Nathaniel Richmond v. Nicholas Higgins

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 05-1206
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Nathaniel Richmond, Stephanie *
Richmond, *
*
Appellants, *
* Appeal From the United States
v. * District Court for the
* Eastern District of Missouri.
Nicholas G. Higgins, doing business *
as Nicholas G. Higgins & Associates, *
*
Appellee. *
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Submitted: January 9, 2006
Filed: February 2, 2006
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Before MURPHY, HEANEY, and MELLOY, Circuit Judges.
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HEANEY, Circuit Judge.
Nathaniel Richmond and his wife, Stephanie Richmond, brought this action
against Nicholas Higgins, d/b/a/ Nicholas G. Higgins & Associates (Higgins), a debt
collection agency, wholly owned by Nicholas Higgins. Richmond alleged that
Higgins violated the Fair Debt Collection Practices Act (FDCPA) by misstating, in
communications with Richmond’s attorney, the amount Richmond owed for treatment
he received at Barnes Jewish Hospital (BJH). The district court1 granted Higgins
summary judgment based on its conclusion that the FDCPA’s prohibition of false
statements in connection with the collection of a debt does not apply to
communications with the debtor’s attorney.2 We affirm, but not for the reason stated
by the district court.
BACKGROUND
Nathaniel Richmond was injured in an automobile accident and treated at BJH
in June 2001. He retained Attorney John Albright to represent him in his personal
injury action against the other driver. In October 2001, Albright sent BJH a letter
requesting a copy of Richmond’s unpaid bill and medical records. On November 5,
2001, BJH provided the requested materials, which showed an outstanding balance
of $6,716.40. In January, February, and April of 2002, BJH contacted Albright
regarding the outstanding balance on Richmond’s account. Each time Albright
informed BJH that Richmond was attempting to settle the personal injury action and
asked BJH to call him back in a few weeks, but did not challenge the validity or the
amount of the debt.
In October of 2002, BJH forwarded Richmond’s still unpaid account to Higgins
for collection. On October 9, 2002, Higgins sent a notice of hospital lien letter to
Albright referencing Richmond, BJH, and the outstanding debt amount of $6,716.40.
(Appellants’ App. at 53.) As required by the FDCPA, see 15 U.S.C. § 1692g(a)(4),
1
The Honorable Thomas C. Mummert III, United States Magistrate Judge for
the Eastern District of Missouri. Both parties consented to the jurisdiction of the
magistrate, with direct appeal to this court. 28 U.S.C. § 636(c)(3).
2
It is undisputed that Higgins is a “debt collector,” Richmond is a “consumer,”
and the “debt” that Higgins attempted to collect from Richmond fits the statutory
definition of “debt” under the FDCPA. See 15 U.S.C. § 1692a(3), (5), (6) (defining
terms).
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the letter stated that failure to notify Higgins within thirty days of receipt of the letter
of any dispute regarding the validity of the debt would result in an assumption that the
debt was valid (Appellants’ App. at 53). Although it is undisputed that he received
it, Albright never responded to the October 9, 2002 letter. On February 13, 2003,
Higgins sent a second letter to Albright requesting a status report on Richmond’s
personal injury claim. (Appellants’ App. at 54.) Albright responded to the February
13 letter on April 1, 2003, alleging for the first time that Higgins misstated the debt
amount, in violation of the FDCPA. Albright claimed that federal Medicaid law
prohibited Higgins from collecting an amount exceeding the amount that Medicaid
would pay. (Id. at 55.) Prior to Albright’s April 1, 2003 letter, Higgins had no
knowledge that the debt amount was disputed or that a medical care provider, who did
not bill Medicaid, might be restricted from collecting more than the Medicaid amount
from a Medicaid-eligible patient. (Id. at 51.) On April 9, 2003, Albright sent Higgins
another letter stating that he could not “find any way to enforce 42 USCA
1396a(a)(25)(C)&(D)3 against medical providers other than through the [FDCPA].”
(Id. at 17.)
Richmond’s personal injury lawsuit settled on August 9, 2003. On
September 30, 2003, Higgins wrote to Albright requesting that they discuss payment
arrangements, otherwise BJH would reduce its claim to judgment. On October 6,
2003, Richmond sued Higgins in federal district court alleging that Higgins violated
the FDCPA by misstating the debt amount in its communications with Albright.
Richmond alleged that he was eligible for Medicaid, and thus BJH and Higgins were
prohibited from attempting to collect an amount exceeding the amount that Medicaid
would pay. Higgins moved for summary judgment alleging that: (1) it could rely on
3
Richmond’s allegation that the Medicaid amount is the maximum amount a
healthcare provider can collect from a Medicaid-eligible patient, where the healthcare
provider elects to collect from the patient rather than Medicaid, has not yet been
accepted by our court. For purposes of this appeal we need not determine whether
Richmond’s interpretation is correct.
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BJH’s representations regarding the debt amount; (2) the focus of the FDCPA is on
the conduct of the debt collector, not the amount of the debt; and (3) letters to the
debtor’s attorney are not actionable under the FDCPA. The district court granted
summary judgment to Higgins based on its conclusion that communications with the
debtor’s attorney are not actionable under the FDCPA, and did not address Higgins’s
remaining bases for summary judgment. Richmond subsequently filed this appeal.
ANALYSIS
Richmond argues that the district court’s finding, that the communications with
his attorney are not actionable under the FDCPA, contradicts the plain language of 15
U.S.C. § 1692e. Higgins asserts that the district court correctly interpreted the
FDCPA, and even if it did not, Higgins is nonetheless entitled to summary judgment
on alternative grounds. We review the district court’s grant of summary judgment de
novo, viewing the evidence “in a light most favorable to the nonmoving party,” Peters
v. Gen. Serv. Bureau, Inc., 277 F.3d 1051, 1054 (8th Cir. 2002), and affirming if
“there is no genuine issue as to any material fact and . . . the moving party is entitled
to summary judgment as a matter of law,” Fed. R. Civ. P. 56(c). We review the
district court’s interpretation of a statute de novo. Dowd v. United Steelworkers,
Local No. 286, 253 F.3d 1093, 1099 (8th Cir. 2001). Although the district court did
not address Higgins’s alternative grounds for summary judgment, this court may
affirm on any basis supported by the record. Brown v. St. Louis Police Dep’t, 691
F.2d 393, 396 (8th Cir. 1982).
The district court granted summary judgment because the communications in
question were directed to the debtor’s attorney rather than the debtor. Whether
§ 1692e regulates communications directed to the consumer’s attorney is a matter of
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first impression for this court.4 According to § 1692e, “[a] debt collector may not use
any false, deceptive, or misleading representation or means in connection with the
collection of any debt.” (Emphasis added). This includes the misrepresentation of the
debt amount. § 1692e(2)(A). “If the plain language of the statute is unambiguous,
that language is conclusive absent clear legislative intent to the contrary.” Dowd, 253
F.3d at 1099 (further citation omitted). Several sections of the FDCPA restrict the
scope of its application by including the word “consumer” in the text. See, e.g., 15
U.S.C. §§ 1692g, 1692f(7), (8). But at least one section includes specific language to
illustrate that it applies to “any person.” See § 1692d. Thus, at least in other sections,
the FDCPA specifies the actors to which the section applies. Section 1692e contains
no indication of to whom it applies, but rather states to what it applies (“any”
representation or means). Because we affirm on an alternative basis, we find it
unnecessary to decide whether the FDCPA would apply to communications with a
debtor’s attorney at this time.
4
Although no circuit court has decided this issue, several district courts have
held that the FDCPA does not apply to communications with the debtor’s attorney,
and dicta from the Second Circuit has reached the same conclusion. See Kropelnicki
v. Siegel, 290 F.3d 118, 127 (2nd Cir. 2002) (stating in dicta that communications
with the debtor’s attorney are not actionable under the FDCPA); Diesi v. Shapiro, 330
F. Supp. 2d 1002, 1004 (C.D. Ill. 2004) (holding that letters written to plaintiffs’
attorney were not actionable under the FDCPA, citing Kropelnicki.); Zaborac v.
Phillips & Cohen Assocs., Ltd., 330 F. Supp. 2d 962, 967 n.5 (N.D. Ill. 2004) (citing
Kropelnicki, in finding that § 1692g does not prohibit debt collection communications
targeted at the debtor’s attorney); Tromba v. M.R.S. Assocs., Inc., 323 F. Supp. 2d
424, 427-28 (E.D.N.Y. 2004) (citing Kropelnicki in finding that a fax addressed to the
debtor’s attorney was not actionable under the FDCPA); Phillips v. N. Am. Capital
Corp., 1999 WL 299872 (N.D. Ill. Apr. 30, 1999) (holding that debtor-plaintiff did not
have standing to bring FDCPA § 1692g claim based on communications sent to his
attorney) (unpublished); Ignatowski v. GC Servs., 3 F. Supp. 2d 187, 190-91 (D. Conn.
1998) (dismissing FDCPA claim based on the failure to include statutorily required
disclosures under § 1692e(11), because the attorney in that case could easily discern
that defendant was attempting to collect a debt).
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The purpose of the FDCPA is to “eliminate abusive debt collection practices by
debt collectors,” § 1692(a), and debt collectors are liable for failure to comply with
“any provision” of the Act. §1692k(a). The FDCPA requires debt collectors to notify
debtors within five days of the initial communication with the debtor of the debtor’s
right to dispute the debt. § 1692g(a)(3). The debt collector must also inform the
debtor of its right to assume that the debt is valid if the debtor fails to dispute the debt
within thirty days of receipt of the notice. Id. If the debtor disputes the debt within
the thirty-day period, the debt collector must “cease collection of the debt, or any
disputed portion thereof, until the debt collector obtains verification of the debt . . . .”
§ 1692g(b)5. Failure to dispute the debt within the thirty-day period is not an
admission of liability. § 1692g(c).
Richmond filed this FDCPA action to dispute a debt. Richmond’s attorney,
Albright, was aware that the debt amount was $6,716.40 in early November 2001,
communicated directly with BJH in January, February, and April of 2002, and did not
dispute the debt during any of those conversations. The debt was not turned over to
Higgins until October of 2002. On October 9, 2002, Higgins sent Albright a letter
stating that it was attempting to collect an outstanding debt of $6,716.40, and
requested notification of any dispute regarding the debt within thirty days. Albright
did not dispute the debt amount within thirty days of receipt of the letter. In fact,
Higgins did not receive notice that the debt was disputed until almost six months later,
on April 1, 2003. Accordingly, Higgins was permitted under the FDCPA to assume
that the debt was valid. See § 1692g(a)(3). In the year and five months between the
date that Albright was first informed of the debt amount, in early November of 2001,
until he first disputed the debt amount on April 1, 2003, the debt amount never
changed.
5
The FDCPA does not speak to whether the protections provided under
§ 1692g(b) attach if the debtor disputes the debt after the expiration of the thirty-day
period.
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Richmond has never alleged that he was billed for services that were not
provided or that he was overcharged for the services he received. The conduct that
Richmond alleges violated the FDCPA was Higgins’s attempt to collect a previously
undisputed debt amount. Richmond was aware of the debt amount almost a year
before the debt was sent to Higgins for collection. There is nothing in the record to
show that the basis for this dispute did not exist prior to April 1, 2003. Having
carefully reviewed the record and the text and legislative history of the FDCPA, we
can ascertain no basis for a claim in these circumstances. To hold otherwise would
be to sanction consumer conduct that the FDCPA clearly did not contemplate. We
hold that there was no violation of the FDCPA,6 and therefore we affirm the district
court’s grant of summary judgment.
CONCLUSION
For the above-stated reasons, we affirm the district court.
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6
We do not hold that Richmond cannot dispute the debt amount.
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