KINNICK v. MED-1 SOLUTIONS, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

JASON KINNICK, )

)

Plaintiff, )

)

v. ) No. 1:19-cv-02563-TAB-SEB

)

MED-1 SOLUTIONS, LLC an Indiana limited )

liability company, )

)

Defendant. )

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

I. Introduction

Plaintiff Jason Kinnick and his wife filed a Chapter 7 bankruptcy petition on March 12,

2019. Defendant Med-1 Solutions, LLC sent Kinnick a collection letter on April 25, 2019,

demanding payment of debts allegedly owed to Community Health Network that were included

in Kinnick's bankruptcy. Kinnick sued Med-1 for violating §§ 1692e and 1692c(c) the Fair Debt

Collection Practices Act by attempting to collect a debt that was subject to bankruptcy and for

which he had demanded that collection communications cease. Kinnick also now argues that

Med-1 violated § 1692e(3) because there was no meaningful attorney review of his account prior

to sending the collection letter. Both parties moved for summary judgment. Questions of fact

remain as to whether Kinnick was misled by Med-1's letter or whether Med-1 maintained

reasonable procedures to avoid the error. However, for reasons stated below, Med-1's motion for

summary judgment [Filing No. 64] is granted as to Kinnick's §§ 1692(c)(3) and 1692e(3) claims.

Accordingly, Kinnick's motion for summary judgment [Filing No. 60] is denied, and Med-1's

motion [Filing No. 64] is granted in part and denied in part.

II. Background1

On February 8, 2019, Kinnick and his wife had their attorney send a notice of attorney

representation to Med-1, to notify Med-1 that they were represented by counsel in connection

with any debts Med-1 was trying to collect from them, and that collection communication should

cease. [Filing No. 61-4, at ECF p. 3.] Med-1 received the February 8, 2019, faxed notice of

attorney representation. [Filing No. 61-2, at ECF p. 3.] On March 12, 2019, Kinnick and his

wife filed a Chapter 7 bankruptcy petition. [Filing No. 1-3.] Among the debts listed on the

petition were various debts allegedly owed for medical services at Community Health Network,

as well as several other debts being collected by Defendant Med-1 at that time, in relation to

Kinnick's wife. [Filing No. 1-3, at ECF p. 3-8.] Both Community Health and Med-1 received

notice of the Kinnicks's bankruptcy petition in March. [Filing No. 1-4; Filing No. 61-2, at ECF

p. 3.] At that time, Med-1 did not have any active accounts for Kinnick. [Filing No. 65-7, at

ECF p. 1-2; Filing No. 65-8, at ECF p. 53-54.]

On April 24, 2019, Med-1 obtained or was assigned for collection two accounts from

Community Health Gallahue Behavioral allegedly owed by Kinnick for services he received

prior to the bankruptcy petition. [Filing No. 61-6, at ECF p. 7-8.] Med-1 allegedly has a policy

to never dun a debtor for a debt that is subject to a bankruptcy. [Filing No. 65-1, at ECF p. 34

("Bankruptcy accounts—cannot work"); Filing No. 65-1, at ECF p. 63 ("If an RP states that they

have filed bankruptcy, we must cease all collection efforts and send the account to the legal

department to verify."); Filing No. 65-3, at ECF p. 1-3 ("NEW Bankruptcy and Deceased Scrub

Procedure" dated 12/16/2014); Filing No. 65-4, at ECF p. 1-3 ("Bankruptcy Process &

1 These background facts are either undisputed or assumed as true for the purpose of ruling on

the summary judgment motions.

Dispositions Procedure, 4/26/2017").] Med-1 also had a policy to run a bankruptcy scrub before

sending an initial dunning letter. [Filing No. 65-3, at ECF p. 1 ("Purpose: To ensure that all

Med1 bad debt placements are sent to Lexis Nexis for bankruptcy and deceased scrubs, and

return files loaded before letters are requested and sent.").]

However, at some point in early 2019, Med-1 created a new process for certain

Community Health Network debts that "tied together" multiple accounts owed by one debtor to

Community Health, so that one single letter would be sent for all debts owed to the same creditor

at the same time. [Filing No. 65-6, at ECF p. 10-11.] In doing so, Med-1 created a unique set of

automated commands for Community Health Gallahue accounts that contained a programming

mistake, which caused the Gallahue letters to be sent the day before the bankruptcy scrub.

[Filing No. 65-6, at ECF p. 14.] Thus, on April 25, 2019, Med-1 sent a letter to Kinnick signed

by attorney Richard Huston demanding payment of debts allegedly owed to Community Health

that were included in Kinnick's bankruptcy petition. [Filing No. 1-5.] Med-1 ran the bankruptcy

scrub that same day and learned that Kinnick's debts were subject to bankruptcy. [Filing No. 13-

1, at ECF p. 1.] Med-1 subsequently ceased all collection activity for the debt at issue. [Filing

No. 13-1, at ECF p. 1-2.]

Kinnick received Med-1's letter and was angered and concerned that he was receiving

collection letters while he was in the middle of a bankruptcy. [Filing No. 61-1, at ECF p. 19.].

Receipt of the letter impacted Kinnick physically, causing extreme frustration, anxiety,

hopelessness, and dread. [Filing No. 61-1, at ECF p. 22-23.] Kinnick's anxiety continued under

his bankruptcy discharge over a month later, on June 11, 2019. [Filing No. 61-1, at ECF p. 23.]

On June 25, 2019, Kinnick filed his complaint against Med-1 for violating the FDCPA. [Filing

No. 1.] Both Kinnick and Med-1 moved for summary judgment. [Filing No. 60; Filing No. 64.]

III. Discussion

In their cross-motions for summary judgment, Kinnick and Med-1 each argue that they

are entitled to summary judgment as a matter of law on Kinnick's FDCPA claims. Kinnick

argues that the uncontroverted evidence shows Med-1's actions—attempting to collect a debt not

owed due to bankruptcy—violated § 1692e and § 1692(c)c of the FDCPA and caused the type of

harm outlawed by Congress's enactment of the FDCPA. [Filing No. 61, at ECF p. 2.] Med-1

argues Kinnick's claims "fail as a matter of law for multiple independent and overlapping

reasons." [Filing No. 66, at ECF p. 4.] Summary judgment is appropriate if "the movant shows

that there is no genuine dispute as to any material fact and that the movant is entitled to judgment

as a matter of law." Fed. R. Civ. P. 56(a).

This notion applies equally where, as here, opposing parties each move for

summary judgment in their favor pursuant to Rule 56. Indeed, the existence of

cross-motions for summary judgment does not necessarily mean that there are no

genuine issues of material fact. Rather, the process of taking the facts in the light

most favorable to the non-movant, first for one side and then for the other, may

reveal that neither side has enough to prevail without a trial. With cross-motions,

the court's review of the record requires that the court construe all inferences in

favor of the party against whom the motion under consideration is made.

Tyler v. JP Operations, LLC, 342 F. Supp. 3d 837, 842 (S.D. Ind. 2018) (internal citations,

quotation marks, and brackets omitted).

A. Article III Standing

Before reaching the merits of the parties' underlying arguments, the Court must address

the threshold issue of Article III standing.

Standing is a threshold requirement because it derives from the

Constitution's limit on federal courts' authority to resolve "cases" and

"controversies." The plaintiff, as the party invoking the court's jurisdiction, must

establish the elements of standing: she must prove that she has suffered a concrete

and particularized injury that is both fairly traceable to the challenged conduct and

likely to be redressed by a favorable judicial decision.

Bazile v. Finance System of Green Bay, Inc., 983 F.3d 274, 278 (7th Cir. 2020) (internal citation

omitted). The Seventh Circuit recently issued a series of decisions that narrowed the

circumstances in which an FDCPA plaintiff has standing to sue. See Larkin v. Finance System of

Green Bay, Inc., 982 F.3d 1060, 1066 (7th Cir. 2020); Brunett v. Convergent Outsourcing, Inc.,

982 F.3d 1067, 1068 (7th Cir. 2020); Gunn v. Thrasher, Buschmann & Voelkel, P.C., 982 F.3d

1069, 1072 (7th Cir. 2020); Bazile, 983 F.3d at 280; Nettles v. Midland Funding, LLC, 983 F.3d

896, 900 (7th Cir. 2020); Spuhler v. State Collection Servs., Inc., 983 F.3d 282, 286 (7th Cir.

2020); Smith v. GC Services Limited Partnership, 986 F.3d 708, 711 (7th Cir. 2021); Pennell v.

Global Trust Management, LLC, 990 F.3d 1041, 1044-45 (7th Cir. 2021); Markakos v.

Medicredit, Inc., No. 20-2351, __ F.3d __, __, 2021 WL 1937267, at *3 (7th Cir. May 14, 2021);

see also Patterson v. Howe, No. 1:16-cv-3364, 2021 WL 1124610, at *1-3 (S.D. Ind. 2021)

(surveying recent cases and granting a motion to reconsider in light of them).

The Court previously addressed similar arguments on standing in this case its October 15,

2019, order denying Med-1's motion to dismiss. Kinnick v. Med-1 Solutions, LLC, No. 1:19-cv-

2563-TAB-SEB, 410 F. Supp. 3d 939 (S.D. Ind. 2019). At that time, the Court concluded Med-

1's alleged conduct was more than a bare procedural violation and that Kinnick's complaint

alleged that he personally was misled and negatively impacted by the collection letter. Id. at

943. While at the pleading stage, a plaintiff must only " 'plausibly suggest' each element of

standing, with the court drawing all reasonable inferences in the plaintiff's favor." Bazille, 983

F.3d at 278 (citation omitted). However, mere allegations alone do not stand for long. Id.

Rather, "[t]o demonstrate standing at the summary judgment stage of litigation, the plaintiffs

must set forth by affidavit or other evidence specific facts demonstrating that they have suffered

a concrete and particularized injury that is both fairly traceable to the challenged conduct and

likely redressable by a judicial decision" Spuhler, 983 F.3d at 284 (internal citations and

quotation marks omitted).

Now, at summary judgment, Med-1 argues Kinnick does not have standing to bring his

claims because Kinnick "did not rely on the alleged FDCPA violations in a way that caused him

to make a detrimental act regarding the debt." [Filing No. 66, at ECF p. 24.] Kinnick maintains

that Med-1's actions "harmed" him because it "destroyed the 'fresh start' Congress intended that

individuals, such as Mr. Kinnick, receive when it enacted the Bankruptcy Code, it made him

doubt the effectiveness of his bankruptcy, his decision to hire his attorney, and it was also a

significant source of tension between him and his wife." [Filing No. 60, at ECF p. 2.]

Mere annoyance or intimidation by the letter is not enough. See, e.g., Gunn, 982 F.3d at

1071-72 ("Many people are annoyed to learn that governmental action may put endangered

species at risk or cut down an old-growth forest. Yet the Supreme Court has held that, to litigate

over such acts in federal court, the plaintiff must show a concrete and particularized loss, not

infuriation or disgust. . . . [T]he Supreme Court has never thought that having one's nose out of

joint and one's dander up creates a case or controversy."). Neither is doubt and confusion. See,

e.g., Brunett, 982 F.3d at 1068 ("A debtor confused by a dunning letter may be injured if she

acts, to her detriment, on that confusion. . . . But the state of confusion is not itself an injury.").

Similarly, the Seventh Circuit clarified in its recent Pennell decision that allegations of

stress, without more, fall short. See Pennell, 990 F.3d at 1045 ("Pennell alleged in her complaint

that Global Trust's dunning letter caused stress and confusion. But we made clear in Brunett that

the state of confusion is not itself an injury. Nor does stress by itself with no physical

manifestation and no qualified medical diagnosis amount to a concrete harm." (Internal citations

and quotation marks omitted)). The Seventh Circuit concluded that Pennell "failed to show that

receiving Global Trust's dunning letter led her to change her course of action of or put her in

harm's way. Instead, she merely pointed to a statutory violation, which is not enough to establish

standing under Article III." Id. See also Brunett, 982 F.3d at 1069 ("Talk is cheap, but where's

the concrete harm? That's what the Constitution requires, and Brunett does not allege any.").

This Court recently dismissed a plaintiff's claims for lack of injury in fact and lack of

standing in a case with similar allegations as this one. See Pucillo v. National Credit Systems,

Inc., No. 1:19-cv-285-TWP-DML, 2021 WL 1061191, at *4 (S.D. Ind. Mar. 19, 2021). Pucillo

alleged in his amended complaint, using nearly identical language as Kinnick, that the collection

company's actions confused and alarmed him and " 'caused him to believe that his exercise of his

rights, through filing bankruptcy, may have been futile and that he did not have the right to a

fresh start that Congress had granted him under the Bankruptcy Code, as well as his rights under

the FDCPA.' " Id. Chief Judge Pratt concluded: "The Seventh Circuit has been clear that,

without more, confusion, stress, concern, and fear are not enough to support a concrete injury in

FDCPA Section 1692e and Section 1692c cases. This is all that Pucillo has alleged. Therefore,

his, claims must be dismissed because of a lack of injury in fact and lack of standing." Id.

As in Pucillo, the bare allegations in Kinnick's complaint fall short of stating the

necessary allegations of a concrete injury. Kinnick used the same general argument about

fearing he did not have the right to a fresh start, in addition to his claim that the letter made him

doubt the effectiveness of his bankruptcy and that it was a significant source of tension with his

wife. [Filing No. 1, at ECF p. 3.] However, at the summary judgment stage, courts peer beyond

mere complaint allegations. See, e.g., Chicago Wine Co. v. Holcomb, No. 1:19-cv-2785-TWP-

DML, __ F. Supp. 3d. __, __, 2021 WL 1196175, at *3 (S.D. Ind. Mar. 30, 2021) ("The purpose

of summary judgment is to pierce the pleadings and to assess the proof in order to see whether

there is a genuine need for trial." (Internal citations and quotation marks omitted)).

In his summary judgment briefing and deposition testimony, Kinnick elaborated on the

harm he allegedly incurred because of Med-1's letter. Kinnick specified that his frustration over

Med-1's letter impacted him physically, interrupting his sleep, causing extreme frustration,

anxiety, hopelessness, and dread. [Filing No. 61, at ECF p. 8.] In support, Kinnick cites to his

deposition testimony, in which he stated that he "panicked" and that the letter gave him a lot of

anxiety. [Filing No. 61-1, at ECF p. 20.] Kinnick stated that it caused him "extreme anxiety"

and that he "had to go to the doctor2 and tell them about it[.]" [Filing No. 61-1, at ECF p. 21.]

Kinnick elaborated:

But, yeah, it caused me stress staying up at night, you know, freaking out that,

you know, my financial future is going to be ruined when I'm trying to get

through a bankruptcy. It made me feel like, you know, is my attorney filing this

stuff right. I panicked. It was definitely panic mode. It was just scary, man.

[Filing No. 61-1, at ECF p. 22.] When asked to describe the panic, Kinnick explained that he felt

dread, anxiousness, nervous, and just felt hopeless. [Filing No. 61-1, at ECF p. 23.]

Furthermore, Kinnick claimed that the letter caused him to experience these issues—

sleeplessness, arguments, and extreme anxiety, frustration, and anger at his bankruptcy

2 Kinnick's testimony regarding visiting a doctor is somewhat unclear. He stated he visited a

nurse practitioner before his attorney interrupted and said, "We're going to stipulate that we're

not relying on any medical experts. We're just relying on the deposition testimony today. We're

going to stipulate that we're not going to produce any of that." [Filing No. 61-1, at ECF p. 21.]

A bit later in the deposition transcript, Med-1's counsel tried to clarify Kinnick's statement

regarding whether he discussed feeling dread, nervousness, and anxiousness with medical

providers. [Filing No. 61-1, at ECF p. 23.] Kinnick responded, "I might have mentioned it,

yeah." [Filing No. 61-1, at ECF p. 23.] Counsel then asked, "But am I correct in understanding

that you are not claiming that those medical visits were necessitated by this letter, or those

medical bills should be paid by my client, correct?" [Filing No. 61-1, at ECF p. 23.] Kinnick

replied, "I've been going to the doctor forever. Yeah, it's fine." [Filing No. 61-1, at ECF p. 23.]

counsel—for over a month, until his debts were ultimately discharged. [Filing No. 61-1, at ECF

p. 22.]

The only evidence Kinnick relies on to support his claim that he experienced concrete

harm from Med-1's letter is his own testimony. To rely on his testimony on emotional distress, it

must be more than merely conclusory. See, e.g., Catalan v. GMAC Mortg. Corp., 629 F.3d 676,

698 (7th Cir. 2011) (finding the plaintiff's testimony on emotional distress sufficient to preclude

summary judgment where "[a]lthough not extensive, the plaintiffs' testimony is not conclusory.

They described their emotional turmoil in reasonable detail and explained what they believe to

be the source of that turmoil."). Cf. Kasten v. LVNV Funding, LLC, No. 19-cv-428, 2021 WL

1102163, at *6 (E.D. Wis. Mar. 23, 2021) ("The Seventh Circuit has found that, absent facts so

inherently degrading that it would be reasonable to infer that a person would suffer emotional

distress from the defendant's actions, a plaintiff whose own testimony is the only proof of

emotional damages must explain the circumstances of his injury in reasonable detail; he cannot

rely on mere conclusory statements." (Internal citation and quotation marks omitted)); Rosen v.

MLO Acquisitions LLC, __ F. Supp. 3d __, __, 2020 WL 7129018, at *5 (N.D. Ind. Dec. 4,

2020) (Rosen's testimony provided detailed, "sufficiently substantial explanation" of Rosen's

distress caused by FDCPA violations to survive the defendant's motion for summary judgment

because testimony included more than just conclusory "buzzwords").

While Kinnick does not provide as detailed testimony as in Kasten, his testimony is not

merely conclusory. Kinnick's testimony regarding his loss of sleep and feeling hopeless and

dread is also more detailed and concrete than the allegations described in Pucillo or the

allegation of a statutory violation with nothing more than stress and confusion in Pennell. Other

courts have explained that allegations of loss of sleep amount to physical manifestations that

make the allegations of emotional distress real, not abstract, even if not necessarily significant.

See, e.g., Crowder v. Andreu, Palma, Lavin & Solic, PLLC, No. 2:19-cv-820-SPC-NPM, 2021

WL 1338767, at *4 (M.D. Fla. Apr. 9, 2021) ("There must be something from which the Court

can conclude Crowder's alleged injury is real, and not abstract. Any number of facts might do

the trick (e.g., loss of sleep or inability to concentrate). But with just the conclusory statement

that a statutory violation cased an injury, there is no standing." (Internal citations and quotation

marks omitted)); Rivas v. Midland Funding, LLC, 842 Fed. App'x 483, 486 (11th Cir. 2021) (loss

of sleep and extreme stress injuries sufficiently tangible and concrete to confer Article III

standing); Waldrop v. LTS Collections Inc., 2020 WL 6545772, at *3 (D. Ariz. Nov. 6, 2020)

(allegations of fear, anxiety, stress, mental anguish, and loss of sleep, loss of appetite, and

headaches sufficient to establish a concrete injury for purposes of determining damages under

the FDCPA).

Thus, while Kinnick's allegations of harm do not necessarily indicate substantial

emotional harm, his allegations are distinguishable from the recent cases cited above, where

plaintiffs failed to tie the alleged FDCPA violations to any detrimental step or concrete harm.

For these reasons, Kinnick has alleged a sufficiently concrete emotional harm and shown that an

Article III case or controversy exists in order to establish standing for his claims.3

3 Kinnick also briefly argues, in his response to Med-1's cross motion for summary judgment

(which also doubles as his reply brief to his own summary judgment motion), that Med-1

intruded on his seclusion or invaded his privacy, citing to Gadelhak v. AT&T Servs., 950 F.3d

458 (7th Cir. 2019), cert. denied, __ S. Ct. __, 2021 WL 1521010 (U.S. Apr. 19, 2021). [Filing

No. 67, at ECF p. 25-26.] However, similar to the plaintiff in Pennell, 990 F.3d at 1045, Kinnick

did not allege an invasion of his privacy rights in his complaint or mention such a claim in his

initial summary judgment motion or brief. Kinnick argues that while he did not use the exact

words "right to privacy," he set forth factual allegations that Med-1 sent him unwanted collection

communications which angered and harmed him, destroying his fresh start, and that all of this

harms necessarily involved an invasion of his privacy. [Filing No. 74, at ECF p. 2.] He further

argues that the Seventh Circuit failed to recognize that the consumer in Pennell had alleged all

B. Attempt to collect debt subject to bankruptcy in violation of 15 U.S.C. §

1692e

Kinnick contends that Med-1's letter violated § 1692e the FDCPA as a matter of law,

because the Seventh Circuit has long affirmed that demanding payment of a debt that is no

longer owed, due to bankruptcy, is false and/or deceptive or misleading. [Filing No. 61, at ECF

p. 13.] Under 15 U.S.C. § 1692e, "[a] debt collector may not use any false, deceptive, or

misleading representation or means in connection with the collection of any debt." In support of

his claim, Kinnick cites Randolph v. IMBS, Inc., 368 F.3d 726, 728-30 (7th Cir. 2004). In

Randolph, the Seventh Circuit stated:

A demand for immediate payment while a debtor is in bankruptcy (or after the

debt's discharge) is "false" in the sense that it asserts that money is due, although,

because of the automatic stay (11 U.S.C. § 362) or the discharge injunction (11

U.S.C. § 524), it is not. A debt collector's false statement is presumptively

wrongful under the Fair Debt Collect Practices Act, see, 15 U.S.C. § 1692e(2)(A),

even if the speaker is ignorant of the truth; but a debt collector that exercises care

to avoid making false statements has a defense under § 1692k(c).

Randolph, 368 F.3d at 728. See also Buckley v. Afni, Inc., 133 F. Supp. 3d 1140, 1150-51 (S.D.

Ind. 2016) ("The test for determining whether there has been a violation is objective, turning on

whether the debt collector's communication would deceive or mislead an unsophisticated, but

reasonable, consumer. The debt collector's subjective intent or belief is not dispositive. § 1692e

applies even when a false representation was unintentional." (Internal citations and quotation

marks omitted)).

the facts to constitute an invasion of privacy and, thus, an injury in fact. [Filing No. 74, at ECF

p. 2.] For a variety of reasons, this argument fails. As in Pennell, Kinnick has raised it too late,

and bringing it up for the first time in his response/reply is insufficient. Id. ("When courts

analyze standing, allegations matter. . . . Pennell did not complain [in her operative complaint]

that her injuries included any perceived invasion of privacy." (Internal citation and quotation

marks omitted)). And the Court decline's Kinnick's invitation to interpret the facts in Pennell

differently than the Seventh Circuit.

Med-1 argues that it is entitled to judgment as a matter of law on this claim because

Kinnick failed to present extrinsic evidence to prove that the unsophisticated consumer would be

deceived by the letter at issue. [Filing No. 66, at ECF p. 17-18.] Kinnick, however, argues that

the letter in this case falls into the category of a plainly false statement, which requires no

evidentiary support. [Filing No. 67, at ECF p. 20.] In addition, Kinnick contends that his

"unwavering testimony" contrasts with other cases, such as Buckley, since Kinnick believed he

owed the debts and may still have to pay for them because, in his mind, perhaps something went

wrong with his bankruptcy. [Filing No. 67, at ECF p. 22.] Kinnick testified that he felt stress

and freaked out wondering if his financial future would be ruined and made him doubt whether

his attorney "filed this stuff right." [Filing No. 61-1, at ECF p. 22.] However, when viewing the

facts in a light favorable to Med-1, Kinnick stated that he called his attorney immediately

because he "knew" he was not supposed to be receiving the collection letter. [Filing No. 61-1, at

ECF p. 16.] Kinnick testified, "I knew I was in the automatic stay. And I wasn't supposed to be

receiving efforts to collect a debt while I was going through my bankruptcy." [Filing No. 61-1,

at ECF p. 17.] Based on these facts, it is unclear whether Med-1's letter truly deceived or misled

Kinnick. Whether Kinnick was misled by Med-1's letter is a material fact in genuine dispute.

See, e.g., Buckley, 133 F. Supp. 3d at 1152 ("Viewing the evidence in a light favorable to each

party, the Court cannot determine whether Buckley, an unsophisticated consumer, was confused

and misled by Afni's collection letter. Whether Buckley was mislead [sic] by Afni's letter is a

material fact in genuine dispute. Accordingly, Buckley's claim that Afni violated § 1692e is best

suited for trial.").

Alternatively, Med-1 contends that even if it violated the FDCPA, any violation was the

result of a bona fide error. [Filing No. 66, at ECF p. 28-30.] To succeed with a bona fide error

defense, Med-1 must demonstrate by a preponderance of the evidence that the violation was not

intentional and resulted from a bona fide error notwithstanding the maintenance of reasonable

procedures to prevent the error. See 15 U.S.C. § 1692k(c) ("A debt collector may not be held

liable in any action brought under this subchapter if the debt collector shows by a preponderance

of evidence that the violation was not intentional and resulted from a bona fide error

notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.").

Med-1 argues that it maintained reasonable procedures to avoid the error, citing to designated

evidence of various Med-1 policies for how to handle notice of a bankruptcy. [Filing No. 66, at

ECF p. 28-29.] Kinnick disputes Med-1's contention that it had procedures in place reasonably

designed to avoid erroneously sending a collection letter for a debt subject to bankruptcy—which

is exactly what ultimately occurred here. [Filing No. 61, at ECF p. 17.] Kinnick argues that the

procedures described in Med-1's manual [Filing No. 65-1] should be ignored because it "was

clearly dated after Med-1 sent Mr. Kinnick the letter at issue [on April 25, 2019.]" [Filing No.

67, at ECF p. 27.] The manual does not state when it was created but notes it was revised on

October 22, 2019. [Filing No. 65-1.] Med-1 also provided a "Bankruptcy Process and

Dispositions Procedure" dated April 26, 2017, which describes the procedure employees should

take when they receive a bankruptcy notification in the mail or are informed by a debtor that they

have filed bankruptcy. [Filing No. 65-4.] In addition, Med-1 provided a document titled "NEW

Bankruptcy and Deceased Scrub Procedure" dated December 16, 2014, which contains step-by-

step instructions on what to do when Med-1 receives a bankruptcy notice. [Filing No. 65-3.]

Genuine issues of material fact remain as to whether Med-1 maintained procedures

reasonably adapted to avoid the error, which precludes summary judgment on this claim. See,

e.g., Keisler v. Encore Receivable Management, Inc., No. 1:06-cv-0912-LJM-WTL, 2008 WL

1774173, at *6 (S.D. Ind. Apr. 17, 2008) ("With respect to Encore's bona fide error defense, at a

minimum, there is a material question of fact on whether the violation was unintentional and

whether the Encore's procedures were reasonably adapted to avoid any such error."); Wehrheim

v. James M. Secrest, P.C., No. IP 00-1328-C-T/K, 2002 WL 31427515, at *4 (S.D. Ind. Oct. 9,

2002) ("The affidavit and supplemental affidavit establish that Defendant had certain procedures

in place to avoid clerical errors in complaints, but the court cannot find that it has shown as a

matter of law that its procedures were reasonably adapted to avoid such errors. Whether certain

procedures were reasonably adapted to avoid the error at issue seems to be a factual matter

requiring a determination by the trier of fact in all but the rarest of cases. This is not such a

case."). Cf. Hyman v. Tate, 362 F.3d 965, 968 (7th Cir. 2004) (district court found via bench

trial that debt collector had reasonable procedures in place to avoid erroneous collection efforts).

Therefore, for all these reasons, summary judgment is denied as to Kinnick's §1692e claim.

C. Attempt to collect debt after Kinnick demanded communications cease in

violation of 15 U.S.C. 1692c(c)

Kinnick next argues that Med-1 violated § 1692c(c) of the FDCPA, which prohibits a

debt collector from communicating with a consumer after a direction to cease communications,

and from continuing to demand payment of a debt that the consumer has indicated that they

refuse to pay. Section 1692c(c) provides that if a consumer notifies a debt collector that he

wishes the debt collector cease communications with him, the debt collector "shall not

communicate further with the consumer with respect to such debt." 15 U.S.C. § 1692c(c).

Kinnick claims Med-1 had notice that Kinnick demanded collection communications cease due

to (1) his bankruptcy filing and (2) his earlier debt dispute letter. [Filing No. 61, at ECF p. 14.]

First, Kinnick contends that by filing bankruptcy, he put his creditors—and their debt

collectors—on written notice that he refused to pay his debts. [Filing No. 61, at ECF p. 14.]

Kinnick's bankruptcy filing was a matter of public record and on his credit reports, and readily

discoverable via a bankruptcy "scrub" system. (Indeed, as noted above, after Med-1 sent the

April 25, 2019, debt collection letter, it performed such a scrub and discovered Kinnick's

bankruptcy.) However, Med-1 notes that the Med-1 debts listed in the Kinnicks' bankruptcy

notice were listed as the debts of Kinnick's wife only, so the bankruptcy notice could not have

provided notice that Kinnick refused to pay a debt. [Filing No. 66, at ECF p. 17.] In addition,

Med-1 argues that even if the bankruptcy petition had listed Med-1 as one of Kinnick's creditors,

the bankruptcy notice does not satisfy the requirements of § 1692c(c), which requires a consumer

to notify the debt collector. [Filing No. 66, at ECF p. 17.] A bankruptcy court is not a

consumer. See, e.g., Shelley v. Ocwen Loan Servicing, LLC, No. 1:13-cv-506-RLY-DKL, 2013

WL 4584649, at *8 (S.D. Ind. Aug. 28, 2013) ("Plaintiffs rely on a notice issued by a bankruptcy

court, which, by the plain language of the statute, is not sufficient to provide notice.").

Second, Kinnick argues Med-1 was already on notice that Kinnick demanded collection

communications cease because his attorney told Med-1 as much in a February 2019 letter prior

to the bankruptcy, which Med-1 received and read. [Filing No. 61, at ECF p. 14.] Med-1,

however, argues that Kinnick's § 1692c(c) claim fails as a matter of law because Med-1 had no

active accounts for Kinnick at the time it received the February 8, 2019, debt dispute letter from

Kinnick's attorney. [Filing No. 66, at ECF p. 15.] Med-1 was not a debt collector with respect to

the Community Health Gallahue debts at the time Kinnick's attorney sent the debt dispute letter,

because it had not yet been assigned those debts. Moreover, § 1692c(c) as written limits the

prohibition to the specific debt at issue. Kinnick could not have requested, with his February

2019 letter, that Med-1 cease communicating with him in respect to a debt that was not assigned

to it until six weeks later. For these reasons, Med-1's motion for summary judgment is granted

as to Kinnick's § 1692c(c) claim.

D. Meaningful attorney review

Kinnick also argues that Med-1 violated § 1692e(3) because "the letter sent to Mr.

Kinnick was ostensibly sent by one of Med-1's attorneys, even though there was no meaningful

attorney review of his account prior to sending the attorney collection letter[.]" [Filing No. 60, at

ECF p. 2 (internal citation omitted).] Section 1692e of the FDCPA prohibits a debt collector

from using any false, deceptive, or misleading representation or means in connection with the

collection of any debt, including the false representation or implication that any individual is an

attorney or any communication is from an attorney. See 15 U.S.C. § 1692e(3).

The Court need not address the substantive arguments surrounding this claim, however,

because it fails procedurally. Kinnick has asserted this § 1692e(3) claim for the first time in his

motion for summary judgment. Under Fed. R. Civ. P. 16(b)(4), a party must set forth good cause

to amend a Case Management Plan. Here, the amended CMP required the party with the burden

of proof to file a statement of claims, stating specifically the legal theories upon which those

claims are based, by June 19, 2020. [Filing No. 32, at ECF p. 6.] Moreover, the deadline to

amend the pleadings passed even earlier, on January 27, 2020. [Filing No. 32, at ECF p. 4.] A

§ 1692e(3) claim did not appear in his complaint. [Filing No. 1.] Similarly, Kinnick makes no

mention of this claim in his statement of claims. [Filing No. 50.] And Kinnick has not set forth

good cause to allow an amendment, or raised any credible argument for a constructive

amendment of his complaint. Med-1 would be unduly prejudiced by allowing Kinnick to amend

his complaint and add this claim now, after discovery has closed, Kinnick has been deposed, and

summary judgment briefing was in progress. Accordingly, Med-1's motion for summary

judgment is granted as to Kinnick's purported $1692e(3) claim.

IV. Conclusion

For the reasons stated above, Kinnick's motion for summary judgment [Filing No. 60] is

denied, and Med-1's motion for summary judgment [Filing No. 64] is granted as to Kinnick's

claim that Med-1 violated § 1692e(3) by sending a collection letter with no meaningful attorney

review, but denied as it relates to Kinnick's claim that Med-1 violated § 1692e and $1692c(c) by

attempting to collect a debt that was subject to bankruptcy and for which he had demanded that

collection communications cease. The Court will provide information in a separate order setting

a telephonic status conference to reset case deadlines and finalize a new trial date.

Date: 6/4/2021 ) □ {

Tim A. Baker

United States Magistrate Judge

Southern District of Indiana

Distribution:

All ECF-registered counsel of record via email

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