In Kinnick v. Med-1 Solutions LLC, an Indiana district court granted partial summary judgment for the defendant in a Fair Debt Collection Practices Act (FDCPA) case. In its holding, the court emphasized that requesting that collection communications cease before the debt collector has active accounts for collection is insufficient to sustain a claim under § 1692c(c).
In that case, the plaintiff incurred medical debts with Community Health Gallahue Behavioral (Community Health), with the defendant assigned to collect on the two accounts on April 24, 2019. The defendant received a notice of attorney representation from the plaintiffs on February 8, 2019 (requesting that collection communications cease), and a notice of the plaintiff’s bankruptcy petition filed in March 2019 (including the two relevant medical debt accounts listed above). At the time it received the notice of the plaintiff’s bankruptcy petition, the defendant did not have any active accounts for collection regarding the plaintiff. However, the defendant created a new process in early 2019, which “‘tied together’ multiple accounts owed by one debtor to Community Health, so that one single letter would be sent for all debts owed to the same creditor at the same time.” This process created a “programming mistake,” which led the defendant to send a letter to the plaintiff on April 25, 2019, signed by an attorney and demanding payment of the two accounts assigned to it on April 24, 2019, which were included in the bankruptcy petition. The following day, the defendant performed a bankruptcy scrub and realized that the plaintiff’s debts were subject to a bankruptcy and ceased collection activity. After receiving a bankruptcy discharge, the plaintiff filed suit on June 25, 2019 for violations of §§ 1692e, 1692e(3), and 1692c(c) of the FDCPA. Both parties moved for summary judgment.
The district court denied the plaintiff’s motion for summary judgment and granted partial summary judgment for the defendant. Although it held that the plaintiff had Article III standing and denied summary judgment to the defendant on plaintiff’s § 1692(e) count (holding that “genuine issues of material fact remain[ed] as to whether [the defendant] maintained procedures reasonably adapted to avoid error), it granted summary judgment to the defendant on all other counts.
The court granted summary judgment on the plaintiff’s claim that the defendant violated §1692e(3) (prohibiting a debt collector from using any false, deceptive, or misleading representation or means in connection with the collection of any debt, including the false representation or implication that any individual is an attorney or any communication is from an attorney) for procedural reasons, as the plaintiff failed to assert this claim against the defendant before his motion for summary judgment.
Further, the court granted summary judgment on the plaintiff’s claim that the defendant violated §1692c(c) (prohibiting debt collectors from communicating with consumers after direction to cease communication or demanding payment on a debt, which the consumer indicates he/she refuses to pay) for two reasons. First, it reasoned that the debts listed in the plaintiff’s March 2019 notice of bankruptcy petition were listed “as the debts of [plaintiff’s] wife only,” and did not provide notice to the defendant that the plaintiff refused to pay a debt. Indeed, it reasoned that even if the notice listed the debts as debts of the plaintiff, the plaintiff failed to notify the debt collector pursuant with § 1692c(c) requirements. Second, it reasoned that the defendant had no active accounts for collection when the plaintiff sent his letter on February 8, 2019, requesting that collection activities cease. At that time, the court concluded, the defendant was not a “debt collector” regarding the two accounts it received from Community Health for collection on April 24, 2019. Accordingly, the court granted partial summary judgment for the defendant and denied summary judgment for the plaintiff.