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Spurlock v. Receivables Management Partners, LLC

United States District Court, S.D. Indiana, Indianapolis Division

April 27, 2018




         On November 8, 2016, Defendant James E. Pruett, on behalf of Defendant Receivables Management Partners, LLC (“RMP”), sent a dunning letter to Plaintiff, Shannon Spurlock, in an effort to collect a medical debt. Plaintiff alleges the letter violates Section 1692e and 1692g(a)(1) of the Fair Debt Collection Practices Act (“FDCPA”). Each party has separately moved for summary judgment. The court, having read and reviewed the parties' written submissions, the designated evidence, and the applicable law, now finds summary judgment should be entered in favor of the Defendants and against the Plaintiff.

         I. Background

         The facts of this case are undisputed.

         Plaintiff incurred delinquent medical debt from Margaret Mary Community Hospital. (Filing No. 25-3, Deposition of Shannon Spurlock (“Spurlock Dep.”) at 50-52). The Hospital assigned Plaintiff's debt to RMP for collection. (Filing No. 26-2, Affidavit of Jamie Menkedick ¶ 4). RMP hired Pruett, an attorney, to assist in the collection of the debt. (Id. ¶ 6). At the time RMP referred the matter to Pruett, the Hospital alleged that Spurlock had a total outstanding balance of $4, 231.96. (Id.).

         On November 8, 2016, Pruett sent Plaintiff a dunning letter. (Filing No. 1-1, Letter; Filing No. 25-3, Affidavit of James E. Pruett (“Pruett Aff.”) ¶ 7). The letter stated that the total amount owed by Plaintiff to Margaret Mary was $4, 231.96. (See Letter). The letter accurately reflected the total amount owed on that date. (Menkedick Aff. ¶ 6).

         RMP's practice is to forego interest, attorney's fees or any other charges above or beyond the outstanding balance until and unless litigation is filed. (Id. ¶ 8). Before RMP initiates litigation against a consumer, several criteria must be satisfied. (Id. ¶ 11). First, RMP must secure permission from its creditor-client to proceed with suit. Second, RMP verifies the debtor's employment. Third, RMP performs a bankruptcy scrub to ensure that the debtor has not recently filed bankruptcy. If these criteria are satisfied, and if the debtor has not paid the account, litigation is initiated no less than 35 days after the initial communication from outside counsel. (Id. ¶¶ 11-12).

         In Plaintiff's case, these criteria were satisfied, so RMP authorized and instructed Pruett to initiate litigation against Plaintiff. (Id. ¶ 15). Pruett filed suit against Plaintiff in Ripley Superior Court, Small Claims Division, on December 21, 2016. (Filing No. 1-2, Small Claims Form). In the Notice of Claim, Pruett, on behalf of RMP, sought the outstanding balance of $4, 231.96. In addition, Defendants also sought 8% prejudgment interest on the unpaid principal amount, totaling $1, 010.04, as well as attorney's fees, and court costs. (Id.). This lawsuit followed.

         II. Summary Judgment Standard

         Summary judgment is required if “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). Where the facts are undisputed, as in this case, summary judgment is particularly appropriate.

         III. Discussion

         “The primary goal of the FDCPA is to protect consumers from abusive, deceptive, and unfair debt collection practices.” Bass v. Stolper, Koritzinsky, Brewster & Neider, SC, 111 F.3d 1322, 1324 (7th Cir. 1997); see also Keele v. Wexler, 149 F.3d 589, 594 (7th Cir. 1998) (“[T]he FDCPA is designed to protect consumers from the unscrupulous antics of debt collectors, irrespective of whether a valid debt actually exists.”). Thus, the FDCPA prohibits a debt collector from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. It also requires debt collectors to state “the amount of the debt” they are seeking to collect from the consumer. 15 U.S.C. § 1692g(a)(1). The “amount of the debt” must be stated “‘clearly enough that the recipient is likely to understand it.'” Williams v. OSI Educ. Servs., Inc., 505 F.3d 675, 677 (7th Cir. 2007) (quoting Chuway v. Nat'l Action Fin. Servs., Inc., 362 F.3d 944, 948 (7th Cir. 2004)). To ensure compliance with the Act, the court applies an objective test and looks at the letter from the perspective of an “unsophisticated consumer or debtor.” Id. “The unsophisticated consumer is ‘uninformed, naïve, [and] trusting, ' but possesses ‘rudimentary knowledge about the financial world, is wise enough to read collection notices with added care, possesses reasonable intelligence, and is capable of making basic logical deductions and inferences.'” Id. at 678 (quoting Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000)).

         Plaintiff argues the Defendants violated §§ 1692e(2)(a) and 1692g(a)(1) by failing to include the interest due in the dunning letter. Second, she argues Defendants violated § 1692e by failing to disclose that interest would continue to accrue in the future.

         A. The ...

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