions unsupported by factual allegations. Ashcroft v. Iqbal, 556
U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009).

Although liberal, Rule 12(b)(6) requires more than bare assertions of legal conclusions.
Allard v. Weitzman, 991 F.2d 1236, 1240 (6th Cir. 1993) (citation omitted). Generally, a
complaint must contain a “short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). A complaint's factual allegations “must be enough to
raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). It must contain “enough facts to state a claim to
relief that is plausible on its face.” Id. at 570. A claim is plausible when it contains “factual
content that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

III. ANALYSIS
Defendants first argue that Plaintiff’s claims are time barred because she brought this
claim more than one year after the alleged violation occurred. Plaintiff counters that the Sixth
Circuit recognizes the “discovery rule” which permits the one-year statute of limitations to begin
tolling from the date that Plaintiff learned or had reason to learn of the FDCPA violation.
Plaintiff cites to Goodson v. Bank of Am., N.A., 600 F. App'x 422, 430 (6th Cir. 2015), but in that

case, the Sixth Circuit did not expressly determine that the discovery rule or equitable tolling
apply. The Sixth Circuit has expressly avoided determining whether the discovery rule applies to
the FDCPA’s statute of limitations. See Lloyd v. Midland Funding, LLC, 639 F. App'x 301, 306
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(6th Cir. 2016) (“We have never decided whether this statute of limitations includes a discovery
rule, and we need not resolve the point today.”). Nonetheless, in the past, this Court has
equitably tolled the statute of limitations for FCDPA claims until the time that the borrower
“‘had reasonable opportunity to discover the fraud involving the complained’ of violation.”
Goodson v. Bank of Am., N.A., 600 F. App'x 422, 430 (6th Cir. 2015) (citing Foster v. D.B.S.

Collection Agy., 463 F.Supp.2d 783, 799 (S.D.Ohio 2006) (determining that Defendants failed to
prove that Plaintiff’s claims were time barred because they did not specify the time when the
class members discovered or had reasonable opportunity to discover Defendants’ alleged
misrepresentations)).
Construing the complaint in the light most favorable to Plaintiff and accepting all her
allegations as true, she did not learn that Defendants had no authority to represent Columbus
Checkcashers until November 29, 2017. (ECF No 1 at 4). Given that this suit was filed less than
one year later, on November 26, 2018, Defendants have failed to prove that Plaintiff’s claims are
time barred.

In the alternative, Defendants argue that Plaintiff fails to state a claim because there is no
“debt” in this case within the meaning of the FDCPA because the check that was cashed was a
counterfeit check and thus Plaintiff’s obligation arose out of a theft and not a covered
transaction. (ECF No. 8 at 3). Plaintiff counters that courts “overwhelmingly agree that an
alleged debt founded on passing a bad check is a ‘debt’ triggering protection under the FDCPA.”
(ECF No. 10 at 7).
The FDCPA was enacted to “eliminate abusive debt collection practices by debt
collectors.” 15 U.S.C. § 1692(e). To properly plead a claim under the FDCPA:
“(1) plaintiff must be a ‘consumer’ as defined by the Act; (2) the ‘debt’ must arises out of
transactions which are ‘primarily for personal, family or household purposes;’ (3)
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defendant must be a ‘debt collector’ as defined by the Act; and (4) defendant must have
violated § 1692e's prohibitions.”
Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012)
Defendants argue that Plaintiff’s passing of the counterfeit check is an “alleged theft” and
there is thus no eligible “transaction” that created the debt. (ECF No. 8 at 6). Defendants cite a
1997 decision by this Court as support for their proposition that the passing of a bad check does
not create a debt for purposes of the FDCPA. See ECF No. 12 at 4; Pocisk v. VAS Dimensions,
C2-96-1161, (S.D. Ohio April 25, 1997). In Pocisk, this Court relied heavily on the Third
Circuit’s decision in Zimmerman v. HBO Affiliate Grp., 834 F.2d 1163 (3d Cir. 1987) to
determine that a “debt” must involve a transaction involving the offer or “extension of credit to a
consumer” and that because tendering a check is a form of immediate payment it is the

“antitheses of a voluntary extension of credit.” Id. at 4-5. At the time the decision in Pocisk was
made, the courts of other circuits had not yet addressed this issue comprehensively. Furthermore,
the Third Circuit has since expressly rejected attempts to extend the rationale of the Zimmerman
decision to debts created by tendering bad checks. F.T.C. v. Check Inv'rs, Inc., 502 F.3d 159, 170
(3d Cir. 2007) (agreeing with other circuits that “there is no ‘fraud exception’ in the FDCPA”
and determining that check drawn on account with insufficient funds created “debt”), abrogated
on other grounds by Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017).
Further, while the Sixth Circuit has not expressly addressed this issue, the majority of
courts in this circuit and elsewhere have in the meantime determined that debts founded on

dishonored or bad checks are “debts” under the FDCPA. Gradisher v. Check Enf't Unit, Inc.,
133 F. Supp. 2d 988, 990 (W.D. Mich. 2001)(“The collection of the amount owed to another
because of a bad check is debt collection under the FDCPA.”); Bass v. Stolper, Koritzinsky,
Brewster & Neider, S.C., 111 F.3d 1322, 1325 (7th Cir. 1997) (“As long as the transaction
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creates an obligation to pay, a debt is created. We harbor no doubt that a check evidences the
drawer's obligation to pay for the purchases made with the check, and should the check be
dishonored, the payment obligation remains.”); Duffy v. Landberg, 133 F.3d 1120, 1123 (8th Cir.
1998) (finding that dishonored check constitutes an FDCPA debt); Charles v. Lundgren &
Assocs., P.C., 119 F.3d 739, 742 (9th Cir. 1997) (same). See also Brown v. Am. Mut. Holdings

Inc., No. 1:13-CV-01072-PLM, 2017 WL 2728409, at *5 (W.D. Mich. June 6, 2017), report and
recommendation adopted, No. 1:13-CV-1072, 2017 WL 2729098 (W.D. Mich. June 23, 2017)
(noting that bringing a suit for fraud in state court is an attempt to collect a “debt” and discussing
in depth and approvingly Third Circuit decision that bounced checks do constitute debts within
the meaning of the FDCPA).
Additionally, the Sixth Circuit did implicitly recognize that a debt created out of a check
drawn on an account with insufficient funds did create a debt covered by the FDCPA. See
Broadnax v. Greene Credit Serv., 106 F.3d 400 (6th Cir. 1997). In Broadnax, the plaintiff,
Broadnax, sued a collection agency that attempted to recover from him a debt resulting from a

dishonored check. Broadnax had issued the check to his handyman in exchange for his
completing repairs on a rental building. The handyman used the check at a grocery store. The
day after the handyman used the check at the grocery store, Broadnax found out that the
handyman had not actually completed the work and withdrew his money from the account so
that it would not be drawn. The grocery store employed debt collectors to collect the debt after
Broadnax stated he did not owe the grocery store anything. The Court determined that the
underlying debt was a commercial debt and not a FDCPA eligible consumer debt because
Broadnax was attempting to pay his handyman for repairs to his rental property. The Sixth
Circuit reversed determining that the “undisputed facts evidence the creation of a consumer debt

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running from [the handyman] to Don's Super Value in the amount of $165, which [the
handyman] attempted to discharge by assignment of Broadnax's check to the supermarket.” Id. at
*3. The Sixth Circuit took no issue with the fact that the debt was due to a dishonored check or
with Broadnax’s actions in withdrawing money to ensure that the check would bounce.
Additionally, and while not dispositive of the issue, Defendants’ September 28, 2011

collection letter to Plaintiff—attached to Defendants’ Motion to Dismiss as an exhibit—contains
a notice made to comply with the FDCPA, stating in all caps that the collection letter “is an
attempt to collect a debt.” (ECF No. 8-1 at 36). If the allegedly counterfeit check did not create a
debt within the meaning of the FDCPA, defendants would not have had reason to use such a
notice.
Defendants add that the check at issue is not simply a bad check but a counterfeit one,
and any caselaw finding that a bad check is a covered debt is inapplicable. (ECF No. 12 at 4).
However, the issue of whether the check is a counterfeit and whether Plaintiff negotiated and
cashed a counterfeit check is an issue of fact and not one relating to improper or insufficient

pleading. See Telecheck Recovery Servs., Inc., No. CIV.A. 94-3182, 1997 WL 736692, at *3
(E.D. La. Nov. 24, 1997) (determining that an FDCPA eligible transaction occurred where an
imposter cashed a bad check to pay for shoes at Nine West and that there is “no exception
created in the Act for situations of fraudulent intent in creating a debt”). This Court is bound to
accept Plaintiff’s contention that the check was not cashed by her as true when deciding
Defendant’s Motion to Dismiss.
Defendants also argue that the “FDCPA is only triggered when an obligation to pay arises
out of a specified ‘transaction’ within the meaning of the statute” and that such a transaction
must be incurred by a consumer involving a “personal, family or household property.” (ECF No.

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12 at 6-7). It is true that Plaintiff has alleged that her wallet was stolen and that she had nothing
to do with the cashing of the check on March 18, 2011. (ECF No. 1 at ¶¶ 14-15). Courts typically
look to the intended use or purpose behind the debt incurred to determine whether the debt was
for “personal, family, or household purposes.” Martin v. Allied Interstate, LLC, 192 F. Supp. 3d
1296, 1306 (S.D. Fla. 2016). In the context of cases of identity theft or mistaken identity,

however, this line of questioning is insufficient and fails to adequately protect the consumer. In
such cases, an individual who has been subjected to identity theft can never prove that the debt
incurred on her behalf was for “personal, family, or household purposes” because she alleges that
she never in fact incurred this debt or had knowledge that it would be incurred. This would create
an obstacle for plaintiffs that would “contravene both the plain meaning and purpose of the
FDCPA.” Id. See also Byes v. Telecheck Recovery Servs., Inc., No. CIV.A. 94-3182, 1997 WL
736692, at *3 (E.D. La. Nov. 24, 1997). Accordingly, this Court finds that Plaintiff’s assertion
that her wallet was stolen and that someone else cashed the check creating the debt at issue is
sufficient to state a claim under the FDCPA.

IV. CONCLUSION
For the reasons state above, this Court DENIES Defendants’ Motion to Dismiss.
IT IS SO ORDERED.

s/ Algenon L. Marbley
ALGENON L. MARBLEY
CHIEF UNITED STATES DISTRICT JUDGE

DATED: November 13, 2019

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10374238. Public record. Not legal advice.