McClanahan v. Medicredit, Inc.
| Decision Date | 22 October 2020 |
| Docket Number | No. 3:19-cv-00163,3:19-cv-00163 |
| Parties | MARTA MCCLANAHAN and JESSICA STINSON, Plaintiffs, v. MEDICREDIT, INC., Defendant. |
| Court | U.S. District Court — Middle District of Tennessee |
Marta McClanahan (formerly known as Marta Stinson) and her daughter Jessica Stinson (collectively, "Plaintiffs") brought this action against Medicredit, Inc. ("Medicredit") for allegedly violating the Fair Debt Collections Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., and Tennessee law. Before the Court are two motions that are ripe for decision: (1) Plaintiffs' Motion for Partial Summary Judgment (Doc. No. 44) on the issue of liability only (see also Doc. Nos. 45, 58-60); and (2) Medicredit's Motion for Summary Judgment (Doc. No. 53; see also Doc. Nos. 54, 61-63). For the following reasons, Plaintiffs' motion will be denied and Medicredit's motion will be granted in part.
On February 24, 2017, Jessica Stinson received a medical procedure at Centennial Medical Center ("Centennial") and incurred a debt to Centennial for those services. (Doc. No. 61 at ¶ 15.) At the time of her procedure, Stinson was over the age of 18, lived with her mother, McClanahan,and was a dependent under McClanahan's medical insurance. (Id. at ¶¶ 20-21, 23; Doc. Nos. 59 at ¶ 9; 57-2 at 3.) McClanahan knew about Stinson's procedure and even drove her to and from the hospital that day.2 (Doc. No. 61 at ¶ 25.) Although McClanahan paid the premiums associated with Stinson's insurance coverage, there is no evidence that she signed any documents making her the guarantor for Stinson's Centennial debt. (Id. at ¶¶ 23-24; Doc. No. 59 at ¶ 10.)
Medicredit is a debt collection corporation that performs past due collections for Centennial. (Doc. No. 61 at ¶ 11.) After Stinson failed to pay her debt to Centennial for several months, Centennial sent her delinquent account to Medicredit for collection on October 13, 2017. (Id. at ¶ 8.) Centennial also provided a document to Medicredit incorrectly identifying McClanahan as the guarantor for Stinson's account.3 (Id. at ¶ 16; Doc. No. 56-6.) This document included McClanahan's address, social security number, phone number, and employer, but listed the same birthdate for both Stinson and McClanahan. (Doc. No. 61 at ¶ 17; Doc. No. 56-6.)
Medicredit has a written policy requiring its clients, including Centennial, to obtain all necessary signatures on all registration forms (Doc. No. 56-5), and Medicredit relies on the validity of this information.4 (Doc. No. 61 at ¶¶ 12, 14.) Thus, based on Centennial's representation that McClanahan was the guarantor for Stinson's account, Medicredit sent McClanahan a letter on April 6, 2018, seeking to collect on Stinson's debt. (Id. at ¶ 35; Doc. No. 56-8.) This letter listed "Jessica Stinson" under "Patient Name," referenced a "Client Account #" ending in "-1493," and included a "Balance Due on File" for Stinson's February 24, 2017 procedure at Centennial. (Doc. No. 56-8 at 1; see also Doc. No. 59 at ¶ 8.) The letter also stated that "[t]his communication is from a debt collector and is an attempt to collect a debt[,]" and that (Doc. No. 56-8 at 1.)
On May 8, 2018, McClanahan advised Medicredit by phone that she was not the guarantor for Stinson's Centennial account and revoked her consent to be contacted about that debt. (Doc. No. 61 at ¶ 37.) In response, Medicredit updated its internal notes to reflect that McClanahan was not the guarantor for Stinson's debt, and never contacted McClanahan about that debt again. (Id. at ¶¶ 38-39.)
Also on May 8, 2018, McClanahan filed the following complaint against Medicredit to the Consumer Financial Protection Bureau ("CFPB"):
I received a letter from Medicredit re: Jessica Stinson who is an adult. I called them and told them that I was not responsible for this debt. They opened a dispute with the medical center, more than 60 days again and it has not been resolved. (Centennial Medical Center). In addition, they have continued to try to collect the debt from me. I have advised them again today that it is not my debt and they havenot provided proof or resolved my complaint and should not be sending me any correspondence about this debt. . . .
(Doc. No. 56-9 at 1; see also Doc Nos. 59 at ¶ 19; 61 at ¶ 41.) On July 17, 2018, Medicredit submitted the following nonpublic response to the CFPB and McClanahan:
Medicredit has received the complaint filed by [McClanahan] and has conducted a thorough investigation. Please see our findings below. The account mentioned in the consumer's complaint, ending in -1493, was placed with our office on October 13, 2017, with [McClanahan] listed as the guarantor. On October 14, 2017 a notice was mailed to the address provided by the consumer to our client at the time of service. On February 23, 2018, Medicredit was able to successfully contact [McClanahan] and she requested no further calls or letters from our office, but did not indicate any dispute regarding proper guarantor. On May 8, 2018 the patient, Jessica Stinson, contacted Medicredit to raise the concern of proper guarantor. On May 11, 2018 the account was corrected and [McClanahan's] information was removed. Subsequently, Medicredit submitted a deletion request to the credit reporting agencies (CRAs) on that same day. Additionally, [McClanahan], has two open and active accounts placed with Medicredit.
(Doc. No. 56-10 at 3-4 (emphasis added); see also Doc. No. 61 at ¶ 43.) Medicredit then provided the CFPB with details about McClanahan's accounts, including partial account numbers, the specific creditors for her debts, and the remaining balances McClanahan owed.5 (Doc. No. 56-10 at 4.) Medicredit also attached numerous personal documents regarding McClanahan's medical information, including an intake form and insurance information disclosing the medical procedures she had undergone. (Doc. No. 56-10 at 7-19.)
Based on Medicredit's April 6, 2018 letter and its communications to the CFPB, Plaintiffs brought claims against Medicredit for allegedly violating multiple FDCPA provisions and committing the Tennessee common law tort of intrusion upon seclusion by (1) improperly attempting to collect Stinson's debt from McClanahan, (2) disclosing McClanahan's alleged otherdebts and medical information to the CFPB, and (3) disclosing Stinson's debt to McClanahan. The parties have both moved for summary judgment on the issue of liability.
Summary judgment is appropriate only where 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). "The party bringing the summary judgment motion has the initial burden of informing the Court of the basis for its motion and identifying portions of the record that demonstrate the absence of a genuine dispute over material facts." Rodgers v. Banks, 344 F.3d 587, 595 (6th Cir. 2003) (citation omitted). "The moving party may satisfy this burden by presenting affirmative evidence that negates an element of the non-moving party's claim or by demonstrating an absence of evidence to support the non-moving party's case." Id. (citation and internal quotation marks omitted).
In deciding a motion for summary judgment, the Court must review all the evidence, facts, and inferences in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted). "And where, as here, the parties filed cross-motions for summary judgment, 'the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.'" McKay v. Federspiel, 823 F.3d 862, 866 (6th Cir. 2016) (quoting Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991)). The Court does not, however, weigh the evidence, judge the credibility of witnesses, or determine the truth of the matter. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). The mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient to survive summary judgment; rather, there must be evidence on which a trier of fact could reasonably find for the non-moving party. Rodgers, 344 F.3d at 595.
Other than Plaintiffs' claims that Medicredit committed the Tennessee common law tort of intrusion upon seclusion, the claims in this case involve alleged violations of the FDCPA. Therefore, it is helpful to begin with some background of the statute and the general legal framework involved with FDCPA claims.
Congress enacted the FDCPA to protect consumers by eliminating widespread "abusive debt collection practices by debt collectors," 15 U.S.C. § 1692(e), and "the recurring problem of debt collectors dunning the wrong person . . ." Fed. Home Loan Mortg. Corp. v. Lamar, 503 F.3d 504, 508 (6th Cir. 2007) (citation omitted). The FDCPA is an "extraordinarily broad" statute and imposes strict liability, meaning a plaintiff does not need to prove knowledge or intent or have suffered actual damages. Stratton v. Portfolio Recovery Assocs., LLC, 770 F.3d 443, 448-49 (6th Cir. 2014). As the Court will explain more fully below, "[a]n exception to strict liability exists only where a debt collector commits a violation resulting from a 'bona fide error.'" Kistner v. Law Offices of Michael P. Margelefsky, LLC, 518 F.3d 433, 441 (6th Cir. 2008) (citing 15 U.S.C. § 1692k(c)).
Medicredit does not dispute that it is a "debt collector" under the FDCPA.6 (Doc. No. 59 at ¶ 4.) "To determine whether a debt collector's conduct runs afoul of the FDCPA, '[c]ourts must view any alleged violation through the lens of the 'least sophisticated consumer'—the...
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