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Hudson v. Medicredit, Inc.

United States District Court, E.D. Missouri, Eastern Division

March 19, 2018

MEDICREDIT, INC., Defendant.



         Plaintiff Patricia Hudson alleges that defendant debt collector Medicredit, Inc., violated the Fair Debt Collection Protection Act (FDCPA) during a phone conversation by asking a question regarding the nature of her legal representation. The matter is presently before the Court on defendant's motion for summary judgment. Plaintiff has filed a response in opposition and the issues are fully briefed. All matters are pending before the undersigned with the consent of the parties, pursuant to 28 U.S.C. § 636(c).

         I. Factual Background

         Plaintiff received medical treatment from Christian Hospital in 2016. The hospital subsequently placed the accounts for plaintiff's treatment with defendant. Plaintiff received a collection letter from defendant in June 2016. On November 3, 2016, plaintiff called defendant to obtain more information about the debt and to inform defendant that it should direct all communications to her attorney. A recording of that call has been provided to the Court.

         At the outset of the telephone conversation, plaintiff stated that she was calling because she “received a statement” and wanted to know if she could “get verification of this debt.” When asked, plaintiff provided the account number, her name, and her address so the proper record could be located. The Medicredit employee, who gave his name as Archie, told plaintiff that Christian Hospital had placed three accounts for collection. Plaintiff then asked whether she could get a “written account statement from the original creditor.” Archie explained that she had to contact the hospital directly to get that information, and offered to provide her the appropriate contact information. In response, plaintiff stated that Medicredit should “please just stop calling [her] cell phone” and “to speak with [her] attorney.” Archie responded by offering to place her attorney's name and phone number “in the system so our legal department can call him up and you won't get any more calls.” Plaintiff supplied the requested information. Archie then asked, “Now is that a bankruptcy ma'am or workman's comp?” Plaintiff responded that those questions needed to be directed to her attorney. Archie responded, “No problem, we always ask it, ” and the call was terminated. Plaintiff testified at deposition that she thought the question was disrespectful and that her rights as a consumer had been violated. [Doc. # 28-1 at pp. 54, 56].

         II. Legal Standards

         Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Under Rule 56, a party moving for summary judgment bears the burden of demonstrating that no genuine issue exists as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party, ” and a fact is material if it “might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         Once the moving party discharges this burden, the non-moving party must set forth specific facts demonstrating that there is a dispute as to a genuine issue of material fact, not the “mere existence of some alleged factual dispute.” Anderson, 477 U.S. at 247. The non-moving party may not rest upon mere allegations or denials in the pleadings. Id. at 256. “Factual disputes that are irrelevant or unnecessary” will not preclude summary judgment. Id. at 248. The Court must construe all facts and evidence in the light most favorable to the non-movant, must refrain from making credibility determinations and weighing the evidence, and must draw all legitimate inferences in favor of the non-movant. Id. at 255.

         The purpose of the FDCPA is to “eliminate abusive debt collection practices by debt collectors.” Richmond v. Higgins, 435 F.3d 825, 828 (8th Cir. 2006) (quoting 15 U.S.C. § 1692(a) and § 1692k(a)); see also Quinn v. Ocwen Fed. Bank FSB, 470 F.3d 1240, 1246 (8th Cir. 2006) (“The FDCPA is designed to protect consumers from abusive debt collection practices and to protect ethical debt collectors from competitive disadvantage.”) (citations omitted). The FDCPA provides for strict liability and is to be construed liberally to protect consumers. Istre v. Miramed Revenue Grp., LLC, No. 4:14 CV 1380 DDN, 2014 WL 4988201, at *2 (E.D. Mo. Oct. 7, 2014) (citation omitted).

         To prevail on her claim that defendant violated the FDCPA, plaintiff must prove that she is a consumer; defendant is a debt collector; there was an attempt to collect a debt; and defendant violated, by act or omission, a provision of the FDCPA. Campbell v. Credit Prot. Ass'n, L.P., No. 4:12CV00289AGF, 2013 WL 1282348, at *4 (E.D. Mo. Mar. 27, 2013) (citing Pace v. Portfolio Recovery Assocs., LLC, 872 F.Supp.2d 861, 864 (W.D. Mo. 2012)). A debt collector who violates the FDCPA is liable for any actual damages sustained by the plaintiff in addition to statutory damages of up to $1, 000 and attorney's fees. Id.;15 U.S.C. § 1692k(a).

         III. Discussion

         Plaintiff's claim arises under 15 U.S.C. § 1692c(a)(2), which provides that “a debt collector may not communicate with a consumer in connection with the collection of any debt . . . if the debt collector knows the consumer is represented by an attorney with respect to such debt . . . .” § 1692c(a)(2) (emphasis added). Plaintiff asserts that defendant violated this provision by asking her whether her attorney represented her in connection with bankruptcy or workers' compensation claims. Defendant argues that it is not liable under the FDCPA because its question was not a “communication in connection with the collection” of the debt.[1]

         Plaintiff cites several cases to support the proposition that, once notified that a debtor has legal representation, debt collectors may only ask for the attorney's contact information before ending the call. In Hanks v. Valarity, LLC, No. 4:14-CV-01433-JAR, 2015 WL 1886960 (E.D. Mo. Apr. 24, 2015), the debt collector Valarity placed multiple calls to plaintiff, despite his requests to cease calling. On one of these calls, the Valarity representative immediately terminated the call after plaintiff stated he had retained counsel. A few days later, a representative again called plaintiff, at which point he was able to provide his attorney's contact information. Hanks filed suit, alleging that Valarity violated four provisions of the FDCPA.[2]The Court denied Valarity's motion to dismiss the § 1692c(a)(2) claim, holding that Valarity was not shielded from liability on the second call because it could have learned the attorney's contact information during the first call. Id. at *3. The Court did not examine the question raised by this case - whether the call to obtain the attorney's contact information constituted a communication in connection with the collection of a debt. In three other cases plaintiff cites, after being informed that the debtors had retained counsel, the debt collectors asked them to set up payment plans - conduct that clearly constitutes an attempt to collect a debt. See Curtis v. Caine & Weiner Co., Inc., No. 4:15CV1721 CDP, 2016 WL 520987 (E.D. Mo. Feb. 10, 2016) (denying Rule 12(b)(6) motion); Istre v. Miramed Revenue Grp., LLC, No. 4:14 CV 1380 DDN, 2014 WL 4988201 (E.D. Mo. Oct. 7, 2014) (denying Rule 12(b)(6) motion); Robin v. Miller & Steeno, P.C., No. 4:13CV2456 SNLJ, 2014 WL 3734318, at * 2 (E.D. Mo. July 29, 2014) (granting plaintiff's motion for partial summary judgment).

         Not all communications between debtor and debt collector are “in connection with a debt.” See Gburek v. Litton Loan Servicing LP, 614 F.3d 380, 384 (7th Cir. 2010) (“Neither this circuit nor any other has established a bright-line rule for determining whether a communication from a debt collector was made in connection with the collection of any debt.”). It is clear that “the statute does not apply to every communication between a debt collector and a debtor.” Id. at 384-85 (emphasis in original). It is equally true, however, that a communication need not include an “explicit demand for payment” to be considered “in connection with the collection” of a debt. Id. at 385. The Eighth Circuit has joined the Third, Sixth, and Seventh Circuits in holding that, “for a communication to be in connection with the collection of a debt, an animating purpose of the communication must be to induce payment by the debtor.” McIvor v. Credit Control Servs., Inc., 773 F.3d 909, 914 (8th Cir. 2014) (citing Simon v. FIA Card Servs., N.A., 732 F.3d 259, 266-67 (3rd Cir. 2013); Grden v. Leikin Ingber & Winters PC, 643 F.3d 169, 173 (6th Cir. 2011); and Gburek, 614 F.3d at 385). “[C]ommunications that include discussions of the status of payment, offers of alternatives to default, and requests for financial information may be part of a dialogue to facilitate satisfaction of the debt and hence can constitute debt collection activity.” McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240, 245-46 (3rd Cir. 2014) (citation omitted); see also Gburek, 614 F.3d at 386 (letters proposing debt repayment and settlement options constituted debt collection activity). By contrast, “[w]here a communication is clearly informational and does not demand payment or discuss the specifics of an underlying debt, it does not violate the FDCPA.” Goodin v. Bank of Am., N.A., 114 F.Supp.3d 1197, 1205 (M.D. Fla. 2015) (bank's notice that debtor could be charged fees while their loan was in default status, letter alerting debtors to existence of a program to avoid foreclosure, and notice that loan had been referred to foreclosure “did not ask for or encourage payment and were not intended to induce payment.”); see also ...

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