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Hill v. Accounts Receivable Services, LLC

United States District Court, D. Minnesota

October 31, 2016

Paul Hill, Plaintiff,
v.
Accounts Receivable Services, LLC, Defendant.

          Darren B. Schwiebert, Esq., DBS Law LLC, counsel for Plaintiff.

          Jessica L. Klander, Esq., and Michael A. Klutho, Esq., Bassford Remele, PA, counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK United States District Judge

         INTRODUCTION

         Plaintiff Paul Hill filed this Fair Debt Collection Practices Act (“FDCPA”) lawsuit against Defendant Accounts Receivable Services, LLC (“ARS”) after ARS attempted to collect a debt allegedly owed by Hill in a conciliation court lawsuit. Hill alleges that ARS violated the FDCPA, 15 U.S.C. §§ 1692-1692p, by: (1) presenting a false document to Hill and the conciliation court; (2) attempting to collect interest to which ARS had no legal entitlement; and (3) including interest in ARS's claim for account stated. ARS moves for judgment on the pleadings.

         BACKGROUND

         On September 2, 2015, ARS filed a lawsuit against Hill in Hennepin County Conciliation Court. (Doc. No. 13 (“Am. Compl.”) ¶ 7; Doc. No. 9 (“Ans.”) ¶ 10, Ex. B (“Concil. Ct. Compl.”).) In its conciliation court complaint, ARS alleged that Hill owed a debt arising out of medical services provided by Allina Health System (“Allina”), and that Allina had sold and assigned the debt to ARS. (Am. Compl. ¶ 9; Concil. Ct. Compl. ¶ 1.) The conciliation court complaint stated: “The costs for medical services rendered was $2, 997.63.” (Concil. Ct. Compl. ¶ 1; see also Am. Compl. ¶ 10.) It then asserted a claim based on the theory of account stated: “[Hill is] indebted to [ARS] on an account stated, for medical service rendered, in the amount of $3, 687.62. Included in the above account stated amount is interest of $683.25 assessed to today's date at 6.00% per annum as allowed by Minnesota Statutes section 334.01.” (Concil. Ct. Compl. ¶ 1; see also Am. Compl. ¶ 11.)

         On October 30, 2015, the conciliation court held a hearing, and Hill appeared and contested liability. (Am. Compl. ¶¶ 13-14.) At the hearing, ARS submitted a document entitled “Bill of Sale” to Hill and the conciliation court. (Id. ¶ 19; Ans. ¶ 10, Ex. 1 (“Bill of Sale”).) The Bill of Sale states that Allina “has entered into a Purchase of Business Agreement” as of August 17, 2015, and under that Agreement, Allina “hereby” sells and assigns its rights and interest in the assets described in the Agreement “as listed in Exhibit 1A attached hereto.” (Bill of Sale; see also Am. Compl. ¶ 21.) Exhibit 1A appears to be a summary of medical costs allegedly incurred by Hill, showing a principal balance of $2, 997.63. (Ans. ¶ 10, Ex. 1A.) Hill alleges that an ARS representative printed Exhibit 1A from ARS's computer system on August 24, 2015. (Am. Compl. ¶ 22.) In addition, ARS submitted a document entitled “Suit Authorization and Assignment” to Hill and the conciliation court. (Id. ¶ 24; Ans. ¶ 10, Ex. A.) That document states that ARS is “a division of” Allina, and it “hereby” assigns Allina's right and interest in Hill's account to ARS. (Ans. ¶ 10, Ex. A; Am. Compl. ¶¶ 25-26.)

         In an Order dated October 30, 2015, the conciliation court ruled in favor of Hill. (Am. Compl. ¶ 31; Ans. ¶ 18, Ex. C (“Concil. Ct. Order”).) The Order includes a checked box next to the following statement: “Plaintiff has not demonstrated an entitlement to relief and recovers zero.” (Concil. Ct. Order.) It does not explain the rationale behind the conciliation court's decision. (Id.)

         On February 1, 2016, Hill filed his Complaint in the instant lawsuit (Doc. No. 1), and on April 5, 2016, Hill filed an Amended Complaint (Doc. No. 13). Hill's Amended Complaint contains a single count, which alleges that ARS violated various provisions of the FDCPA, namely 15 U.S.C. §§ 1692e(2), 1692e(5), 1692e(10), 1692f, and 1692f(1). (Am. Compl. ¶¶ 40-43.) In his brief opposing ARS's motion for judgment on the pleadings, Hill characterizes his Amended Complaint as alleging that ARS violated the FDCPA in three ways: (1) ARS provided Hill with a fake Bill of Sale; (2) in the conciliation court suit, ARS attempted to collect interest to which it is not entitled; and (3) ARS's conciliation court complaint was false and misleading to the extent that it included interest in the amount ARS alleged Hill owed to it pursuant to an account stated theory. (Doc. No. 27 at 1.) Hill's Amended Complaint seeks actual damages, statutory damages, costs, and fees under 15 U.S.C. § 1692k(a). (Am. Compl. at 8 (Prayer for Relief).)

         DISCUSSION

         I. Judgment on the Pleadings

         A party may move for judgment on the pleadings at any point after the close of pleadings, so long as it moves early enough to avoid a delay of trial. Fed.R.Civ.P. 12(c). The Court evaluates a motion for judgment on the pleadings under the same standard as a motion brought under Federal Rule of Civil Procedure 12(b)(6). See Ashley Cty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009).

         In deciding a motion to dismiss under Rule 12(b)(6), a court assumes all facts in the complaint to be true and construes all reasonable inferences from those facts in the light most favorable to the complainant. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). In doing so, however, a court need not accept as true wholly conclusory allegations, Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999), or legal conclusions drawn by the pleader from the facts alleged, Westcott v. City of Omaha, 901 F.2d 1486, 1488 (8th Cir. 1990). A court deciding a motion to dismiss may consider the complaint, matters of public record, orders, materials embraced by the complaint, and exhibits attached to the complaint. See Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999).

         To survive a motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although a complaint need not contain “detailed factual allegations, ” it must contain facts with enough specificity “to raise a right to relief above the speculative level.” Id. at 555. As the Supreme Court reiterated, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, ” will not pass muster under Twombly. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). In sum, this standard “calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the claim].” Twombly, 550 U.S. at 556.

         II. The FDCPA

         As noted above, Hill claims that ARS violated various provisions of the FDCPA. Congress enacted the FDCPA to protect consumers by “eliminat[ing] abusive debt collection practices by debt collectors, [insuring] that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and [promoting] consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). The FDCPA specifically ...


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