# Opposition Brief — Healthcare Recoveries, Inc. v. Hamilton > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1524%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 2003 - **Citation:** 539 U.S. 916 ## Text Supreeae Overt, U8. FILED No. 02-1602 MAY 8 2003 OFPRE GF Ear OLaRK In The son Supreme Court of the Anited States + HEALTHCARE RECOVERIES, INC., Petitioner, Vv. KYLE M. HAMILTON, Respondent. On Petition For Writ Of Certiorari To The United States Court Of Appeals For The Fifth Circuit BRIEF IN OPPOSITION + GEORGE D. FAGAN Counsel of Record LEAKE & ANDERSSON, L.L.P. 1100 Poydras Street 1700 Energy Centre New Orleans, Louisiana 70163 Telephone: (504) 585-7500 Fax: (504) 585-7775 Attorneys for Kyle M. Hamilton, Respondent COCKLE LAW BRIEF PRINTING CO (800) 225-6964 OR CALL COLLECT (402) 342-2831 1 BRIEF IN OPPOSITION Kyle M. Hamilton (“Kyle”), plaintiff and respondent, respectfully requests that the Court deny the petition for writ of certiorari filed by Trover Solutions, Inc. d/b/a Healthcare Recoveries, Inc. (“HRI”), defendant and peti- tioner, for the following reasons: ee -_ INTRODUCTION Based on a group health policy issued to Kyle’s father, United Healthcare of Louisiana, Inc. (“United”) paid for Kyle’s medical treatment for severe injuries sustained in an automobile accident. The United policy contains subro- gation and reimbursement provisions regarding recoveries that its policyholders may receive from third parties. Since 1998, United has contracted with HRI to enforce and collect amounts due under those provisions. This lawsuit claims that HRI’s enforcement of United’s subrogation provisions against Kyle violated the Fair Debt Collection Practices Act (“FDCPA”), 15 USC 1692, et seq. 1. There Is No Conflict in the Circuits’ Interpre- tation of “Debt” under the FDCPA Insurance is plainly a consumer transaction under the FDCPA. The Fifth Circuit concluded that United’s con- tract-based claim regarding Kyle’s third party recoveries is a “debt” under 15 USC 1692a(5) of the FDCPA. “We cannot avoid the inescapable conclusion that the plain meaning of ‘debt’ encompasses the funds owed in this case. There is no question that the obligation to pay arose out of Hamilton’s transaction of purchasing insurance. HRI is simply incor- rect in its assertion that the obligation to pay arose out of 2 a tortious act.” Hamilton v. United Healthcare of Louisi- ana, Inc., 310 F.3d 385, 392 (5th Cir. 2002). This is consistent with other Circuits’ interpretation of “debt.” “(T]he plain language of the Act defines ‘debt’ quite broadly as ‘any obligation to pay arising out of a [con- sumer] transaction.’ In examining this definition, we first focus on the clear and absolute language in the phrase, ‘any obligation to pay.’ Such absolute language may not be alternatively read to reference only a limited set of obliga- tions as appellants suggest ... As long as the transaction creates an obligation to pay, a debt is created.” Bass uv. Stoper, Koritzinsky, Brewster & Neider, 111 F.3d 1322, 1325 (7th Cir. 1997); See Also, Duffy vu. Landberg, 133 F.3d 1120, 1123 (8th Cir. 1998), cert. denied, 525 U.S. 821 (1998); Pollice v. National Tax Funding, L.P., 225 F.3d 379, 401 (8rd Cir. 2000); Romea v. Heiberger & Assoc., 163 F.3d 111, 115 (2nd Cir. 1998); and, Arruda v. Sears, Roebuck & Co., 310 F.3d 3, 23 (1st Cir. 2002). The Fifth Circuit’s decision does not conflict with Pollice because United’s contract-based claims against Kyle are not analogous to the legisiatively-created prop- erty tax obligations that the Third Circuit described as due “not from the purchase of property but from the fact of ownership.” Jd., 225 F.3d at 402. Pcllice establishes that United’s claim against Kyle is a “debt” because the obliga- tion to pay money is derived from the purchase of the United policy. The Fifth Circuit’s decision relied on, and is consistent with, the Seventh Circuit’s decision in Bass. Hamilton, 310 F.3d at 391-392. Further, the Seventh Circuit extends the FDCPA’s protections beyond the obligation to pay for the original transaction. See, Miller v. McCalla, Raymer, 214 3 F.3d 872, 874-875 (7th Cir. 2000); and, Newman v. Boehm, Pearlstein & Bright, Ltd., 119 F.3d 477, 481-482 (7th Cir. 1997); See Also, Ladick v. Van Gemert, 146 F.3d 1205, 1206-07 (10th Cir. 1998), cert. denied, 525 U.S. 1002 (1998). The Fifth Circuit’s decision likewise does not conflict with Hawthorne v. Mac Adjustment, Inc., 140 F.3d 1367 (11th Cir. 1998). In that case, Liberty Mutual paid its insured victim for the damages caused by an accident with Hawthorne, and Mac Adjustment handled the subrogation claim against Hawthorne, the tortfeasor. The Eleventh Circuit held that Liberty Mutual’s subrogation claims against the tortfeasor — who was not insured by Liberty Mutual — did not involve a consumer transaction because the insurer’s claim “arose purely out of an accident, [and] involved no contract of any type between the [tortfeasor] and the damaged party, the insurer or Mac Adjustment.” Id., 140 F.3d at 1372, n. 2. In contrast, Kyle’s alleged obliga- tion to pay money is solely based on the insurance contract with United. HRI’s argument that the payment due for the transac- tion itself is the only obligation that arises out of a con- sumer transaction is the “extension of credit” limitation that has been rejected by every Circuit that has addressed that issue. Bass, 111 F.3d at 1326; Brown v. Budget Rent- A-Car Systems, Inc., 119 F.3d 922, 924 (11th Cir. 1997) (“Budget’s assertion that Brown is obligated as a result of a consumer transaction suffices to bring the obligation within the ambit of the FDCPA.”); Snow v. Jesse L. Riddle, P-C., 143 F.3d 1350, 1353 (10th Cir. 1998); Charles v. Lundgren & Associates, 119 F.3d 739, 742 (9th Cir. 1997), cert. denied, 522 U.S. 1028 (1997); Duffy, 133 F.3d at 1123; Pollice, 225 F.3d at 400-401); and, Romea, 163 F.3d at 115. The FDCPA defines a “debt” as “any obligation” to pay money “arising out of’ a consumer transaction, which does not mean only the obliga- tion to pay for the consumer transaction. The Fifth Circuit determined that “arising out of” is “ordinarily understood to mean ‘originating from,’ ‘having its origin in,’ ‘growing out of’ or ‘flowing from,’ or in short, ‘incident to,’ or ‘having connection with.’” Hamilton, 310 F.3d at 391, quoting, Red Ball Motor Freight v. Employers Mutual Liab. Ins. Co., 189 F.2d 374, 378 (5th Cir. 1951). Based on Humphries v. Various Federal USINS Employ- ees, 164 F.3d 936, 943-944 (5th Cir. 1999), the dissenting judge in this case argued that “arising out of” requires a causal nexus between the underlying transaction and the obligation to pay money, but such a nexus undeniably exists in this case. The use of “arising out of” establishes that a series of events may be required to trigger the obligation to pay. In Brown, Mr. Brown ran a Budget rental truck into an over- pass, and Budget sought reimbursement for the amounts that Mr. Brown’s personal insurer refused to pay. Id., 119 F.3d at 923. Because Budget’s claims arose as a result of the consumer transaction — Mr. Brown’s rental of the truck, the Eleventh Circuit concluded that Budget’s claim was a “debt” under the FDCPA. Id. at 924. Likewise, while a series of events may have been necessary to trigger the obligation, Kyle’s alleged obligation is solely based on a consumer transaction: the United insurance contract. 2. United’s Subrogation Contract-Based Subro- gation Claims Are Not Torts Under Louisiana law, health insurers have no subroga- tion rights unless the insurance contract includes provisions 5 for such rights; there are no other legal, equitable or implied rights of subrogation. Martin v. Louisiana Farm Bureau Cas. Ins. Co., 638 So.2d 1067, 1069 (La. 1994). That subrogation can also be based on the payment of contractual or legal obligations owed or due by another refutes HRI’s argument that “subrogation interests are tort claims” rather than consumer debts. The nature of the subrogated debt does not take away from the fact that United’s alleged subroga- tion rights are derived from a consumer transaction — the insurance contract issued to Kyle’s father. 4 Vv CONCLUSION The Fifth Circuit correctly held that HRI collected and is seeking to collect “debts” under the FDCPA because the alleged obligation to pay money to United arises directly out of a consumer insurance transaction. Kyle M. Hamil- ton, plaintiff and respondent, respectfully requests that the Court deny HRI’s petition for writs of certiorari. Respectfully submitted: GEORGE D. FAGAN Counsel of Record LEAKE & ANDERSSON, L.L.P. 1100 Poydras Street 1700 Energy Centre New Orleans, Louisiana 70163 Telephone: (504) 585-7500 Fax: (504) 585-7775 Attorneys for Kyle M. Hamilton, Respondent --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1524%3A2. Public record. Not legal advice.