Court Opinion

ID: 2690422
Source: CourtListenerOpinion
Date Created: 2014-08-01 20:44:25.378791+00
Date Added: 2024-06-11T12:53:35.770365
License: Public Domain

[Cite as Anderson v. Barclay’s Capital Real Estate, Inc., 136 Ohio St. 3d 31, 2013-Ohio-1933.]

              ANDERSON v. BARCLAY’S CAPITAL REAL ESTATE, INC.,
                               D.B.A. HOMEQ SERVICING.

  [Cite as Anderson v. Barclay’s Capital Real Estate, Inc., 136 Ohio St. 3d 31,
                                    2013-Ohio-1933.]
Certified questions of state law—The servicing of a borrower’s residential
        mortgage loan is not a “consumer transaction” as defined in R.C.
        1345.01(A)—An entity that services a residential mortgage loan is not a
        “supplier” as defined in R.C. 1345.01(C).
    (No. 2011-0908—Submitted February 26, 2013—Decided May 14, 2013.)
ON ORDER from the United States District Court for the Northern District of Ohio,
 Western Division, Certifying Questions of State Law, No. 3:09-cv-02335-JGC.
                                ____________________
                                SYLLABUS OF THE COURT
1. The servicing of a borrower’s residential mortgage loan is not a “consumer
        transaction” as defined in R.C. 1345.01(A).
2. An entity that services a residential mortgage loan is not a “supplier” as defined
        in R.C. 1345.01(C).
                                ____________________
        O’CONNOR, C.J.
        {¶ 1} In this case, which is before us on the certification of state-law
questions by the United States District Court for the Northern District of Ohio,
Western Division, we address whether the Ohio Consumer Sales Practices Act
(“CSPA”), codified in R.C. Chapter 1345, applies to the servicing of residential
mortgage loans. We determine that it does not.
                               RELEVANT BACKGROUND
        {¶ 2} The federal court provided the following facts, circumstances, and
allegations from which the questions of law arise:
                             SUPREME COURT OF OHIO

       {¶ 3} Barclays Capital Real Estate, Inc., doing business as HomEq
Servicing (“HomEq”), defendant in the underlying action and petitioner here, is a
“mortgage servicer” that engages in the business of servicing residential
mortgages of individuals. HomEq is not a bank, financial institution, or any other
entity defined in R.C. 5725.01.
       {¶ 4} HomEq “accepts, applies and distributes mortgage loan payments
and other fees, penalties and assessments, and in connection with so doing
exercises discretion regarding the fees charged or applied to a particular mortgage
loan account.” HomEq is paid for its loan administration and other services “from
the payment stream generated by the consumers’ residential mortgages.”
       {¶ 5} HomEq “maintains customer service departments and call centers
to which Ohio residents with loans being serviced by HomEq are directed to call
with questions [or] concerns about their mortgage loans” and “directs customers
who are in default or danger of default to contact it for options concerning loss
mitigation or loan modification and further holds itself out as having authority to
make substantive decisions regarding which customers, if any, will receive loan
modification agreements or loss mitigation assistance.”         HomEq “handles
consumer disputes regarding their mortgage loans,” “negotiates and executes loan
modification, forbearance and other agreements directly with customers,” and
“makes customer service related promises on its website to which consumers are
directed by the servicer.” It also “purchases homeowner’s insurance on behalf of,
and at the expense of, consumers who HomEq believes not to have purchased
insurance required by the note and mortgage.”
       {¶ 6} The federal court determined that the interpretation of R.C.
1345.01(A) and (C) may be determinative of the case pending before it. Finding
no controlling precedent on the determinative issue in Ohio case law, the federal
court certified the following questions to us for answers:

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              1. Does the servicing of a borrower’s residential mortgage
       loan constitute a “consumer transaction” as defined in the Ohio
       Consumer Sales Practices Act, R.C. 1345.01(A)?
              2. Are entities that service residential mortgage loans
       “suppliers * * * engaged in the business of effecting or soliciting
       consumer transactions” within the meaning of the Ohio Consumer
       Sales Practices Act, R.C. § 1345.01(C)?

       {¶ 7} Before us, Sondra Anderson, plaintiff in the underlying action,
contends that mortgage servicing is a “consumer transaction” because the
mortgage servicer provides a number of services to borrowers, including
accepting payments and working with borrowers to obtain loan modifications.
She asserts that we must answer the certified questions in the affirmative. But
HomEq counters that mortgage servicers perform services for financial
institutions, not for borrowers, and therefore the transactions are commercial in
nature and are not covered by the CSPA. It thus avers that we must answer the
questions in the negative. For the reasons that follow, we agree with HomEq.
                                   ANALYSIS
       {¶ 8} The CSPA prohibits unfair or deceptive acts and unconscionable
acts or practices by suppliers in consumer transactions whether they occur before,
during, or after the transaction. R.C. 1345.02(A) and 1345.03(A); Williams v.
Spitzer Autoworld Canton, L.L.C., 122 Ohio St. 3d 546, 2009-Ohio-3554, 913
N.E.2d 410, ¶ 10. The CSPA defines a “consumer transaction” to be

       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.

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        “Consumer transaction” does not include transactions between
        persons, defined in sections 4905.03 and 5725.01 [financial
        institution defined] 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; transactions involving a home construction service
        contract as defined in section 4722.01 of the Revised Code;
        transactions between certified public accountants or public
        accountants and their clients; transactions between attorneys,
        physicians, or dentists and their clients or patients; and transactions
        between veterinarians and their patients that pertain to medical
        treatment but not ancillary services.

R.C. 1345.01(A).
        {¶ 9} The CSPA is remedial in nature, having been designed to
compensate for incomplete consumer remedies available at common law.
Einhorn v. Ford Motor Co., 48 Ohio St. 3d 27, 29, 548 N.E.2d 933 (1990); see
Roberts & Martz, Consumerism Comes of Age: Treble Damages and Attorney
Fees in Consumer Transactions—The Ohio Consumer Sales Practices Act, 42
Ohio St.L.J. 927, 928 (1981). Thus, we must liberally construe the statute in
favor of the consumer. Whitaker v. M.T. Automotive, Inc., 111 Ohio St. 3d 177,
2006-Ohio-5481, 855 N.E.2d 825, ¶ 11, quoting Einhorn at 29; see also R.C.
1.11.
        {¶ 10} Notably, however, the CSPA has no application in a “pure” real
estate transaction. Brown v. Liberty Clubs, Inc., 45 Ohio St. 3d 191, 193, 543
N.E.2d 783 (1989). In fact, real estate transactions are excluded from the statute’s

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definition of “consumer transaction.” R.C. 1345.01(A); see Shore W. Constr. Co.
v. Sroka, 61 Ohio St. 3d 45, 48, 572 N.E.2d 646 (1991); Heritage Hills, Ltd. v.
Deacon, 49 Ohio St. 3d 80, 551 N.E.2d 125 (1990).
              Is servicing of a borrower’s residential mortgage loan
                            a “consumer transaction”?
       {¶ 11} The first question asks whether the servicing of a borrower’s
residential mortgage loan constitutes a “consumer transaction” as defined in the
Ohio Consumer Sales Practices Act, R.C. 1345.01(A)? It does not.
       {¶ 12} In the servicing of a real estate mortgage, one essential element of
R.C. 1345.01(A) is not met: there is no sale, lease, assignment, award by chance,
or other transfer of a service to a consumer.
       {¶ 13} Mortgage servicing is a contractual agreement between the
mortgage servicer and the financial institution that owns both the note and
mortgage. Mortgage servicing is carried out in the absence of a contract between
the borrower and the mortgage servicer.          We recognize that the mortgage
servicer’s duties may involve direct and indirect interactions with borrowers on
behalf of the financial institution. Sometimes the mortgage servicer may even
assist the borrower in modifying the terms of the note, but the mortgage servicer
undertakes the negotiation not for itself but on behalf of the financial institution.
       {¶ 14} These interactions do not satisfy the language found in R.C.
1345.01(A). Instead, mortgage servicing, similar to appraisal services and title
services, is a “collateral service” associated with a pure real estate transaction.
Except for the transactions specified in the statute, the CSPA does not apply to
“collateral services that are solely associated with the sale of real estate and are
necessary to effectuate a ‘pure’ real estate transaction.” U.S. Bank v. Amir, 8th
Dist. No. 97438, 2012-Ohio-2772, ¶ 42-43, citing Hurst v. Ent. Title Agency, Inc.,
157 Ohio App. 3d 133, 2004-Ohio-2307, 809 N.E.2d 689, ¶ 34-35 (holding that
the escrow services involved were collateral services related to the real estate

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transaction and that they were therefore not subject to the CSPA), citing Colburn
v. Baier Realty & Auctioneers, 11th Dist. No. 2002-T-0161, 2003-Ohio-6694,
¶ 16. See also Hanlin v. Ohio Builders & Remodelers, Inc., 212 F. Supp. 2d 752,
757 (S.D.Ohio 2002) (closing services were “part and parcel of the real estate
transaction” and thus outside the CSPA).
       {¶ 15} Moreover, transactions between mortgage-service providers and
homeowners are not “consumer transactions” within the meaning of the CSPA
because there is no “transfer of an item of goods, a service, a franchise, or an
intangible, to an individual.” See R.C. 1345.01(A) (“ ‘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”). A financial institution may contract with a mortgage servicer to service
the loan, but the mortgage servicer does not transfer a service to the borrower,
which is what would be required in order to trigger the CSPA.
       {¶ 16} The term “transfer” is not defined in the CSPA, so we must give it
its plain and ordinary meaning. See State v. Anthony, 96 Ohio St. 3d 173, 2002-
Ohio-4008, 772 N.E.2d 1167, ¶ 11. Black’s Law Dictionary defines the term to
mean “[t]o sell or give.” Black’s Law Dictionary 1636 (9th Ed.2009).
       {¶ 17} Here, the mortgage servicer neither sells nor gives the borrower the
services it provides to the owner of the mortgage and note. A mortgage servicer
provides a service to a financial institution, but providing such a service to a
financial institution is neither analogous to transferring a service to a borrower nor
sufficient to impose liability under the CSPA. See Rossbach v. FBS Mtge. Corp.,
Minn.App. Nos. C3-97-1622 and C9-97-1852, 1998 WL 156303, *3 (Apr. 7,
1998) (affirming order granting summary judgment to mortgage servicer on state
consumer-protection-act claims because the mortgage servicer operated through a
contract with the entity that owned the mortgage on plaintiff’s home). Accord

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Indep. Glass Assn., Inc. v. Safelite Group, Inc., D.Minn. No. 05-238, 2005 WL
2093035 *7 (Aug. 26, 2005) (dismissing claim of violation of state consumer-
protection laws where the defendant was a third-party administrator who was
“fulfilling a contractual obligation” to insurers and noting that the administrator
“provides the service for the benefit of the insurance companies” rather than the
insureds, and thus there was no service provided to the consumer). Thus, under a
plain reading of the statute, the servicing of a borrower’s residential mortgage
loan is not a “consumer transaction” as defined in R.C. 1345.01(A). The statute
simply cannot be read to cover instances in which a financial institution contracts
with an entity to service its loans and mortgages.
       {¶ 18} Our conclusion is buttressed by the commentary to the Uniform
Consumer Sales Practices Act, on which the CSPA is modeled. The commentary
states, “On the assumption that land transactions frequently are, and should be,
regulated by specialized legislation, they are excluded altogether.” 7A, Part I,
National Conference of Commissioners on Uniform State Laws, Uniform Laws
Annotated, Business and Financial Laws, Uniform Consumer Sales Practices Act,
Official Comment to Section 2(1), at 73 (Master Ed.2002). The transactions
presented here include the acceptance and application of mortgage payments and
management of loans in default. Those transactions do not cease to be part of the
land transaction simply because an entity that did not originate the loan and
mortgage executes them.
       {¶ 19} Further, other states that have enacted a consumer-sales-practices
act based on the uniform act included specific language referring to land
transactions in the statutes when they wanted real estate transactions to be
covered.    See, e.g., Kan.Stat.Ann. 50-624(c) and (j) (defining “consumer
transaction” to mean “disposition for value of property” and defining “property”
to include real estate). Ohio did not. That omission is important.

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       {¶ 20} In past decisions interpreting the CSPA, we have taken note of the
General Assembly’s decision not to include certain language. For example, in
Heritage Hills, we rejected a residential tenant’s attempt to bring her complaint
against her landlord within the ambit of R.C. Chapter 1345. In so doing, we
recognized that the General Assembly had considered, but not enacted, a bill that
would have included the lease of real property within the definition of “consumer
transaction.” 49 Ohio St. 3d at 82-83, 551 N.E.2d 125.
       {¶ 21} Here, we recognize that the General Assembly has repeatedly
amended R.C. Chapter 1345 to reach specific transactions that take place in the
mortgage industry. But it has chosen not to incorporate mortgage services within
the expanded definition of transactions subject to CSPA’s provisions.
       {¶ 22} For example, the General Assembly, through Am.Sub.S.B. No.
185 (“S.B. 185”), amended R.C. 1345.01(A), effective in 2007, to expressly
include three types of entities actively engaged in the residential mortgage market
that were not previously subject to the CSPA: loan officers, mortgage brokers,
and nonbank mortgage lenders. But, notably, the legislature has not expanded the
application of the CSPA to include mortgage servicers.
       {¶ 23} Indeed, after S.B. 185 passed, the 128th General Assembly
considered a bill that would have brought more extensive regulation to mortgage
servicers and included them within the ambit of the CSPA. Am.Sub.H.B. No. 3.
That bill was not enacted, however.
       {¶ 24} We will not speculate as to why the bill failed. But we do take
notice of the fact that the legislative branch considered and rejected an
amendment to the statutory scheme that would have specifically made mortgage
servicers liable under the CSPA.
       {¶ 25} We conclude that the General Assembly’s rejection of the
proposed amendment supports our conclusion that mortgage servicers are not

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covered by the current language of R.C. Chapter 1345.1 If the General Assembly
is dissatisfied with our interpretation, it may amend the Revised Code. See, e.g.,
Shay v. Shay, 113 Ohio St. 3d 172, 2007-Ohio-1384, 863 N.E.2d 591, ¶ 25 (noting
that within six months of a decision interpreting R.C. 3937.31, the General
Assembly responded by amending R.C. 3937.31).
        {¶ 26} We turn now to the second certified question.
                          Is a mortgage servicer a “supplier”?
        {¶ 27} The second question presented asks, “Are entities that service
residential mortgage loans, ‘suppliers * * * engaged in the business of effecting or
soliciting consumer transactions’ within the meaning of the Ohio Consumer Sales
Practices Act, O.R.C. § 1345.01(C)?” We hold that they are not.
        {¶ 28} Anderson’s argument centers on her belief that because servicers
like HomEq engage in transactions with borrowers, and essentially function as
collection agencies, they are “suppliers” under the CSPA. But the term “supplier”
under the CSPA does not include a mortgage servicer.
        {¶ 29} “ ‘Supplier’ means a seller, lessor, assignor, franchisor, or other
person engaged in the business of effecting or soliciting consumer transactions,
whether or not the person deals directly with the consumer.” R.C. 1345.01(C).
The terms “effecting” and “soliciting” are not defined by the statute, so we give
the terms their plain and ordinary meanings.
        {¶ 30} “Effect” is defined as “[t]o bring about; to make happen.” Black’s
Law Dictionary at 592. “Solicitation” is defined as “[t]he act or an instance of
requesting or seeking to obtain something; a request or petition.” Black’s at 1520.

1. Amici curiae, including legal-aid organizations that are concerned about the number of
foreclosures that continue to take place in Ohio, raise some thought-provoking arguments. And
we accept for the sake of argument that regulation may be warranted. But it is the legislature’s
role, not ours, to bring mortgage servicers within the CSPA’s scope.

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Thus, under the CSPA, “suppliers” are those that cause a consumer transaction to
happen or that seek to enter into a consumer transaction.
       {¶ 31} Here, HomEq does not engage in the business of effecting or
soliciting consumer transactions.    The residential mortgage transaction is a
transaction that occurs between the financial institution and the borrower.
Mortgage servicers are not part of this transaction. And simply servicing the
mortgage is not causing a consumer transaction to happen. Similarly, mortgage
servicers do not seek to enter into consumer transactions with borrowers.
       {¶ 32} We therefore have little trouble concluding that an entity that
services a residential mortgage loan is not a “supplier” as defined in R.C.
1345.01(C).
                                  CONCLUSION
       {¶ 33} We answer both of the certified state-law questions in the negative.
Mortgage servicing is not a consumer transaction under the CSPA, and an entity
that services a residential mortgage loan is not a “supplier” under the CSPA.
                                                                     So answered.
       O’DONNELL, LANZINGER, and KENNEDY, JJ., concur.
       FRENCH, J., concurs in judgment only.
       PFEIFER and O’NEILL, JJ., dissent.
                             ____________________
       O’NEILL, J., dissenting.
       {¶ 34} I dissent from the majority’s decision answering the certified
questions in the negative. I believe that this court should answer the certified
questions in the affirmative and hold that the Consumer Sales Practices Act
(“CSPA”) applies to mortgage-loan servicers.
       {¶ 35} In this case, and in many like it, a residential homebuyer
contracted with a lender to provide her with a residential real estate loan.
Subsequent to executing the note and mortgage for the property, the lending

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institution entered into an agreement with a mortgage servicer, HomEq Servicing.
HomEq receives payment for its services by keeping a portion of the consumer’s
residential mortgage payments. Thus, the lender is contractually responsible for
paying HomEq, but the payment is incorporated into the interest rate and fees paid
by the consumer, in effect transferring the cost of HomEq’s services to the
consumer. As described by the majority opinion, HomEq’s services are extensive
and primarily involve interaction with the consumer. But HomEq is not a party to
the mortgage contract, and although the consumer does not necessarily want to
have any sort of relationship with HomEq, he or she has no choice in the matter.
       {¶ 36} According to Sondra Anderson, the plaintiff/consumer in the
underlying case, her complaint alleges that HomEq failed to apply her mortgage
payments in the manner required by her note and mortgage, failed to provide
accurate information in response to her repeated inquiries about her residential
mortgage loan, and accepted payments without acknowledging them and without
forwarding them to her mortgage-loan lender. Thus, she was subject to HomEq’s
neglect and/or malfeasance, and yet she had no means of recourse because she did
not have a contractual relationship with HomEq.
       {¶ 37} Although some federal district courts have interpreted Ohio’s
CSPA in similar cases, the federal court reviewing the present case determined
that there was no controlling precedent on the definitions of “consumer
transaction” and “supplier” in the context of mortgage-loan servicers. I agree
with Anderson’s assertion that mortgage-loan-servicing companies transfer their
services to the consumers, because the provided services do not constitute part of
the original real estate transaction and because the plain language of R.C.
1345.01(A) does not provide any exceptions for mortgage servicers.
       {¶ 38} R.C. 1345.01(A) provides as follows:

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               “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; transactions
       involving a home construction service contract as defined in
       section 4722.01 of the Revised Code; transactions between
       certified public accountants or public accountants and their clients;
       transactions between attorneys, physicians, or dentists and their
       clients or patients; and transactions between veterinarians and their
       patients that pertain to medical treatment but not ancillary services.

       {¶ 39} To summarize the foregoing language, the statute establishes that a
consumer transaction includes transactions that involve the provision of goods,
services, or intangibles to individual consumers for personal, family, or household
purposes.    The statute then provides exceptions.        Those exceptions include
transactions between a customer and a financial institution, a dealer in intangibles,
or an insurance company.        The statute then provides an exception to those
exceptions: even if the entity is a financial institution or other exempted entity, the
transaction nonetheless constitutes a consumer transaction if it is a particular kind
of short-term loan under $500, or if it is a transaction involving a home
construction contract or a transaction in connection with a residential mortgage

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involving an interaction between a customer and his or her loan officer, mortgage
broker, or nonbank mortgage lender. Finally, the statute exempts transactions
between certain professionals and their clients or patients, but those transactions
are not pertinent to the present controversy.
       {¶ 40} The CSPA is a remedial law, so it must be liberally construed in
favor of the consumer. Einhorn v. Ford Motor Co., 48 Ohio St. 3d 27, 29, 548
N.E.2d 933 (1990), citing R.C. 1.11. HomEq is not a financial institution, dealer
in intangibles, or an insurance company, nor does it fit within the definitions of
loan officer, mortgage broker, or nonbank mortgage lender. Thus HomEq does
not fit within the exceptions for any particular entities.        Because mortgage
servicers are not excluded by the statute, they must be included, and their services
therefore constitute consumer transactions that are covered by the CSPA.
       {¶ 41} The majority’s primary holding is that HomEq’s collection of
mortgage payments and other services cannot be considered consumer
transactions, because the consumers’ only contractual relationship is with the
lending institutions and because the underlying transaction that HomEq’s services
facilitate is the original real estate transaction. Thus, the majority focuses entirely
on the transactions rather than on the parties to the transactions. However, the
language of R.C. 1345.01(A) demonstrates that the nature of the underlying
transaction does not matter as much as the identity of the commercial entity
involved in the transaction. Specifically, the statute provides that the transaction
between a consumer and a “nonbank mortgage lender” qualifies as a consumer
transaction, even though that relationship will obviously involve a pure real estate
transaction.
       {¶ 42} Further, in many federal decisions that address the applicability of
Ohio’s CSPA to mortgage-loan servicers, the courts have held that the CSPA may
apply. Dowling v. Litton Loan Servicing, L.P., S.D.Ohio No. 2:05-CV-0098,
2006 WL 3498292, at *13-14 (Dec. 1, 2006); Kline v. Mtge. Electronic

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Registration Sys., Inc., S.D.Ohio No. 3:08cv408, 2011 WL 1233642, at *4-5
(Mar. 29, 2011); Jent v. BAC Home Loans Servicing, L.P., S.D.Ohio No. 1:10-
CV-00783, 2011 WL 2971846, at *3 (July 21, 2011); Munger v. Deutsche Bank,
N.D.Ohio No. 1:11-CV-00585, 2011 WL 2930907, at *9 (July 18, 2011); Sims v.
CitiMortgage, Inc., N.D.Ohio No. 1:12 CV 00096, 2013 WL 310236, at *5 (Jan.
25, 2013). These decisions rely on the principle of liberal application in favor of
the consumer or analogize mortgage servicers to consumer-debt collectors. “Ohio
courts have long held that entities engaging in the collection of consumer debts
are suppliers.” Kline at *4, citing Celebrezze v. United Research, Inc., 19 Ohio
App.3d 49, 482 N.E.2d 1260 (9th Dist.1984).
       {¶ 43} By way of comparison, the evolution of court holdings on the issue
whether debt collectors fall within the purview of the CSPA confirms that the
appropriate focus in this analysis is on the identity of the commercial entity
involved in the transaction instead of the nature of the original underlying
transaction. Early federal decisions on the subject had determined that debt
collecting did not involve consumer transactions under the Ohio CSPA if the
original lender was a financial institution, even when the debt collection took
place after the debt had been transferred to a debt collector. See Gionis v. Javitch,
Block & Rathbone, 405 F. Supp. 2d 856, 869 (S.D.Ohio 2005). Later, federal
courts rejected that view and determined that an assignee of a debt who is not a
financial institution has no entitlement to the financial-institution exemption to the
CSPA. The reasoning is compelling. A debt collector is not a financial institution,
much as a mortgage servicing company is not as well. See Lee v. Javitch, Block &
Rathbone, L.L.P., 522 F. Supp. 2d 945, 956 (S.D.Ohio 2007). The holding that a
nonexempted entity cannot hide behind the exempted status of the original entity
is supported by the fact that “[a] bank customer has other adequate remedies if a
bank should engage in deceptive or unfair conduct in making a loan or issuing a
credit card. But if the financial institution sells a past due or defaulted debt at a

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deep discount to an unrelated party, whose only business is debt collection, the
sound policy for the financial institution exemption evaporates.” Id.
       {¶ 44} In fact, the other exceptions to the CSPA are also justified by the
fact that the transactions involved are heavily regulated by other statutory
schemes. See, e.g., Heritage Hills, Ltd. v. Deacon, 49 Ohio St. 3d 80, 83, 551
N.E.2d 125 (1990) (landlord-tenant lease agreements are already well regulated
by R.C. Chapter 5321); 7A, Part I, National Conference of Commissioners on
Uniform State Laws, Uniform Laws Annotated, Business and Financial Laws,
Uniform Consumer Sales Practices Act, Official Comment to Section 2(1), at 73
(Master Ed.2002) (the sale of real estate is completely excluded from the CSPA
“[o]n the assumption that land transactions frequently are, and should be,
regulated by specialized legislation”). The fact that mortgage-loan servicing is
not so regulated is all the more reason to find that the CSPA applies.
       {¶ 45} Given the foregoing history of protecting consumers when they are
forced into the hands of third-party debt collectors, it is wholly appropriate to also
protect residential-mortgage-loan borrowers when they are forced into the hands
of mortgage-loan servicers.     I would therefore respond to the first certified
question by holding that the servicing of a borrower’s residential mortgage loan
constitutes a “consumer transaction” as defined in R.C. 1345.01(A).
       {¶ 46} The second certified question asks whether a mortgage-loan
servicer constitutes a “supplier” in a consumer transaction, as defined in R.C.
1345.01(C). That statute defines a supplier as an entity that effects consumer
transactions. Because I believe that the correct answer to the first certified
question is yes, i.e., the transactions performed by a mortgage-loan servicer are
consumer transactions, I would also answer the second question in the
affirmative, i.e., a mortgage-loan servicer is a supplier in a consumer transaction.
       {¶ 47} The scope of the term “consumer transaction” is broad, and its
exceptions are very specific and limited. HomEq’s services clearly do not fit

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within any of the exceptions articulated in R.C. 1345.01. We owe it to the public
to curb the activities of unregulated entities when it is the consumers, and only the
consumers, who are left homeless and in dire financial straits as a result of the
entities’ unscrupulous and/or negligent activities. To do otherwise shirks our duty
pursuant to R.C. 1.11 to liberally construe the CSPA in favor of the consumer. I
must therefore dissent.
                             ____________________
       Murray & Murray Co., L.P.A., John T. Murray, Leslie O. Murray, and
Michael J. Stewart, for respondent.
       Porter, Wright, Morris & Arthur, L.L.P., James D. Curphey, Kathleen M.
Trafford, and L. Bradfield Hughes; and Buckley Sandler, L.L.P., and Benjamin B.
Klubes, for petitioner.
       Crawford, Lowry & Associates, L.L.C., and G. Ian Crawford; and Wells
Law Office, Inc., and Amy L. Wells, urging that the certified questions be
answered in the affirmative for amicus curiae Ohio Association for Justice.
       Michael DeWine, Attorney General, Alexandra T. Schimmer, Solicitor
General, Michael J. Hendershot, Chief Deputy Solicitor, and Jeffrey R. Loeser,
Assistant Attorney General, urging that the certified questions be answered in the
affirmative for amicus curiae the Ohio Attorney General.
       Linda Cook, Lauren E. Dreshman, Tammy L. Greenwald, Aneel L.
Chablani, and Andrew D. Neuhauser, urging that the certified questions be
answered in the affirmative for amici curiae Ohio Legal Services Programs,
Coalition on Homelessness and Housing in Ohio, Toledo Fair Housing Center,
Miami Valley Fair Housing Center, and the National Consumer Law Center.
                           _______________________

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