Orenbuch v. North Shore Health Systems, Inc.

• Decision Date: 13 March 2003
• Docket Number: No. CV 01-5169(ADS)(WW).,CV 01-5169(ADS)(WW).
• Citation: 250 F.Supp.2d 145
• Parties: Nathan ORENBUCH, on behalf of himself and all others similarly situated, Plaintiff, v. NORTH SHORE HEALTH SYSTEMS, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

250 F.Supp.2d 145

Nathan ORENBUCH, on behalf of himself and all others similarly situated, Plaintiff, v. NORTH SHORE HEALTH SYSTEMS, INC., Defendant.

No. CV 01-5169(ADS)(WW).

United States District Court, E.D. New York.

March 13, 2003.

COPYRIGHT MATERIAL OMITTED

Katz & Kleinman, Uniondale, NY (Abraham Kleinman, Lawrence Katz, of counsel), for Plaintiff.

Jacobowitz, Garfinkel & Lesman, New York City (Kevin Barry McHugh, of Counsel), North Shore-Long Island Jewish Health Systems, Office of Legal Affairs, Great Neck, NY (Mark A. Gloade, of Counsel), for Defendant.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

This case involves allegations by Nathan Orenbuch ("Orenbuch" or the "plaintiff) that North Shore Health System, Inc. ("NSHS" or the "defendant") violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Presently before the Court is the defendant's motion for summary judgment dismissing the complaint in its entirety.

I. BACKGROUND

The following facts are not materially in dispute. NSHS, North Shore University Hospital (NSU Hospital), North Shore Long Island Jewish System ("NSLIJS"), and Long Island Jewish Medical Center ("LIJ") are all corporations organized under the Not-For-Profit Law of New York State. NSLIJS is the sole corporate member of NSHS, which in turn is the sole corporate member of NSU Hospital and certain other hospitals in Queens, Nassau, Suffolk and Staten Island. NSLIJS is also the sole corporate member of LIJ. NSHS provides administrative support services to the hospitals of which it is a member.

Regional Claims Recovery Service ("RCRS") is an unincorporated subdivision of the defendant. Since 1992, "RCRS" has been the registered trade name with the New York Department of State and has been licensed with the New York City Department of Consumer Affairs since 1994. RCRS performs customary debt collection services for most of the hospitals of which NSHS is a member, in addition for other medical care providers unrelated to NSHS. Since RCRS was formed in 1992, one of its primary goals has been to expand its debt collection business to clients unrelated to NSHS and its affiliated hospitals. Indeed, RCRS has a fulltime sales representative who devotes nearly all of her time to the procurement of new business from sources unaffiliated with NSHS and has a sales brochure which is given to prospective clients.

RCRS has 85 full-time employees and 15 part-time employees, none of whom are employed by hospitals or by any RCRS clients. RCRS has its own office in a different location from NSHS or any affiliated hospital. RCRS has its own fully automated computer system, which it uses to monitor the delinquent accounts of all of its clients. RCRS orders and is billed directly for its supplies from sources unrelated to NSHS. RCRS handles its own mailings, and the letters that it uses for NSHS affiliated hospitals do not differ from the letters for the non-affiliated hospitals.

RCRS follows the same procedure when it receives payments on behalf of all of its clients. RCRS receives a fee percentage of all sums collected (except for its Medicaid Eligibility Program). The fees it charges reflect the prevailing market rates generally charged by debt collection agencies. All of RCRS's clients receive the same service options. RCRS makes the same type of telephone calls on behalf of all of its clients and uses the standard written reports used in the debt collection industry. If RCRS's collection efforts are unsuccessful, RCRS makes recommendations to all of its clients regarding the initiation of legal action.

On March 5, 2001, Orenbueh received medical treatment at LIJ, and ten days later, received medical treatment from NSU Hospital. The plaintiff owed the sums of $200 and $40, respectively, for his treatment at the hospitals. After unsuccessfully attempting to obtain payment from the plaintiff, both hospitals referred the debts to RCRS, as stated above, an unincorporated subdivision of the defendant.

On June 21, 2001 and July 16, 2001, RCRS sent letters to the plaintiff in an effort to obtain the debts owed to LIJ and NSU Hospital. The letters bore the RCRS letterhead, address and telephone number and are the subject of this case. Both letters stated, among other things:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within the 30 day period that the debt or any portion thereof is disputed, this office will obtain verification or judgment. If you request this office in writing within the 30 day period, this office will provide you with the name and address of the original creditor, if different from the current creditor.... IF ACCOUNT IS PAID, THANK YOU AND DISREGARD THIS LETTER.

On August 3, 2001, Orenbueh commenced this action alleging that NSHS violated several sections of the FDCPA. On July 12, 2002, NSHS filed a motion for summary judgment dismissing the complaint. On July 24, 2002, Orenbueh filed a memorandum entitled "Plaintiffs Memorandum Of Law In Support Of His Motion For Summary Judgment", which the Court construes as his opposition to the defendant's motion for summary judgment.

II. DISCUSSION

A. Standard of Review

A motion for summary judgment should be granted only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party bears the burden of establishing the absence of a genuine issue of material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "When a movant demonstrates through competent evidence that no material facts are genuinely in dispute, the non-movant `must set forth specific facts showing that there is a genuine issue for trial.'" Western World Ins. Co. v. Stack Oil, Inc., 922 F.2d 118, 121 (2d Cir.1990) (quoting Fed.R.Civ.P. 56(e)). "The non-movant cannot escape summary judgment merely by vaguely asserting the existence of some unspecified disputed material facts, or defeat the motion through mere speculation or conjecture." Id. (internal quotations and citations omitted); see Scotto v. Almenas, 143 F.3d 105,114 (2d Cir.1998).

In deciding a motion for summary judgment, the Court must view the evidence in the light most favorable to the non-moving party and must draw all permissible inferences from the submitted affidavits, exhibits, interrogatory answers, and depositions in favor of that party. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 255, 106 S.Ct. 2505; Vann v. City of New York, 72 F.3d 1040, 1048-49 (2d Cir.1995). Disputed facts that are not material to the issue at hand will not defeat summary judgment. See Anderson, 477 U.S. at 248, 106 S.Ct. 2505. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of judgment." Id. A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. If there is evidence in the record, including affidavits, exhibits, interrogatory answers, and depositions, as to any material fact from which an inference could be drawn in favor of the non-movant, summary judgment is unavailable. See Lane v. New York State Electric & Gas Corp., 18 F.3d 172, 176 (2d Cir.1994).

Notably, "the trial court's task at the summary judgment motion state of litigation is carefully limited to discerning whether there are genuine issues of material fact to be tried, not to decide them. Its duty, in short, is confined at this point to issue-finding, it does not extend to issue resolution." Gallo v. Prudential Residential Servs. Ltd., 22 F.3d 1219, 1224 (2d Cir.1994); see Donahue v. Windsor Locks Board of Fire Commissioners, 834 F.2d 54, 57 (2d Cir.1987) (holding that on a motion for summary judgment, the court "cannot try issues of fact; it can only determine whether there are issues to be tried").

B. Fair Debt Collection Practices Act

FDCPA was enacted "to eliminate abusive debt collection practices by debt collectors" in addition to ensuring that "those debt collectors who refrain from abusive practices are not competitively disadvantaged." 15 U.S.C. 1692(e). Non-compliance with the regulations will subject the debt collector to liability. 15 U.S.C. 1692k. The regulations primarily apply to a class defined under the act as "debt collectors", which includes any creditor who uses a name other than his own to indicate that a third party is attempting to collect the debt. 15 U.S.C. 1692a(6). Both parties agree that the FDCPA applies to the defendant. However, the plaintiff contends that the defendant has committed several violations of the act, while the defendant avers full compliance.

1. Relationship of NSU Hospital and NSHS and its Subdivision RCRS

Orenbuch claims that the defendant violated 15 U.S.C. § 1692j, which prohibits the creditor from falsely creating the impression that a third party is involved in the debt collection. See Clomon v. Jackson, 988 F.2d 1314, 1321 n. 1 (2d Cir.1993). Section 1692J provides, in pertinent part:

(a) It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating.

15 U.S.C. 1692j. The purpose of this section is to prevent the abusive practice known as "flat-rating". Rumpler v. Phillips & Cohen Associates, Ltd., 219 F.Supp.2d 251, 260 (E.D.N.Y.2002); Franceschi v. Mautner-Glick Corp., 22 F.Supp.2d 250, 256 (S.D.N.Y.1998)....