Michelle Snyder v. Finley & Co., L.P.A. ( 2022 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 22a0126p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
┐
MICHELLE L. SNYDER,
│
Plaintiff-Appellant, │
> No. 21-3997
│
v. │
│
FINLEY & CO., L.P.A., │
Defendant-Appellee. │
┘
Appeal from the United States District Court for the Northern District of Ohio at Cleveland.
No. 1:20-cv-02144—Donald C. Nugent, District Judge.
Argued: April 27, 2022
Decided and Filed: June 15, 2022
Before: CLAY, GRIFFIN, and WHITE, Circuit Judges.
_________________
COUNSEL
ARGUED: Marc E. Dann, DANN LAW, Lakewood, Ohio, for Appellant. Boyd W. Gentry,
LAW OFFICE OF BOYD W. GENTRY, LLC, Beavercreek, Ohio, for Appellee. ON BRIEF:
Marc E. Dann, Brian D. Flick, DANN LAW, Lakewood, Ohio, for Appellant. Boyd W. Gentry,
LAW OFFICE OF BOYD W. GENTRY, LLC, Beavercreek, Ohio, for Appellee.
_________________
OPINION
_________________
GRIFFIN, Circuit Judge.
Ohio’s Necessaries Statute permits creditors to collect certain debts from one spouse
incurred by the other. Ohio Rev. Code § 3103.03. Seeking to recover outstanding legal bills
owed by plaintiff Michelle L. Snyder’s husband, defendant Finley & Co., LPA filed a debt-
No. 21-3997 Snyder v. Finley & Co., LPA Page 2
collection lawsuit against plaintiff and her husband, asserting joint liability under the Necessaries
Statute. In this litigation, she contends that defendant’s lawsuit was “objectively baseless” and
thus violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e. Van Hoven v. Buckles
& Buckles, P.L.C., 947 F.3d 889, 896 (6th Cir. 2020). We agree. As the Ohio Supreme Court
has clearly held, the Necessaries Statute “does not impose joint liability on a married person for
the debts of his or her spouse.” Embassy Healthcare v. Bell, 122 N.E.3d 117, 121 (Ohio 2018).
Rather, “[a] creditor must . . . first seek satisfaction of its claim from the assets of the spouse who
incurred the debt” and must show that the debtor-spouse is “unable to pay” for a nondebtor-
spouse to be liable under the Necessaries Statute. Id. at 122. We therefore reverse and remand
with instructions to enter judgment in plaintiff’s favor and for further proceedings consistent
with this opinion.
I.
Plaintiff’s husband, Charles David Snyder, owned a technology-consulting company.
United States v. Snyder, 789 F. App’x 501, 503–04 (6th Cir. 2019). In an unsuccessful attempt
to keep his business afloat during the Great Recession, he funded the company’s day-to-day
operating expenses by diverting hundreds of thousands of dollars from employees’ 401(k)
contributions and Federal Insurance Contributions Act deductions to the company’s coffers. Id.
Charles was ultimately convicted of embezzlement and willful failure to pay over taxes.
The law firm of Zukerman, Lear & Murray Co. (Zukerman) assisted with his criminal
defense and sent him invoices for legal fees. When some of Zukerman’s invoices went unpaid,
defendant Finley & Co., LPA (Finley) filed a debt-collection action in Ohio state court on behalf
of Zukerman against Charles and his wife, plaintiff Michelle Snyder, jointly. Regarding
plaintiff, Finley asserted a spousal-obligation-to-support claim under Ohio’s Necessaries Statute.
The Ohio trial court granted judgment in Michelle Snyder’s favor on that claim, and the Ohio
Court of Appeals dismissed Finley’s interlocutory appeal for lack of a final, appealable order,
reasoning that the “claim against Michelle is contingent on the merits of” the claims against
Charles. Zukerman, Lear & Murray Co., L.P.A. v. Snyder, No. 110063, 2021 WL 2837215, at *1
(Ohio. Ct. App. July 8, 2021). Finley’s claims against Charles remain pending in the Ohio state
trial court.
No. 21-3997 Snyder v. Finley & Co., LPA Page 3
Thereafter, plaintiff Michelle L. Snyder commenced this federal Fair Debt Collection
Practices Act (FDCPA) lawsuit against Finley in an Ohio state court. Plaintiff claims that by
filing a debt-collection claim under the spousal-obligation-to-support theory without an arguable
legal basis, Finley engaged in debt-collection practices prohibited by the FDCPA. 15 U.S.C.
§ 1692e. Following removal to the Northern District of Ohio, the district court resolved the
parties’ cross-motions for summary judgment in favor of Finley, and Michelle L. Snyder now
appeals. We review the district court’s decision de novo. Ferro Corp. v. Cookson Grp.,
585 F.3d 946, 949 (6th Cir. 2009).
II.
The issue presented in this case is whether Finley violated the FDCPA when it sued
plaintiff to recover her husband’s criminal-defense legal fees under Ohio’s Necessaries Statute.1
The FDCPA provides that “[a] debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. This
is an “extraordinarily broad[,] . . . strict-liability statute,” and we “view any alleged violation
through the lens of the least sophisticated consumer.” Stratton v. Portfolio Recovery Assocs.,
770 F.3d 443, 448, 450 (6th Cir. 2014) (internal quotation marks and citations omitted). An
FDCPA violation occurs when a debt collector’s representation or action is materially false or
misleading, Wallace v. Wash. Mut. Bank, F.A., 683 F.3d 323, 326–27 (6th Cir. 2012), and had
the purpose of inducing payment by the debtor, Grden v. Leikin Ingber & Winters PC, 643 F.3d
169, 173 (6th Cir. 2011).
Section 1692e applies to debt-collection efforts utilizing the legal process. See Van
Hoven, 947 F.3d at 893–94. Merely advancing an ultimately unsuccessful claim for relief does
not, in and of itself, rise to an FDCPA violation. Heintz v. Jenkins, 514 U.S. 291, 296 (1995).
Proscribed rather is what is alleged to have occurred here: a material misstatement about state
law in a court filing that is “false, deceptive, or misleading” at the time it is made. Van Hoven,
947 F.3d at 893–94 (quoting 15 U.S.C. § 1692e).
1Finley’s complaint also asserted accounting and unjust enrichment claims against “defendants,” but
plaintiff’s FDCPA lawsuit and this appeal rest only on the propriety of Finley’s Necessaries Statute claim.
No. 21-3997 Snyder v. Finley & Co., LPA Page 4
So how do we distinguish between a non-winning claim that violates the FDCPA and a
non-winning claim that does not? Our recent decision in Van Hoven instructs that when
evaluating an alleged FDCPA violation in a legal action, “a lawyer does not ‘misrepresent’ the
law by advancing a reasonable legal position later proved wrong.” Id. at 896. Instead, we held,
courts must determine “whether the legal contention was objectively baseless at the time it was
made, making it legally indefensible or groundless in law.” Id. (internal quotation marks and
citation omitted and emphasis added). That would include, for example, “misquoting a case,
relying on a statute no longer in existence, . . . invoking an overruled decision,” “claim[ing] that
a one-year statute of limitations runs for two years,” “say[ing] today that the [FDCPA] does not
apply to attorneys collecting debts,” “suing on a time-barred debt,” and “filing a writ of
garnishment against a debtor current on his payments.” Id. at 895–96 (collecting cases).
Finley sought to hold plaintiff liable for her husband’s outstanding legal bills via Ohio’s
Necessaries Statute, Ohio Rev. Code § 3103.03. That law originates from coverture, wherein “a
married woman’s legal identity merged with her husband’s,” thus prohibiting her from owning
property, entering into contracts, or receiving credit. Embassy Healthcare, 122 N.E.3d at 119.
Given these “legal disabilities,” courts developed the common-law “necessaries doctrine” to
“encourage[] third parties to provide essential items and services to neglected wives.” Id. So,
under the common law, “a husband was liable to third parties for necessaries—i.e., food, shelter,
clothing, and medical services—that those third parties provided to his wife.” Id.
Section 3103.03 codified this doctrine, which has been subsequently modernized by
abolishing the common law’s antiquated view of the marital relationship—“the duty of support
now extends to both spouses.” Id. The Necessaries Statute thus currently provides that a
“married person must support the person’s self and spouse,” and if one is “unable to do so, the
spouse of the married person must assist in the support so far as the spouse is able.” Ohio Rev.
Code § 3103.03(A). And if one spouse fails to support the other, a third party may do so and
then “recover the reasonable value of the necessaries supplied from the married person who
neglected to support the spouse.” § 3103.03(C).
The parties primarily focus on whether attorneys’ fees constitute “necessaries” under the
Necessaries Statute. So too did the district court. It concluded that Finley’s claim against
No. 21-3997 Snyder v. Finley & Co., LPA Page 5
plaintiff was “at the very least, arguable” because the Ohio Supreme Court has twice held that
certain attorneys fees’ are recoverable against a spouse. See Wolf v. Friedman, 253 N.E.2d 761,
765–67 (Ohio 1969); Blum v. Blum, 223 N.E.2d 819, 820–21 (Ohio 1967). Therefore, in the
district court’s view, no FDCPA liability could lie against Finley. But we need not consider
whether the Necessaries Statute includes the attorneys’ fees at issue here because Finley’s
lawsuit did not comply with the law’s threshold procedural requirements.
A little less than a year before Finley filed its debt-collection claim against plaintiff, the
Ohio Supreme Court expounded upon a nondebtor-spouses’s liability under the Necessaries
Statute. In Embassy Healthcare, the Ohio Supreme Court held that “each married person retains
primary responsibility for supporting himself or herself from his or her own income or property,”
and a “nondebtor spouse becomes liable only if the debtor spouse does not have the assets to pay
for his or her necessaries.” 122 N.E.3d at 121. Because of this contingency, Embassy
Healthcare requires a creditor to exhaust its debt-collection efforts against the debtor before
attempting to collect from a spouse. Specifically, the Ohio Supreme Court held that “[a] creditor
must . . . first seek satisfaction of its claim from the assets of the spouse who incurred the debt.
[The Necessaries Statute] does not impose joint liability on a married person for the debts of his
or her spouse.” Id. (emphasis added).
Embassy Healthcare clearly establishes that defendant’s debt-collection lawsuit against
plaintiff was objectively baseless. As the Ohio Court of Appeals recognized, Finley’s “claim
against Michelle is contingent” on its claims against Charles. Zukerman, 2021 WL 2837215, at
*1. But when Finley sued Michelle, it had not satisfied the prerequisites to collect from her.
There was no finding that its claims against Charles were meritorious or that he lacked the assets
to pay for those claims. Embassy Healthcare required Finley to “first seek satisfaction of its
claim from” Charles and prohibited it from filing a joint-liability suit against Charles and
Michelle without clearly stating that its claim against Michelle was contingent. 122 N.E.3d at
121. Finley did not follow Embassy Healthcare’s express commands. If “misquoting a case,
relying on a statute no longer in existence, . . . invoking an overruled decision, [or] . . . suing on a
time-barred debt” runs afoul of the FDCPA, Van Hoven, 947 F.3d at 895–96, asserting a claim
No. 21-3997 Snyder v. Finley & Co., LPA Page 6
against a party under circumstances in which a state supreme court has explicitly held that the
party cannot be held liable certainly does as well.
III.
For these reasons, we reverse the district court’s judgment, and remand with instructions
to enter judgment in plaintiff’s favor and for further proceedings consistent with this opinion.