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Klein v. Affiliated Group, Inc.

United States District Court, D. Minnesota

November 13, 2019

Dina Klein, Plaintiff,
v.
The Affiliated Group, Inc., and Credit Management, LP, Defendants.

          Darren B. Schwiebert, Esq., and James R. Mayer, Esq., DBS Law LLC, counsel for Plaintiff.

          Charity A. Olson, Esq., Varnum LLP; Eugene Xerxes Martin, IV, Esq., Malone Frost Martin PLLC; Michael S. Kreidler, Esq., and Patrick M. Biren, Esq., Stich Angell Kreidler & Unke P.A., counsel for Defendants.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on a Motion for Partial Summary Judgment brought by Plaintiff Dina Klein (“Plaintiff” or “Klein”) (Doc. No. 66); and a Motion for Summary Judgment brought by Defendants The Affiliated Group, Inc. (“TAG”) and Credit Management, LP (“CMLP”) (together, “Defendants”) (Doc. No. 60). For the reasons set forth below, the Court grants Defendants' motion and denies Plaintiff's motion.

         BACKGROUND

         In this action, Plaintiff alleges that Defendants violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”). (Doc. No. 48 (“Second Am. Compl.”).) The allegations center on Defendants' attempts to collect a debt owed by Plaintiff to North Memorial Health Care (“NMHC”).

         Before November 2017, Plaintiff incurred two debts to NMHC. (Doc. No. 65 (“Defs.' App.”) Ex. C (“Plaintiff's Dep.”) at 10.) Plaintiff applied for financial assistance from NMHC but was told that she did not qualify. (Id. at 14-16.) In November 2017, the debts were placed with TAG for collection and on November 20, 2017, TAG sent a letter to Plaintiff. (Defs.' App. Ex. A (“Gapinski Aff.”) ¶ 2, Ex. A-1; Doc. No. 69 (“Schwiebert Decl.”) ¶ 7, Ex. 6; Schwiebert Decl. ¶ 2, Ex. A (“NMHC 30(b)(6) Dep.”) at 21-22, 39.) The letter read:

Your account(s) has been placed for collection and payment in full is due. The below listed account(s) has been turned over to us by our client, who has given you an opportunity to satisfy this obligation. You can avoid continued collection activities by sending your payment in full directly to Affiliated Credit Services. . . .
This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will be used for this purpose.

(Gapinski Aff. ¶ 2, Ex. A-1.) The letter did not contain language referencing any financial aid program (“FAP”) offered by NMHC.

         On January 1, 2018, TAG and CMLP[1] merged. (Gapinski Aff. ¶ 6 (“TAG was integrated into CMLP”); Wilson Aff. ¶ 5 (same).)[2] Before this, TAG and CMLP had been operating as separate and distinct entities, albeit under common ownership. (Gapinski Aff. ¶ 4.) After the merger, all accounts placed with TAG for collection were placed with CMLP, CMLP incorporated all of TAG's account notes into its own, and CMLP restarted the validation period of each debt. (Wilson Aff. ¶ 5.) In addition, all contracts and any rights TAG had under those contracts were transferred and assigned to CMLP. (Id. ¶ 6.) Relevant to this case, TAG had a written agreement with NMHC for collection services dated December 15, 2014 (the “TAG/NMHC Agreement” or the “Agreement”). (Gapinski Aff. ¶ 2, Ex. A-2; Schwiebert Decl. ¶ 3, Ex. B (“CMLP 30(b)(6) Dep.”) at 34.) The TAG/NMHC Agreement does not specifically provide for assignments or for successors of TAG, nor does it prohibit assignments.

         Defendants maintain that the TAG/NMHC Agreement originally executed between TAG and NMHC, as well as all rights and terms to the Agreement, were transferred and assigned to CMLP. (Gapinski Aff. ¶¶ 6-8; Wilson Aff. ¶¶ 5-7.) In addition, in August and October of 2018, NMHC and CMI executed an amendment to the Agreement recognizing that TAG had been “consolidated into” CMLP and amending the Agreement to substitute the name CMLP on TAG's agreement. (Wilson Aff. ¶ 7 & ¶ 2, Ex. B-2.) The amendment further provides that “[a]ll other terms and conditions of the Agreement which are not contrary to this First Amendment shall remain in effect.” (Wilson Aff. ¶ 2, Ex. B-2.)

         Then, on or about March 16, 2018, CMLP sent a letter to Plaintiff, which read in part:

Your account(s) has been placed for collection and payment in full is due. The above listed account(s) has been turned over to us by our client, who has given you an opportunity to satisfy this obligation. You can avoid continued collection activities by sending your payment in full directly to Credit Management, LP. . . .
This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will ...

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