Mayall v. Randall Firm, PLLC

JUSTIN MAYALL, Plaintiff, v. THE RANDALL FIRM, PLLC, an Idaho professional limited liability company;NEAL S. RANDALL, MEADE RECOVERY SERVICES, LLC,a Utah limited liability company; and MEADERS, LLC,a Utah limited liability company, Defendants.

Case No. 1:13-cv-00166-TC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH NORTHERN DIVISION

September 26, 2019

ORDER AND MEMORANDUM DECISION

Plaintiff Justin Mayall brought this action following efforts to collect a medical bill he claims he did not owe. Before the court are three motions for judgment on the pleadings or summary judgment. Two sets of defendants, Meade Recovery Services and Meaders, LLC (collectively, Meade), and Neal S. Randall and The Randall Firm, PLLC (collectively, the Randall Defendants), have filed nearly identical motions seeking dismissal of all claims against them. (ECF Nos. 156, 167.) For the reasons set forth below, the court grants in part and denies in part these motions. The Randall Defendants have additionally filed a motion seeking dismissal on the narrow grounds that Mr. Mayall failed to comply with his discovery obligations and has not pierced the corporate veil to hold Mr. Randall personally liable. (ECF No. 153.) This motion is denied.

BACKGROUND¹

This case arises from a straightforward billing error made by a medical clinic. On August 8, 2012, Mr. Mayall visited Advanced Spine Pain Specialists (Advanced Spine) in Logan, Utah, for surgery to treat back pain. But Mr. Mayall, a disabled veteran who receives medical benefits from the Department of Veterans Affairs (VA) and Medicare, needed insurance preauthorization before he could undergo surgery. Advanced Spine promised to submit the necessary papers, and scheduled his surgery for August 14, 2012.

Mr. Mayall underwent surgery, but Advanced Spine forgot to submit his preauthorization papers. Because of the error, Advanced Spine waived the cost of the procedure. But the Cache Valley Hospital still sent Mr. Mayall a bill for the surgery, which Mr. Mayall refused to pay. The hospital turned the bill over to Meade for collection.

On July 18, 2013, Mr. Mayall received a letter from the Randall Defendants on behalf of Meade demanding payment. The letter stated:

Our records indicate that you owe a past-due balance as calculated below:

Original Balance

$3,670.10

Accrued Interest at 18% APR

$620.80

Collection Costs

$1,468.04

Attorney Fees

$175.00

Less Payments Made

-$0.00

Total Past-Due Balance

$5,933.94

You should pay off the amount owed now by mailing a check or money order to: Meade Recovery Service, LLC . . . . If you cannot pay off the amount owed right now, then you should call my office and set up monthly payments and sign apayment agreement; the fee to set up the payment arrangement will be included in the monthly payments. If you do not: 1) Pay off the amount owed, or 2) set up monthly payments, then a lawsuit will be filed against you to collect the original balance. Also, the lawsuit will seek to recover interest, attorney fees, collection costs and other court costs from you. Therefore, in order to avoid legal action, you should contact me immediately. Otherwise, my client has instructed me to file a lawsuit against you.

Sincerely,

Neal S. Randall

Attorney at Law

(Ex. 1 to Second Am. Compl. (ECF No. 80-1).) At the bottom of the letter was a fine print legal notice:

If this is a consumer debt, you are hereby notified of the following: 1) This letter is an attempt to collect a debt allegedly owed to the above-listed original creditor, and any information will be used for that purpose. 2) Unless you dispute the validity of the debt, or any portion thereof within thirty (30) days after receipt of this letter, the debt will be assumed to be valid. 3) If you notify this office in writing within the thirty-day period that the debt, or any portion therof, is disputed, then this office will obtain verification of the debt, or, if applicable, a copy of the judgment against you, and this office will mail a copy of such verification or judgment against you. 4) Upon your written request within the thirty-day period, this office will provide you with the name and address of the original creditor, if different from the current creditor. 5) This past due debt may be reported, if not reported already, to a credit reporting company, if it remains unpaid.

(Id.)

According to Mr. Mayall, he disputed the debt in writing within thirty days of receiving the letter.

On August 20, 2013, the Randall Defendants sent Mr. Mayall another letter with a copy of an unfiled state court complaint, which said,

You have just been served with a lawsuit. The lawsuit will seek damages as described in the attached Complaint, and as shown in the brief summary below:

Original Balance

$3,670.10

Accrued Interest at 18% APR

(thru 8/9/12 to 8/20/13)

$680.53

Collection Costs* and Attorney Fees

$2,120.54

Less Payments Made

-$0.00

Total Past-Due Balance

$6,471.17

*Including estimated service of process costs of $27.50

In addition to the Total Claim for Damages amount, the lawsuit seeks future court filing fees that range between $75.00 and $360.00. If you wish to prevent the commencement of the lawsuit, then you should contact my office within five (5) days of the receipt of this letter to settle the matter and/or establish a payment plan. If you call my office and set up a payment plan, then you can prevent the lawsuit from being filed with the court, thereby saving yourself the additional cost of the court filing fees as described above. Therefore, in order to prevent the lawsuit from progressing and to save yourself from the additional costs of litigation, you should contact me immediately to make payment arrangements.

Please be advised that without payment in full or a written payment agreement signed by you and returned to Meade Recovery Services, LLC within 10 business days, the attached Complaint will be filed with the Court.

Sincerely,

Neal S. Randall

Attorney at Law

(Ex. 2 to Second Am. Compl. (ECF No. 80-2).)

Meade and the Randall Defendants filed suit against Mr. Mayall shortly after sending the letter, but dismissed the suit on the eve of trial. Mr. Mayall filed this action on December 03, 2013. In his operative second amended complaint, he brings claims under the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA), Consumer Financial Protection Act (CFPA), and Utah law. Meade and the Randall Defendants now seek dismissal of all claims against them.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 12(c) provides that "[a]fter the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings." But if "matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d).

Meade and the Randall Defendants seek to dismiss most claims based solely on the pleadings. For these claims, the court will use the same standard as a Rule 12(b)(6) motion. Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1160 (10th Cir. 2000). The court must determine whether the complaint contains "sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In doing so, the court must "liberally construe the pleadings and make all reasonable inferences in favor of the non-moving party." Brokers' Choice of Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1105 (10th Cir. 2017).

Meade and the Randall Defendants challenge one of Mr. Mayall's FDCPA claims—the alleged violation of 15 U.S.C. § 1692g—with materials outside of the pleadings, so the court will evaluate that claim using the summary judgment standard. "Summary judgment is proper if the movant demonstrates that there is 'no genuine issue as to any material fact' and that it is 'entitled to a judgment as a matter of law.'" Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (quoting Fed. R. Civ. P. 56(c)). "The movant bears the initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law." Id. at 670-71. Should the nonmovant bear the burden of persuasion at trial, the movant need only show a lack of evidence on a required element of the claim. Id. at 671. Upon making this prima facie showing, "the burden shifts to the nonmovant togo beyond the pleadings and 'set forth specific facts' that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Id. (quoting Fed. R. Civ. P. 56(e)). When applying the summary judgment standard, court must "view the factual record and draw all reasonable inferences therefrom most favorably to the nonmovant." Id. at 670.

ANALYSIS

I. Mr. Mayall's FCRA and CFPA Claims

Meade and the Randall Defendants challenge Mr. Mayall's FCRA and CFPA claims on the ground that neither statute gives Mr. Mayall a private right of action. The court agrees.

The court has already evaluated Mr. Mayall's FCRA and CFPA claims in this case. A different set of defendants—the entities comprising the hospital that furnished billing information to Meade—moved for judgment on the pleadings on the ground that neither statute conferred a private right of action to sue. See Mayall v. Randall Firm, PLLC et al., No. 1:13-cv-00166-TC, 2017 WL 3432033, at *1-2. (D. Utah Aug. 9, 2017). As the court stated in that decision:

The FCRA "imposes a duty on persons who provide information to credit reporting agencies ('furnishers') to accurately report information." Sanders v. Mountain Am. Fed. Credit Union, 689 F.3d 1138, 1147 (10th Cir. 2012) (citing 15 U.S.C. § 1681s-2(a)). While it also "gives consumers a private right of action against those who violate its provisions, . . . that right of action

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