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Mavris v. RSI Enterprises Incorporated

United States District Court, D. Arizona

January 16, 2015

Joanna F. Mavris, Plaintiff,
RSI Enterprises Incorporated, Defendant.


NEIL V. WAKE, District Judge.

Before the Court are Defendant's Motion for Summary Judgment, or Alternatively, Summary Adjudication (Doc. 41) and the Response (Doc. 49). For the reasons that follow, the Motion will be denied.


On two occasions in December 2012, Plaintiff received medical treatment at a hospital operated by Scottsdale Healthcare. Doc. 45-1 at 6-7. The hospital created separate billing accounts for these two visits, one ending in 0028 ("0028 account") and the other ending in 0403 ("0403 account"). Doc. 43 at 4. Because Plaintiff was uninsured, she did not pay the hospital at the time of her treatment, and she has not submitted payment since. Doc. 45-1 at 13-14. Scottsdale Healthcare assigned the 0028 account and the 0403 account to Defendant on January 14, 2013, and January 15, 2013, respectively, for servicing. Doc. 44 at 2. The day after receiving each account, Defendant sent Plaintiff a billing invoice on Scottsdale Healthcare letterhead. Id. at 2-3. Sometime around late January 2013, Plaintiff applied to Scottsdale Healthcare for "financial aid" in paying down her debts. Doc. 45-1 at 7-8. Scottsdale Healthcare denied these requests in letters dated April 22, 2013, and May 10, 2013. Doc. 44 at 2. Defendant's "collection notes" for the 0028 account show an entry dated March 8, 2013, that reads "CANCELLED-CAN 4062.64"; a May 16, 2013 notation indicates "ACCT REACTIVATED PER NEW BIS FILE." Doc. 44 at 2; 44-1 at 4. The 0403 account's collection notes show similar entries made on March 8, 2013, and April 18, 2013. Doc. 44 at 2; Doc. 44-2 at 4.

On May 23, 2013, Defendant sent Plaintiff a letter on Scottsdale Healthcare letterhead notifying her that the 0028 and 0403 accounts "remain[ed] unresolved" and requesting that she submit payment to Scottsdale Healthcare. Doc. 44 at 3; Doc. 51-5 at 2. A June 20, 2013 letter from Defendant, also on Scottsdale Healthcare letterhead, informed Plaintiff that the two accounts were "now seriously past due." Doc. 44 at 3; Doc. 51-6 at 2. "If this account is not paid in full, or if suitable arrangements for payment have not been made within 30 days, " the June 20 letter reads, "this account will be turned over to an outside collection agency for collection." Doc. 51-6 at 2. The letter also states that "THIS IS YOUR FINAL OPPORTUNITY TO RESOLVE YOUR ACCOUNT BEFORE IT IS PLACED WITH A COLLECTION AGNECY." Id. (emphasis in original). Both letters are signed "Sincerely, Scottsdale Healthcare"; neither gives any indication that it was sent by Defendant, rather than Scottsdale Healthcare. See Doc. 51-5, 51-6. A month later, on July 18, 2013, Defendant sent Plaintiff another letter regarding the 0403 account-this time on its own letterhead-that begins, "Scottsdale Healthcare assigned this balance to [Defendant] for pre-collection efforts.... If payment in full is not received or contact established with Scottsdale Healthcare within 30 days you may be sent to a third-party collections company." Doc. 44 at 3; Doc. 51-7 at 2. Lower down, the letter contains the following warning: "This communication is from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose." Doc. 51-7 at 2 (emphasis in original). In two separate locations, the letter instructs Plaintiff to send all payments and correspondence to Scottsdale Healthcare. Id. A substantially identical letter concerning account 0028 followed on August 15, 2013. See Doc. 51-8; Doc. 44 at 3.

The next day, Scottsdale Healthcare "recall[ed]" the 0403 account from Defendant, which then "cancelled" the account and "returned" it to Scottsdale Healthcare. Doc. 44 at 3. Defendant's collection notes for this date reflect entries reading "ACCOUNT CANCELLED AND RETURNED FOR BAD DEBT PER DAILY TRANS FILE" and "CANCELLED-CNR 3394.83." Doc. 44-2 at 8. Scottsdale Healthcare declared that account to be in default and two weeks later, on August 30, 2013, referred it to West Asset Management, a "third-party debt collector." Doc. 41 at 8; Doc. 43 at 4. After attempting for a month to collect Plaintiff's debt, West Asset Management returned the 0403 account to Scottsdale Healthcare on October 3, 2013. Doc. 43 at 4. Similarly, Scottsdale Healthcare declared the 0028 account to be in default and recalled it from Defendant on September 13, 2013, then referred it to West Asset Management on September 27, 2013. Id. On Defendant's collection notes for the 0028 account, two September 13, 2013 entries read "ACCOUNT CANCELLED AND RETURNED FOR BAD DEBT PER DAILY TRANS FILE" and "CANCELLED-CNR 4062.64." Doc. 44-1 at 7. The account was returned to Scottsdale Healthcare in January 2014 after unsuccessful attempts to collect the debt from Plaintiff. Doc. 43 at 4.

Plaintiff filed this putative class action on May 16, 2014, seeking statutory and actual damages, on behalf of herself and other members of the proposed class, under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. The first of the Complaint's (Doc. 1) three causes of action alleges a violation of 15 U.S.C. § 1692g(b). Under § 1692g(a), "[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall" provide the consumer a "written notice" that contains:

(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

Section 1692g(b) provides, in turn, that "[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor." According to Plaintiff, Defendant's July 18, 2013 and August 15, 2013 letters-which were written on Defendant's own letterhead and which contain the § 1692g(a) disclosures-were "ineffective and overshadowed and contradicted the statutory notice" in two ways. Doc. 1 at 11. First, those letters "directed Plaintiff to send all correspondence not to Defendant, but to [Scottsdale Healthcare], " notwithstanding the statute's requirement that "all disputes and verification requests must be made to the debt collector, not to a third party, to be effective." Id. at 11-12. Second, the letters allegedly demanded payment be made "within 30 days" of the dates they were sent, id. at 12, even though the statute permits consumers to inform a debt collector of a dispute "within thirty days after receipt of the notice, " 15 U.S.C. § 1692g(a)(3) (emphasis added). The Complaint alleges that the "effect of the July 18, 2013 and August 15, 2013 communications was to cause the least-sophisticated consumer to waive, or not assert, the rights afforded under 15 U.S.C. § 1692g." Doc. 1 at 12.

In her second cause of action, Plaintiff alleges Defendant ran afoul of 15 U.S.C. § 1692e(2)(A), which prohibits a "debt collector" from "us[ing] any false, deceptive, or misleading representation or means in connection with the collection of any debt, " such as the "false representation" of "the character, amount, or legal status of any debt." Defendant allegedly violated this provision in its July 18, 2013 and August 15, 2013 letters when it warned Plaintiff that her account might be sent to a "third-party collections company" if she did not submit payment within 30 days. Doc. 51-7 at 2. Because Defendant is itself a ...

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