Court Opinion

ID: 4661262
Source: CourtListenerOpinion
Date Created: 2021-02-18 17:12:07.5013+00
Date Added: 2024-06-11T08:02:12.304558
License: Public Domain

[Cite as McCruter v. Advantage Imaging of Lake Cty., L.L.C., 2021-Ohio-433.]

                              COURT OF APPEALS OF OHIO

                             EIGHTH APPELLATE DISTRICT
                                COUNTY OF CUYAHOGA

DERRICK A. MCCRUTER,                                  :

                Plaintiff-Appellant,                  :
                                                                           No. 109778
                v.                                    :

ADVANTAGE IMAGING OF LAKE                             :
COUNTY, L.L.C.,

                Defendant-Appellee.                   :

                               JOURNAL ENTRY AND OPINION

                JUDGMENT: AFFIRMED
                RELEASED AND JOURNALIZED: February 18, 2021

            Civil Appeal from the Cuyahoga County Court of Common Pleas
                                Case No. CV-20-928141

                                           Appearances:

                Luftman, Heck & Associates, L.L.P., and Matthew L.
                Alden, for appellant.

                Brouse McDowell, L.P.A., and Nicholas J. Kopcho, for
                appellee.

LISA B. FORBES, J.:

                  Plaintiff-appellant Derrick A. McCruter (“McCruter”) appeals the trial

court’s order granting defendant-appellee Advantage Imaging of Lake County,
L.L.C.’s (“Advantage”) motion for judgment on the pleadings in this case alleging a

violation of the Consumer Sales Practices Act (“CSPA”). After reviewing the facts of

the case and pertinent law, we affirm the trial court’s judgment because McCruter’s

claim is preempted by federal bankruptcy law.

I.   Facts and Procedural History

              On June 24, 2019, McCruter filed a bankruptcy petition. See In re

Derrick A. McCruter, N.D.Ohio Bankr. N0. 19-13924 (Oct. 2, 2019). On October 2,

2019, McCruter received a bankruptcy discharge, and his case was closed.

Advantage was not named as a creditor in McCruter’s bankruptcy case and did not

receive notice of the discharge. On December 31, 2019, Advantage sent McCruter a

billing statement in the amount of $1,520 for medical services performed in

December 2012.

              On January 21, 2020, McCruter filed a complaint in the trial court

alleging that Advantage “committed unfair, deceptive and unconscionable acts or

practices in violation of [R.C.] 1345.02(A) and 1345.03 (A) of the Consumer Sales

Practices Act including attempting to collect on a debt in violation of the discharge

injunction imposed by 11 U.S.C. 524” of the bankruptcy code. On June 17, 2020, the

trial court granted judgment on the pleadings in favor of Advantage, finding that

McCruter’s ‘“sole avenue of recourse * * * is to bring an action against the creditor

for contempt’ in the bankruptcy court that issued the discharge order.” (Quoting In

re Perviz, 302 B.R. 357, 370 (Bankr.N.D.Ohio 2003)).
              It is from this order that McCruter appeals, alleging that “[t]he trial

court erred in granting Advantage Imaging of Lake County, LLC’s motion for

judgment on the pleadings.” McCruter argues two issues under his sole assignment

of error: first, “[w]hether a medical practice group incorporated as an Ohio limited

liability company is a ‘supplier’ subject to the provision of the Ohio Consumer Sales

Practices Act”; and second, “[w]hether a Consumer Sales Practices Act claim alleging

unfair and deceptive practices in the collection of a discharged debt is preempted by

the Bankruptcy Code.” We find the preemption issue dispositive of this case and

limit our analysis accordingly.

II. Law and Analysis

              Pursuant to Civ.R. 12(C), “[a]fter the pleadings are closed but within

such time as not to delay the trial, any party may move for judgment on the

pleadings.” Appellate courts review a trial court’s decision regarding a motion for

judgment on the pleadings under a de novo standard. “The determination of a

motion for judgment on the pleadings is limited solely to the allegations in the

pleadings and any writings attached to the pleadings.” Bradigan v. Strongsville City

Schools, 8th Dist. Cuyahoga No. 88606, 2007-Ohio-2773, ¶ 11.

      Under Civ.R. 12(C), dismissal is appropriate where a court (1) construes
      the material allegations in the complaint, with all reasonable inferences
      to be drawn therefrom, in favor of the nonmoving party as true, and (2)
      finds beyond doubt, that the plaintiff could prove no set of facts in
      support of his claim that would entitle him to relief. Thus, Civ.R. 12(C)
      requires a determination that no material factual issues exist and the
      movant is entitled to judgment as a matter of law.
(Citations omitted.) State ex rel. Midwest Pride IV v. Pontious, 75 Ohio St.3d 565,

570, 664 N.E.2d 931 (1996).

              A de novo standard of review is also required when appellate courts

review whether federal law preempts state law. Bailey v. Manor Care of Mayfield

Hts., 8th Dist. Cuyahoga No. 99798, 2013-Ohio-4927, ¶ 12. The Ohio Supreme

Court reiterated “the controlling principles that govern” federal preemption in

Darby v. A-Best Prods. Co., 102 Ohio St.3d 410, 2004-Ohio-3720, 811 N.E.2d 1117:

      (1) the critical question is whether Congress intended state law to be
      superseded by federal law — the historic police powers of the state are
      not to be superseded by federal law unless that is the clear and manifest
      purpose of Congress, (2) a presumption exists against preemption of
      state police-power regulations, and (3) federal law preempts state law
      where Congress has occupied the entire field * * *.

Id. at ¶ 27. See also Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct.

1146, 91 L.Ed. 1447 (1947) (an intent to preempt may be inferred when “[t]he scheme

of federal regulation [is] so pervasive as to make reasonable the inference that

Congress left no room for the States to supplement it”).

              In Pertuso v. Ford Motor Credit Co., 233 F.3d 417, 200 U.S. App.

LEXIS 29583 (6th Cir.2000), the United States Court of Appeals for the Sixth Circuit

held that state law claims alleging violations of a bankruptcy discharge order were

preempted by the Bankruptcy Code.

      As Ford correctly points out, the Pertusos’ state law claims presuppose
      a violation of the Bankruptcy Code. Permitting assertion of a host of
      state law causes of action to redress wrongs under the Bankruptcy Code
      would undermine the uniformity the Code endeavors to preserve and
      would “stand as an obstacle to the accomplishment and execution of
      the full purposes and objectives of Congress.” Accordingly, and
      because Congress has preempted the field, the Pertusos may not assert
      these claims under state law.

(Citations omitted.) Id. at 426.

               As the trial court in the case at hand stated, 11 U.S.C. 524 provides the

exclusive remedy for a violation of a bankruptcy discharge. A “debtor injured by a

violation of the discharge injunction has no right to statutory damages. Instead,

when a violation of the discharge injunction does occur, a debtor’s sole avenue of

recourse * * * is to bring an action against the creditor for contempt” in federal

bankruptcy court. In re Perviz, 302 B.R. at 370 (Bankr.N.D. Ohio 2003).

               On appeal, McCruter argues that Pertuso does not apply to his case

because Pertuso did not involve claims under the CSPA. We find this to be a

distinction without a difference. “Under the law as it now stands * * * we have no

hesitancy in joining those courts (a clear majority) that have held [11 U.S.C.] 524

does not impliedly create a private right of action.” Pertuso at 422-423. Pertuso’s

application extends to private causes of action in general and is not limited to a

particular action under a specific statutory scheme or at common law.

               Other federal circuit courts, as well as bankruptcy courts, align with

Pertuso’s analysis and holding. In Gaitor v. U.S. Bank, N.A. (In re Gaitor),

M.D.N.C. Bankr. No. 13-80530, 2015 Bankr. LEXIS 2545 (July 31, 2015), the debtor

filed suit against a bank alleging that, after he received his bankruptcy discharge, the

bank “continued to send him statements that he was in default on his mortgage

payments.” Id. at 2. In addition to a claim for “civil contempt for willful violations
of the permanent discharge injunction,” the debtor sought relief under two state

consumer protection statutes, as well as the general notion of “good faith and fair

dealing.” Id. at 3. The court dismissed the debtor’s latter state law claims. “Courts

applying the law of preemption to debtors’ efforts to remedy violations of the

discharge injunction have generally found nonbankruptcy causes of action to be

preempted, at least to the extent that the nonbankruptcy cause of action depends on

proof of the discharge violation.” Id. at 8-9.

               In Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 504, 2002 U.S.

App. LEXIS 202 (9th Cir.2002), the Ninth Circuit Court of Appeals addressed

“whether a discharged debtor may pursue a simultaneous claim under the Fair Debt

Collections Practices Act, 15 U.S.C. 1692f.” The court held that the debtor may not

pursue simultaneous claims, “as to do so would circumvent the Bankruptcy Code’s

remedial scheme.” Id. The court further explained:

      Implying a private remedy here could put enforcement of the discharge
      injunction in the hands of a court that did not issue it (perhaps even in
      the hands of a jury), which is inconsistent with the present scheme that
      leaves enforcement to the bankruptcy judge whose discharge order
      gave rise to the injunction. This makes a good deal of sense, given that
      the equities at issue are bankruptcy equities, and it would undermine
      Congress’s deliberate decision to place supervision of discharge in the
      bankruptcy court * * *.

Id. at 509.

               In his complaint, McCruter refers to the billing statement that

Advantage sent him — which is the sole alleged “unfair, deceptive and

unconscionable” act at issue in this case — as a “violation of the discharge order.”
McCruter further claims that sending this statement violated the CSPA by

“attempting to collect on a debt in violation of the discharge injunction imposed by

11 U.S.C. 524.” McCruter does not allege any other means by which Advantage may

have violated the CSPA. Despite McCruter’s designation of this claim as a violation

of the CSPA, the language in the complaint clearly reveals that McCruter seeks to be

compensated for Advantage allegedly having violated McCruter’s bankruptcy

discharge.   See, e.g., Blank v. Secrux, Inc., 123 Ohio App.3d 248, 254, 704 N.E.2d

21 (8th Dist.1997) (although the claim is labeled “as one for breach of fiduciary duty,

* * * we conclude this claim is merely a disguised R.C. 1701.85 claim and was

properly dismissed due to the plaintiffs’ failure to comply with the statute of

limitations set forth in R.C. 1701.85(A)(2)”).

               In looking only at the allegations in the pleadings, because we must

when reviewing a trial court’s granting of a motion for judgment on the pleadings,

whether McCruter is entitled to relief depends on a finding that Advantage violated

the bankruptcy discharge. That determination must be made in bankruptcy court.

Furthermore, McCruter’s exclusive remedy lies in bankruptcy court in the form of a

contempt action. Therefore, no material factual issues exist in this case, and

Advantage is entitled to judgment as a matter of law.

               For these reasons, we find that the trial court properly granted

Advantage’s motion for judgment on the pleadings, and McCruter’s sole assignment

of error is overruled.

               Judgment affirmed.
      It is ordered that appellee recover from appellant costs herein taxed.

      The court finds there were reasonable grounds for this appeal.

      It is ordered that a special mandate be sent to said 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.

                                              _____
LISA B. FORBES, JUDGE

KATHLEEN ANN KEOUGH, P.J., and
EILEEN T. GALLAGHER, J., CONCUR