Daley v. Provena Hospitals
| Decision Date | 09 March 2000 |
| Docket Number | No. 99 C 0187.,99 C 0187. |
| Citation | 88 F.Supp.2d 881 |
| Parties | Gregory DALEY, Sherry L. Bigalke, and Charles E. Jones, Jr., Plaintiffs, v. PROVENA HOSPITALS, an Illinois corporation, Provena Health, an Illinois corporation, and John Does 1-10, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Daniel A. Edelman, Cathleen M. Combs, James O. Latturner, Christopher R. Zink, Edelman, Combs & Latturner, Chicago, IL, for plaintiffs.
Lazar P. Raynal, Geoffrey A. Vance, McDermott, Will & Emery, Chicago, IL, for defendants.
Before the court are defendants Provena Hospitals and Provena Health's motions to dismiss the plaintiffs' consolidated complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons that follow, the court denies defendants' motions to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
The consolidated complaint alleges the following facts which, for the purpose of ruling on this motion, are taken as true. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). Plaintiffs are residents of Illinois. Defendant Provena Hospitals is an Illinois corporation operating hospitals and other health care facilities, including Provena St. Therese Medical Center and Provena St. Joseph Medical Center, in Illinois. Furthermore, Provena Hospitals is a wholly-owned subsidiary of defendant Provena Health.
This case was originally two separate cases pending before Judge Williams and Judge Bucklo. On January 13, 1999, plaintiff Gregory Daley ("Daley") filed his original complaint against defendants, Provena Hospitals and John Does 1-10, alleging violations of §§ 1692e and 1692g of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692(o). This case was originally assigned to Judge Williams. On April 7, 1999, Daley filed a first amended complaint. Then, on April 28, 1999, Daley filed a second amended complaint adding Provena Health as an additional defendant and alleging an additional violation of § 1692j of the FDCPA.
At this same time, plaintiffs Sherry L. Bigalke ("Bigalke") and Charles E. Jones, Jr. ("Jones") had their case pending before Judge Bucklo. In this case, Bigalke and Jones sued Provena Hospitals, Provena Health and John Does 1-10 for violations of the FDCPA. On May 27, 1999, Bigalke and Jones filed a motion with Judge Williams to reassign their case based on relatedness. On June 6, 1999, Judge Williams granted that motion to reassign. Accordingly, plaintiffs Daley, Bigalke, and Jones filed their consolidated complaint before Judge Williams on June 4, 1999 and Judge Bucklo dismissed, without prejudice, Bigalke and Jones' case on June 7, 1999.1 In plaintiffs' consolidated complaint, they allege that defendant Provena Hospitals violated §§ 1692e, 1692g and 1692j of the FDCPA and that defendant Provena Health violated § 1692j of the FDCPA. Section 1692e makes "debt collectors" liable for using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. Section 1692g makes "debt collectors" liable for failing to validate a consumers' debt. Id. § 1692g. Section 1692j makes a person liable for designing, compiling, and furnishing "any form knowing that such form would be used to create the false belief that a person other than the creditor ... is participating in the collection ... of a debt [owed]." Id. § 1692j. These alleged violations arise out of the collection practices of Provena Hospitals and Provena Health.
Each of the named plaintiffs received a collection letter purportedly from Sacor Systems Collection Agency for unpaid debts owed to one of the Provena Hospitals. A letter was sent to Daley on June 8, 1998; to Bigalke on October 8, 1998; and to Jones on April 23, 1998. Although each letter was sent by a company entitled Sacor Systems Collection Agency, plaintiffs' consolidated complaint alleges that, at the time each of the named plaintiffs received their letters, Sacor Systems Collection Agency did not exist.
On December 4, 1998, the State of Illinois authorized Provena Health to do business in Illinois as Sacor Systems Collection Agency. Soon thereafter, Provena Health filed an application for registration as a collection agency with the Department of Professional Regulation. On February 8, 1999, Provena Health, doing business as Sacor Systems Collection Agency, was licensed as a collection agency. Thus, according to plaintiffs, prior to February 8, 1999, Provena Health could not engage in the business of debt collecting.
Previous to Sacor Systems Collection Agency's existence, a corporation named Sacor Systems, Incorporated existed, but it merged with Franciscan Sisters Health Care Corporation ("Franciscan Sisters") on August 31, 1993. Thereafter, Sacor Systems, Incorporated became the management information unit for the Franciscan Sisters. On November 30, 1997, Franciscan Sisters and Provena Hospitals merged. Thus, Sacor Systems, Incorporated eventually merged into Provena Hospitals. According to the plaintiffs, Provena Hospitals, therefore, knew that no entity entitled "Sacor Systems Collection Agency" existed as of November 30, 1997. Plaintiffs allege that, despite this knowledge, Provena Hospitals sent out collection letters under the name of Sacor Systems Collection Agency.
The June 8, 1998 letter which Daley received states in pertinent part:
THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.
YOUR CREDITOR HAS TURNED THIS ACCOUNT OVER TO OUR COLLECTION AGENCY. THE BALANCE [$23.70] SHOWN ABOVE IS DUE AND PAYABLE. THIS IS A DEMAND FOR PAYMENT IN FULL.
CREDIT BUREAU WILL BE NOTIFIED IN 30 DAYS.
YOU MAY CONTACT U.S. OR PAY IN PERSON....
The October 8, 1998 letter which Bigalke received states in pertinent part:
SACOR SYSTEMS COLLECTION AGENCY, A DULY AUTHORIZED AGENT FOR PROVENA — ST. THERESE MEDICAL CTR WOULD LIKE TO OFFER YOU A *ONE-TIME* *20% DISCOUNT* ON ALL UN-PAID BALANCES CURRENTLY AT SACOR SYSTEMS COLLECTION AGENCY. THIS DISCOUNT WOULD REPRESENT A SAVINGS TO YOU OF $ 38.33.
IF YOU WOULD LIKE TO TAKE ADVANTAGE OF THIS SPECIAL SETTLEMENT OFFER, WE WOULD NEED YOUR PAYMENT OF $153.34 BY 11-08-98.
IF YOUR ACCOUNT HAS BEEN REPORTED TO THE CREDIT BUREAU, SACOR SYSTEMS WILL NOTIFY THAT YOUR DEBT ($191.68) SHOWN ABOVE HAS BEEN SATISFIED WITH OUR CLIENT.
(Id. Ex. B.) The April 23, 1998 letter which Jones received states in pertinent part:
— THIS ACCOUNT WAS PAID ON __________. ENCLOSED IS A COPY OF MY RECEIPT OR BOTH SIDES OF MY CANCELLED CHECK.
— I WILL PAY THIS ON ______.
— ENCLOSED IS THE BALANCE IN FULL.
(Id. Ex. C.) On the reverse of each of these letters, the following is printed:
UNLESS YOU NOTIFY THIS OFFICE WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE THAT YOU DISPUTE THE VALIDITY OF THE DEBT OR ANY PORTION THEREOF[,] THIS OFFICE WILL ASSUME THIS DEBT IS VALID. IF YOU NOTIFY THIS OFFICE IN WRITING WITHIN 30 DAYS FROM RECEIVING THIS NOTICE, THIS OFFICE WILL: OBTAIN VERIFICATION OF THE DEBT OR OBTAIN A COPY OF THE JUDGMENT AND MAIL YOU A COPY OF SUCH JUDGMENT OR VERIFICATION. IF YOU REQUEST THIS OFFICE IN WRITING WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE[,] THIS OFFICE WILL PROVIDE YOU WITH THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR, IF DIFFERENT FROM THE CURRENT CREDITOR. THIS IS AN ATTEMPT TO COLLECT A DEBT. ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.
(Id. Exs. A-C.)
Defendants Provena Hospitals and Provena Health both filed motions to dismiss plaintiffs' consolidated complaint on June 30, 1999. In their joint memorandum, defendants argue that the court should dismiss plaintiffs' consolidated complaint because (1) the court lacks subject matter jurisdiction and (2) neither defendant has violated the FDCPA.
The defendants move to dismiss plaintiffs' consolidated complaint pursuant to both Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). According to the defendants, the court should dismiss plaintiffs' consolidated complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) ("Rule 12(b)(1)") because the defendants are not "debt collectors" under the FDCPA; thus, the court does not have subject matter jurisdiction. Furthermore, the defendants allege that the court should dismiss plaintiffs' consolidated complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Rule 12(b)(6)") because the plaintiffs have failed to sufficiently allege that defendants have violated the FDCPA.
Rule 12(b)(1) permits the court to dismiss a case for lack of subject matter jurisdiction, FED.R.CIV.P. 12(b)(1), because, unlike state courts, federal courts are courts of limited subject matter jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). However, courts have uniformly held that, when a question arises on the applicability of a federal statute, "'the preferable practice is to assume jurisdiction exists and proceed to determining the merits of the claim pursuant to [Rule 12(b)(6)].'" Health Cost Controls v. Skinner, 44 F.3d 535, 537 (7th Cir.1995) (quoting 2A JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE ¶ 12.07[2.-1] (2d ed.1994)). "Thus, if a plaintiff fails to properly allege a claim for relief brought under a federal statute, the case should be dismissed under Federal Rule of Civil Procedure 12(b)(6), rather than Rule 12(b)(1)." Id. Because the defendants in this case are questioning the applicability of the FDCPA, the court will review defendants' motions to dismiss pursuant to Rule 12(b)(6).2...
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