OKON ETEFIA V CREDIT TECHNOLOGIES INC
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STATE OF MICHIGAN
COURT OF APPEALS
OKON ETEFIA,
FOR PUBLICATION
April 27, 2001
9:10 a.m.
Plaintiff-Appellant,
v
No. 216166
Oakland Circuit Court
LC No. 97-545891-NZ
CREDIT TECHNOLOGIES, INC., LEE
ACCEPTANCE CORP., MURDOCH J.
HERTZOG, and THOMAS D. HOCKING,
Defendants-Appellees.
Updated Copy
June 8, 2001
Before: Doctoroff, P.J., and Cavanagh and Meter, JJ.
CAVANAGH, J.
Plaintiff Okon Etefia appeals as of right an order granting defendant Credit Technologies,
Inc. (CTI), summary disposition of his claim for alleged violations of the Fair Credit Reporting
Act (FCRA), 15 USC 1681 et seq. We affirm with regard to that order. Plaintiff also appeals
from an order transferring his case against the remaining defendants from the circuit court to the
48th District Court pursuant to MCR 2.227. We reverse and remand with regard to that order.
This claim arises as a consequence of defendant CTI's1 production of credit information
regarding plaintiff and his wife in response to a subpoena.
The subpoena was signed by
defendant Murdoch J. Hertzog, as counsel for defendant Lee Acceptance Corporation (Lee),2 and
was served on defendant CTI in the course of a debt collection action originally filed against
plaintiff 's wife on behalf of defendant Lee in the 48th District Court.
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Plaintiff brought the instant action alleging violations of the FCRA against all four
defendants and, in addition, asserted various tort claims against defendants Hertzog, Thomas D.
Hocking, and Lee.
Defendant CTI moved for summary disposition, pursuant to MCR
2.116(C)(8) and (10), arguing that it did not violate the FCRA because it properly complied with
a court order, the subpoena. Relying on MCR 2.506(B)(1) and MCR 2.117(B)(1), the trial court
held that a subpoena signed by an attorney of record is a court order for purposes of the FCRA
and that defendant Hertzog was an attorney of record although he had not filed his appearance
until after the subpoena was served on defendant CTI. Consequently, the trial court granted
defendant CTI summary disposition.
Subsequently, on its own motion pursuant to MCR 2.227, the circuit court entered an
order transferring the case against the remaining defendants to the 48th District Court. The court
held that it did not have subject-matter jurisdiction over the action because the case mediated for
less than $25,000 and, on review of the complaint, it appeared that the amount in controversy did
not exceed $25,000. After plaintiff failed to pay the statutory filing fee following entry of the
transfer order, the circuit court dismissed plaintiff 's case without prejudice.
On appeal, plaintiff first argues that the trial court erred in summarily dismissing his
claim against CTI because a subpoena issued by an attorney is not a court order for purposes of
the FCRA, in particular 15 USC 1681b(a)(1). We disagree. This Court reviews rulings on
motions for summary disposition de novo. Spiek v Dep't of Transportation, 456 Mich 331, 337;
572 NW2d 201 (1998). Statutory interpretation is a question of law that is considered de novo
on appeal. Oakland Co Bd of Co Rd Comm'rs v Michigan Property & Casualty Guaranty Ass'n,
456 Mich 590, 610; 575 NW2d 751 (1998).
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15 USC 1681b provides, in pertinent part:
(a) Subject to subsection (c), any consumer reporting agency may furnish a
consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an
order, or a subpoena issued in connection with proceedings before a Federal grand
jury.
The trial court, relying on MCR 2.506(B)(1), held that a subpoena issued by an attorney of record
is an order of the court for purposes of the FCRA. However, this case requires the interpretation
of 15 USC 1681b, a federal statute; therefore federal law controls. See Ann Arbor Housing
Comm v Wells, 240 Mich App 610, 614, n 4; 618 NW2d 43 (2000), quoting Auto-Owners Ins Co
v Corduroy Rubber Co, 177 Mich App 600, 604; 443 NW2d 416 (1989). Further, state courts
are bound by holdings of federal courts on federal questions where there is no conflict among
federal appellate courts. Ann Arbor Housing Comm, supra at 614, n 4, citing Schueler v
Weintrob, 360 Mich 621, 633-634; 105 NW2d 42 (1960), and Young v Young, 211 Mich App
446, 450; 536 NW2d 254 (1995). Accordingly, the trial court erred in relying on the Michigan
Court Rules for interpretation of the FCRA. However, this Court will not reverse a trial court's
order if it reached the right result for the wrong reason. Detroit v Presti, 240 Mich App 208,
214; 610 NW2d 261 (2000).
The issue whether a subpoena issued by an attorney is an order of the court for purposes
of 15 USC 1681b(a)(1) was raised in Hahn v Star Bank, 190 F3d 708 (CA 6, 1999). In that case,
the plaintiffs asserted that the FCRA was violated by the disclosure of loan information in
response to a subpoena that was invalid because it was issued by an attorney and thus was not an
order of the court for purposes of the FCRA. The Hahn Court disagreed, holding:
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In the first place, the subpoena issued by Gonzales [attorney] has every
appearance of being "an order of a court," given that it is signed by Gonzales on
behalf of the clerk of the court. See In re Grand Jury Proceedings, 503 F Supp 9,
12 (D N J 1980) (reasoning that an "order of a court" under this section of FCRA
may be oral, may be a paper bearing the word "order" that is "signed by a judge or
other judicial officer [,][o]r it may be a subpoena, writ of execution or other
process."). [Hahn, supra at 713.]
We are unaware of any conflict among the federal appellate courts with regard to this issue and
thus are bound by the Hahn holding. See Ann Arbor Housing Comm, supra. Therefore, a
subpoena issued by an attorney is an order of the court for purposes of 15 USC 1681b(a)(1).
Plaintiff argues, in the alternative, that the subpoena was invalid because it was not
signed by an attorney of record, plaintiff was not a party in the debt collection case at the time the
subpoena was issued, and there was no permissible purpose under the FCRA for defendant CTI
to release the credit information. First, although defendant Hertzog did not formally file his
appearance until after the issuance of the subpoena, he filed pleadings with the district court
before the issuance of the subpoena and thus performed acts indicating that he represented
defendant Lee in the action in accordance with MCR 2.117(B)(1). Second, plaintiff has cited no
law providing that a subpoena becomes invalid if the parties are not accurately stated on the
subpoena. Insufficiently briefed issues are deemed abandoned on appeal. See Dresden v Detroit
Macomb Hosp Corp, 218 Mich App 292, 300; 553 NW2d 387 (1996). Finally, whether the
disclosure of plaintiff 's credit information was for an impermissible purpose under the FCRA
was not properly preserved for appeal because it was not raised before and addressed by the trial
court. See Fast Air, Inc v Knight, 235 Mich App 541, 549; 599 NW2d 489 (1999). Accordingly,
the trial court properly dismissed plaintiff 's claim against defendant CTI.
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Next, plaintiff argues that the circuit court erred in transferring his claims against the
remaining defendants to the 48th District Court because 15 USC 1681p provides any state court
with jurisdiction without regard to the amount in controversy. We disagree. Whether a trial
court has subject-matter jurisdiction is a question of law that this Court reviews de novo.
Rudolph Steiner School of Ann Arbor v Ann Arbor Charter Twp, 237 Mich App 721, 730; 605
NW2d 18 (1999).
15 USC 1681p provides, in pertinent part:
An action to enforce any liability created under this subchapter may be
brought in any appropriate United States district court without regard to the
amount in controversy, or in any other court of competent jurisdiction . . . .
The statute is plain and unambiguous; it does not specifically grant jurisdiction to a state circuit
court, but to a court of competent jurisdiction. If the plain and ordinary meaning of statutory
language is clear, judicial construction is generally neither necessary nor permitted. Sun Valley
Foods Co v Ward, 460 Mich 230, 236; 596 NW2d 119 (1999). Claims involving the FCRA may
be brought in state courts. Broom v TRW Credit Data, 732 F Supp 66, 69 (ED Mich, 1990). A
court of competent jurisdiction would be determined by the law of a particular state.
In
Michigan, circuit courts have original jurisdiction over civil claims except where exclusive
jurisdiction is given in the constitution or by statute to another court. See MCL 600.605.
However, MCL 600.8301 provides district courts with exclusive jurisdiction over civil claims
when the amount in controversy does not exceed $25,000. Consequently, the circuit court did
not have exclusive jurisdiction over plaintiff 's FCRA claim and did not improperly deprive
plaintiff of jurisdiction.
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Plaintiff finally argues that the circuit court erred in transferring his claims against the
remaining defendants to the 48th District Court, pursuant to MCR 2.227, for lack of subjectmatter jurisdiction based on the amount in controversy. We agree.
Administrative Order No. 1998-1 controls reassignment of circuit court actions to the
district court with regard to actions filed after January 1, 1997. Plaintiff filed his complaint on
June 12, 1997; therefore, AO 1998-1 was applicable and provides, in pertinent part:
A circuit court may not transfer an action to district court under MCR
2.227 based on the amount in controversy unless: (1) The parties stipulate to the
transfer and to an appropriate amendment of the complaint, see MCR 2.111(B)(2);
or (2) From the allegations of the complaint, it appears to a legal certainty that the
amount in controversy is not greater than the applicable jurisdictional limit of the
district court.
MCL 600.8301 provides the district court with exclusive jurisdiction in civil actions when the
amount in controversy does not exceed $25,000. However, the amendment of MCL 600.8301
that increased the jurisdictional limit of district courts from $10,000 to $25,000, became effective
January 1, 1998,3 after plaintiff filed his complaint. Therefore, we must first determine whether
the amendment of MCL 600.8301 should be applied retroactively.
A general rule of statutory construction is that a new or amended statute applies
prospectively unless the Legislature has expressly or impliedly indicated its intention to give it
retrospective effect. Seaton v Wayne Co Prosecutor (On Second Remand), 233 Mich App 313,
316-317; 590 NW2d 598 (1998). However, a remedial or procedural statute may be excepted
from the general rule if it does not deny vested rights. See In re Certified Questions (Karl v
Bryant Air Conditioning Co), 416 Mich 558, 575; 331 NW2d 456 (1982). MCL 600.8301 is a
jurisdictional statute and thus procedural in nature in that it provides for the allocation of civil
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actions between district and circuit courts depending on the amount in controversy. See Baxter v
Gates Rubber Co, 171 Mich App 588, 591; 431 NW2d 81 (1988). Consequently, retrospective
application of the amendment of MCL 600.8301 would not impair or burden any vested right.
See In re Certified Questions, supra at 570-571, 575. Accordingly, we hold that the amended
statute may be applied retroactively to actions that were filed before its effective date of January
1, 1998.
The next issue to be considered is whether the trial court properly determined that the
amount in controversy was, with legal certainty, not greater than the $25,000 jurisdictional limit
of the district court. AO 1998-1. In rendering its decision to transfer the case to the district
court, the trial court referenced its review of the complaint and noted that the case mediated for
less than $25,000 before holding that it did not have "jurisdiction over a matter, a civil claim, for
less than $25,000." Although the mediation evaluation may provide some guidance regarding a
decision to transfer an action, it is not dispositive.
AO 1998-1 clearly provides that the
allegations of the complaint must be considered in determining whether the amount in
controversy appears to a legal certainty to be within the jurisdictional limit of the district court.
Our review of the allegations contained in plaintiff 's complaint and the nature of the
damages available under the claims does not lead us to conclude with legal certainty that the
amount in controversy does not exceed the jurisdictional limit of the district court. In particular,
plaintiff alleged wilful noncompliance with provisions of the FCRA because defendants obtained
plaintiff 's consumer credit information under false pretenses and for an impermissible purpose.
If plaintiff prevailed on his claim, 15 USC 1681n provides for a potential award of punitive
damages.
Plaintiff also alleged malicious prosecution pursuant to MCL 600.2907, which
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potentially allows treble damages if plaintiff prevailed on his claim. In addition, plaintiff 's
complaint alleged abuse of process and invasion of privacy claims. Further, defendants filed a
counterclaim for malicious prosecution. Review of the causes of action alleged in the complaint
and the counterclaim reveals a potential for significant damages in this case and leads us to
conclude that the amount in controversy does not appear to a legal certainty to be within the
jurisdictional limit of the district court. See MCL 600.8301; AO 1998-1. Therefore, the trial
court erred in transferring the action against the remaining defendants to the 48th District Court
pursuant to MCR 2.227.
Affirmed in part, reversed in part, and remanded to the circuit court for further
proceedings consistent with this opinion. We do not retain jurisdiction.
/s/ Mark J. Cavanagh
/s/ Martin M. Doctoroff
/s/ Patrick M. Meter
1
Defendant CTI is allegedly a consumer reporting agency engaged in the business of furnishing
consumer credit reports to third parties.
2
Defendant Lee is allegedly a debt collection agency.
3
MCL 600.8301 was amended by 1996 PA 388, ยง 1.
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