Hill v. Accounts Receivable Servs., LLC
| Decision Date | 31 October 2016 |
| Docket Number | Civil No. 16-219 (DWF/BRT) |
| Parties | Paul Hill, Plaintiff, v. Accounts Receivable Services, LLC, Defendant. |
| Court | U.S. District Court — District of Minnesota |
Darren B. Schwiebert, Esq., DBS Law LLC, counsel for Plaintiff.
Jessica L. Klander, Esq., and Michael A. Klutho, Esq., Bassford Remele, PA, counsel for Defendant.
Plaintiff Paul Hill filed this Fair Debt Collection Practices Act ("FDCPA") lawsuit against Defendant Accounts Receivable Services, LLC ("ARS") after ARS attempted to collect a debt allegedly owed by Hill in a conciliation court lawsuit. Hill alleges that ARS violated the FDCPA, 15 U.S.C. §§ 1692-1692p, by: (1) presenting a false document to Hill and the conciliation court; (2) attempting to collect interest to which ARS had no legal entitlement; and (3) including interest in ARS's claim for account stated. ARS moves for judgment on the pleadings.
On September 2, 2015, ARS filed a lawsuit against Hill in Hennepin County Conciliation Court. ¶ 10, Ex. B ( ).) In its conciliation court complaint, ARS alleged that Hill owed a debt arising out of medical services provided by Allina Health System ("Allina"), and that Allina had sold and assigned the debt to ARS. The conciliation court complaint stated: "The costs for medical services rendered was $2,997.63." (Concil. Ct. Compl. ¶ 1; see also Am. Compl. ¶ 10.) It then asserted a claim based on the theory of account stated: (Concil. Ct. Compl. ¶ 1; see also Am. Compl. ¶ 11.)
On October 30, 2015, the conciliation court held a hearing, and Hill appeared and contested liability. (Am. Compl. ¶¶ 13-14.) At the hearing, ARS submitted a document entitled "Bill of Sale" to Hill and the conciliation court. (Id. ¶ 19; Ans. ¶ 10, Ex. 1 ("Bill of Sale").) The Bill of Sale states that Allina "has entered into a Purchase of Business Agreement" as of August 17, 2015, and under that Agreement, Allina "hereby" sells and assigns its rights and interest in the assets described in the Agreement "as listed in Exhibit 1A attached hereto." (Bill of Sale; see also Am. Compl. ¶ 21.) Exhibit 1A appears to be a summary of medical costs allegedly incurred by Hill, showing a principalbalance of $2,997.63. (Ans. ¶ 10, Ex. 1A.) Hill alleges that an ARS representative printed Exhibit 1A from ARS's computer system on August 24, 2015. (Am. Compl. ¶ 22.) In addition, ARS submitted a document entitled "Suit Authorization and Assignment" to Hill and the conciliation court. (Id. ¶ 24; Ans. ¶ 10, Ex. A.) That document states that ARS is "a division of" Allina, and it "hereby" assigns Allina's right and interest in Hill's account to ARS. .)
In an Order dated October 30, 2015, the conciliation court ruled in favor of Hill. C ( ).) The Order includes a checked box next to the following statement: "Plaintiff has not demonstrated an entitlement to relief and recovers zero." (Concil. Ct. Order.) It does not explain the rationale behind the conciliation court's decision. (Id.)
On February 1, 2016, Hill filed his Complaint in the instant lawsuit (Doc. No. 1), and on April 5, 2016, Hill filed an Amended Complaint (Doc. No. 13). Hill's Amended Complaint contains a single count, which alleges that ARS violated various provisions of the FDCPA, namely 15 U.S.C. §§ 1692e(2), 1692e(5), 1692e(10), 1692f, and 1692f(1). (Am. Compl. ¶¶ 40-43.) In his brief opposing ARS's motion for judgment on the pleadings, Hill characterizes his Amended Complaint as alleging that ARS violated the FDCPA in three ways: (1) ARS provided Hill with a fake Bill of Sale; (2) in the conciliation court suit, ARS attempted to collect interest to which it is not entitled; and (3) ARS's conciliation court complaint was false and misleading to the extent that it included interest in the amount ARS alleged Hill owed to it pursuant to an account statedtheory. (Doc. No. 27 at 1.) Hill's Amended Complaint seeks actual damages, statutory damages, costs, and fees under 15 U.S.C. § 1692k(a). (Am. Compl. at 8 (Prayer for Relief).)
A party may move for judgment on the pleadings at any point after the close of pleadings, so long as it moves early enough to avoid a delay of trial. Fed. R. Civ. P. 12(c). The Court evaluates a motion for judgment on the pleadings under the same standard as a motion brought under Federal Rule of Civil Procedure 12(b)(6). See Ashley Cty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).
In deciding a motion to dismiss under Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court deciding a motion to dismiss may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint. See Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).
To survive a motion to dismiss, a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain "detailed factual allegations," it must contain facts with enough specificity "to raise a right to relief above the speculative level." Id. at 555. As the Supreme Court reiterated, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements," will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard "calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim]." Twombly, 550 U.S. at 556.
As noted above, Hill claims that ARS violated various provisions of the FDCPA. Congress enacted the FDCPA to protect consumers by "eliminat[ing] abusive debt collection practices by debt collectors, [insuring] that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and [promoting] consistent State action to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). The FDCPA specifically authorizes private individuals to enforce its provisions against debt collectors engaged in abusive debt collection practices. Id. § 1692k.
To begin, Hill alleges that ARS violated three subsections of § 1692e. Section 1692e provides that debt collectors "may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." Id.§ 1692e. Its subsections provide sixteen types of conduct that specifically violate § 1692e. Id. § 1692e(1)-(16). Hill claims that ARS falsely represented "the character, amount, or legal status of [a] debt," id. § 1692e(2)(A); threatened "to take [an] action that cannot legally be taken," id. § 1692e(5); and used "[a] false representation or deceptive means to collect or attempt to collect [a] debt," id. § 1692e(10).
In addition, Hill alleges that that ARS violated § 1692f and one of its subsections. Section 1692f prohibits debt collectors from "us[ing] unfair or unconscionable means to collect or attempt to collect any debt." Id. § 1692f. Its subsections provide eight types of conduct that specifically violate § 1692f. Id. § 1692f(1)-(8). Hill claims that ARS violated § 1692f(1), which forbids "[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." Id. § 1692f(1).
Before examining ARS's alleged violations of the FDCPA, the Court considers whether Hill has standing to bring this lawsuit under Article III of the Constitution. ARS first raised the question of standing in its reply brief. (Doc. No. 28.) While courts typically do not consider new arguments raised in reply briefs, standing is a jurisdictional requirement, and "any party or the court may, at any time, raise the issue of subject matter jurisdiction." Gray v. City of Valley Park, 567 F.3d 976, 982-83 (8th Cir. 2009) (brackets and quotation marks omitted). To establish Article III standing, a plaintiff hasthe burden of proving: (1) that he suffered an "injury in fact"; (2) that a "causal connection" links the injury to the challenged conduct; and (3) that a favorable decision will "likely" redress the injury. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). At the pleading stage, a plaintiff must "clearly . . . allege facts demonstrating" each element. Warth v. Seldin, 422 U.S. 490, 518 (1975).
Recently, in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549 (2016), the Supreme Court clarified that alleging a violation of a statutory right may, in some cases, be insufficient to establish the injury-in-fact element of the standing test.1 In Spokeo, the Supreme Court began by reaffirming that the injury-in-fact element requires a plaintiff to allege an injury that is "concrete" as well as particular to that plaintiff. Spokeo, 136 S. Ct. at 1548. It then explained that a "concrete" injury "must actually exist," although it may be...
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