United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER
A. KIMBALL UNITED STATES DISTRICT JUDGE
matter is before the court on Plaintiff Sandi Gorman's
Motion for Summary Judgment [Docket No. 27], and Defendant
Express Recovery Services, Inc.' Motion for Summary
Judgment [Docket No. 30]. On October 17, 2018, the court held
a hearing on the motions. At the hearing, Plaintiff was
represented by Ryan L. McBride and Defendant was represented
by Joseph J. Lico. The court took the motions under
advisement. The court has carefully considered the materials
submitted by the parties and the facts and law relevant to
the motions. Now being fully advised, the court issues the
following Memorandum Decision and Order.
an action for alleged violations of the Fair Debt Collection
Practices Act, 15 U.S.C. § 1692 et seq.
(“FDCPA”). On September 14, 2015, Plaintiff Sandi
Gorman received medical treatment at Tanner Clinic. Gorman
had TriCare Medical Insurance and provided her insurance
information to Tanner Clinic. Gorman alleges and ERS disputes
that Gorman paid her $12.00 copay to Tanner Clinic at the
time of service.
her visit, Gorman received an explanation of benefits from
TriCare stating that TriCare would pay $104.07 for the visit
and Gorman was responsible for the $12.00 copay. However,
Tanner Clinic sent Gorman repeated bills for payment of
$128.07. The bills stated that Gorman owed $116.07 for the
September 14, 2015 visit and a $12.00 copay for a July 7,
2015 visit. The invoices were designed in a way to show the
amount charged for the services, the amount adjusted based on
an insurance agreement, the amount insurance paid, and the
amount for which the patient was responsible. The Tanner
Clinic invoices sent to Gorman showed that Gorman's
insurance had paid its part for Gorman's July 7, 2015
visit, but no copay had been made. The invoices also showed
that no payment from Gorman or her insurance had been made
with respect to the September 14, 2015 visit. Gorman never
responded to Tanner Clinic's billing statements and she
alleges that she did not know that Tricare had failed to make
its payment to Tanner Clinic for the September 14, 2015
January 29, 2016, Tanner Clinic assigned Gorman's account
to ERS, a debt collection agency, for collection on the
unpaid account. Prior to the assignment, Tanner Clinic and
ERS had entered into a contract for ERS to collect delinquent
accounts for Tanner Clinic. On February 2, 2016, ERS sent
Gorman a letter indicating that it had been assigned her
account from Tanner Clinic and providing a validation notice
for the Tanner Clinic account. ERS also called Gorman on
February 9, 2016, March 4, 2016, March 16, 2016, and March
22, 2016. On March 22, 2016, ERS sent Gorman another
collection letter. Gorman did not respond to any of ERS'
letters or telephone calls.
April 13, 2016, ERS had the law offices of Edwin Parry send a
validation letter to Gorman. The letter stated that the law
firm represented ERS in the collection of the unpaid account
and it gave Gorman thirty days to dispute the validity of the
debt. On April 14, 2016, ERS sought confirmation from Tanner
Clinic that the debt was correct, due, and owing. On April
27, 2016, a representative from Tanner Clinic signed the
confirmation request verifying that the debt was due and
owing. The Tanner Clinic representative included an invoice
and financial agreement with debt verification. The invoice
showed the $12.00 copay due for services on July 7, 2015, the
$116.07 due for services on September 14, 2015, and $32.02
due for collection fees for a total amount due of $160.09.
did not respond to the April 13, 2016 letter from the law
offices of Edwin Parry. On May 23, 2016, ERS had Gorman
served with a copy of the Summons and Complaint in a state
lawsuit for payment of the overdue account. On June 1, 2016,
ERS filed its complaint for payment of the account in
Utah's Second District Court against Gorman and her late
husband. Gorman's late husband died approximately five
years ago, long before the services at issue in the case.
Gorman did not answer or otherwise respond to the complaint.
On June 16, 2016, ERS filed a motion for default, seeking
$128.07 owed for services at Tanner Clinic, $4.78 for accrued
interest, $92.00 for court costs, $32.02 for collection fees,
and $250.00 in attorney fees for a total judgment of $506.87.
13, 2016, the state court granted default judgment against
Gorman in the requested amount of $506.87. Although the
Default Judgment states that it is “against said
defendant(s) jointly and severally, ” the judgment
specifically states that it is “against defendant SANDI
GORMAN.” There is no indication that the judgment is
against her late husband. Despite Gorman's assertions to
the contrary, there were no allegations in the state court
complaint made specifically against her late husband or
additional costs sought against him. He was named because of
a Utah statute allowing family expenses to be collected
against both spouses.
7, 2016, a week before the state court entered default
judgment against Gorman, Tanner Clinic received payment from
TriCare Insurance for $104.00 on Gorman's account. Under
the collection agreement between Tanner Clinic and ERS,
Tanner Clinic was required to inform ERS of the payment
within 72 hours. However, Tanner Clinic did not inform ERS.
On July 18, 2016, the law offices of Edwin Parry sent a
notice of the state court Default Judgment to Gorman.
However, she did not respond.
Tanner Clinic nor Gorman informed ERS of the July 7, 2016
$104.00 TriCare payment until December 6, 2016, when Gorman
made her first contact with ERS. ERS contacted Tanner Clinic
for confirmation and learned on December 12, 2016, that
Tanner Clinic received payment from TriCare on July 7, 2016.
ERS notified the law offices of Edwin Parry of the insurance
payment and the law firm made an adjustment to the amount
Gorman owed under the Default Judgment.
January 19, 2017, Tyler Allred, an employee of the law
offices of Edwin Parry, and Gorman appeared in state court
for a supplemental hearing on satisfying the Default Judgment
against Gorman. Gorman alleges that she was not informed of
the outstanding debt at the hearing. However, at the hearing,
Gorman agreed to a payment plan for the outstanding Tanner
Clinic debt. Gorman never made any payments on the payment
plan agreed to during the supplemental hearing.
February 22, 2017, Holli Clark, an employee at the law
offices of Edwin Parry, received a letter from Plaintiff
disputing the debt and asking for a payoff amount. Ms. Clark
marked the account as disputed but did not immediately
respond to Gorman's request for a payoff amount. The law
offices of Edwin Parry assert that they have policies and
procedures requiring employees to provide a payoff amount if
requested by a consumer. Ms. Clark testified that she
received such training and mistakenly failed to respond in
this instance. The law offices of Edwin Parry disciplined Ms.
Clark for failing to follow proper procedures with Gorman.
Approximately six weeks later, on April 10, 2017, the law
offices of Edwin Parry sent a letter to Gorman, addressed to
Gorman and her late husband, about payment on the judgment
because she had not made any payments on the payment plan.
The letter reflected the total amount due and notifying her
that a lien will be placed on any real property in her name
within the county.
2017, Gorman filed the present lawsuit against ERS in
Utah's Second District Court for violation of the FDCPA
and the Utah Consumer Sales Practices Act, Utah Code Ann.
§§ 13-11-1 et seq. ...