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Young v. NPAS, INC.

United States District Court, D. Utah, Central Division

February 5, 2019

ROBYN YOUNG, Plaintiff,
v.
NPAS, INC. and MEDICREDIT, INC., Defendants.

          MEMORANDUM DECISION AND ORDER

          Clark Waddoups United States District Judge.

         Introduction

         Before the court are (I) Plaintiff Robyn Young's Motion for Summary Judgment against Defendant Medicredit for violations of the FDCPA (ECF No. 32); (II) Ms. Young and Defendant NPAS' Cross Motions regarding whether NPAS violated the FDCPA (ECF Nos. 32 and 91); (III) Defendants' Motion on Actual Damages (ECF No. 88); and (IV) Ms. Young's Motion to Amend the Complaint (ECF No. 75). The court heard oral argument on September 19, 2018. (ECF No. 114.)

         For the reasons stated herein, the court GRANTS, in part, Ms. Young's Motion against Medicredit for violations of the FDCPA; GRANTS, in part, Ms. Young's Motion against NPAS for violations of the FDCPA; DENIES Defendants' Motion on actual Damages; and DENIES Ms. Young's Motion to Amend Complaint.

         Facts

         Plaintiff Robyn Young (Ms. Young) was employed with Granite School District as a teacher for special needs children, including children with severe autism. (ECF No. 100 at 4.) In the Spring of 2013, Ms. Young was attacked at work by one of her students and suffered a concussion. (ECF No. 100 at 4.) In the Spring of 2014, Plaintiff was again attacked at work by a different student. (ECF No. 100 at 4.) As a result of these attacks, Ms. Young suffered from migraine headaches, partial paralysis, sensitivity to light, and blurry vision. (ECF No. 100 at 4.) Ms. Young filed a worker's compensation claim with the State of Utah against Granite School District to recover for her injuries. (ECF No. 100 at 4.)

         As part of her treatment for the injuries suffered in 2013 and 2014, Ms. Young sought medical care, on six different dates, [1] from St. Mark's Hospital. St. Mark's Hospital is owned by Hospital Corporation of America (HCA). (See ECF No. 99-1 at 10.[2]) HCA also owns an entity named “Parallon.” (ECF No. 99-1 at 5.[3]) Parallon, in turn, owns Defendants NPAS, Inc. and Medicredit, Inc. (ECF No. 99-1 at 5.[4]). NPAS, Inc., Medicredit, Inc., and HSS Systems LLC are all Parallon Affiliates. (ECF No. 93-2 at 4.)

         According to NPAS, Inc., NPAS conducts “early out” collections “for St. Mark's Hospital.” (ECF No. 93-1 at 3.) NPAS claims that “early out” collections involve “attempts to collect unpaid accounts prior to the time that the account is deemed to be [in] default.” (Wright Decl., ¶ 3, ECF No. 93-1 at 3.) According to NPAS, Inc., its collection services for St. Mark's Hospital are governed, “in part, ” by two agreements: (1) an Intercompany Services Agreement (Intercompany Agreement) and (2) an Amended and Restated Master Services Agreement (Master Agreement). (Wright Decl., ¶ 3, ECF No. 93-1 at 3.) The Intercompany Agreement is “between NPAS on the one hand, and HSS Systems, LLC” on the other. (Wright Decl., ¶ 3, ECF No. 93-1 at 3.) The Master Agreement is between Parallon and “non-party Mountain Division, Inc.” (Wright Decl., ¶ 3, ECF No. 93-1 at 3.) Ms. Young was not a party to either agreement.

         The Intercompany Agreement provides that “HSS desire[d] to contract with NPAS . . . to provide . . . early-out collection services for its Client-Hospitals.” (ECF No. 93-3 at 2 (emphasis in original).) The Intercompany Agreement further provides that “NPAS . . . shall use commercially reasonable efforts to obtain the amounts owed . . . .” (ECF No. 93-3 at 3-4.) The Intercompany Agreement also provides that “NPAS . . . shall maintain its own employees to provide Early-Out Collection Services for HSS.” (ECF No. 93-3 at 4.) And the Agreement provides that “NPAS . . . possesses experience and expertise in providing early-out collection services for hospital facilities.” (ECF No. 93-3 at 2.)

         According to NPAS, “[u]nder the [Master Agreement, ] St. Mark's Hospital is a facility which receives services from NPAS and HSS.” (Wright Decl., ¶ 5, ECF No. 93-1 at 3.) “As part of the services that HSS provides for St. Mark's Hospital, it contracts certain services with NPAS via the [Intercompany Agreement].” (Wright Decl., ¶ 7, ECF No. 93-1 at 4.)

         On four of six dates on which Ms. Young received treatment from St. Mark's Hospital, she “signed a ‘Conditions of Admission and Consent for Outpatient Care,' [Consent for Care Agreement] in connection with medical services received . . . .” (See ECF No. 98 at 13-14.) On one date, June 3, 2014, Ms. Young's husband signed one of the Consent for Care Agreements. (See ECF No. 98 at 13.) It is unclear from the record whether Ms. Young signed a Consent for Care Agreement on February 23, 2015. (See ECF No. 98 at 13-14.) Each of these Consent for Care Agreements contained the following provision:

I acknowledge that the Providers may utilize the services of a third party Business Associate or affiliated entity as an extended business office (“EBO Servicer”) for medical account billing and servicing. During the time that the medical account is being serviced by the EBO Servicer, the account shall not be considered delinquent, past due or in default, and shall not be reported to a credit bureau or subject to collection legal proceedings. When the EBO Servicer's efforts to obtain payment have been exhausted due to a number of factors (for e.g., Patient of Guarantor's failure to pay or make a payment arrangement after insurance adjustments and payments have been credited, and/or the insurer's denial of claim(s) or benefits is received), the EBO Servicer will send a final notice letter which will include the date that the medical account may be returned from the EBO Servicer to the Provider. Upon return to the Provider by the EBO Servicer, the Provider may place the account back with the EBO Servicer, or, at the option of the Provider, may determine the account to be delinquent, past due and in default. Once the medical account is determined to be delinquent it may be subject to late fees, interest as stated, referral to a collection agency for collection as a delinquent account, credit bureau reporting and enforcement by legal proceedings.

(See ECF No. 92-6 at 3-4.)

         As a result of the treatment she received from St. Mark's Hospital, six different accounts were placed with NPAS, and four were placed with Medicredit.

         NPAS Accounts

         Six different accounts were placed with NPAS as shown in the following chart.[5]

Placement Date

Date of Service

Amount

Account Number

7/22/14

6/3/14

$431.76

4860

2/27/15

5/23/14

$2, 539.88

4683

6/11/15

2/23/15

$181.05

1437

12/28/15

11/2/15

$952.84

4604

2/29/16

2/2/16

$847.36

6966

8/2/16

5/29/16

$713.89

1159

         NPAS maintained records of these accounts in its Collection Notes. (See ECF No. 32-17 at 1-73.) The court first discusses Account 4683 and then the remaining accounts placed with Medicredit.

         Account 4683

         On or around October 26, 2015, NPAS sent Ms. Young a letter stating, in part, that “[d]espite [its] efforts, ” it had “been unable to secure payment on” Account 4683. It also stated: “You are obligated to pay for the services provided.” (ECF No. 82-2 at 2.) On or around May 17, 2016, NPAS sent Ms. Young another letter regarding Account 4683 in which it requested that Ms. Young send NPAS her attorney's information. (ECF No. 32-3 at 2.) Ms. Young's attorney, Lester Perry replied on July 5, 2016 with reference to this account, and accounts 6966 and 4604, requesting certain information from NPAS and informing NPAS that there could be other accounts that NPAS was attempting to collect on. (See ECF No. 32-4 at 2.)

         Medicredit Accounts

         Account 4683 was first placed with Medicredit on October 11, 2014. (Wright Decl., ¶ 21, ECF No. 62-2 at 6; see also ECF No. 32-16 at 2 (Medicredit's Account Notes indicate that the “placement date” of this account was “10/11/2014.”).) Four months later, on February 27, 2015, Account 4683 “was placed with NPAS . . . .” (See ECF No. 98 at 16.) Three additional debts were placed with Medicredit on three different dates for the services that St. Mark's Hospital performed for Ms. Young. (See ECF No. 62 at 15.) All of these debts were assigned different “reference ID” numbers: 4683, 1437, 4604, and 6966. (See ECF No. 101-5 at 2.) Even though the four accounts were each assigned a different reference ID number, Medicredit had a single “consumer ID” that was specifically tied to Ms. Young and all four of her accounts. (See ECF No. 101-5 at 2.)

         Medicredit maintained records of these four accounts in its “Medicredit Account Notes” and in its “Noble System” call history log. (Wright Decl., ¶ 20, ECF No. 62-2 at 6.) The Medicredit Account Notes are comprised, at least in part, of “notes from St. Mark's [hospital]” and “notes from NPAS.” (See ECF No. 101-2 at 17, Wright Depo. 59: 7-14.) The Medicredit Account Notes also include some entries from the Noble System Call Log.

         Medicredit's Account Notes do not clearly delineate between accounts-if it all. (Compare ECF No. 32-16 with ECF No. 32-17[6].) In other words, the Medicredit Account Notes appear to be one large, amorphous, omnibus account. In his deposition, Medicredit's 30(b)(6) witness, Mr. Wright, described the Medicredit Account Notes as “a Consumer Fact Sheet out of the system we have at Medicredit.” (ECF No. 101-2, Wright Depo. 30: 1-2.) He then stated that “[i]t's called DM9, it's a collection system.” (ECF No. 101-2 at 10, Wright Depo. 30:4.) The following line of questioning then ensued between Ms. Young's counsel and Mr. Wright:

Q. What type of information is in the Consumer Fact Sheet?
A. This is the record of the history of accounts that were placed, demographic information, and notes associated, related to those accounts.
Q. So if I wanted to go into the system there at Medicredit and look up, for instance, Mrs. Young's information, how would you do that at Medicredit?
A. There's lots of ways to do it, but the best way to do it would just be to pull the accounts up by the consumer ID number, the upper left-hand corner.
Q. So this ID number would have every account that Medicredit has worked on that -- Mrs. Young?
A. As long as the -- as long as all of the information from subsequent accounts matched in the merging rules, then all those accounts would merge together and belong to one single consumer number for Robyn Young.

(ECF No. 101-2 at 10, Wright Depo. 30:10-22.)

         Mr. Wright explained that when an account is placed with Medicredit, no one at Medicredit independently verifies that the consumer actually owes money before Medicredit contacts the consumer. (ECF No. 101-2 at 15, Wright Depo. 52: 6-14.[7]) Mr. Wright also clarified that the information contained in the “Consumer Fact Sheet” would have been available to Medicredit representatives, but that it would not have been in the same format as has been presented to the court. (See ECF No. 101-2 at 12, Wright Depo. 38: 23-25; 39: 1-6, [8] see also ECF No. 101-2 at 13, Wright Depo. 44: 7-9.[9])

         Medicredit Treatment of Account 4683

         As noted, Account 4683 was placed first with Medicredit.[10] (Wright Decl., ¶ 21, ECF No. 62-2 at 6; see also ECF No. 32-16 at 2.) Medicredit assigned Ms. Young with the “Consumer ID” “48159461” at this time. (See ECF No. 32-16 at 73.)

         After receiving Account 4683, Medicredit called Ms. Young six times in October 2014- on October 13, 15, 16, 17, 20 and 21. (See ECF No. 32-16 at 78; see also ECF No. 32-16 at 73.)

         Account 4683 was then removed from Medicredit, and placed with NPAS on February 27, 2015. (Wright Decl., ¶ 15, ECF No. 62-2 at 5.) Almost a year later, on February 5, 2016, Medicredit “merged” Ms. Young's previous Consumer ID, “48159461” with the most recent Consumer ID, “29169038.” (ECF No. 32-16 at 73.) Again, the Consumer ID allowed Medicredit employees to see all accounts associated with Ms. Young. (See ECF No. 101-2 at 10, Wright Depo. 30:10-22.)

         On July 4, 2016, Account 4683 was placed with Medicredit for a second time. (ECF No. 32-16 at 2.) At the same time, NPAS' Collection Notes for Account 4683 were transferred to Medicredit's Account Notes. (Compare ECF No. 32-17 at 32-43 with ECF No. 32-16 at 7-36.) Many of the entries in NPAS' Collection Notes for Account 4683 are nearly identical to Medicredit's Account Notes dated “7/4/2016”. For example, a June 3, 2016 entry from NPAS' Collection Notes providing “LETTER FROM K DAWN ATLAN . . . STATING THAT THEY REPRSESENT PT” can be found in Medicredit's Account Notes timestamped “7/4/2016.” (Compare ECF No. 32-17 at 42 with ECF No. 101-5 at 27.) As another example, NPAS' collection notes from 11/23/15 provides “NOTES: ATTN WORK COMP . . . GN STTD THIS ACCT IS WORK COMP RELATED AND IS CURRENTLY UNDER LITIGATION.” (ECF No. 32-17 at 34.) Medicredit's Account Notes for 7/4/2016 similarly provide “ATTN WORK COMP . . . .” and also provide “[T]HIS ACCT IS WORK COMP REL . . . .” (ECF No. 101-5 at 29.) The similarities between the NPAS Collection Notes and Medicredit's Account Notes demonstrate that NPAS' Collection Notes for Account 4683 were imported into Medicredit's Account Notes on 7/4/2016-the date that Account 4683 was placed with Medicredit for the second time.

         On the very next day, Lester Perry sent Medicredit a letter asking for information. (See ECF No. 32-14 at 2.) This letter also referenced Ms. Young's Consumer ID number, 29169038.

         On or around July 11, 2016, notwithstanding the letter from Lester Perry, Medicredit sent Ms. Young a further letter about Account 4683, informing her that Medicredit had “the full intention of collecting on this account(s)” and stating that “this office will assume this debt is valid” unless Ms. Young disputed the debt within 30 days of receiving the letter. (See ECF No. 32-10 at 2; Young Decl. ¶ 17, ECF No. 101-4 at 4.)

         One of Medicredit's Account Note entries confirms that Medicredit had received an attorney letter, at the latest, on July 20, 2016. For example, one of Medicredit's Account Notes, timestamped on 7/20/2016, provides “RECV ATTY REP LETER.” (ECF No. 32-16 at 5.) Another entry, timestamped on 7/21/2016 provides “RCVD CORR FROM HOOLE & KING LAW OFFICES STATING THAT THEY REPRESENTS TO CONS AND REQUESTING I/S FOR ACCT# 67838544, 69726746 & 73736726 . . . .” (ECF No. 32-16 at 5.)

         In addition to the July 11 letter, Medicredit also called Ms. Young four more times after July 4, 2016-on July 5, 7, 15, and 21 of 2016. (ECF No. 32-16 at 80.) Importantly, Medicredit called Ms. Young on July 21, 2016-after Medicredit's time stamp from July 20, 2016 revealed that, at least by that date, Medicredit had received a letter from Ms. Young's attorney. (See ECF No. 32-16 at 5.)

         Account 1437

         “On February 5, 2016, ” Account 1437 “was first placed with Medicredit.” (Wright Decl., ¶ 22, ECF No. 62-2 at 6; see also ECF No. 32-16 at 2.) Just like Account 4683, NPAS' Collection Notes for Account 1437 were imported into Medicredit's Account Notes on this placement date. (Compare ECF No. 32-17 at 19-31 with ECF No. 32-16 at 59-73.) For example, a July 29, 2015 entry from NPAS' Collection Notes providing “ATTN WORKERS COMP: RPLS REVIEW, AND DETERMINE ORDER OF INSR. THANK YOU” can be found in Medicredit's Account Notes timestamped on 2/5/2016. (Compare ECF No. 32-17 at 24 with ECF No. 32-16 at 65.) As another example, NPAS' collection notes from 10/13/15 for Account 1437 provides “CHKD CORRES SAYS CLM IN LITIGATION . . . .” (ECF No. 32-17 at 26.) The identical entry is found in Medicredit's Account Notes, timestamped on 2/5/2016. (See ECF No. 32-16 at 67.)

         After Account 1437 was placed with Medicredit, Medicredit called Ms. Young five times before March 4, 2016 (the date that the next account, Account 4604, was placed with Medicredit). Medicredit called Ms. Young on February 11, 16, 19, 25 of 2016 and on March 3, 2016. (See ECF No. 32-16 at 78.)

         On May 13, 2016, Ms. Young's then attorney, Dawn Atkin, sent St. Mark's Hospital a letter regarding Account 1437. (See ECF No. 32-13 at 2.) She informed St. Mark's Hospital that she represented Ms. Young, and that based on “Utah Code. Ann. 34-2-401(b), ” Ms. Young “dispute[d] the validity of this debt . . . .” (ECF No. 32-13 at 2.) An entry from Medicredit's Account Notes, timestamped on 5/27/2016, provides in part, “ATKIN & ASSOC SENT LTR STTN WC HAS BEEN FILED.” (ECF No. 101-5 at 37.)

         Account 4604

         “On March 4, 2016, ” Account 4604 “was first placed with Medicredit.” (Wright Decl., ¶ 22, ECF No. 62-2 at 6; see also ECF No. 32-16 at 2.) Just like Account 4683 and Account 1437, NPAS' Collection Notes for Account 4604 were imported into Medicredit's Account Notes on this placement date. (Compare ECF No. 32-17 at 44-46 with ECF No. 32-16 at 51-57.) For example, a December 28, 2015 entry from NPAS' Collection Notes providing “ATTY INVOLVED ON ASSOC ACCT CHECK VALIDITY” can be found in Medicredit's Account Notes timestamped on 3/4/2016. (Compare ECF No. 32-17 at 45 with ECF No. 32-16 at 57.)

         On or around March 8, 2016, Medicredit sent Ms. Young a letter about Account 4604, informing her that Medicredit had “the full intention of collecting on this account(s)” and stating that “this office will assume this debt is valid” unless Ms. Young disputed the debt within 30 days of receiving the letter. (See ECF No. 32-8 at 2; Young Decl. ¶ 15, ECF No. 101-4 at 4.)

         After account 4604 was placed with Medicredit, Medicredit called Ms. Young eight times before April 25, 2016 (the date that the next account, Account 6966, was placed with Medicredit). Medicredit called Ms. Young on March 8, 14, 21, 28, and April 6, 11, 19, and 22, 2016. (ECF No. 32-16 at 78-79.)

         As noted above, on July 5, 2016, Ms. Young's attorney, Lester Perry, sent Medicredit a letter regarding this account, and accounts 4683 and 6966, requesting certain information from Medicredit and informing Medicredit that Ms. Young was represented by his firm, Hoole & King. (See ECF No. 32-14 at 2.)

         Account 6966

         On April 25, 2016, Account 6966 was placed with Medicredit. (ECF No 32-16 at 2.) Just like Account 4683, Account 1437, and Account 4604, NPAS' Collection Notes for Account 6966 were imported into Medicredit's Account Notes on this placement date. (Compare ECF No. 32-17 at 47-69 with ECF No. 32-16 at 39-51.) For example, a February 2, 2016 entry from NPAS' Collection Notes providing “PT. STATES THIS IS IN LITIGATION THRU WCF” can be found in Medicredit's Account Notes timestamped on 4/25/2016. (Compare ECF No. 32-17 at 49 with ECF No. 32-16 at 39.)

         After Account 6966 was placed with Medicredit, Medicredit called Ms. Young twenty-five times before July 4, 2016 (the date that Account 4683 was placed with Medicredit for the second time). (See ECF No. 32-16 at 79-80.) These calls were made on April 25, 26, 27, 28, May 2, 4, 5, 9, (twice on May 10, ) 11, 17, 23, 25, June 2, 7, 9, 13, 14, 15, 21, 22, 27, 28, and 29. (See ECF No. 32-16 at 79-80.)

         On or around May 1, 2016, Medicredit sent Ms. Young another letter on this account informing her that Medicredit had “the full intention of collecting on this account(s)” and stating that “this office will assume this debt is valid” unless Ms. Young disputed the debt within 30 days of receiving the letter. (See ECF No. 32-9 at 2; Young Decl. ¶ 16.)

         Standard

         Summary judgment is proper when the moving party demonstrates that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A material fact is one that may affect the outcome of the litigation. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the initial burden of showing an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). “Once the moving party meets this burden, the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter.” Id. The nonmoving party may not rest solely on allegations on the pleadings, but must instead designate “specific facts showing that there is a genuine issue for trial.” Id. at 324. The court must “view the evidence and draw reasonable inferences therefrom in a light most favorable to the nonmoving party.” Commercial Union Ins. Co. v. Sea Harvest Seafood Co., 251 F.3d 1294, 1298 (10th Cir. 2001).

         Analysis

         In her First Amended Complaint, Ms. Young alleges that NPAS and Medicredit violated both the Fair Debt Collection Practices Act (FDCPA) and the Utah Consumer Sales Practices Act (UCSPA). (FAC ¶¶ 49-67, ECF No. 26 at 9-12.) For the alleged FDCPA violations, Ms. Young alleges that NPAS and Medicredit violated Sections 1692a, 1692c, 1692d, 1692e, (FAC ¶¶ 51-54, ECF No. 26 at 9) and 1692f (FAC ¶ 58, ECF No. 26 at 10.)

         In her Motion for Partial Summary Judgment, Ms. Young argues that both NPAS and Medicredit violated sections [1] 1692f(1), [2] 1692e(2)(A), [3] 1692e(10), [4] 1692c(a)(2), and [5] 1692c(c) of the FDCPA. (See ECF No. 32 at 15, 19, 21, and 22.) Ms. Young reserves the “determination of other FDCPA” violations “for trial by jury.” (ECF No. 32 at 22.) And Ms. Young reserves the “determination” of “state law violations, ” “tort claims, ” “and the question of appropriate actual damages” for trial. (ECF No. 32 at 22.)

         In Opposition to Ms. Young's Motion, Defendants argue that Ms. Young “has failed to demonstrate the absence of any genuine issue of material fact regarding whether Defendants have violated the FDCPA.” (ECF No. 62 at 34.) Defendants further argue that Ms. Young is not entitled to summary judgment because she “failed to demonstrate the absence of any genuine issue of material fact regarding whether NPAS is a ‘debt collector' under the FDCPA.” (ECF No. 62 at 28.) On this issue, NPAS argues, in its Motion for Partial Summary Judgment, that it is entitled to summary judgment “in its favor and against” Ms. Young because “NPAS does not meet the definition of a ‘debt collector' under the FDCPA” and cannot “be sued for violating the FDCPA.” (ECF No. 91 at 2.) Additionally, Defendants move the court “for partial summary judgment in their favor and against” Ms. Young “on her claim that she sustained actual damages from Defendants' alleged violations of the” FDCPA and UCSPA. (ECF No. 88 at 2.)

         The court addresses (I) Ms. Young's Motion for Summary Judgment against Medicredit; (II) Ms. Young and NPAS' Cross Motions regarding whether NPAS violated the FDCPA, (III) Defendants' Motion on actual damages; and (IV) Ms. Young's Motion to Amend Complaint.

         I. Ms. Young Is Entitled to Summary Judgment Against Medicredit

         “To establish a violation of the FDCPA, Plaintiff must prove . . . four elements.” Rhodes v. Olson Assocs., P.C., 83 F.Supp.3d 1096, 1103 (D. Colo. 2015). There is no disputed material fact that as to each of the accounts at ...


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