Robinson v. Accelerated Receivables Solutions (A.R.S.), Inc.

• Decision Date: 19 April 2018
• Docket Number: 8:17CV56
• Citation: Robinson v. Accelerated Receivables Sols. (A.R.S.), Inc., 8:17CV56 (D. Neb. Apr 19, 2018)
• Parties: TRISHA ROBINSON, on behalf of herself and all others similarly situated; Plaintiff, v. ACCELERATED RECEIVABLES SOLUTIONS (A.R.S.), INC., and DAVID W. BROSTROM, Defendants.
• Court: U.S. District Court — District of Nebraska

TRISHA ROBINSON,on behalf of herself and all others similarly situated; Plaintiff, v. ACCELERATED RECEIVABLES SOLUTIONS (A.R.S.), INC.,and DAVID W. BROSTROM, Defendants.

8:17CV56

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

April 19, 2018

MEMORANDUM AND ORDER

This matter is before the Court on the Motion for Judgment on the Pleadings, ECF No. 37, filed by DefendantsAccelerated Receivables Solutions, Inc.(ARS), and David Brostrom.For the reasons stated below, the motion will be granted.

BACKGROUND

On September 20, 2016, ARS filed a complaint (County Court Complaint) in the County Court of Thayer County, Nebraska.ECF No. 1-1.The County Court Complaint, a standard form used by ARS, seeCompl.¶ 20-21, ECF No. 1, Page ID 6, alleged fifteen causes of action against PlaintiffTrisha Robinson for unpaid medical debts, assigned to ARS from Thayer County Health Services.In total, ARS sought "$3,692.85 in principal, $257.39 in interest and/or check fees, costs of this action, and a reasonable attorney's fee and post judgment interest as provided by statute."ECF No. 1-1.Page ID 17.

On February 23, 2017, Robinson filed this action against ARS on behalf of herself and a class of similarly situated persons, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.(FDCPA), and the Nebraska Consumer Protection Act, Neb. Rev. Stat. § 59-1601 et seq.(NCPA).Specifically, Robinson alleged that ARS was liable for "deceptive acts or practices" under Neb. Rev. Stat. § 59-1602,¹ for "miscast[ing] the cause of action is [sic] for 'services and supplies' for the purpose of availing Defendants of attorney's fees and interest pursuant [to]Neb. Rev. Stat. § 25-1801, when in fact Defendants do not meet the statutory requirements," Compl.¶ 22, ECF No. 1, Page ID 6, and "seek[ing] . . . sums in addition to principal, including prejudgment interest and statutory attorney fees even though their standard collection complaints do not meet the requirements for being awarded either attorney fees or prejudgment interest,"id.¶ 23.

Neb. Rev. Stat. § 25-1801 states²:

Any . . . corporation in this state having a claim which amounts to four thousand dollars or less against any person . . . doing business in this state for . . . services rendered [or] material furnished . . . may present the same to such person . . . for payment in any county where suit may be instituted for the collection of the same.If, at the expiration of ninety days after the presentation of such claim, the same has not been paid or satisfied, [the corporation] may institute suit thereon in the proper court. . . .If [the corporation] establishes the claim and secures judgment thereon, [the corporation] shall be entitled to recover the full amount of such judgment and all costs of suit thereon, and, in addition thereto, interest on the amount of the claim at the rate of six percent per annum from the date of presentation thereof, and, if [the corporation] has an attorney employed in the case, an amount for attorney's fees as provided in this section. . . .

Robinson also alleged that "Defendants' routine practices of collecting unauthorized charges violates the FDCPA by seeking and collecting amounts, including interest, fees and costs, which are not permitted by law in violation of 15 U.S.C. §1692f and 1692f(1).³"Compl.¶ 24, ECF No. 1, Page ID 7.

Defendants filed the current motion, seeking judgment in their favor on the grounds that they could not have violated the FDCPA or NCPA because they were permitted "to seek attorney fees and pre-judgment interest when collecting debts as an assignee of a health care provider that provided medical services and supplies to the consumer" and "to seek and recover attorney fees for services performed by attorneys employed as in-house counsel and appearing as counsel of record when attempting to collect debts arising from medical services and supplies provided by Defendants' assignor."ECF No. 37, Page ID 90-91.Defendants alternatively sought thecertification of several questions of law to the Nebraska Supreme Court.Id., Page ID 91-92.

STANDARD OF REVIEW

"Judgment on the pleadings is appropriate where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law."Minch Family LLLP v. Buffalo-Red River Watershed Dist., 628 F.3d 960, 965(8th Cir.2010)(citingFaibisch v. Univ. of Minn., 304 F.3d 797, 803(8th Cir.2002)).This is "the same standard used to address a motion to dismiss for failure to state a claim under Rule 12(b)(6)."Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665(8th Cir.2009)."To survive a motion to dismiss, the factual allegations in a complaint, assumed true, must suffice 'to state a claim to relief that is plausible on its face.'"Northstar Indus., Inc. v. Merrill Lynch & Co., 576 F.3d 827, 832(8th Cir.2009)(quotingBell Atl. Corp. v. Twombly, 550 U.S. 544, 570(2007)).

DISCUSSION

I.Claims for Services Rendered versus Claims on Accounts under § 25-1801

In its motion, ARS argues that Robinson's claims fail because ARS's County Court Complaint was for "services rendered" and qualifies for prejudgment interest and attorney's fees under § 25-1801.Robinson argues that the County Court Complaint represents a claim on an "account" and as such doesn't qualify under § 25-1801.For support, Robinson relies on Powers v. Credit Mgmt. Servs., Inc., No. 8:11CV436, 2016 WL 612251, at *1(D. Neb.Feb. 2, 2016).In Powers, the defendants were a debt collecting corporation (CMS) and two of its employees, including an in-house attorney.CMS filed claims in Nebraska countycourt, using standard-form complaints, seekingpayment for medical services debts it purchased from a medical care provider.CMS's standard-form complaint stated that the medical provider "provided goods, services and/or labor to Defendant(s) and/or family members of Defendant(s)" and sought prejudgment interest and attorney's fees.Powers, 2016 WL 612251, at *2.Plaintiffs brought suit alleging violations of the FDCPA and NCPA, similar to those at bar.

The court in Powers held that "[a]n action to collect on a past due amount for services is properly characterized as an action on an account."2016 WL 612251, at *10(D. Neb.Feb. 2, 2016)(citingThomas & Thomas Court Reporters, L.L.C. v. Switzer, 810 N.W.2d 677, 686(Neb.2012);Sodoro, Daly & Sodoro, P.C. v. Kramer, 679 N.W.2d 213, 219(Neb.2004)).The court distinguished between actions based on quantum meruit, which are based on the implied promise to pay the reasonable value of furnished labor and materials, and actions on accounts, which are "appropriate where the parties have conducted a series of transactions for which a balance remains."Id.(quotingKramer, 679 N.W.2d at 219)(citingHancock v. Parks, 110 N.W.2d 69, 74(Neb.1961)).Thus, the two types of actions needed to be pleaded separately and "[m]isrepresenting the nature of a debtor's debts as debts for materials or services rendered, rather than actions on accounts, in order to deceive state courts and debtors and collect impermissible fees and prejudgment interest is a violation of the FDCPA."Id.(citingJenkins v. General Collection Co., 538 F.Supp.2d 1165, 1174(D. Neb.2008);American. Title, Inc. v. Genisys Fin. Corp., No. 8:03 CV 463, 2005 WL 2388038, at *3(D. Neb.Sept. 28, 2005)).

Plaintiffs rely on Powers for the proposition that "actions on accounts" do not qualify under § 25-1801. Opp. Brief, ECF No. 50, Page ID 230 ("Defendants do notcollect on 'goods and services' but rather defaulted accounts or accounts stated.This Court[has] consistently held that such accounts do not fit under . . . § 25-1801.").Yet Powers never reached this holding, and the Court must look to the Nebraska Supreme Court when interpreting § 25-1801.In Thomas & Thomas Court Reporters, L.L.C. v. Switzer, 810 N.W.2d 677, 686(Neb.2012), the Nebraska Supreme Court analyzed whether various groupings of invoices were within the $4,000 limit of § 25-1801.The court held that because the plaintiff's claim was best characterized as "an action on an account"⁴ the amount of the invoices should be aggregated, disqualifying the claim under § 25-1801.Switzer, 810 N.W.2d at 686.If the claim's designation as an action on an account was sufficient to disqualify the claim under § 25-1801, the Nebraska Supreme Court would not have addressed the issue of aggregate value.The Nebraska Supreme Court's analysis suggests that "actions on accounts" are proper under § 25-1801 if they otherwise qualify under the statute's criteria.Thus, regardless of whether the County Court Complaint is an action on an account, the debts at issue were incurred for services rendered or materials furnished, and otherwise appear to fall within the scope of § 25-1801.

II.Original Submission of Claim by Thayer County Health Services

Robinson argues that ARS is liable for violations of the FDCPA and NCPA because ARS alleged it filed the County Court Complaint at least ninety days after theclaim was presented to Robinson, although the original claim was presented by Thayer County Medical Services—not ARS.Robinson contends that the original presentment by Thayer was insufficient under § 25-1801.

Neither this Court, nor counsel, has identified Nebraska case law directly addressing this issue.However, the Court's analysis is informed by the longstanding legal principle that an assignee acquires all the rights and obligations of an assignor.SeeZapata v. McHugh, 893 N.W.2d 720, 727(Neb.2017)(citingEhlers v. Perry, 494 N.W.2d 325(Neb.1993))("An assignee stands in the shoes of the assignor . . . .");Kasel v. Union Pac. R.R. Co., 865 N.W.2d 734, 738(Neb.2015)(citingSpanish Oaks v. Hy-Vee, 655 N.W.2d 390(Neb.2003);Hansen v. E.L. Bruce Co., 77 N.W.2d 458(Neb.1956))("An assignment does not affect or change any of the provisions of the contract.").Following this principle, ARS...