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Hillbeck v. Accounts Receivable Services, LLC

United States District Court, D. Minnesota

May 15, 2017

Kelly and David Hillbeck, Plaintiffs,
v.
Accounts Receivable Services, LLC, Defendant.

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

          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

         This matter is before the Court on a Motion to Dismiss brought by Defendant Accounts Receivable Services, LLC (“ARS”). (Doc. No. 8.) For the reasons set forth below, the Court grants the motion.

         BACKGROUND

         This dispute arises from ARS's attempt to collect medical debt allegedly owed by Plaintiffs Kelly and David Hillbeck. On October 5, 2015, ARS filed a lawsuit in Anoka County Conciliation Court, Case No. 15-1583, against the Hillbecks alleging that they had unpaid medical debts arising from medical services provided by Allina Health System (“Allina”). (Doc. No. 4 (“Am. Compl.”) ¶¶ 6-8.) In the Conciliation-Court Complaint, ARS alleged that the Hillbecks received medical services at Unity Hospital between January 7, 2012, and March 27, 2013. (Conciliation-Court Complaint ¶ 1.)[1]ARS also alleged that Allina sold and assigned the debt to ARS. (Id.) In addition, ARS noted in the complaint that Minnesota law holds spouses jointly and severally liable for medical debt arising from necessary medical services provided while the spouses are living together. (Id.)

         On December 10, 2015, ARS appeared at the hearing through a non-attorney representative. (Am. Compl. ¶¶ 10, 12.) The Hillbecks appeared with counsel. (Id. ¶ 11.) When ARS's non-attorney representative saw that the Hillbecks were represented by counsel, she dismissed the lawsuit without prejudice pursuant to her instructions from ARS. (Id. ¶ 13.) After the dismissal, ARS wrote to the Hillbecks seeking to collect the debt. (Id. ¶¶ 18-19.) In a subsequent letter, ARS provided the Hillbecks with documents to verify ARS's ownership of the alleged debt. (Am. Compl. ¶ 20; Doc. No. 13 ¶ 2, Ex. A.) The documents identified Kelly Hillbeck as the “Debtor” and David Hillbeck as the “Co-debtor.” (Am. Compl. ¶ 21.) The documents also indicated that Allina had accounted for the bad-debt referral on October 10, 2015, which was five days after ARS filed its complaint in conciliation court. (Id. ¶¶ 22-23.)

         The Hillbecks commenced this action on October 4, 2016. (Doc. No. 1.) Then, on November 29, 2016, the Hillbecks filed an Amended Complaint alleging that ARS violated §§ 1692e(2), 1692e(5), 1692e(10), and 1692f of the Fair Debt Collection Practices Act (“FDCPA”).[2] (Am. Compl. ¶ 29.) In the Amended Complaint, the Hillbecks allege that ARS violated the FDCPA by: (1) falsely stating in the Conciliation-Court Complaint that the debt arose from medical services provided to both David and Kelly Hillbeck, instead of just David; (2) falsely stating in the Conciliation-Court Complaint that Allina had sold and assigned the Hillbecks' account to ARS; and (3) falsely identifying Kelly Hillbeck as the “debtor” and David Hillbeck as the “co-debtor” in the subsequent verification documents. (Am. Compl. ¶¶ 9, 15-16, 21.) On January 24, 2017, ARS moved to dismiss. (Doc. No. 8.)[3]

         DISCUSSION

         I. Legal Standard

         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 Fair Debt ...


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