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Garner v. Claimassist, LLC

United States District Court, D. Maryland

March 22, 2017

JESSICA GARNER, Individually and on behalf of all others similarly situated Plaintiff
v.
CLAIMASSIST, LLC, et al. Defendants.

          MEMORANDUM OPINION

          Ellen L. Hollander United States District Judge.

         Jessica Garner, plaintiff, individually and on behalf of all others similarly situated, initiated a class action against defendants ClaimAssist, LLC (“ClaimAssist”); Credit Control Services, Inc. (CCS); and CCS Financial Services, Inc. (CCS Financial), [1] alleging violations of the Fair Debt Collection Practices Act (“FDCPA” or “Act”), as amended, 15 U.S.C. § 1692 et seq. ECF 1. According to plaintiff, ClaimAssist, CCS, and CCS Financial operate, in effect, as a single entity. ECF 1, ¶¶ 6, 7.

         In particular, Garner alleges that ClaimAssist is a debt collector that violated the FDCPA because it made false representations and used deceptive or misleading means to attempt to collect a debt from a consumer. She relies, inter alia, on a letter dated April 28, 2015, sent by ClaimAssist to plaintiffs tort lawyer, asserting that a hospital lien had been lodged against plaintiff on behalf of Northwest Hospital. Id. ¶¶ 11, 12, 27, 28; ECF 1-1.

         Defendants answered the suit. ECF 8 (ClaimAssist); ECF 9 (CCS; CCS Financial). Thereafter, they filed a Motion for Judgment on the Pleadings (ECF 20), which is supported by a Memorandum of Law. ECF 21 (collectively, “Motion”). Garner opposes the Motion (ECF 26, “Opposition) and defendants have replied. ECF 27 (“Reply”).

         The Motion is fully briefed and no hearing is required to resolve it. See Local Rule 105.6. For the reasons that follow, I shall deny the Motion.

         I. Factual History[2]

         ClaimAssist is a limited liability company, formed under the laws of Delaware, with its principal office in Newton, Massachusetts. ECF 1, ¶ 5. It “holds itself out, in publicly available documents, as providing ‘recovery services' (i.e., debt collection services) ‘for the health care industry.'” Id. According to the Complaint, customer service representatives of Claim Assist “actively negotiate and settle outstanding alleged debt amounts on behalf of” its “medical provider clients.” Id. ClaimAssist is publicly identified as a CCS company that is “‘proven to maximize overall recoveries.'” Id. Indeed, ClaimAssist “touts itself ‘as a leader in recovering Revenue Cycle Funds.'” Id.

         CCS and CSS Financial are Delaware corporations that maintain their principal offices in Newton, Massachusetts. Id. ¶ 6, ¶ 7. CSS “is the owner and manager” of ClaimAssist and “in that capacity directs and/or is legally responsible for the acts and omissions of ClaimAssist, LLC . . . .” Id. CCS Financial is the manager of ClaimAssist and, “in that capacity directs and/or is legally responsible for the acts and omissions of ClaimAssist.” Id. According to plaintiff, CCS Financial and/or ClaimAssist “improperly disregard corporate formalities and effectively operate a single ‘CCS' . . . .” Id. Hereafter, unless the context indicates otherwise, I shall refer to defendants collectively as “ClaimAssist.”

         The FDCPA case is rooted in the events of May 16, 2014, when Garner was involved in a motor vehicle accident in Baltimore. Id. ¶ 9 (the “Collision”). From the scene of the Collision, “Garner was transported via ambulance to Northwest Hospital, ” where she received medical treatment. Id. ¶ 10. As a result, Garner incurred a debt to Northwest Hospital (the “Hospital” or “NWH”). Id. In connection with the Collision, Garner retained a lawyer, Michael Greene, to represent her in a tort case. Greene now represents Garner in the FDCPA action.

         On April 28, 2015, ClaimAssist sent Greene a letter. Id. ¶ 11; see ECF 1-1 (“Letter”). Page one of the Letter provides, ECF 1-1 at 1:

Dear MR GREEN [sic], The attached is a copy of the lien in which [sic] NORTHWEST HOSPITAL has filed with BALTIMORE CITY CIRCUIT COURT.
This is to inform you that we statutorily attach a hospital lien to any funds that an injured patient may receive as reimbursement as a result of an accident or injury.
Title 16 S16-601 is the Maryland Statute providing the legal means of insuring payment of the injured person's hospital bill. The lien is filed when the possibility exists that other persons, firms or corporations may be liable for damages caused to the patient.
An example would be if a person was injured in an automobile accident and an insurance company was expected to cover the related hospital expenses, the hospital would file a lien to insure that they would be paid out of any recovered funds.
The patient and/or person or company who appear on the lien is provided a copy of said lien by certified mail.
Please let me know if you have any questions about this procedure.
Sincerely,
RAJA KHOURY

         Page two of the Letter is titled “NOTICE AND CLAIM OF HOSPITAL LIEN.” ECF 1-1 at 2. A facsimile of page two of the Letter is included below.

         (Image Omitted)

         As the Letter reflects, page two includes, inter alia, Garner's name and address, and provides that Garner was admitted to the Hospital on May 16, 2014, and discharged from the Hospital on the same date. ECF 1-1 at 2. Further, it indicates: “Amount due [to NWH] for care for $801.16. Id.

         The Letter identifies NWH as the “Claimant Hospital” and Raja Khoury, who signed page one of the Letter on behalf of ClaimAssist, as the “Executive Officer or Agent of Hospital.” Id. The Letter also includes the following statement, id.:

The above named hospital pursuant to laws of the State of Maryland in such cases made and provided, does hereby claim a lien upon any and all causes of action, suits, claims, counter-claims, or demands for damages accruing to the patient named herein, or to the legal representative of such patient, on account of injuries giving rise to such causes of action and which necessitated his or her hospitalization, for its customary charges for hospital care and treatment of the above named injured patient in the sum hereinabove claimed to be clue.

         In addition, the Letter provides, id.: “No other responsible parties identified at this time.”

         According to plaintiff, the Letter inaccurately stated that she owed $801.16 to NWH. ECF 1, ¶ 12. Garner does not seem to dispute that a debt was owed to the Hospital. Rather, she claims that she had “health insurance (and/or other contractual / legal relationship) with Aetna insurance . . . and U.S. Medicare . . . .” and the Hospital and ClaimAssist were legally required to process the bill for hospital services consistent with NWH's agreements with Aetna and Medicare. Id. According to plaintiff, the bill had not been processed as of April 28, 2015. Id. Therefore, “the alleged debt amount of $801.16 was plainly false, inaccurate, deceptive, and/or misleading (including by being not certain, and known to be so).” Id.

         II. Standard of Review

         Defendants have moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c). Under Rule 12(h)(2)(B), a defendant may assert “failure to state a claim upon which relief can be granted” in a Rule 12(c) motion. And, a Rule 12(c) motion “for judgment on the pleadings” may be filed “[a]fter the pleadings are closed, ” so long as it is “early enough not to delay trial.” A motion under Rule 12(c) is “assessed under the same standard that applies to a Rule 12(b)(6) motion.” Walker v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009) (citing Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)); see also McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010).

         A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss under Rule 12(b)(6). Goines v. Valley Cmty, Servs, Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th Cir. 2010), aff'd sub nom. McBurney v. Young, ___ U.S. ___, 133 S.Ct. 1709 (2013); Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the well-pleaded allegations are true, the complaint fails as a matter of law “to state a claim upon which relief can be granted.” Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Fed.R.Civ.P. 8(a)(2). It provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendants with “fair notice” of the claims and the “grounds” for entitlement to relief. Bell Atl., Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

         To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . . .” (citation omitted)); see also Hall v. DirecTV, LLC, F.3d ___, No. 15-1857, 2017 WL 361065, at *4 (4th Cir. Jan. 25, 2017). But, a plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, U.S. ___, 135 S.Ct. 346, 346 (2014) (per curiam).

         Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action, ” it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely.” Twombly, 550 U.S. at 556 (internal quotations omitted).

         In reviewing a Rule 12(b)(6) motion, a court “‘must accept as true all of the factual allegations contained in the complaint'” and must “‘draw all reasonable inferences [from those facts] in favor of the plaintiff.'” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); see Semenova v. Maryland Transit Admin., 845 F.3d 564, 567 (4th Cir. 2017); Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697, 705 (4th Cir. 2016); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert. denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). “A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. Denied, ___ U.S. ___, 132 S.Ct. 1960 (2012).

         In general, courts do not “resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses” through a Rule 12(b)(6) motion. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). The purpose of the rule is to ensure that defendants are “given adequate notice of the nature of a claim” made against them. Twombly, 550 U.S. at 555- 56 (2007). But, “in the relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint, the defense may be reached by a motion to dismiss filed under Rule 12(b)(6).” Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long Term Disability Plan, 533 F.3d 334, 336 (4th Cir. 2009); see also U.S. ex rel. Oberg v. Penn. Higher Educ. Assistance Agency, 745 F.3d 131, 148 (4th Cir. 2014). However, because Rule 12(b)(6) “is intended [only] to test the legal adequacy of the complaint, ” Richmond, Fredericksburg & Potomac R.R. Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), “[t]his principle only applies . . . if all facts necessary to the affirmative defense ‘clearly appear[ ] on the face of the complaint.'” Goodman, 494 F.3d at 464 (quoting Forst, 4 F.3d at 250) (emphasis added in Goodman ).

         Under limited exceptions, a court may consider documents outside the complaint, without converting the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Baltimore, 791 F.3d 500, 508 (4th Cir. 2015). In particular, a court may properly consider documents that are “explicitly incorporated into the complaint by reference and those attached to the complaint as exhibits . . . .” Goines, 822 F.3d at 166 (citations omitted); see U.S. ex rel. Oberg, 745 F.3d at 136 (quoting Philips v. Pitt Cty Memorial Hosp., 572 F.3d 176, 180 (4th Cir. 2009)); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543 U.S. 979 (2004); Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir. 1999).

         However, “before treating the contents of an attached or incorporated document as true, the district court should consider the nature of the document and why the plaintiff attached it.” Goines, 822 F.3d at 167 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 455 (7th Cir. 1998)). “When the plaintiff attaches or incorporates a document upon which his claim is based, or when the complaint otherwise shows that the plaintiff has adopted the contents of the document, crediting the document over conflicting allegations in the complaint is proper.” Goines, 822 F.3d at 167. Conversely, “where the plaintiff attaches or incorporates a document for purposes other than the truthfulness of the document, it is inappropriate to treat the contents of that document as true.” Id.

         Here, plaintiff included the Letter as an exhibit to the Complaint. And, the claims in the Complaint are based upon the content of the Letter. ECF 1 ¶ 11. The Letter is integral to the Complaint, and there is no dispute as to its authenticity. See ECF 20; ECF 21. Consequently, I may consider the Letter.

         III. Overview of the FDCPA

         Congress enacted the FDCPA in 1977 (see Pub. L. 95-109, 91 Stat. 874 (1977)) to protect consumers from debt collectors who engage in “abusive, deceptive, and unfair debt collection practices, ” to “insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e); see Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 576 (2010); United States v. Nat'l Fin. Servs., Inc., 98 F.3d 131, 135 (4th Cir. 1996). The statute is concerned with “rights for consumers whose debts are placed in the hands of ...


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