United States District Court, D. Colorado
CLIFFORD L. EDWARDS, Plaintiff,
v.
BC SERVICES, INC., Defendant.
ORDER
SCOTT
T. VARHOLAK, UNITED STATES MAGISTRATE JUDGE
This
matter comes before the Court on Defendant's Motion and
Memorandum Brief for Summary Judgment [#16] (the
“Motion”). The parties have consented to proceed
before the undersigned United States Magistrate Judge for all
proceedings, including entry of a final judgment. [#9, 12]
The Court has carefully considered the Motion and related
briefing, the entire case file, and the applicable case law,
and has determined that oral argument would not materially
assist in the disposition of the instant Motion. For the
following reasons, Defendant's Motion is GRANTED
IN PART and DENIED IN PART.
I.
UNDISPUTED FACTS
This
action arises out of Defendant BC Services, Inc.'s
attempts to collect a debt from Plaintiff Clifford Edwards
related to purportedly past due payments for medical services
Plaintiff received from Colorado Imaging Associates
(“CIA”), which is referred to herein as the
“Subject Debt.” [#1 at ¶¶ 9-12] Except
where expressly noted, the relevant facts are
undisputed.[1]
In or
around the summer of 2018, Plaintiff went to the hospital for
injuries sustained in an accident. [#1, ¶ 9; #22, SOF1]
Plaintiff told the hospital that the injury happened at work
but provided the hospital with insurance information for his
private insurance carrier. [#22, SOF2, SOF25] CIA was one of
the healthcare providers who provided treatment to Plaintiff
for his injuries. [Id. at SOF3] Following treatment,
Plaintiff's private insurance carrier paid a portion of
CIA's bill to CIA. [Id. at SOF5; see
also #17-1 at 18, ¶ 5] After payments and
adjustments from the insurance carrier were provided, there
was a remaining balance due to CIA in the amount of $7.20.
[#17-1 at 18, ¶ 5; #22, SOF8] On December 10, 2018, CIA
referred the Subject Debt in the amount of $7.20 to
Defendant. [#17-1 at 18, ¶ 6] CIA sent Defendant
information concerning the Subject Debt indicating that
Plaintiff had private health insurance. [#22, SOF4] It is
undisputed that CIA had provided accurate information on
other accounts to Defendant in the past and that Defendant
relies on the information provided to it by CIA.
[Id. at SOF23, SOF24]
On
December 11, 2018, Defendant sent a collection letter (the
“Collection Letter”) to Plaintiff relating to the
Subject Debt, notifying Plaintiff that “Your creditor,
listed above, has placed your account for collection.”
[Id. at SOF6; see also #17-1 at 16] With
regard to the amount due on the Subject Debt, the Collection
Letter stated:
Date: December 11, 2018 L35552-#101
Creditor: COLORADO IMAGING ASSOCIATES
Account #: 16106121
Principal: $7.20 Interest:
$0.00 Balance: $7.20
[#17-1 at 16] The Collection Letter thus reflected principal
in the amount of $7.20, interest in the amount of $0.00, and
a balance due in the amount of $7.20. [Id.] It is
undisputed that the Subject Debt totaled $7.20 at the time
the Collection Letter was sent.[2] [#22, SOF8] The Collection Letter
was the only communication sent by Defendant to Plaintiff.
[Id. at SOF18]
On
December 18, 2018, Plaintiff called Defendant and stated that
he did not owe the Subject Debt, because it was covered by
workers' compensation, and stated that he was going to
sue Defendant's “client” (the “December
18 Call”). [Id. at SOF9] It is undisputed that
Defendant did not become aware that the Subject Debt may be
covered by workers' compensation insurance until the
December 18 Call. [Id. at SOF10] On December 19,
2018, Plaintiff retained an attorney, who instructed
Plaintiff to call Defendant again. [Id. at SOF11,
SOF12] As instructed by his attorney, Plaintiff called
Defendant on December 19, 2018 and asked Defendant what its
intentions were regarding the Subject Debt (the
“December 19 Call”). [Id. at SOF13,
SOF14] In response, Defendant stated on the December 19 Call
that its intent was to collect the Subject Debt.
[Id. at SOF15] Defendant did not request payment of
the Subject Debt from Plaintiff during the December 19 Call.
[Id. at SOF16] Although it is undisputed that
Defendant did not expressly state during the December 19 Call
that it would continue to seek to collect the Subject Debt
from Plaintiff, the parties dispute whether that was
Defendant's intent and the implication of Defendant
stating that it intended to collect the Subject Debt.
[Id. at SOF17] Defendant did not tell Plaintiff in
either the December 18 Call or the December 19 Call that the
amount of the Subject Debt may change. [Id. at
SOF19]
After
the December 19 Call, Pinnacol Assurance
(“Pinnacol”), the workers' compensation
carrier, contacted Defendant and stated that it would pay the
Subject Debt. [Id. at SOF20] Pinnacol subsequently
paid the Subject Debt in the full amount of $7.20.
[Id. at SOF21] Upon receipt of the payment from
Pinnacol, Defendant considered the debt paid in full.
[Id. at SOF22]
On
December 26, 2018, Plaintiff filed the instant lawsuit
alleging that Defendant violated two provisions of the Fair
Debt Collection Practices Act (“FDCPA”). [#1]
Plaintiff first contends that Defendant violated 15 U.S.C
§ 1692e, which prohibits debt collectors from
“us[ing] any false, deceptive, or misleading
representation or means in connection with the collection of
any debt, ” by seeking to collect on a debt that
Plaintiff did not owe, even after Plaintiff informed
Defendant that the Subject Debt was covered by workers'
compensation, and by including an interest line item in the
Collection Letter. [Id. at ¶¶ 29-32]
According to the Complaint, the inclusion of a reference to
interest “misleadingly suggests to consumers the false
possibility that Defendant could tack on additional amounts
on debts that are not owed” and because Plaintiff did
not owe the subject debt, “interest could not be
lawfully added and/or collected from Plaintiff.”
[Id. at ¶ 32] Plaintiff also contends that
Defendant's inclusion of the interest line item and
attempts to collect a debt that Plaintiff did not owe
violated 15 U.S.C § 1692f, which prohibits debt
collectors from “us[ing] unfair or unconscionable means
to collect or attempt to collect any debt.”
[Id. at ¶¶ 33-36]
On
September 24, 2019, Defendant filed the instant motion. [#16]
Plaintiff filed his response to the Motion on October 15,
2019. [#19] On October 29, 2019, Defendant filed its reply in
support of the Motion. [#21]
II.
STANDARD OF REVIEW
Summary
judgment is appropriate only if “the movant shows that
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); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co.,
Inc., 41 F.3d 567, 569 (10th Cir. 1994). The movant
bears the initial burden of making a prima facie
demonstration of the absence of a genuine issue of material
fact, which the movant may do “simply by pointing out
to the court a lack of evidence . . . on an essential element
of the nonmovant's claim” when the movant does not
bear the burden of persuasion at trial. Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 670-71 (10th Cir. 1998). If
the moving party bears the burden of proof at trial,
“the moving party must establish, as a matter of law,
all essential elements of the [claim or affirmative defense
on which summary judgment is sought] before the nonmoving
party can be obligated to bring forward any specific facts
alleged to rebut the movant's case.” Pelt v.
Utah, 539 F.3d 1271, 1280 (10th Cir. 2008). In other
words, the moving party “must support its motion with
credible evidence showing that, if uncontroverted, the moving
party would be entitled to a directed verdict.”
Rodell v. Objective Interface Sys., Inc., No.
14-CV-01667-MSK-MJW, 2015 WL 5728770, at *3 (D. Colo. Sept.
30, 2015) (citing Celotex Corp., 477 U.S. at 331).
If the movant carries its initial burden, the burden then
shifts to the nonmovant “to go beyond the pleadings and
set forth specific facts that would be admissible in evidence
in the event of trial.” Adler, 144 F.3d at 671
(quotation omitted).
“[A]
‘judge's function' at summary judgment is not
‘to weigh the evidence and determine the truth of the
matter but to determine whether there is a genuine issue for
trial.'” Tolan v. Cotton, 572 U.S. 650,
656 (2014) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249 (1986)). Whether there is a genuine dispute
as to a material fact depends upon whether the evidence
presents a sufficient disagreement to require submission to a
jury. See Anderson, 477 U.S. at 248-49; Stone v.
Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000);
Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th
Cir. 1987). Evidence, including testimony, offered in support
of or in opposition to a motion for summary judgment must be
based on more than mere speculation, conjecture, or surmise.
Bones v. Honeywell Int'l Inc., 366 F.3d 869, 875
(10th Cir. 2004). A fact is “material” if it
pertains to an element of a claim or defense; a factual
dispute is “genuine” if the evidence is so
contradictory that if the matter went to trial, a reasonable
jury could return a verdict for either party.
Anderson, 477 U.S. at 248. “Where the record
taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no ‘genuine
issue for trial.'” Matsushita Elec. Indus. Co.,
Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(citing First Nat'l Bank of Ariz. v. Cities Serv.
Co., 391 U.S. 253, 289 (1968)). In reviewing a motion
for summary judgment, the Court “view[s] the evidence
and draw[s] reasonable inferences therefrom in the light most
favorable to the non-moving party.” See Garrett v.
Hewlett-Packard Co., 305 F.3d 1210, 1213 (10th Cir.
2002).
III.
ANALYSIS
The
purpose of the FDCPA is “to eliminate abusive debt
collection practices by debt collectors, to insure that those
debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and
to promote consistent State action to protect consumers
against debt collection abuses.” 15 U.S.C. §
1692(e). To succeed on a claim under the FDCPA, a plaintiff
must establish the following four elements: (1) the plaintiff
is a natural person who is a “consumer” under 15
U.S.C. § 1692a(3); (2) the “debt” arises out
of a transaction entered primarily for personal, family, or
household purposes under 15 U.S.C. § 1692a(5); (3) the
defendant is a “debt collector” within the
meaning of 15 U.S.C. § 1692a(6); and (4) the defendant
violated, by act or omission, a provision of the FDCPA.
Rhodes v. Olson Assocs., P.C., 83 F.Supp.3d 1096,
1103 (D. Colo. 2015). Here, Defendant challenges only the
fourth element-i.e., whether any of Defendant's
actions or omissions constitute a violation of any provision
of the FDCPA.
Plaintiff
alleges that Defendant violated Section 1692e and Section
1692f. [#1] Section 1692e prohibits a debt collector from
using “any false, deceptive, or misleading
representation or means in connection with the collection of
any debt” and includes a non-exhaustive list of 16
specifically prohibited practices that violate the general
prohibition against false, deceptive, or misleading
representation or means. 15 U.S.C. § 1692e. Of relevance
to the instant Motion, Plaintiff argues that Defendant's
conduct, in addition to violating the general prohibition,
violated subsection 2(a), which prohibits the false
representation of the character, amount, or legal status of
any debt, subsection 5, which forbids the threat to take any
action that cannot legally be taken or that is not intended
to be taken, and subsection 10, which prohibits the use of
any false representation or deceptive means to collect or
attempt to collect any debt.[3] [#1 at ¶¶ 30-32]
Section 1692f proscribes a debt collector from using
“unfair or unconscionable means to collect or attempt
to collect any debt, ” and includes a non-exhaustive
list of eight specifically prohibited practices that violate
the general prohibition against unfair or unconscionable
means. 15 U.S.C. § 1692f. Of relevance here, Plaintiff
contends that Defendant's conduct, in addition to
violating the general prohibition, violated subsection 1,
which prohibits “[t]he collection of any amount
(including any interest, fee, charge, or expense incidental
to the principal obligation) unless such amount is expressly
authorized by the agreement creating the debt or permitted by
law.” [#1 at ¶¶ 34-35]
The
federal circuits are split with regard to the appropriate
standard that should be applied in evaluating whether a debt
collector's representations are false, deceptive,
misleading, unfair, or unconscionable. The majority of
Circuits-including the Second, Third, Sixth, Ninth, and
Eleventh Circuits-have adopted a “least sophisticated
consumer” standard, whereas a minority of
Circuits-including the First, Seventh, and Eighth
Circuits-have adopted an “unsophisticated
consumer” standard.[4] See, e.g., Pollard v. Law
Office of Mandy L. Spaulding, 766 F.3d 98, 103 n.4 (1st
Cir. 2014) (noting Circuit split and adopting the
“hypothetical unsophisticated consumer”
standard); Hatuey v. IC Sys., Inc., No.
1:16-CV-12542-DPW, 2018 WL 5982020, at *3 n.3 (D. Mass. Nov.
14, 2018) (identifying Circuit Split). Although the Tenth
Circuit has not expressly addressed the appropriate standard
in a published opinion, it has applied the least
sophisticated consumer standard in two unpublished decisions.
See Fouts v. Express Recovery Servs., Inc., 602
Fed.Appx. 417, 421 (10th Cir. 2015); Ferree v.
Marianos, 129 F.3d 130, 1997 WL 687693, at *1 (10th Cir.
1997) (unpublished table decision). Here, both parties agree
that the Court should apply the least sophisticated consumer
standard. [#16 at 4-5; #19 at 4-5] Consistent with the
parties' approach, for purposes of the current Motion,
the Court thus will apply the least sophisticated consumer
standard to Plaintiff's claims.
The
least sophisticated consumer standard is an objective
standard that considers “how the least sophisticated
consumer-one not having the astuteness of a
‘Philadelphia lawyer' or even the sophistication of
the average, everyday, common consumer- understands the
[communication] he or she receives” from the debt
collector. Russell v. Equifax A.R.S., 74 F.3d 30, 34
(2d Cir. 1996). The least sophisticated consumer, however,
“can be presumed to possess a rudimentary amount of
information about the world and a willingness to read a
collection notice with some care.” Ferree,
1997 WL 687693, at *1 (quoting Clomon v. Jackson,
988 F.2d 1314, 1319 (2d Cir. 1993)). The least sophisticated
consumer standard serves the dual purpose of “(1)
ensur[ing] the protection of all consumers, even the naive
and the trusting, against deceptive debt collection
practices, and (2) protect[ing] debt collectors against
liability for bizarre or idiosyncratic interpretations of
collection notices.” Clomon, 988 F.2d at 1320.
Here,
Plaintiff's Section 1692e and Section 1692f claims
“stem from two instances of Defendant's conduct:
(1) Defendant's attempts to collect a debt from Plaintiff
which was covered by worker's compensation and which
Plaintiff did not owe; and (2) Defendant's decision to
send Plaintiff a collection letter which itemized the
interest due on the subject debt as ‘$0.00.'”
[#19 at 1] The Court addresses each in turn.
A.
Defendant's Attempt to Collect a Debt ...