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Dudley v. Focused Recovery Solutions, Inc.

United States District Court, E.D. Virginia, Newport News Division

July 12, 2017



          Arenda L. Wright Allen United States District Judge.

         This case arises from Plaintiff Kimberly Dudley's unpaid medical bill of $143.80 and the attempts to collect that debt undertaken by Defendant Focused Recovery Solutions, Inc. ("Focused Recovery"). Plaintiff filed suit in state court, alleging that Focused Recovery's collection efforts violated the Fair Debt Collection Practices Act ("FDCPA" or "the Act"), 15 U.S.C. § 1692 et seq. After removing the suit to federal court, Focused Recovery moved to dismiss the Complaint for failure to state a claim upon which relief can be granted. Because Plaintiff alleges no falsehood, misrepresentation, unfairness, or unconscionable means within the ambit of the Act, Plaintiff fails to state a viable claim for relief. Accordingly, Focused Recovery's Motion to Dismiss (ECF No. 5) is granted.

         I. BACKGROUND

         When ruling on a motion to dismiss for failure to state a claim, courts accept a complaint's well-pled factual allegations as true, and draw any reasonable inferences in favor of the plaintiff. See Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012). Accordingly, the Court recites the facts as alleged by Plaintiff. See Compl. (ECF No. 1-1).

         On May 20, 2015, Plaintiff received medical services from the Surgery Center of Chesapeake, incurring $7, 554.56 in charges. See Itemization[1] (ECF Nos. 6-5, 1-1 Exh. E); see also Compl. ¶ 19. She was discharged that same day. See Itemization; see also Compl. ¶ 19. Prior to treatment, Plaintiff signed a document titled "Consent for Treatment, Release of Information and Financial Responsibility" ("the Agreement"). See Agreement (ECF Nos. 6-1, 1-1 Exh. A); see also Compl. ¶¶ 19-21. The Agreement provided, inter alia, that "[a]ny unpaid balance, whether covered by insurance or other benefit, will be subject to a finance charge of 1 [percent] per month, commencing sixty . . . days after the discharge date. This is an annual percentage rate of 12 [percent]." Agreement at 1 (capitalization omitted). Plaintiff further "agree[d] to pay all costs of collection including an attorney's fee o[r] collection fee of [30] percent of the unpaid bill at the time of placement with such attorney or collection agency." Id. (capitalization omitted).

         Plaintiffs health insurer paid for $7, 392.36 of the services' cost, in two payments made on June 16, 2015. See Itemization. This apparently underpaid the insurer's share of the bill by $18.40. See Id. Plaintiffs portion of the surgery's expense, $143.80, also remained outstanding throughout the summer of 2015. See Id. These debts totaled $162.20. See id.

         Seeking to collect this outstanding sum, the Surgery Center engaged the debt-collection services of Focused Recovery. See Compl. ¶¶ 15, 18. Focused Recovery sent Plaintiff a letter dated October 8, 2015 (the "Dunning Letter"), informing her of the debt, seeking payment, and providing several payment options. See Dunning Letter (ECF Nos. 6-2, 1-1 Exh. E). The Dunning Letter lists a balance of $207.61 and states: "Payment in full to this office will stop further collection action on this account. Make your check or money order payable for $207.61." Id. The Dunning Letter also provides statutorily required disclosures and advises Plaintiff of her right to request verification of the debt. See Id. Plaintiff responded to the Dunning Letter by invoking this right. See Verification Request at 1-2 (ECF Nos. 6-3, 1-1 Exh. C).

         Focused Recovery provided the requested verification by letter (the "Verification Letter") dated December 15, 2015. See Verification Letter (ECF Nos. 6-4, 1-1 Exh. D). Enclosed was an itemized bill printed on the Surgery Center's letterhead (the "Itemization"), which provides:

Figure 1: Itemization Summary[2]

May 20

Medical Services

$7, 554.56

June 16

Insurer Payment 1

-$5, 932.56

June 16

Insurer Payment 2

-$1, 459.80

September 30

Collection Fee Assessed


October 13

Refund of Insurer Payment 2 (from June 16)

$1, 459.80

October 13

Insurer Payment 3

-$1, 478.20

October 14

Interest Charge to Insurer


October 14

Interest Payment from Insurer


Total Outstanding Balance:


         The Itemization reveals that the $189.21 outstanding balance is comprised of $143.80 overdue for services and a $45.41 collection fee. See Id. The $18.40 difference between the unpaid amounts listed in the Dunning Letter ($207.61) and the Itemization ($189.21) results from an interim insurer payment. See Id. The record is silent regarding whether Focused Recovery undertook additional efforts to collect the debt or whether Plaintiff ultimately paid the debt, and, if so, the amount she paid.

         A year later, Plaintiff filed suit in Hampton Circuit Court, alleging Focused Recovery's methods violated provisions of the Fair Debt Collection Practices Act ("FDCPA"). See Compl. ¶¶ 50-67. Focused Recovery removed the suit to this Court and moved to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6). See Removal Notice (ECF No. 1); see also Mot. Dismiss. The Motion is now ripe for resolution by the Court.


         "To survive a Rule 12(b)(6) motion to dismiss, a complaint must 'state a claim to relief that is plausible on its face.'" United States ex rel Nathan v. Takeda Pharm. N. Am., Inc., 707 F.3d 451, 455 (4th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. "The plausibility standard is not akin to a 'probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "Facts that are 'merely consistent with' liability do not establish a plausible claim to relief." Takeda Pharm., 707 F.3d at 455. Rather, the '"[f]actual allegations must be enough to raise a right to relief above the speculative level, ' thereby 'nudg[ing] [plaintiffs] claims across the line from conceivable to plausible.'" Vitol, S.A. v. Primerose Shipping Co., 708 F.3d 527, 543 (4th Cir. 2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)) (first and second alteration in original).

         At this stage, "(1) the complaint is construed in the light most favorable to the plaintiff, (2) its allegations are taken as true, and (3) all reasonable inferences that can be drawn from the pleading are drawn in favor of the pleader." 5B Charles A. Wright et al., Federal Practice & Procedure § 1357 & n.11 (3d ed.) (collecting cases); accord Wag More Dogs, LLC v. Cozart, 680 F.3d 359, 365 (4th Cir. 2012). However, courts "will not accept 'legal conclusions couched as facts or unwarranted inferences, unreasonable conclusions, or arguments.'" Takeda Pharm., 707 F.3d at 455 (quoting Wag More Dogs, 680 F.3d at 365).

         "[A]s a general rule extrinsic evidence should not be considered at the 12(b)(6) stage." Am. Chiropractic Ass'n v. Trigon Healthcare, Inc.,367 F.3d 212, 234 (4th Cir. 2004). "Generally, . . . courts are limited to considering the sufficiency of allegations set forth in the complaint and the 'documents attached or incorporated into the complaint.'" Zak v. Chelsea Therapeutics Int'l, Ltd.,780 F.3d 597, 606 (4th Cir. 2015); see also Fed. R. Civ. P. 12(d). However, "when a defendant attaches a document to its motion to dismiss, 'a court may consider it in determining whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the plaintiffs ...

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