The United States District Court for the Southern District of Ohio denied the defendants’ motion for judgment on the pleadings, finding that the plaintiffs had met all of the legal requirements to establish Article III standing. Plaisted v. Harper, No. 1:24-cv-634 (S.D. Ohio May 13, 2025).
Jacqueline Holden, a disabled retiree, had a one-half interest in her home, which she owned jointly with rights of survivorship with her mother, who received Medicaid benefits during her lifetime. When her mother died in 2023, Jacqueline became the sole owner. The defendants, which are under contract with the State of Ohio to collect amounts owed to the State as repayment for certain Medicaid benefits, sent Jacqueline a letter informing her that Ohio had a $372,435.73 claim against her mother's estate for Medicaid services. The defendants also filed an affidavit with the county recorder’s office that listed the home, its address, and its parcel number and stated that the State of Ohio possibly had a claim against Jacqueline’s mother’s estate for the lesser of a one-half interest in the home or up to the claimed amount.
Medardo Funez had owned his home jointly with rights of survivorship with his wife, who was receiving Medicaid benefits before her death in 2024. The defendants sent Medardo a letter and filed an affidavit similar to those in Jacqueline’s situation, although the claim amount was $65,398.27.
Jacqueline and Medardo were distressed because they believed that the defendants were trying to take their homes, that the affidavit was a lien on their homes, and that they would be left homeless. The defendants released the affidavit regarding Jacqueline’s home after she hired an attorney to clear title, but they did not release the affidavit addressing Medardo’s home.
Jacqueline and Medardo filed an action in an Ohio federal district court against the defendants, claiming that they had violated the Fair Debt Collection Practices Act (FDCPA) and had committed slander of title because they had sought to recover against the estates of their mother and spouse, respectively, and had placed liens on their homes in violation of 42 U.S.C. §§ 1396p(b)(2) and (a)(2) and applicable state law, which prohibit such conduct during the lifetime of a surviving spouse or disabled child who lives in the home. The defendants filed a motion for judgment on the pleadings, asserting that Jacqueline and Medardo did not have Article III standing, and thus their claims could not proceed.
The federal district court determined that Article III standing requires plaintiffs to establish (1) a concrete, particularized, and actual or imminent injury; (2) an injury traceable to the defendant’s conduct; and (3) that a favorable ruling would redress the alleged injury. The court determined that Jacqueline and Medardo had satisfied the first element because they had alleged that the affidavits filed by the defendants had injured them by improperly placing a cloud on the title to their properties. Further, they met the second prong because the injury they alleged traced directly back to the defendants’ actions, i.e., filing the affidavits that clouded their title. Finally, Jacqueline and Medardo established the third element by requesting injunctive relief and damages, which the court could provide to redress the alleged harm. The court ruled that, because they had established all three elements, they had standing to bring their claims.
The court rejected the defendants’ argument that the affidavits were not liens under Ohio law and could not cloud Jacqueline’s and Medardo’s titles or encumber their property, and therefore, they had not suffered an injury sufficient to establish standing. Although the defendants may have been correct that Ohio law distinguishes between the legal effect of an affidavit and a lien or deed, federal law, not state law, controls whether a plaintiff has established an injury sufficient to provide standing under Article III. Under federal standing law, harm to state-law-created property rights is not limited to liens but extends generally to encumbrances as defined by federal law. The court concluded that the affidavits the defendants had filed were encumbrances and that Jacqueline and Medardo had sufficiently established a federally cognizable injury and therefore had standing. The court denied the defendants’ motion for partial judgment on the pleadings.
Subscribe to the Knowledge Bank.
