Zahra Bouye v. James Bruce, Jr.

CourtCourt of Appeals for the Sixth Circuit
DecidedMarch 1, 2023
Docket22-5016
StatusPublished

This text of Zahra Bouye v. James Bruce, Jr. (Zahra Bouye v. James Bruce, Jr.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zahra Bouye v. James Bruce, Jr., (6th Cir. 2023).

Opinion

RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 23a0034p.06

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

┐ ZAHRA A. BOUYE, │ Plaintiff-Appellant/Cross-Appellee, │ > Nos. 21-6195/22-5016 │ v. │ │ JAMES E. BRUCE, JR., │ Defendant-Appellee/Cross-Appellant. │ │ ┘

Appeal from the United States District Court for the Western District of Kentucky at Louisville. No. 3:20-cv-00201—David J. Hale, District Judge.

Argued: January 12, 2023

Decided and Filed: March 1, 2023

Before: COLE, NALBANDIAN, and READLER, Circuit Judges.

_________________

COUNSEL

ARGUED: James R. McKenzie, JAMES R. MCKENZIE ATTORNEY, PLLC, Louisville, Kentucky, for Appellant/Cross-Appellee. R. Brooks Herrick, DINSMORE & SHOHL LLP, Louisville, Kentucky, for Appellee/Cross-Appellant. ON BRIEF: James R. McKenzie, JAMES R. MCKENZIE ATTORNEY, PLLC, Louisville, Kentucky, James Hays Lawson, LAWSON AT LAW, PLLC, Shelbyville, Kentucky, for Appellant/Cross-Appellee. R. Brooks Herrick, DINSMORE & SHOHL LLP Louisville, Kentucky, for Appellee/Cross-Appellant. _________________

OPINION _________________

NALBANDIAN, Circuit Judge. Zahra Bouye sued attorney James Bruce for violating the Fair Debt Collection Practices Act. She alleged that Bruce, representing Mariner Finance, Nos. 21-6195/22-5016 Bouye v. Bruce Page 2

LLC, subjected her to an abusive debt-collection lawsuit in state court. The district court dismissed her complaint as time-barred and dismissed Bruce’s later request for attorney’s fees. Both appealed. Because one of Bouye’s claims falls within the statute of limitations, we reverse both rulings and remand for further proceedings.

I.

Zahra Bouye financed a furniture purchase with Winner Furniture (“Winner”) through a retail installment contract (“RIC”).1 While Bouye was making payments on the contract, Winner supposedly sold the debt to Mariner Finance, LLC (“Mariner”). Eventually, Bouye defaulted on the debt.

So, on March 4, 2019, Mariner, through its attorney James Bruce, sued Bouye in Kentucky state court to recover the outstanding debt and attorney’s fees “of one-third of the amount sued upon and collected.” (R. 5, Amended Complaint, p. 2.) That attorney’s fees request contradicted the RIC, however, which provided that Bouye would pay “reasonable attorney’s fee[s] limited to 15% of the unpaid balance of this contract after default[.]” (R. 5, Amended Complaint, p. 3.)

And there was another problem with this original state-court complaint. The RIC attached to the complaint didn’t establish that Winner had ever properly transferred the debt to Mariner, such that Mariner would have the right to sue on the debt. On July 2, 2019, Mariner supplemented the record with a second, updated RIC. It reflected that a Winner employee had authorized the transfer of the debt from Winner to Mariner. Next, both parties moved for summary judgment.

But the Kentucky trial court denied both motions for summary judgment and ordered Mariner to file proof of assignment “within 45 days of September 4, 2019.” (R. 5., Amended Complaint, p. 4.) On September 20, Mariner again filed for summary judgment, this time with

1These facts come from the amended complaint and state-court filings appended to Bruce’s motion to dismiss. See Siefert v. Hamilton Cnty., 951 F.3d 753, 757 (6th Cir. 2020) (“We take the facts only from the complaint, accepting them as true as we must do in reviewing a Rule 12(b)(6) motion.”); see also Chase v. MaCauley, 971 F.3d 582, 587 n.1 (6th Cir. 2020) (explaining that we may “take judicial notice of proceedings in other courts of record” (quoting Lyons v. Stovall, 188 F.3d 327, 332 n.3 (6th Cir. 1999))). Nos. 21-6195/22-5016 Bouye v. Bruce Page 3

the updated RIC that listed Winner’s store manager as assigning the debt to Mariner. And on that basis, the state court granted Mariner’s motion for summary judgment.

Bouye appealed to the state appellate court, which agreed with her that Mariner had not sufficiently demonstrated that the transfer from Winner to Mariner was valid. That court remanded the case, which Mariner ultimately voluntarily dismissed.

On March 19, 2020—a year and fifteen days after Mariner sued Bouye in state court— Bouye sued Bruce in federal district court for violating the Fair Debt Collection Practices Act (“FDCPA”). Relevant here is her allegation that Bruce, on Mariner’s behalf, doctored the RIC mid-litigation to make it look like the debt assignment from Winner to Mariner was proper.2 Bruce moved to dismiss Bouye’s complaint as barred by the FDCPA’s one-year statute of limitations or by Rooker-Feldman and collateral estoppel.3

The district court granted Bruce’s motion to dismiss because Bouye filed her complaint more than a year after Mariner filed the state-court complaint. Bouye filed a motion for reconsideration, and Bruce filed a motion for attorney’s fees. While Bouye and Bruce were waiting for the district court’s decision on these motions—and unbeknownst to Bruce—Bouye and Mariner entered into a settlement agreement that released Mariner and all its “attorneys” from liability. (Appellate R. 18, Exhibit A to the Motion, p. 21.) A few weeks later, also unbeknownst to Bruce—but after Bruce learned of the existence of the settlement agreement— Bouye and Mariner executed an addendum that “clarif[ied]” that Bruce had not been released by the terms of the settlement agreement. (See Appellate R. 21, Exhibit A to Bouye’s Response, p. 24.) The district court then denied Bouye’s motion for reconsideration and Bruce’s motion for attorney’s fees. Bouye timely appealed, and Bruce cross-appealed for attorney’s fees.

2Bruce argues that he was not responsible for these actions since he had a right to rely on Mariner’s representations in conducting the state-court litigation. (Appellee’s Br. at 13.) That is a merits issue, which we need not address in the context of an appeal from a Rule 12(b)(6) dismissal on statute-of-limitations grounds. 3Because there was no final state-court judgment, neither collateral estoppel nor Rooker-Feldman applies here. See Fridley v. Horrighs, 291 F.3d 867, 875 (6th Cir. 2002); Abbott v. Michigan, 474 F.3d 324, 328 (6th Cir. 2007). Nos. 21-6195/22-5016 Bouye v. Bruce Page 4

At least three months before the trial court resolved the motions for reconsideration and attorney’s fees, Bruce learned of the settlement agreement. That agreement, however, was never entered into the district-court record. Nevertheless, before the parties briefed the merits of this appeal, Bruce moved to dismiss the appeal for lack of jurisdiction based on the settlement agreement. Bouye argued that Bruce had forfeited the argument or, alternatively, that the agreement didn’t go to our jurisdiction to hear the case. And producing the addendum to the agreement as well as Bruce’s employment contract with Mariner, Bouye also argued that Bruce was not an intended third-party beneficiary of the settlement agreement.

We denied Bruce’s motion to dismiss on the basis that the settlement agreement didn’t moot the appeal because, in the context of this case, the settlement agreement doesn’t go to our jurisdiction to hear the case.4 See Bouye v. Bruce, No. 21-6195, slip op. at 1–2 (6th Cir. June 21, 2022) (order). We then allowed the parties to proceed with their briefing on appeal.

Now, Bouye argues that at least one of her claims fell within the one-year statute of limitations. Bruce challenges Bouye’s Article III standing to bring this lawsuit.

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