UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

JOHN CHILENKO and

LOIS CHILENKO, No. 09–12247

Plaintiffs, District Judge Victoria A. Roberts

v. Magistrate Judge R. Steven Whalen

AMERICAN HOME MORTGAGE 

SERVICING, INC., et. al. 

Defendants.

 /

REPORT AND RECOMMENDATION

 Before the Court is Defendant Orlans Associates, P.C.’s Motion for Summary Judgment

[Doc. #27], filed June 16, 2010 which has been referred for a Report and Recommendation pursuant

to 28 U.S.C. § 636(b)(1)(B). For the reasons set forth below, I recommend that the motion be

GRANTED as to the claims under the Fair Debt Collection Practices Act. I further recommend that

the Court decline to exercise pendent jurisdiction over claims brought under the Michigan Collection

Practices Act and M.C.L. 600.3204 (foreclosure of mortgage by advertisement), dismissing these

claims WITHOUT PREJUDICE. 

 I. FACTUAL AND PROCEDURAL BACKGROUND

 Plaintiffs John and Lois Chilenko filed suit on June 10, 2009, alleging violations of the Fair

Debt Collection Practices Act, 15 U.S.C. 1692 et seq. (“FDCPA”); Michigan Collection Practices

Act, M.C.L. 445.251 et seq. (“MCPA”); and M.C.L. 600.3101, et. seq. by Defendants American

Home Mortgage, Inc. (“AHM”) and Orlans Associates, P.C., (“Orlans”). These claims arise out of

a February 10, 2009 foreclosure sale involving a mortgage loan originally obtained from non-party

American Broker Conduit on December 22, 2006 for Plaintiffs’ residence in Northville, Michigan.

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Plaintiffs make the following factual allegations. On October 3, 2008, they received

notification from Orlans, a law firm hired by AHM, of the impending foreclosure sale, advising that

Plaintiffs had 30 days to seek validation of the mortgage debt. Complaint at ¶21. On October 8,

2008, Plaintiffs notified Orlans that they were disputing the debt, demanding validation of the debt

and “a complete accounting of the arrears.” Id. at ¶22. They allege that although they never

received a validation of the debt, Orlans proceeded with the first and second publication of the

notice on November 4 and November 25, 2008 respectively. Id. at ¶23. They also assert that

although the mortgage loan was $400,000, the “[t]he amount of sale was set at $440.604.11" for the

purpose of creating a “deficiency.” Id. Finally, citing M.C.L. 600.3204(1)(d), they contend that the

February 10, 2009 foreclosure is invalidated by the fact that Defendant AHM did not record its

interest in the property with the Register of Deeds until November 18, 2008, 14 days subsequent to

the first publication of the foreclosure sale. Id. at ¶19. 

 II. STANDARD OF REVIEW

 Summary judgment is appropriate where “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter

of law.” Fed. R.Civ.P. 56(c). To prevail on a motion for summary judgment, the non-moving party

must show sufficient evidence to create a genuine issue of material fact. Klepper v. First American

Bank, 916 F.2d 337, 341-42 (6th Cir. 1990). Drawing all reasonable inferences in favor of the nonmoving party, the Court must determine “whether the evidence presents a sufficient disagreement

to require submission to a jury or whether it is so one-sided that one party must prevail as a matter

of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202

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1 See 15 U.S.C. § 1692a(6).

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(1986). Entry of summary judgment is appropriate “against a party who fails to make a showing

sufficient to establish the existence of an element essential to that party’s case, and on which that

party will bear the burden of proof at trial.” Celetox Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct.

2548, 91 L.Ed.2d 265 (1986). When the “record taken as a whole could not lead a rational trier of

fact to find for the nonmoving party,” there is no genuine issue of material fact, and summary

judgment is appropriate. Simmons-Harris v. Zelman, 234 F.3d 945, 951 (6th Cir. 2000).

Once the moving party in a summary judgment motion identifies portions of the record

which demonstrate the absence of a genuine dispute over material facts, the opposing party may not

then “rely on the hope that the trier of fact will disbelieve the movant’s denial of a disputed fact,”

but must make an affirmative evidentiary showing to defeat the motion. Street v. J.C. Bradford &

Co., 886 F.2d 1472, 1479 (6th Cir. 1989). The non-moving party must identify specific facts in

affidavits, depositions or other factual material showing “evidence on which the jury could

reasonably find for the plaintiff.” Anderson, 477 U.S. at 252 (emphasis added). If, after sufficient

opportunity for discovery, the non-moving party cannot meet that burden, summary judgment is

clearly proper. Celotex Corp., 477 U.S. at 322-23.

III. ANALYSIS

A. FDCPA, 15 U.S.C. 1692g

Orlans argues that it is not a “debt collector” as defined by the FDCPA1 and thus, claims

brought under the Act should be dismissed. Defendant’s Brief at 4-6, Doc. #27. Orlans, a law firm

hired to process the foreclosure against Plaintiffs, argues that it did not seek to “collect a debt,” but

rather to enforce AHM’s security interest in the mortgage. Id. at 6. 

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2

I note that Plaintiffs’ response to the present motion argues that Orlan is a “debt

collector” under the FDCPA but does not address the merits of their claims under the Act. 

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Orlan’s attempts to enforce its client’s security interests, with nothing more, is insufficient

to show that it was a “debt collector” under the FDCPA. Montgomery v. Huntington Bank, 346 F.3d

693, 699 -701 (6th Cir. 2003)(citing Jordan v. Kent Recovery Serv., Inc., 731 F.Supp. 652, 656

(D.Del.1990)). Further, the fact that Orlan’s October 3, 2008 letter contained the statement that

“[c]ommunication with our office could be interpreted as an attempt to collect a debt,” does not

render the firm “a debt collector” under the Act. “Courts faced with identical arguments have

rejected the proposition that a law firm is transformed into a debt collector when its letterhead

contains such a disclaimer.” Golliday v. Chase Home Finance, — F. Supp. 2d —, 2011 WL 31038,

*5 (W.D.Mich.2011). Because for “the narrow purposes of 15 U.S.C. § 1692f(6)” they could be

considered debt collectors, “the firm could reasonably conclude that the FDCPA requires such a

legend in certain circumstances.” Id.; see also Jordan,supra, 731 F.Supp. at 656. Because Plaintiffs

do not allege violations of § 1692f(6) among their FDCPA claims, the Act is wholly inapplicable

to Orlan’s role in the foreclosure. As such, the substantive question of whether Defendant Orlans

violated §§1692e(3)(A)(5),(10);1692f(1); 1692g(a)(1-4); or 1692g(b), as alleged in the Complaint,

is moot.2

B. The Court Should Decline to Exercise Pendent Jurisdiction Over the Remaining 

 State Law Claims. 

 Plaintiffs also allege that Orlans violated the Michigan Collection Practices Act by

misrepresenting AHM’s interest in the property and by extension, the statute governing foreclosure

by advertisement. M.C.L. 445.251 et seq. (“MCPA”); M.C.L. 600.3204. I recommend that the Court

dismiss these claims without prejudice. While the Court enjoys supplemental jurisdiction over state

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law claims arising from a “common nucleus of fact,” remaining state claims should be dismissed

upon the dismissal of the federal claims . United Mine Workers v. Gibbs, 383 U.S. 715, 725-727,

86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); see also Musson Theatrical, Inc. v. Federal Exp. Corp.,89

F.3d 1244, 1254 -1255 (6th Cir. 1996)(“When all federal claims are dismissed before trial, the

balance of considerations usually will point to dismissing the state law claims . . .”). Because the

remaining issues deal exclusively with state statutes, dismissal without prejudice is appropriate.

Musson, at 1257. 

III. CONCLUSION

For these reasons, I recommend that the Defendants’ motion for summary judgment [Doc.

#27] be GRANTED as to the claims under the Fair Debt Collection Practices Act. I further

recommend that the Court decline to exercise pendent jurisdiction over claims brought under the

Michigan Collection Practices Act and M.C.L. 600.3204 (foreclosure of mortgage by

advertisement), dismissing these claims WITHOUT PREJUDICE. 

 Any objections to this Report and Recommendation must be filed within fourteen (14) days

of service of a copy hereof as provided for in 28 U.S.C. §636(b)(1) and E.D. Mich. LR 72.1(d)(2).

Failure to file specific objections constitutes a waiver of any further right of appeal. Thomas v. Arn,

474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985); Howard v. Secretary of HHS, 932 F.2d 505

(6th Cir. 1991); United States v. Walters, 638 F.2d 947 (6th Cir. 1981). Filing of objections which

raise some issues but fail to raise others with specificity will not preserve all the objections a party

might have to this Report and Recommendation. Willis v. Sullivan, 931 F.2d 390, 401 (6th Cir.

1991); Smith v. Detroit Fed’n of Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir. 1987). Pursuant

to E.D. Mich. LR 72.1(d)(2), a copy of any objections is to be served upon this Magistrate Judge.

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Within fourteen (14) days of service of any objecting party’s timely filed objections, the

opposing party may file a response. The response shall be not more than twenty (20) pages in length

unless by motion and order such page limit is extended by the court. The response shall address

specifically, and in the same order raised, each issue contained within the objections.

s/R. Steven Whalen

R. STEVEN WHALEN

UNITED STATES MAGISTRATE JUDGE

Dated: February 15, 2011

 

______________________________________________________________________

CERTIFICATE OF SERVICE

I hereby certify on February 15, 2011 that I electronically filed the foregoing paper with the

Clerk of the Court sending notification of such filing to all counsel registered electronically. I hereby

certify that a copy of this paper was mailed to the following non-registered ECF participants on

February 15, 2011: None.

s/Michael E. Lang 

Deputy Clerk to 

Magistrate Judge R. Steven Whalen

(313) 234-5217

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