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Brooks v. Laughlin Memorial Hospital, Inc.

United States District Court, E.D. Tennessee, Greeneville

December 10, 2019





         Before the Court are motions for summary judgment by all remaining parties: Greeneville Collection Service, Inc. (Doc. 69), Chesnut Law Office, LLP, and Alex Chesnut (Doc. 73), and Plaintiffs Michael Brooks and Kasey Brooks (Doc. 75). Also before the Court are two substantially identical Motions for Judgment on the Pleadings by Chesnut Law Office, LLP, and Alex Chesnut (Docs. 65 & 71). For the reasons set forth herein, Plaintiffs' Motion for Partial Summary Judgment (Doc. 75) will be GRANTED IN PART and DENIED IN PART; Greeneville Collection Service, Inc.'s Motion for Summary Judgment (Doc. 69) will be DENIED, and Chesnut Law Office, LLP, and Alex Chesnut's Motion for Summary Judgment (Doc. 73) will be DENIED. The Motions for Judgment on the Pleadings (Docs. 65 & 71) will likewise be DENIED.


         On or about December 10, 2014, Michael Brooks received medical care from Laughlin Memorial Hospital, Inc. (“Laughlin”). (Doc. 76-1 at ¶¶ 4, 6-7). He was married to Kasey Brooks at the time. (Doc. 70-5 at 12). Apparently, he did not pay the bill for the services he received. Laughlin referred the account to Greenville Collection Service, Inc. (“Greenville”) for collection. (Doc. 70-2 at 7). Greeneville in turn referred the account to Chesnut Law Office, LLP and attorney Alex Chesnut (the “Chesnut Defendants”) to file a collection action. (Id. at 14). On August 28, 2017, Alex Chesnut filed a Civil Summons and Affidavit of Sworn Account in Greene County General Sessions Court against Michael Brooks and Kasey Brooks, identifying Laughlin as the plaintiff. (Doc. 11-1). This lawsuit arises out of that collection action.

         Greeneville is a company that works to collect past-due consumer accounts for various clients, including Laughlin. (Doc. 70-2 at 5). The number of accounts Laughlin refers to Greeneville varies, but the average is around two hundred accounts per month. (Id. at 7). Greeneville receives account information from Laughlin via email, which is automatically uploaded or transferred to Greeneville's system. (Id.). Once an account is referred, Greeneville sends out an initial collection letter. (Doc. 70-2 at 7). Pursuant to an agreement between Laughlin and Greeneville, if a lawsuit is not filed in connection with an account, 30% of any amount collected goes to Greeneville. (Id. at 17). If a lawsuit is filed, 40% of any amount collected goes to Greeneville. (Id.). If funds are collected through a lawsuit, they are first applied to the filing and service fees paid by Greeneville. (Id.). If Greeneville does not collect anything from the lawsuit, it is not reimbursed for these fees. (Id.).

         Greeneville refers accounts to Chesnut Law for litigation by sending information sheets it calls Debtor Master Files. (Doc. 70-1 at 6; Doc. 70-2 at 15). Each Debtor Master File is a screenshot of a Greeneville computer. (Doc. 70-2 at 15). A Greeneville program is open on the screen, displaying a summary of the account information generated from information received from Laughlin. (Id.). The Debtor Master file for Plaintiffs lists Michael Brooks as the Debtor and Michael Brooks and Kasey Brooks as Guarantor. (Doc. 70-1 at 64; Doc. 70-2 at 15). The sheet includes the date of service, date the account was placed, balance due, and agency number for Greeneville. (Id.). It identifies the client as Laughlin Memorial Hospital. (Id.). The boxes for transaction amount, total amount paid, accrued interest, legal expenses, and interest rate are all blank. (Id.). Below the screenshot image are three lines of text: the names Michael Gene Brooks and Kasey Brooks, Michael Brooks' social security number, and Michael Brooks' employment. (Id.).

         According to Greeneville, the Debtor Master File was the only document sent to Chesnut Law prior to the preparation of the Civil Summons and Affidavit. (Doc. 70-2 at 15; Doc. 70-1 at 6). Attorney Chesnut testified his office would have reviewed the Debtor Master File, but could not recall if they reviewed anything else. (Doc. 70-1 at 6, 7). He testified he relies on the address of the patient/spouse at the time the patient received medical service, which he receives from Greeneville. (Id. at 8). Chesnut further testified the Debtor Master File does not indicate Michael Brooks and Kasey Brooks were married, but that it “does list Michael Gene and Kasey Brooks which indicates a marriage as guarantor.” (Id. at 9). Similarly, Greeneville's representative testified Chesnut Law would know the debtors were a married couple because there were two names on the Debtor Master File. (Doc. 70-2 at 16). She testified that Greeneville verifies whether the debtor is married, single, or divorced on the date of medical service. (Id.).

         Karen Kilday, a secretary at Chesnut Law, prepared the Civil Summons and Affidavit of Sworn Account. (Doc. 70-2 at 7; Doc. 70-1 at 4). Elizabeth Gosnell of Greeneville Collection then took the Affidavit of Sworn Account to Charles Whitfield, the CEO of Laughlin Memorial Hospital. (Doc. 70-1 at 4; Doc. 70-2 at 5, 7). Mr. Whitfield signed the affidavit and Gosnell notarized his signature. (Id.). The Affidavit identifies the patient as Michael Brooks and the “Debtor(s)” as Michael Brooks and Kasey Brooks. (Id.). The Civil Summons identifies Alex A. Chesnut as attorney for plaintiff Laughlin Memorial Hospital, Inc. (Doc. 11-1). The Summons indicates $2, 631.44 is the amount past due and owing on the account, plus court costs of $150 and service of process fees of $52. (Id.).

         On August 28, 2017, the collection action was filed in Greene County General Sessions Court. (Id.). As with all lawsuits they file from Greeneville, the Chesnut Defendants paid the filing fee and service fee, but Greeneville reimbursed them for both the same day. (Doc. 70-2 at 8, 17). Greeneville also paid Chesnut's legal fee for the collection action. (Doc. 70-1 at 7, 10). Chesnut testified that at some point, either he or Chesnut Law had a signed representation agreement with Laughlin Memorial; he could not recall if he had an agreement with Greeneville. (Doc. 70-1 at 7).

         On November 16, 2017, default judgment was entered against Plaintiffs in the collection action in the amount of $2, 631.44 plus interest. (Doc. 11-1 at 1).

         On August 28, 2018, Plaintiffs filed their Complaint (Doc. 1), and on October 11, 2018, they filed an Amended Complaint (Doc. 11) (as amended, the “Complaint”). The Complaint asserts claims for marital status discrimination in violation of the Equal Credit Opportunity Act (“ECOA”), invasion of privacy under Tennessee state law and the Fair Debt Collection Practices Act (“FDCPA”), and the following FDCPA claims:

1. Failure to send Plaintiffs a notice that contains the disclosures required by 15 U.S.C.A. § 1692g; 2. False representation of the legal status of the debt in violation of §§ 1692e(2)(A), 1692e(8), 1692e, and 1692e(10);
3. Attempting to collect a debt from Mrs. Brooks that she did not owe, in violation of §§ 1692e(2)(A), 1692e(5), 1692e(8), 1692e, 1692e(10), 1692f, 1692f(1), 1692d, and 1692c(b);
4. Claiming interest and collection fees from Mrs. Brooks without a signed contract, in violation of §§ 1692e, 1692e(2)(A), 1692e(2)(B), 1692e(5), 1692e(10), 1692f and 1692f(1);
5. Filing the collection lawsuit against Mrs. Brooks in an improper venue, in violation of §§ 1692e, 1692e(10), 1692f, and 1692i(a)(2); and
6. Falsely representing or implying that a communication is from an attorney, in violation of §§ 1692e(3) and 1692e.

(Doc. 11).

         On June 26, 2019, the Court granted in part a Motion for Judgment on the Pleadings (Doc. 26) filed jointly by Laughlin and Greeneville. (Doc. 56). The Court dismissed the third and fourth FDCPA claims, italicized above, for lack of subject matter jurisdiction. (Doc. 56 at 19-21). The Court found consideration of these claims barred by the Rooker-Feldman doctrine, because both sought review and rejection of the state court's default judgment. (Id.). The Court also dismissed Plaintiffs' ECOA claim, state law invasion of privacy claim, and FDCPA invasion of privacy claim. (Id. at 26).

         Thereafter, Chesnut Law and Alex Chesnut filed two identical Motions for Judgment on the Pleadings (Docs. 65 & 71). Greeneville Collection filed a Motion for Summary Judgment (Doc. 69), as did the Chesnut Defendants (Doc. 73). Finally, Plaintiffs filed a Motion for Partial Summary Judgment, asking the Court to rule on all claims but reserve the issue of damages (Doc. 75).


         In reviewing a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), the Court “must construe the complaint in the light most favorable to the plaintiff, accept all of the complaint's factual allegations as true, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claim that would entitle him to relief.” Engler v. Arnold, 862 F.3d 571, 574-75 (6th Cir. 2017) (internal quotations omitted). The Court reviews a Rule 12(c) motion for judgment on the pleadings using the same standards it applies to a Rule 12(b)(6) motion to dismiss. See Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 403 (6th Cir. 2012) (“The manner of review under Rule 12(c) is the same as a review under Rule 12(b)(6).” (internal quotation omitted)). “The [plaintiff's] factual allegations, assumed to be true, must do more than create speculation or suspicion of a legally cognizable cause of action; they must show entitlement to relief.” League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007). “Mere labels and conclusions are not enough; the allegations must contain ‘factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Id. at 575 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

         As to the summary judgment motions, Federal Rule of Civil Procedure 56 instructs the Court to grant summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A party asserting the presence or absence of genuine issues of material fact must support its position either by “citing to particular parts of materials in the record, ” including depositions, documents, affidavits or declarations, stipulations, or other materials, or by “showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed.R.Civ.P. 56 (c)(1). When ruling on a motion for summary judgment, the Court must view the facts contained in the record and all inferences that can be drawn from those facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Nat'l Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). The Court cannot weigh the evidence, judge the credibility of witnesses, or determine the truth of any matter in dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

         The moving party bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the movant has satisfied this burden, the nonmoving party cannot “rest upon its . . . pleadings, but rather must set forth specific facts showing that there is a genuine issue for trial.” Moldowan v. City of Warren, 578 F.3d 351, 374 (6th Cir. 2009) (citing Matsushita, 475 U.S. at 586; Fed.R.Civ.P. 56).

         III. ANALYSIS

         Congress passed the Fair Debt Collection Practices Act to eliminate the use of abusive, deceptive, and unfair debt collection practices. Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 329 (6th Cir. 2006). “The statute is very broad, and was intended to remedy ‘what it considered to be a widespread problem.'” Id. (quoting Frey v. Gangwish, 970 F.2d 1516, 1521 (6th Cir. 1992)). Whether particular conduct violates the FDCPA is an objective test based on the least sophisticated consumer. Id.

         To prevail on an FDCPA claim, a plaintiff must establish that (1) he or she is a “consumer” within the meaning of the FDCPA, (2) the “debt” arises out of transactions entered primarily for personal, family, or household purposes, (3) the defendant is a “debt collector” as defined by the FDCPA, and (4) the debt collector violated a provision of the FDCPA in attempting to collect a debt. White v. Univ. Fidelity, LP, __ Fed.Appx. __, 2019 WL 5856433, *2 (6th Cir. Nov. 8, 2019); Clark v. Lender Processing Servs., 562 Fed.Appx. 460, 465-66 (6th Cir. 2014) (“To state a claim under the FDCPA, a plaintiff must show that a defendant violated one of the substantive provisions of the FDCPA while engaging in debt collection activity.”). “Debt collectors who fail to comply with … provisions of the Act are subject to civil liability under 15 U.S.C. § 1692k.” Wadlington v. Credit Acceptance Corp., 76 F.3d 103, 106 (6th Cir. 1996).

         In this case, there is no dispute as to the first three elements: Defendants are “debt collectors, ” Plaintiffs are “consumers, ” and the account was a “debt, ” all within the meaning of the FDCPA. (See Doc. 70 at 6). Michael and Kasey Brooks are natural people who were obligated or alleged obligated to pay money arising out of a transaction for personal medical services. See 15 U.S.C.A. § 1692a(3), (5). Defendants are likewise debt collectors within the meaning of the FDCPA. Greeneville concedes it is a debt collector for the purpose of its own summary judgment motion, and its representative testified the company's business is to collect debts owed to its clients. (Doc. 70 at 6; Doc. 70-2 at 5). In their answer, the Chesnut Defendants state they are debt collectors. (Doc. 21 at ¶¶ 18-19). Thus, only the violation element of each FDCPA claim is at issue.

         Initially, there appears to be some confusion as to the remaining FDCPA claims in this action. Each party seeks judgment as to at least one claim that is not before the Court, either because it was previously dismissed or never asserted in the Complaint.[1] This confusion persists despite the Court's June 26, 2019 Order, which explicitly set forth the remaining claims before the Court: (1) failure to send notice required by 15 U.S.C. § 1692g, asserted against the Chesnut Defendants, (2) false representation of the legal status of the debt, asserted against all Defendants, (3) filing a collection action in an improper venue, asserted against all Defendants, and finally, (4) false representation that a communication is from an attorney, against all Defendants. (Doc. 56 at 27).

         A. Motions for ...

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