United States District Court, D. Minnesota
Mark C. Jorgensen, Plaintiff,
Accounts Receivable Services, LLC, Defendant.
RICHARD H. KYLE United States District Judge
Mark Jorgensen commenced this action after Defendant Accounts
Receivable Services, LLC (“ARS”) sued him in
state court to collect an allegedly past-due medical debt.
Jorgensen alleges that ARS violated the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692
et seq., by falsely asserting he was liable on an
“account stated.” Presently before the Court are
the parties' cross-Motions for Summary Judgment. For the
reasons set forth below, the Court will grant ARS's
Motion and deny Jorgensen's Motion.
following facts are undisputed. On October 5, 2015, ARS sued
Jorgensen in Anoka County, Minnesota conciliation court.
There it alleged, in relevant part:
[Jorgensen] owe[s] [ARS] . . . because: Allina Health System
provided medical services to [Jorgensen] on various dates . .
. The costs for medical services rendered was $1, 487.50.
Allina Health System sold and assigned [Jorgensen's]
Accounts Receivable to [ARS].
[Jorgensen is] liable to [ARS] on an account stated, for
medical services rendered, in the amount of $1, 859.30.
Included in the above account stated amount is interest of
$371.80 assessed to today's date . . . as allowed by
Ex. A.) Jorgensen appeared in conciliation court and,
ultimately, ARS voluntarily dismissed its lawsuit. Jorgensen
then commenced this action; against this factual backdrop,
the parties cross-move for summary judgment.
FDCPA prohibits debt collectors from using a “false,
deceptive, or misleading representation” while
attempting to collect a debt, including a false
representation of “the character, amount, or legal
status of any debt.” 15 U.S.C. § 1692e. Jorgensen
argues ARS ran afoul of this proscription by alleging an
“account stated, ” a legal doctrine addressing
the formation of an implied contract to pay a debt. Where a
debt purportedly exists, and “one side proffers a
‘statement' of an account between the parties, the
other side's retention of it without objection for an
unreasonable amount of time constitutes prima facie evidence
of the accuracy of the account that has been set
forth.” Egge v. Healthspan Servs. Co., Civ.
No. 00-934, 2001 WL 881720, at *2 (D. Minn. July 30, 2001)
(Montgomery, J.) (citing Erickson v. Gen. United Life
Ins. Co., 256 N.W.2d 255, 259 (Minn. 1977) (internal
citations omitted)). Once established, an account stated
“constitute[s] a promise to pay whatever balance is
thus acknowledged to be due.” Meagher v.
Kavli, 88 N.W.2d 871, 879 (Minn. 1958).
ARS contends it sent Jorgensen billing statements reflecting
a balance due of $1, 487.50 and that it “merely
added” prejudgment interest of $371.80 to that amount
“[f]or the convenience of the conciliation
court.” (Def.'s Mem. in Opp'n 5.) But, as
quoted above, ARS's state-court complaint averred in no
uncertain terms that Jorgensen was liable on an account
stated for $1, 859.30. It is undisputed that ARS never
sent Jorgensen a statement reflecting that amount
and, hence, its representation was false.
said, not every falsity gives rise to FDCPA liability. To be
actionable, a misrepresentation must also be
material. Powers v. Credit Mgmt. Servs.,
Inc., 776 F.3d 567, 571 (8th Cir. 2015). A
misrepresentation is material if it “frustrate[s] the
consumer's ability to intelligently choose his or her
response” to the creditor. Salaimeh v. Messerli
& Kramer, P.A., Civ. No. 13-3201, 2014 WL 6684970,
at *3 (D. Minn. Nov. 25, 2014) (Doty, J.) (citations
omitted). The Court must analyze materiality through the lens
of the unsophisticated consumer, a standard “designed
to protect consumers of below average sophistication or
intelligence without having the standard tied to the very
last rung on the sophistication ladder.” Duffy v.
Landberg, 215 F.3d 871, 874-75 (8th Cir. 2000)
(citations and quotations omitted). Thus, while the standard
protects even the “uninformed or naive consumer,
” it also incorporates “an objective element of
reasonableness which ensures that debt collectors remain free
from liability for peculiar interpretations of
[statements].” Adams v. J.C. Christensen &
Assocs., Inc., 777 F.Supp.2d 1193, 1195-96 (D. Minn.
2011) (citing Strand v. Diversified Collection Serv.,
Inc., 380 F.3d 316, 317 (8th Cir. 2004) (internal
citations and quotations omitted)). As the Seventh Circuit
[§ 1692e] is designed to provide information that helps
consumers to choose intelligently, and by definition
immaterial information neither contributes to that objective
(if the statement is correct) nor undermines it (if the
statement is incorrect). . . . If a statement would not
mislead the unsophisticated consumer, it does not violate the
[FDCPA]-even if it is false in some technical sense.
Hahn v. Triumph P'ships, LLC, 557 F.3d 755,
757-58 (7th Cir. 2009) (cited with approval in
Powers, 776 F.3d at 571); see also McIvor v.
Credit Control Servs., Inc., 773 F.3d 909, 913 (8th Cir.
2014) (“Even a literally false statement does not
violate § 1692e if it would not mislead the
Jorgensen asserts that he found ARS's state-court
complaint misleading because he “never received any
account statement from Allina or [ARS] . . . so [he] could
not understand why that was listed as . . . an account
stated.” (Jorgensen Decl. ¶ 7.) As a result,
“[r]ather than simply placing a call to [ARS] and
explaining that [he] did not owe any money, [he] appeared for
the hearing in Anoka County with counsel.”
(Id. ¶ 9.) It is difficult to perceive exactly
how his decision to appear at the hearing (rather than call
ARS) flowed from ARS's invocation of the term
“account stated.” After all, he was
summoned to conciliation court. In any event, the
Court need not linger on this point, as materiality is
analyzed objectively, e.g., Adams, 777
F.Supp.2d at 1195-96, and hence Jorgensen's subjective
confusion is not dispositive.
Court's view, ARS's use of the words “account
stated” in this context is not material as a matter of
law. ARS's state-court pleading set forth the cost of
medical services Jorgensen allegedly received ($1, 487.50)
and the amount of prejudgment interest ARS sought ($371.80).
This breakdown does not remedy the falsity, but it clearly
informed Jorgensen (or any other person who might have
reviewed it) of the precise components of the alleged debt,
and it equipped him to respond intelligently. Under these
circumstances, it is fair to classify Jorgensen's view
that the words “account stated” mandated his
appearance in court as “peculiar.” Considered
objectively, the presence of the words “account
stated”-a legal term of art-is not misleading to the
unsophisticated consumer when combined with a breakdown of
the amount allegedly owed. Indeed, had ARS omitted the words
“account stated, ” in the Court's view, the
objective, unsophisticated consumer would have responded in
the same way, and no FDCPA claim would lie.
and based upon all the files, records, and proceedings
herein, IT IS ORDERED that ARS's Motion for Summary
Judgment (Doc. No. 37) is GRANTED, Jorgensen's Motion for
Summary Judgment on Liability (Doc. No. 41) ...