Hagy v. Demers & Adams, No. 17-3696 (6th Cir. 2018)Annotate this Case
The Hagys took a loan to purchase a mobile home and property on which to park it. In 2010, they defaulted. Green Tree initiated foreclosure. Hagy called Green Tree’s law firm, Demers & Adams, wanting to settling the claim. Demers sent a letter containing a Warranty Deed in Lieu of Foreclosure, stating, “In return for [the Hagys] executing the Deed … Green Tree has advised me that it will waive any deficiency balance.” The Hagys executed the Deed. Demers wrote to the Hagys’ attorney, confirming receipt of the executed Deed and reaffirming that “Green Tree will not attempt to collect any deficiency balance.” Green Tree dismissed the foreclosure complaint but began calling the Hagys to collect the debt that they no longer owed. Green Tree realized its mistake and agreed that the Hagys owed nothing. In 2011, the Hagys sued, citing the Fair Debt Collection Practices Act and the Ohio Consumer Sales Practices Act. Green Tree resolved the dispute through arbitration. The court granted the Hagys summary judgment, reasoning that Demers’ letter “fail[ed] to disclose” that it was “from a debt collector” under 15 U.S.C. 1692e(11). The court awarded them $1,800 in statutory damages and $74,196 in attorney’s fees. The Sixth Circuit dismissed an appeal and the underlying suit. The complaint failed to identify a cognizable injury traceable to Demers; Congress cannot override Article III of the Constitution by labeling the violation of any statutory requirement a cognizable injury.