United States District Court, S.D. Florida
OMNIBUS ORDER ON CROSS MOTIONS FOR SUMMARY
G. COOKE UNITED STATES DISTRICT JUDGE
MATTER is before me on the Defendant I.C. System, Inc.'s
(“ICS”) Motion for Summary Judgment (ECF No. 87),
Defendant MD Now's (“MD Now”) Motion for
Summary Judgment (ECF No. 89), and Plaintiff Faustin
Cornette's (“Plaintiff”) Motion for Partial
Summary Judgment (ECF No. 92). All parties have filed
responses and replies, as well as Statements of Undisputed
Facts in support of their motions. The matter is now ripe for
case arises out of a $37.79 collection charge added to
Plaintiffs account as a result of unpaid medical
costs. MD Now contracts with ICS to collect
unpaid debt from consumers in Florida on its behalf. ICS'
Statement of Material Facts (“ICS' SMF”), ECF
No. 88, ¶ 25. The relationship between ICS and MD Now is
governed by the Premier Collect Agreement dated September 3,
2013. ICS' SMF, ¶ 26. The Premier Collect Agreement
states “[MD Now's] fees include the non-refundable
service fee of $0 plus $0 (applicable state tax) for a total
of $0 and the highest applicable fee specified below on all
amounts realized after placement.” ECF No. 49-4, p. 2.
According to the Agreement, MD Now is responsible for a fee
of 20% of “all amounts realized” on balances of
$150.01 or more. Id. Attached to the Premier Collect
Agreement is the “Patient Contract, ” which
governs the relationship between MD Now and its clients. ECF
No. 47-1. The Patient Contract states, “If my balance
is not paid after 60 days, the information necessary for
collection purposes will be forwarded to a professional
collection agency, ” and “Further, in the event
collection action is required to be initiated by MD Now, I
hereby guarantee payment of all attorney's fees, court
costs and collection charges incurred up to 40% of the
outstanding principal.” ECF No. 47-1, p. 4, ¶ 5.
ICS reviewed the Patient Contract to ensure it allowed for
collection fees to be assessed. Morris Depo., 78:14-24. MD
Now believes it incurs the 20% charge at the moment it refers
an account to ICS. MD Now's Statement of Material Facts,
(“MD Now's SMF”), ECF No. 90, ¶ 15.
March 25, 2015, Plaintiff received medical treatment at a
facility owned by MD Now. MD Now's SMF, ¶ 7. Prior
to receiving medical care, Plaintiff signed a “Patient
Contract” with MD Now. MD Now's SMF, ¶ 8. On
or about June 3, 2015, MD Now sent Plaintiff a Statement
seeking payment for medical costs totaling $188.94. ECF No.
47-3. By October 2015, Plaintiff still had not paid his bill.
MD Now's SMF, ¶ 9. On October 19, 2015, MD Now
referred Plaintiff's account to ICS for collection. MD
Now's SMF, ¶ 10. The total amount referred was
$226.73, which consisted of $188.94 in
“Principal” and a $37.79 “Collection
Charge.” ICS' SMF, ¶ 16.
sent Plaintiff a letter dated October 22, 2015, which showed
the Principal Due of $188.94 and a Collection Charge Due of
$37.79. ECF No. 47-4. After receiving ICS' letter,
Plaintiff paid the full amount shown on the MD Now website
but did not pay the collection charge. MD Now's SMF,
¶ 19. MD Now paid ICS $37.79, the amount of the
collection charge, after Plaintiff paid his medical bill to
MD Now. MD Now's SMF, ¶ 22. ICS was notified on
October 30, 2015 that a payment was received on
Plaintiff's account and ICS stopped all collection
efforts. ICS' SMF, ¶ 24. Plaintiff never disputed
the debt with ICS prior to filing suit in state court on
December 16, 2015. ICS' SMF, ¶ 21.
filed a complaint against MD Now and ICS in the Circuit Court
of Palm Beach County, Florida alleging violations of the
Florida Consumer Collection Practices Act
(“FCCPA”) and the Florida Deceptive and Unfair
Trade Practices Act (“FDUTPA”) on the same facts
described above. ICS' SMF, ¶¶ 1-2. MD Now filed
a motion to dismiss the state court complaint, arguing
Plaintiff could not meet the “knowledge”
requirement under the FCCPA. ICS SMF, ¶ 3; ECF No. 49-2.
After oral arguments, the state court granted MD Now's
motion to dismiss without prejudice. ICS' SMF, ¶ 4;
ECF No. 49-3. Plaintiff then filed the instant action on
October 21, 2016. An ICS “Debt Detail” dated
February 22, 2017 showed Plaintiff had a current balance of
$37.79. ECF No. 105-11.
judgment “shall be granted if the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” Allen v. Tyson Foods, Inc., 121 F.3d 642
(11th Cir. 1997) (quoting Fed.R.Civ.P. 56(c)) (internal
quotations omitted); Damon v. Fleming Supermarkets of
Florida, Inc., 196 F.3d 1354, 1358 (11th Cir. 1999). In
making this assessment, the Court “must view all the
evidence and all factual inferences reasonably drawn from the
evidence in the light most favorable to the nonmoving party,
” Stewart v. Happy Herman's Cheshire Bridge,
Inc., 117 F.3d 1278, 1285 (11th Cir. 1997), and
“must resolve all reasonable doubts about the facts in
favor of the non-movant.” United of Omaha Life Ins.
Co. v. Sun Life Ins. Co. of Am., 894 F.2d 1555, 1558
(11th Cir. 1990).
its very terms, this standard provides that the mere
existence of some alleged factual dispute between
the parties will not defeat an otherwise properly supported
motion for summary judgment; the requirement is that there be
no genuine issue of material fact.”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247-48 (1986) (emphasis in original). “As to
materiality, the substantive law will identify which facts
are material. Only disputes over facts that might affect the
outcome of the suit under the governing law will properly
preclude the entry of summary judgment. Factual disputes that
are irrelevant or unnecessary will not be counted.”
Id. at 248. Likewise, a dispute about a material
fact is a “genuine” issue “if the evidence
is such that a reasonable jury could return a verdict for the
nonmoving party.” Id.
factual issues to be considered genuine, they must have a
real basis in the record...mere conclusions and unsupported
factual allegations are legally insufficient to defeat a
summary judgment motion.” Ellis v. England,
432 F.3d 1321, 1326 (11th Cir. 2005) (citations omitted). The
moving party “always bears the initial responsibility
of informing the district court of the basis for its motion,
and identifying those portions of the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any, which it believes demonstrate
the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Summary judgment is proper “against a party who fails
to make a showing sufficient to establish the existence of an
element essential to that party's case, and on which that
party will bear the burden of proof at trial.”
Id. at 322. In those cases, there is no genuine
issue of material fact “since a complete failure of
proof concerning an essential element of the nonmoving
party's case necessarily renders all other facts
immaterial.” Id. at 323.
Debt Collection Practices Act (“FDCPA”)
brings two FDCPA claims against ICS pursuant to 15 U.S.C.
§§ 1692e(2)(A) and 1692f(1). Plaintiff and ICS each
maintain they are entitled to summary judgment on both FDCPA
claims. After a careful review of the record and the relevant
legal authorities, ICS is entitled to judgment as a matter of
20% collection charge violated the FDCPA.
to 15 U.S.C. § 1692e(2)(A), a debt collector is
prohibited from using any false, deceptive, or misleading
representation in connection with the collection of a debt,
specifically including the false representation of the
character, amount or legal status of any debt. 15 U.S.C.
§ 1692f(1) prohibits a debt collector from using unfair
or unconscionable means to collect a debt, including
collecting any amount, interest, fee, charge, or expense
incidental to the principal obligation, unless expressly
authorized by the agreement creating the debt. To prevail on
an FDCPA claim, a plaintiff must prove three elements.
“First, the plaintiff must have been the object of a
collection activity arising from consumer debt. Second, the
defendant must be a debt collector as defined by the FDCPA.
Third, the defendant must have engaged in an act or omission
prohibited by the FDCPA.” Erickson v. Gen. Elec.
Co., 854 F.Supp.2d 1178, 1182 (M.D. Fla. 2012) (internal
citations omitted). There is no dispute that the first two
elements have been met; I must therefore determine whether
ICS engaged in an act or omission prohibited by the FDCPA.
Eleventh Circuit addressed an almost identical factual
situation in Bradley v. Franklin Collection
Serv., Inc., 739 F.3d 606 (11th Cir. 2014). In
Bradley, the plaintiff received medical services for
which he did not pay. Id. at 609. The medical
provider referred his account to a collection agency, and in
doing so added a fee of 33.33%. Id. The contract
between the plaintiff and the medical provider stated the
plaintiff would pay for “all costs of
collection.” Id. The Eleventh Circuit
interpreted the contract to obligate plaintiff only for the
“actual” costs of collection. Id., at
610. Because the 33.33% fee bore no correlation to the actual
costs of collection, the fee was not expressly agreed to by
plaintiff and violated the FDCPA. Id. According to
the court, percentage-based fees are not per se
violations of the FDCPA; the agreement just needs expressly
to allow for it. Id. Similarly, in a case against a
mortgage loan servicer, the Eleventh Circuit held that
estimated fees violated both §§ 1692(e)(2) and
1692f(1) where the contract language only allowed for
“incurred” or “disbursed” fees.
Prescott v. Seterus, Inc., 635 F. App'x 640,
633-44 (11th Cir. 2015) (hereinafter “Prescott
contract at issue here required Plaintiff to pay “all
attorney's fees, court costs and collection charges
incurred up to 40%.” ECF No. 47-1, p. 4, ¶ 5.
Plaintiff argues that the 20% charge MD Now added to his
outstanding balance is simply a percentage-based fee and was
not expressly agreed to by Plaintiff in the
agreement. ICS does not contest the inappropriateness
under the FDCPA of the collection charge as calculated by MD
Now. MD Now, however, argues that the 20% fee is MD
Now's actual cost because, based on the Premier Collect
Agreement, it incurred the 20% fee at the time it sent
Plaintiffs account to ICS for collection. In addition, MD
Now contends that ...