[Cite as Harper v. Weltman, Weinberg & Reis Co., L.P.A.,

.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

CHARLES HARPER, ET AL., :

Plaintiffs-Appellants, : No. 107439 v. :

WELTMAN, WEINBERG AND REIS CO., L.P.A., ET AL., :

Defendants-Appellees. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: August 1, 2019

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-18-894696

Appearances:

Weltman, Weinberg & Reis Co., L.P.A., and Daniel A. Friedlander, for appellees.

Darryl E. Pittman & Associates, and Darryl E. Pittman, for appellants.

EILEEN T. GALLAGHER, P.J.:

Plaintiffs-appellants, Charles Harper, et al. (collectively “appellants,”

individually “Charles” and “Bernadette”), appeal from the trial court’s judgment

granting the motion to dismiss filed by defendants-appellees, Weltman, Weinberg & Reis Co., L.P.A., et al. (“defendants”). Appellants raise the following assignment

of error for review:

The trial court abused its discretion in dismissing the case because there were questions of fact which precluded the court from granting a motion to dismiss.

After careful review of the record and relevant case law, we affirm the

trial court’s judgment.

I. Procedural and Factual History

In May 2011, a complaint for cognovit judgment (the “Cognovit

Complaint”) was filed against Charles and others in Cuyahoga C.P. No. CV-11-

756112. The Cognovit Complaint alleged that in March 2010, Charles Emerman, as

trustee of the Charles Emerman Revocable Trust, loaned $63,374 to Donald

Williams, Sr., Donald Williams, Jr., and Charles. Trustar Funding, L.L.C. (“Trustar”)

served as the loan servicer for Emerman, and thus, the cognovit note was between

Trustar and the three borrowers. The note was secured by a mortgage on

commercial property located at 22021 Euclid Avenue, Euclid, Ohio. The property

was owned by Shepherd Group Realty and Development Corporation, a Georgia

corporation that was owned and operated by Donald Williams, Sr.

Judgment in that case was ultimately rendered in favor of Trustar and

against Charles in the amount of $71,951.11. In February 2018, this court affirmed

the trial court’s judgment denying Harper’s motion to vacate the cognovit judgment.

Trustar Funding, L.L.C. v. Harper, 8th Dist Cuyahoga No. 105837,

. In September 2017, defendants filed a complaint on behalf of Trustar

in Cuyahoga C.P. No. CV-17-886346 (the “Fraudulent Conveyance Complaint”)

against Charles, Bernadette, and Gilmore Heights Dental Holdings, Ltd. In the

Fraudulent Conveyance Complaint, Trustar stated that it was “the holder of an

outstanding cognovit judgment rendered in the Cuyahoga Court of Common Pleas,

under Case No. CV-11-756112 on May 25, 2011 against Charles W. Harper and

others.” In an effort to collect the outstanding judgment, Trustar sought a creditor’s

bill and set forth a fraudulent conveyance cause of action. Trustar alleged that

Bernadette “holds, receives, [and] conceals income rightfully due [to Charles] * * *

in an attempt to avoid payment of creditors’ claims including that of [Trustar].” In

January 2018, Trustar voluntarily dismissed the complaint.

On March 16, 2018, appellants filed the complaint that is the subject

of this appeal in Cuyahoga C.P. No. CV-18-107439 against the defendants, Weltman,

Weinberg & Reis Co., L.P.A., and attorney Donald A. Mausar. The complaint alleged

that by filing the Fraudulent Conveyance Complaint on behalf of Trustar, the

defendants violated certain provisions of the federal Fair Debt Collection Practices

Act, 15 U.S.C. 1692 (“FDCPA”), and the Ohio Consumer Sales Practices Act

(“OCSPA”), R.C. 1345.01 et seq. Specifically, appellants alleged that because Trustar

previously assigned the cognovit judgment to a third party in 2016, defendants filed

the Fraudulent Conveyance Complaint while having knowledge that Trustar “had no

interest whatsoever in the judgment being sued upon.” Relevant to this appeal, the

complaint incorporated the Fraudulent Conveyance Complaint by reference. In April 2018, defendants filed a Civ.R. 12(B)(6) motion to dismiss,

arguing that appellants’ complaint failed to state a claim upon which relief may be

granted because the underlying debt did not arise from a “consumer transaction” as

contemplated under the FDCPA or the OCSPA. Thus, defendants maintained that

appellants’ FDCPA and OCSPA claims fail as a matter of law because they “are

definitionally invalid given that the [underlying] lawsuit was based on a commercial,

not a consumer transaction.” The motion to dismiss attached copies of the Cognovit

Complaint, the Fraudulent Conveyance Complaint, and the underlying cognovit

promissory note.

In June 2018, the trial court issued a journal entry granting

defendants’ motion to dismiss. The court stated, in relevant part:

The court, in construing all factual allegations in the complaint as true and drawing all reasonable inferences in favor of Plaintiffs, finds that Plaintiffs’ complaint fails to state a claim upon which relief may be granted.

Appellants now appeal from the trial court’s judgment.

II. Law and Analysis

In their sole assignment of error, appellants argue the trial court erred

by granting defendants’ motion to dismiss. Appellants contend that its complaint

“alleged facts sufficient to satisfy Ohio’s notice pleading standard on all counts.”

A. Standard of Review

A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim on

which relief can be granted “is procedural and tests the sufficiency of the complaint.”

State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs.,

,

(1992), citing Assn. for Defense of Washington Local School Dist. v.

Kiger,

,

(1989). In order for a trial court to

grant a motion to dismiss for failure to state a claim on which relief can be granted,

it must appear “beyond doubt from the complaint that the plaintiff can prove no set

of facts entitling her to relief.” Grey v. Walgreen Co.,

, 2011-

Ohio-6167,

(8th Dist.), citing LeRoy v. Allen, Yurasek &

Merklin,

,

,

.

An appellate court employs “a de novo standard of review for motions

to dismiss filed pursuant to Civ.R. 12(B)(6).”

, citing Greeley v. Miami

Valley Maintenance Contrs., Inc.,

,

(1990). Under

de novo analysis, we are required to “accept all factual allegations of the complaint

as true and draw all reasonable inferences in favor of the nonmoving party.” Id. at

¶ 3, citing Byrd v. Faber,

,

(1991). “Unsupported

conclusions of a complaint[,] [however,] are not considered admitted and are not

sufficient to withstand a motion to dismiss.” State ex rel. Hickman v. Capots,

,

(1989), citing Schulman v. Cleveland,

,

(1972).

Given the litigation history of the parties involved in this case, it is

necessary to note that when assessing a Civ.R. 12(B)(6) motion to dismiss, a trial

court is not permitted to “take judicial notice of court proceedings in another case.”

NorthPoint Props. v. Petticord,

,

,

(8th Dist.), citing Campbell v. Ohio Adult Parole Auth., 10th Dist. Franklin No. 97APE05-616,

(Oct. 28, 1997). Similarly, “‘a trial

court may not take judicial notice of prior proceedings in the court even if the same

parties and subject matter are involved.’”

quoting First Michigan Bank & Trust

Co. v. P. & S. Bldg., 4th Dist. Meigs No. 413,

(Feb. 16,

1989). A trial court “may only take judicial notice of prior proceedings in the

immediate case.”

quoting In re LoDico, 5th Dist. Stark No. 2003-CA00446,

.

With that said, however, courts may take judicial notice of judicial

opinions and public records accessible from the internet. See, e.g., State ex rel.

Everhart v. McIntosh,

,

,

.

In addition, this court has previously stated that “‘documents attached to or

incorporated into the complaint may be considered on a motion to dismiss pursuant

to Civ.R. 12(B)(6).’” Glazer v. Chase Home Fin. L.L.C., 8th Dist. Cuyahoga Nos.

99875 and 99736,

, quoting NCS Healthcare, Inc. v.

Candlewood Partners, L.L.C.,

,

,

(8th Dist.); State ex rel. Crabtree v. Franklin Cty. Bd. of Health,

,

(1997). In fact, the trial court may “review

documents that were incorporated into the complaint, even if not attached to the

complaint.”

citing Irvin v. Am. Gen. Fin., Inc., 5th Dist. Muskingum No.

CT2004-0046,

; Fillmore v. Brush Wellman, Inc., 6th

Dist. Ottawa No. OT-03-029,

. In this case, the trial court did not convert the motion to dismiss into

a motion for summary judgment. Our review, therefore, is limited to the four

corners of the complaint and to the documents attached or incorporated therein.

.

B. The FDCPA and the OCSPA

As stated, appellants’ complaint alleged that defendants violated

certain provisions of the OCSPA and FDCPA while attempting to collect a consumer

debt on behalf of Trustar. Both the FDCPA, 15 U.S.C. 1692 et seq., and the OCSPA,

R.C. 1345.01 et seq., are remedial statutes, intended to reach a broad range of

conduct.

The United States Congress enacted the FDCPA “to eliminate abusive

debt collection practices by debt collectors, to ensure that those debt collectors who

refrain from using abusive debt collection practices are not competitively

disadvantaged, and to promote consistent state action to protect consumers against

debt collection abuses.” 15 U.S.C. 1692a.

Under the FDCPA, a debt collector is prohibited from using “any false,

deceptive, or misleading representation or means in connection with the collection

of any debt.” 15 U.S.C. 1692e. A debt collector is also prohibited from using “unfair

or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. 1692f.

The FDCPA includes a list of these prohibited practices under each of these sections.

15 U.S.C. 1692e and f. When analyzing whether conduct giving rise to the claim fits within

the broad scope of the FDCPA, “the conduct is viewed through the eyes of the ‘least

sophisticated consumer.’” Currier v. First Resolution Invest. Corp.,

(6th Cir. 2014). That standard, while protecting “the gullible and the shrewd

alike,” also presumes “a basic level of reasonableness and understanding on the part

of the debtor.”

A plaintiff must prove four essential elements to establish a prima

facie case for a violation of the FDCPA:

1. [T]he plaintiff is a natural person who is harmed by violations of the FDCPA, or is a “consumer” within the meaning of 15 U.S.C.A. §§ 1692a(3), 1692(d) for purposes of a cause of action, 15 U.S.C.A. § 1692c or 15 U.S.C.A. § 1692e(11);

2. [T]he “debt” arises out of a transaction entered primarily for personal, family, or household purposes, 15 U.S.C.A. § 1692a(5);

3. [T]he defendant collecting the debt is a “debt collector” within the meaning of 15 U.S.C.A. § 1692a(6); and

4. [T]he defendant has violated, by act or omission, a provision of the FDCPA, 15 U.S.C.A § 1692a—1692o; 15 U.S.C.A § 1692a; 15 U.S.C.A § 1692k.

Whittiker v. Deutsche Bank Natl. Trust Co.,

(N.D.Ohio

2009). “The absence of any one of the four essential elements is fatal to a FDCPA

lawsuit.”

.

Regarding the elements of a claim under the FDCPA, this court has

stated:

The FDCPA defines “debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. 1692a(5). As the plain language of the statute indicates, not all obligations to pay are considered debts subject to the FDCPA. Rather, the FDCPA may be triggered only when an obligation to pay arises out of a consumer transaction. Bloom v. I.C. Sys., Inc.,

(9th Cir. 1992) (holding that the FDCPA applies only to “consumer debts” incurred “primarily for personal, family, or household purposes”).

A “debt collector” includes “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). Within this context, a “consumer” is “any natural person obligated or allegedly obligated to pay any debt.” 15 U.S.C. 1692a(3).

(Emphasis added.) Cawrse v. Melvin Banchek Co., L.P.A. (In re Apelt), 8th Dist.

Cuyahoga No. 102765,

, ¶ 22-23.

“[T]he OCSPA also provides protections for consumer debtors against

debt collectors and their attorneys.” Taylor v. First Resolution Invest. Corp.,

,

,

. The act states that “[n]o

supplier shall commit an unfair or deceptive act or practice in connection with a

consumer transaction.” R.C. 1345.02(A). R.C. 1345.03(A) provides that “[n]o

supplier shall commit an unconscionable act or practice in connection with a

consumer transaction.”

R.C. 1345.01(A) defines a “consumer transaction” as follows:

“Consumer transaction” means a sale, lease, assignment, award by chance, or other transfer of an item of goods, a service, a franchise, or an intangible, to an individual for purposes that are primarily personal, family, or household, or solicitation to supply any of these things. “Consumer transaction” does not include transactions between persons, defined in sections 4905.03 and 5725.01 of the Revised Code, and their customers, except for transactions involving a loan made pursuant to sections 1321.35 to 1321.48 of the Revised Code and transactions in connection with residential mortgages between loan officers, mortgage brokers, or nonbank mortgage lenders and their customers; * * *.

With the essential elements of appellants’ federal and state claims in

mind, we now consider the sufficiency of appellants’ complaint to determine

whether it fails to state a claim on which relief can be granted.

C. Sufficiency of Appellants’ Complaint

With respect to the necessary elements of claims under the FDCPA

and the OCSPA, appellants’ complaint alleged, in relevant part:

6. Plaintiffs are “consumers” as defined in FDCPA 15 U.S.C. § 1692a(3) and OCSPA R.C. 1345.01(D).

7. Defendants, Weltman, Weinberg and Reis Co., L.P.A., and Donald A. Mauser, are attorneys engaged in the business of debt collection in the State of Ohio, and regularly collect debts due to others. Defendants are debt collectors within the meaning of the FDCPA, as defined at 15 U.S.C. § 1692a(6).

8. Defendants sought to collect debts allegedly owed to Trustar, a defunct Ohio corporation, and a third-party who is not a party to this suit.

9. The debt that is the subject of this Complaint is a “consumer debt” as defined by FDCPA 15 U.S.C. § 1692a([5]) and a “consumer transaction” as defined [under] R.C. 1345.01(A).

Appellants’ complaint, ¶ 6-9.

In support of their claims under the FDCPA, appellants alleged that

the defendants’ Fraudulent Conveyance Complaint falsely misrepresented “that

Trustar had standing to sue Plaintiffs, that [Trustar] owned the alleged debt, and

that Plaintiffs owed money to Trustar.” Complaint at ¶ 23, citing 15 U.S.C. 1692e. Appellants further alleged that “‘defendants’ efforts to collect the alleged debt

violated 15 U.S.C. 1692f, as there was no basis—legal nor contractual—which could

support the collection of the [cognovit judgment] from Plaintiff.” Id. at ¶ 24.

Regarding their claims under the OCSPA, appellants alleged that

defendants violated R.C. 1345.01 et seq. by using “abusive, harassing, deceptive, and

unconscionable sales practices” to collect the cognovit judgment debt. Id. at ¶ 32.

Appellants asserted that defendants’ violations include, but are not limited to (1)

“engaging in conduct the natural consequence of which is to harass, oppress or

abuse Plaintiff”; (2) “giving Plaintiffs the impression that Defendants would take

action they could not legally take”; (3) “engaging in conduct which had the purpose

and effect of disgracing Plaintiffs”; and (4) “failing to include consumer warnings in

communications with Plaintiffs.” Id.

On appeal, appellants argue that their complaint “alleged facts

sufficient to satisfy Ohio’s notice pleading standard on all counts.” Appellants

further contend that the trial court erred by failing to “look at the substance” of the

underlying cognovit note transaction in “determining whether or not the transaction

was a consumer transaction.” Defendants oppose appellants’ position, arguing that

appellants’ complaint contains “no factual allegations in any way supporting the

‘consumer’ and ‘consumer transaction’ elements of an OCSPA or FDCPA claim.”

Because Ohio is a notice-pleading state, Ohio law ordinarily does not

require a plaintiff “to plead operative facts with particularity.” Cincinnati v. Beretta

U.S.A. Corp.,

,

,

, ¶ 29. However, “the ‘notice pleading’ requirement is not meaningless.” Dottore v. Vorys, Sater,

Seymour & Pease, L.L.P., 8th Dist. Cuyahoga No. 98861,

.

Civ.R. 8(A) requires “a short and plain statement of the claim showing

that the party is entitled to relief.” “Although a complaint need not state with

precision all elements that give rise to a legal basis for recovery, fair notice of the

nature of the action must be provided.” McWreath v. Cortland Bank, 11th Dist.

Trumbull No. 2010-T-0023,

, ¶ 40, citing Bridge v. Park Natl.

Bank, 10th Dist. Franklin No. 03AP-380,

, ¶ 5. “Under the notice

pleading requirements, ‘to constitute fair notice, the complaint must still allege

sufficient underlying facts that relate to and support the alleged claim, and may not

simply state legal conclusions.’”

citing Gonzalez v. Posner, 6th Dist. Fulton No.

F-09-017,

, ¶ 11. This court has explained:

“[T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the- defendant-unlawfully-harmed-me accusation. A pleading that offers ‘labels and conclusion’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertions’ devoid of ‘further factual enhancement.’”

Sultaana v. Horseshoe Casino, 8th Dist. Cuyahoga No. 102501,

,

¶ 12, quoting Digiorgio v. Cleveland, 8th Dist. Cuyahoga No. 95945, 2011-Ohio-

5878, ¶ 49, quoting Ashcroft v. Iqbal,

,

,

(2009).

As stated, appellants alleged in their complaint that (1) “[they] are

‘consumers’ as defined in FDCPA 15 U.S.C. 1692a(3) and OCSPA R.C. 1345.01(D)”; and (2) “[t]he debt that is the subject of this complaint is a ‘consumer debt’ as

defined by FDCPA 15 U.S.C. § 1692a([5]) and a ‘consumer transaction’ as defined

[under] R.C. 1345.01(A).” However, appellants’ recitation of the relevant language

used in the FDCPA and the OCSPA amounts to “legal conclusions, deductions, or

opinions couched as factual allegations.” Allstate Ins. Co. v. Electrolux Home Prods.

Inc., 8th Dist. Cuyahoga No. 97065,

. Thus, they are not given a

presumption of truthfulness.

Upon review, we find appellants complaint is entirely devoid of any

factual allegations that would support or further enhance any inference that the

underlying debt arose from a transaction that was primarily for “personal, family, or

household purposes.” See 15 U.S.C. 1692a(5) and R.C. 1345.01(A). Beyond

referencing the cognovit judgment rendered against Charles and others in Case No.

CV-11-756112, the complaint does not contain any factual allegations relating to the

circumstances of the relevant transaction. Thus, we find appellants failed to allege

sufficient facts to support essential elements of their claims under the FDCPA and

the OCSPA — i.e., the consumer nature of the underlying transaction.

Because bare legal conclusions are not considered admitted and are

not sufficient to withstand a motion to dismiss, we find appellants’ complaint failed

to state a claim upon which relief can be granted. See, e.g., Michelson v. Volkswagen

Aktiengesellschaft,

,

(8th Dist.) (finding

plaintiff’s complaint failed to state a claim upon which relief can be granted because

plaintiff made “bare legal conclusion[s]” that “are not supported by any facts in the complaint[.]”); Bush v. Cleveland Mun. School Dist., 8th Dist. Cuyahoga No. 99612,

(stating that the recitation of relevant statutory language,

without additional facts to support the allegation, is not sufficient to withstand a

motion to dismiss).

Similarly, we find no merit to appellants’ broad position that the trial

court “erred by not examining the [underlying cognovit] transaction as a whole to

determine whether it was primarily consumer or commercial in nature.” Appellants

suggest the trial court took a “short cut” by failing to carefully examine the “purpose

of the [underlying cognovit transaction].” However, under Civ.R. 12(B)(6), the trial

court was not required to render legal conclusions on disputed issues of fact, such

as the purpose of the underlying loan, at this stage of the litigation. As previously

stated, dismissal under Civ.R. 12(B)(6) was appropriate in this case due to the

insufficiency of the complaint, and not the merits of the unsupported legal

conclusions raised therein.

In an effort to avoid the aforementioned deficiencies of the complaint,

appellants argue Bernadette was not required to demonstrate that “the underlying

transaction was a consumer transaction” because she was not a party to the cognovit

transaction in 2010. In support of this argument, appellants rely on a decision

issued by the United States District Court for the Eastern District of California.

In Davis v. Midland Funding, L.L.C.,

(E.D.Cal.

2014), the plaintiff filed an action against defendants, alleging that the defendants

violated several provisions of the FDCPA. The gravamen of plaintiff’s complaint was that defendants wrongly attempted to collect an obligation from him that was

actually owed by another person. Defendants moved for summary judgment,

arguing that they were entitled to judgment because plaintiff was unable to establish

whether the obligation the defendants sought to collect arose from a “debt” as

defined under 15 U.S.C. 1692a(5). Thus, the issue before the court was “whether a

debt collector that attempts to collect an obligation from the wrong person is subject

to the FDCPA, even if there is some possibility that the underlying obligation

stemmed from a commercial transaction.”

.

Ultimately, the Davis court denied the defendants’ motion for

summary judgment, stating, in relevant part:

By its plain text, the FDCPA encompasses claims brought by individuals subjected to collection efforts for obligations they are falsely alleged to have owed.

***

It would be absurd to hold that a plaintiff who is subject to debt collection efforts for an obligation that he does not owe is ineligible for the FDCPA’s protections simply because he cannot characterize the nature of that obligation.

. But see Strauss v. CBE Group, Inc., S.D.Fla. No. 15-62026-CIV-

COHN/SELTZER,

(June 8, 2016) (stating that “Davis

is seemingly in conflict with binding Eleventh Circuit precedent that, in order to

recover on an FDCPA claim, ‘a plaintiff must make a threshold showing that the

money being collected qualifies as a debt.’”), citing Oppenheim v. I.C. Sys., Inc.,

(11th Cir. 2010); McBeth v. Credit Protection Assn., L.P., M.D.Fla. No.

8:14-CV-606-T-36AEP,

(July 20, 2015). In this case, appellants ask this court to follow the reasoning of Davis,

and hold that Bernadette need not establish that the debt at issue was a “consumer

debt” as defined by the FDCPA. However, after careful consideration, we find Davis

to be factually distinguishable, and therefore, inapplicable. Contrary to the facts

addressed in Davis, the defendants’ fraudulent conveyance claim against Bernadette

in this case did not equate to an attempt “to collect an obligation from the wrong

person.” This case does not involve a mistaken identity, nor does it involve a debt,

the nature of which is unknown to the parties. See Lyon v. Am. Recovery Serv.,

N.D.Ohio No. 1:14CV25412016, U.S. Dist. LEXIS 119936 (Sept. 6, 2017)

(distinguishing Davis). Here, the Fraudulent Conveyance Complaint supporting

appellants’ FDCPA and OCSPA claims sought a creditor’s bill to collect the

underlying obligation from Charles. It did not allege that Bernadette owed the

defendants a consumer debt. Rather, the fraudulent conveyance claim against

Bernadette was predicated on alleged conduct that was completely independent

from the underlying transaction that gave rise to the cognovit judgment against

Charles and others. Accordingly, we find no basis to apply Davis to the

circumstances of this case.

III. Conclusion

Viewing the four corners of the appellants’ complaint, we find the trial

court did not err by granting defendants’ Civ.R. 12(B)(6) motion to dismiss.

Appellants’ sole assignment of error is overruled.

Judgment affirmed. It is ordered that appellees recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to the common pleas court to carry

this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

EILEEN T. GALLAGHER, PRESIDING JUDGE

MARY J. BOYLE, J., and PATRICIA ANN BLACKMON, J., CONCUR