Kinnick v. Med-1 Sols., LLC
| Decision Date | 04 June 2021 |
| Docket Number | No. 1:19-cv-02563-TAB-SEB,1:19-cv-02563-TAB-SEB |
| Parties | JASON KINNICK, Plaintiff, v. MED-1 SOLUTIONS, LLC an Indiana limited liability company, Defendant. |
| Court | U.S. District Court — Southern District of Indiana |
Plaintiff Jason Kinnick and his wife filed a Chapter 7 bankruptcy petition on March 12, 2019. Defendant Med-1 Solutions, LLC sent Kinnick a collection letter on April 25, 2019, demanding payment of debts allegedly owed to Community Health Network that were included in Kinnick's bankruptcy. Kinnick sued Med-1 for violating §§ 1692e and 1692c(c) the Fair Debt Collection Practices Act by attempting to collect a debt that was subject to bankruptcy and for which he had demanded that collection communications cease. Kinnick also now argues that Med-1 violated § 1692e(3) because there was no meaningful attorney review of his account prior to sending the collection letter. Both parties moved for summary judgment. Questions of fact remain as to whether Kinnick was misled by Med-1's letter or whether Med-1 maintained reasonable procedures to avoid the error. However, for reasons stated below, Med-1's motion for summary judgment [Filing No. 64] is granted as to Kinnick's §§ 1692(c)(3) and 1692e(3) claims. Accordingly, Kinnick's motion for summary judgment [Filing No. 60] is denied, and Med-1's motion [Filing No. 64] is granted in part and denied in part.
On February 8, 2019, Kinnick and his wife had their attorney send a notice of attorney representation to Med-1, to notify Med-1 that they were represented by counsel in connection with any debts Med-1 was trying to collect from them, and that collection communication should cease. [Filing No. 61-4, at ECF p. 3.] Med-1 received the February 8, 2019, faxed notice of attorney representation. [Filing No. 61-2, at ECF p. 3.] On March 12, 2019, Kinnick and his wife filed a Chapter 7 bankruptcy petition. [Filing No. 1-3.] Among the debts listed on the petition were various debts allegedly owed for medical services at Community Health Network, as well as several other debts being collected by Defendant Med-1 at that time, in relation to Kinnick's wife. [Filing No. 1-3, at ECF p. 3-8.] Both Community Health and Med-1 received notice of the Kinnicks's bankruptcy petition in March. [Filing No. 1-4; Filing No. 61-2, at ECF p. 3.] At that time, Med-1 did not have any active accounts for Kinnick. [Filing No. 65-7, at ECF p. 1-2; Filing No. 65-8, at ECF p. 53-54.]
On April 24, 2019, Med-1 obtained or was assigned for collection two accounts from Community Health Gallahue Behavioral allegedly owed by Kinnick for services he received prior to the bankruptcy petition. [Filing No. 61-6, at ECF p. 7-8.] Med-1 allegedly has a policy to never dun a debtor for a debt that is subject to a bankruptcy. Med-1 also had a policy to run a bankruptcy scrub before sending an initial dunning letter. [Filing No. 65-3, at ECF p. 1 ().]
However, at some point in early 2019, Med-1 created a new process for certain Community Health Network debts that "tied together" multiple accounts owed by one debtor to Community Health, so that one single letter would be sent for all debts owed to the same creditor at the same time. [Filing No. 65-6, at ECF p. 10-11.] In doing so, Med-1 created a unique set of automated commands for Community Health Gallahue accounts that contained a programming mistake, which caused the Gallahue letters to be sent the day before the bankruptcy scrub. [Filing No. 65-6, at ECF p. 14.] Thus, on April 25, 2019, Med-1 sent a letter to Kinnick signed by attorney Richard Huston demanding payment of debts allegedly owed to Community Health that were included in Kinnick's bankruptcy petition. [Filing No. 1-5.] Med-1 ran the bankruptcy scrub that same day and learned that Kinnick's debts were subject to bankruptcy. [Filing No. 13-1, at ECF p. 1.] Med-1 subsequently ceased all collection activity for the debt at issue. [Filing No. 13-1, at ECF p. 1-2.]
Kinnick received Med-1's letter and was angered and concerned that he was receiving collection letters while he was in the middle of a bankruptcy. [Filing No. 61-1, at ECF p. 19.]. Receipt of the letter impacted Kinnick physically, causing extreme frustration, anxiety, hopelessness, and dread. [Filing No. 61-1, at ECF p. 22-23.] Kinnick's anxiety continued under his bankruptcy discharge over a month later, on June 11, 2019. [Filing No. 61-1, at ECF p. 23.] On June 25, 2019, Kinnick filed his complaint against Med-1 for violating the FDCPA. [Filing No. 1.] Both Kinnick and Med-1 moved for summary judgment. [Filing No. 60; Filing No. 64.]
In their cross-motions for summary judgment, Kinnick and Med-1 each argue that they are entitled to summary judgment as a matter of law on Kinnick's FDCPA claims. Kinnick argues that the uncontroverted evidence shows Med-1's actions—attempting to collect a debt not owed due to bankruptcy—violated § 1692e and § 1692(c)c of the FDCPA and caused the type of harm outlawed by Congress's enactment of the FDCPA. [Filing No. 61, at ECF p. 2.] Med-1 argues Kinnick's claims "fail as a matter of law for multiple independent and overlapping reasons." [Filing No. 66, at ECF p. 4.] Summary judgment is appropriate if "the movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
This notion applies equally where, as here, opposing parties each move for summary judgment in their favor pursuant to Rule 56. Indeed, the existence of cross-motions for summary judgment does not necessarily mean that there are no genuine issues of material fact. Rather, the process of taking the facts in the light most favorable to the non-movant, first for one side and then for the other, may reveal that neither side has enough to prevail without a trial. With cross-motions, the court's review of the record requires that the court construe all inferences in favor of the party against whom the motion under consideration is made.
Tyler v. JP Operations, LLC, 342 F. Supp. 3d 837, 842 (S.D. Ind. 2018) (internal citations, quotation marks, and brackets omitted).
Before reaching the merits of the parties' underlying arguments, the Court must address the threshold issue of Article III standing.
Standing is a threshold requirement because it derives from the Constitution's limit on federal courts' authority to resolve "cases" and "controversies." The plaintiff, as the party invoking the court's jurisdiction, must establish the elements of standing: she must prove that she has suffered a concrete and particularized injury that is both fairly traceable to the challenged conduct and likely to be redressed by a favorable judicial decision.
Bazile v. Finance System of Green Bay, Inc., 983 F.3d 274, 278 (7th Cir. 2020) (internal citation omitted). The Seventh Circuit recently issued a series of decisions that narrowed the circumstances in which an FDCPA plaintiff has standing to sue. See Larkin v. Finance System of Green Bay, Inc., 982 F.3d 1060, 1066 (7th Cir. 2020); Brunett v. Convergent Outsourcing, Inc., 982 F.3d 1067, 1068 (7th Cir. 2020); Gunn v. Thrasher, Buschmann & Voelkel, P.C., 982 F.3d 1069, 1072 (7th Cir. 2020); Bazile, 983 F.3d at 280; Nettles v. Midland Funding, LLC, 983 F.3d 896, 900 (7th Cir. 2020); Spuhler v. State Collection Servs., Inc., 983 F.3d 282, 286 (7th Cir. 2020); Smith v. GC Services Limited Partnership, 986 F.3d 708, 711 (7th Cir. 2021); Pennell v. Global Trust Management, LLC, 990 F.3d 1041, 1044-45 (7th Cir. 2021); Markakos v. Medicredit, Inc., No. 20-2351, ___ F.3d ___, ___, 2021 WL 1937267, at *3 (7th Cir. May 14, 2021); see also Patterson v. Howe, No. 1:16-cv-3364, 2021 WL 1124610, at *1-3 (S.D. Ind. 2021) ().
The Court previously addressed similar arguments on standing in this case its October 15, 2019, order denying Med-1's motion to dismiss. Kinnick v. Med-1 Solutions, LLC, No. 1:19-cv-2563-TAB-SEB, 410 F. Supp. 3d 939 (S.D. Ind. 2019). At that time, the Court concluded Med-1's alleged conduct was more than a bare procedural violation and that Kinnick's complaint alleged that he personally was misled and negatively impacted by the collection letter. Id. at 943. While at the pleading stage, a plaintiff must only " 'plausibly suggest' each element of standing, with the court drawing all reasonable inferences in the plaintiff's favor." Bazille, 983 F.3d at 278 (citation omitted). However, mere allegations alone do not stand for long. Id. Rather, "[t]o demonstrate standing at the summary judgment stage of litigation, the plaintiffs must set forth by affidavit or other evidence specific facts demonstrating that they have suffered a concrete and particularized injury that is both fairly traceable to the challenged conduct andlikely redressable by a judicial decision" Spuhler, 983 F.3d at 284 (internal citations and quotation marks omitted).
Now, at summary judgment, Med-1 argues Kinnick does not have standing to bring his claims because Kinnick "did not rely on the alleged FDCPA violations in a way that caused him to make a detrimental act regarding the debt." [Filing No. 66, at ECF p. 24.] Kinnick maintains that Med-1's actions "harmed" him...
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