United States District Court, S.D. Alabama, Southern Division
MAHALA A. CHURCH, individually and on behalf of all similarly situated individuals, Plaintiff,
ACCRETIVE HEALTH, INC., aka, dba, MEDICAL FINANCIAL SOLUTIONS, Defendant.
WILLIAM H. STEELE, Chief District Judge.
This matter comes before the Court on defendant's Motion to Dismiss and, in the Alternative, for Summary Judgment (doc. 43). The Motion has been extensively briefed and is now ripe for disposition.
Plaintiff, Mahala A. Church, purporting to act individually and on behalf of all similarly situated individuals, brought this action alleging unlawful collection activities by defendant, Accretive Health, Inc., in violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 ("FDCPA"), and a discharge injunction entered by the Bankruptcy Court.
According to the well-pleaded factual allegations of the Amended Complaint (doc. 41), Church received a bill from non-party Providence Hospital, sometime after January 1, 2013, in the amount of $1, 944.80, for medical expenses related to a surgical procedure performed on December 18, 2012. Upon receipt of the bill, Church contacted Providence and disputed the charges because she contended that her insurance should have covered the full cost of the procedure. (Doc. 41, ¶ 14.) The Amended Complaint does not specify when, exactly, Providence sent bills or letters to Church, but instead states generally that Providence sent the original bill to her "[s]ometime after" January 1, 2013, and that Providence had "mailed at least one billing statement" to her "[p]rior to January 2014." ( Id., ¶¶ 14, 19.)
The Amended Complaint further alleges that Church filed a voluntary Chapter 7 bankruptcy petition on June 7, 2013, and that she listed the disputed Providence debt from December 2012 on the appropriate bankruptcy schedules. ( Id., ¶¶ 15-16.) Church received a discharge of her debts from the Bankruptcy Court on September 9, 2013. ( Id., ¶ 18.) As a listed creditor, Providence was mailed notice of both Church's original bankruptcy filing and her subsequent discharge. ( Id., ¶¶ 17-18.)
The well-pleaded allegations of plaintiff's pleading are that "Providence transferred the account to Medical Financial Solutions for collections... on January 10, 2014... for collection purposes, including sending letters as a third-party demanding payment." ( Id., ¶ 19.) The Amended Complaint characterizes Medical Financial Solutions as "Accretive's collection arm." ( Id., ¶ 8.) The Amended Complaint further alleges that Church's "account was in default when it was referred to Medical Financial Solutions" and "was over 12-months past due" at that time. ( Id., ¶ 20.) On January 17, 2014, defendant Accretive (doing business as Medical Financial Solutions) sent the letter to Church which lies at the heart of this litigation (the "January 17 Letter"). ( Id., ¶ 22 & Exh. A.) In part, the January 17 Letter notified Church that she had "an active balance of $1, 944.80 with Providence Hospital" and that "[t]o assist you in resolving this balance, Providence Hospital has sent your account to Medical Financial Solutions. It is very important we hear from you." ( Id. ) The January 17 Letter went on to state that "Medical Financial Solutions is a non-credit reporting, third party agency. Our company works directly with Providence Hospital to ensure your account is protected from moving further into collections." ( Id. )
In Church's view, the January 17 Letter is legally problematic for two reasons. First, although that correspondence was Accretive's "initial contact with plaintiff, " it "contained none of the disclosures required by the FDCPA" and Church received no other corrective communications or notices within a five-day period. ( Id., ¶ 23.) Second, the Amended Complaint alleges that "[a]t all relevant times Accretive knew or should have known that Plaintiff, who had included the debt at issue in her Chapter 7 case, had received a discharge." ( Id., ¶ 24.) These concerns translate directly into the two substantive causes of action Church brings against Accretive. Count One alleges "violations of the FDCPA, " and asserts that such violations "include, but are not limited to, failing to comply with the notice requirements of 15 U.S.C. §§ 1692e and 1692g." ( Id., ¶¶ 26, 30.) The Amended Complaint expounds on the alleged FDCPA violations as also including misrepresentations of the legal status of a debt by attempting to collect a discharged debt (in violation of 15 U.S.C. § 1692e(2)(A)-(B)) and harassment of Church by attempting to collect a discharged debt (in violation of 15 U.S.C. §§ 1692d and 1692f(1)). ( Id., ¶ 31.) Meanwhile, Count Two alleges simply that Accretive's efforts to collect the debt from Church "constitute willful violations of the discharge injunction in violation of 11 U.S.C. § 524." ( Id., ¶ 34.) Defendant now moves for dismissal of both counts on multiple stated grounds.
II. Analysis of Rule 12(b)(6) Motion.
A. Legal Standard.
Defendant's Motion to Dismiss is rooted in the premise that the Amended Complaint fails to state claims upon which relief can be granted, and therefore is properly analyzed under Rule 12(b)(6), Fed.R.Civ.P. To withstand Rule 12(b)(6) scrutiny and satisfy Rule 8(a), a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face, " so as to "nudge[ ][its] claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). "This necessarily requires that a plaintiff include factual allegations for each essential element of his or her claim." GeorgiaCarry.Org, Inc. v. Georgia, 687 F.3d 1244, 1254 (11th Cir. 2012). Thus, minimum pleading standards "require [ ] more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. As the Eleventh Circuit has explained, Twombly / Iqbal principles require that a complaint's allegations be "enough to raise a right to relief above the speculative level." Speaker v. U.S. Dep't of Health and Human Services Centers for Disease Control and Prevention, 623 F.3d 1371, 1380 (11th Cir. 2010) (citations omitted). "To survive a 12(b)(6) motion to dismiss, the complaint does not need detailed factual allegations, ... but must give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Randall v. Scott, 610 F.3d 701, 705 (11th Cir. 2010) (citations and internal quotation marks omitted).
For purposes of its Rule 12(b)(6) analysis, the Court accepts as true all well-pleaded factual allegations of the Complaint, and draws all reasonable inferences in the plaintiff's favor. See, e.g., Keating v. City of Miami, 598 F.3d 753, 762 (11th Cir. 2010) (in reviewing Rule 12(b)(6) motion, court must "accept the facts alleged in the complaint as true, " "draw all reasonable inferences in the plaintiff's favor, " and "limit our review to the four corners of the complaint"). Notwithstanding this deference given to plaintiff's pleading at the Rule 12(b)(6) stage, it is also true that "[l]egal conclusions without adequate factual support are entitled to no assumption of truth." Mamani v. Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011).
B. Movant's Contention that Defendant is Not a FDCPA "Debt Collector."
The parties agree that the FDCPA claims asserted in Count One of the Amended Complaint are viable only if Accretive is properly deemed a "debt collector" within the meaning of the statute. Indeed, the Congressional findings and declaration of purpose accompanying the FDCPA specify that the statute's purpose is "to eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). Thus, a threshold requirement for liability in Count One is that Church must show that Accretive is a "debt collector" within the meaning of the FDCPA. Defendant maintains that Count One fails to state a claim upon which relief can be granted because the Amended Complaint does not plead sufficient facts to support a plausible inference that Accretive qualifies as a "debt collector" for FDCPA purposes.
The appropriate analytical starting place is the statutory language itself. "A debt collector' is a term of art in the FDCPA." Ausar-El ex rel. Small, Jr. v. BAC (Bank of America) Home Loans Servicing LP, 448 Fed.Appx. 1, 2 (11th Cir. Sept. 21, 2011). The FDCPA defines "debt collector" as meaning "any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect... debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). Importantly, this definition expressly excludes from the scope of a debt collector "any person collecting or attempting to collect any debt owed or asserted to be owed or due another to the extent such activity... concerns a debt which was not in default at the time it was ...