Bradley et al v. Franklin Collection Service, Inc

Filing 98

MEMORANDUM OPINION AND ORDER. As further set out in order, Bradley's partial motion for summary judgment, 61 , is DENIED and, except for Calma's unjust enrichment claim, Franklin's motion for summary judgment, 77 , is GRANTED. Signed by Judge Abdul K Kallon on 03/28/13. (CVA)

FILED
2013 Mar-28 PM 03:30
U.S. DISTRICT COURT
N.D. OF ALABAMA

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
NORTHEASTERN DIVISION
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MELVIN BRADLEY, KEVIN A
CALMA, and DIANNE RODEN
BRADLEY as executrix for the
estate of Melvin Bradley,
Plaintiffs,
v.
FRANKLIN COLLECTION
SERVICE, INC.,
Defendant.

Civil Action Number
5:10-cv-01537-AKK

MEMORANDUM OPINION AND ORDER
Plaintiffs Melvin Bradley1 and Kevin Calma, (collectively “Plaintiffs”),
incurred medical debts at North Alabama Urology, P.C. (“Urology”) and UAB
Medical West (“UAB West”), respectively. Because Plaintiffs failed to pay their
debts, Urology and UAB West referred the accounts to Defendant Franklin
Collection Service, Inc. (“Franklin”). As part of the referral, Urology and UAB
West added a charge for collection fees to Plaintiffs’ accounts – leading Plaintiffs

1

The court substituted Diane Roden Bradley as a party for Melvin Bradley, as executrix
of Melvin Bradley’s estate, after the court received a suggestion of death notice. Doc. 53, 60.
Because Mrs. Bradley is standing in place of her deceased husband, the court will not
differentiate between the two in its opinion and will only make reference to “Bradley.”
1

to file this action against Franklin under state law, the Fair Debt Collection
Practices Act (“FDCPA”), and the Racketeer Influenced and Corrupt Organizations
Act (“RICO”). See doc. 1. Bradley and Franklin have filed cross motions for
summary judgment, docs. 61 and 77, and fully briefed each motion, docs. 66, 69,
78, 94, and 96. For the reasons stated more fully below, Bradley’s partial motion
for summary judgment is DENIED and, except as to Calma’s unjust enrichment
claim, Franklin’s motion is GRANTED.
I. SUMMARY JUDGMENT STANDARD OF REVIEW
Under Rule 56(c)(2) of the Federal Rules of Civil Procedure, summary
judgment is proper “if the pleadings, the discovery and disclosure materials on file,
and any affidavits show that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.” “Rule 56(c) mandates
the entry of summary judgment, after adequate time for discovery and upon motion,
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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The
moving party bears the initial burden of proving the absence of a genuine issue of
material fact. Id. at 323. The burden then shifts to the nonmoving party, who is
required to “go beyond the pleadings” to establish that there is a “genuine issue for
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trial.” Id. at 324 (citation and internal quotation marks omitted). A dispute about a
material fact is genuine “if the evidence is such that a reasonable jury could return
a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986).
The court must construe the evidence and all reasonable inferences arising
from it in the light most favorable to the non-moving party. Adickes v. S. H. Kress
& Co., 398 U.S. 144, 157 (1970); see also Anderson, 477 U.S. at 255 (all justifiable
inferences must be drawn in the non-moving party’s favor). Any factual disputes
will be resolved in Plaintiffs’ favor when sufficient competent evidence supports
Plaintiffs’ version of the disputed facts. See Pace v. Capobianco, 283 F.3d 1275,
1276, 1278 (11th Cir. 2002) (a court is not required to resolve disputes in the nonmoving party’s favor when that party’s version of events is supported by
insufficient evidence). However, “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) (per curiam) (citing Bald Mountain
Park, Ltd. v. Oliver, 863 F.2d 1560, 1563 (11th Cir. 1989)). Moreover, “[a] mere
‘scintilla’ of evidence supporting the opposing party’s position will not suffice;
there must be enough of a showing that the jury could reasonably find for that
party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citing Anderson,
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477 U.S. at 252)).
II. FACTUAL BACKGROUND
A.

Calma and UAB West
UAB West is a healthcare institution operating under the control of the

University of Alabama at Birmingham Health System (“UAB”). Doc 79-7 at 2-3;
see also doc. 79-8. UAB manages healthcare delivery and billing for its hospitals,
including UAB West. Id. UAB and UAB West contracted with Franklin to collect
unpaid medical bills. Doc. 82-1 *SEALED* at 1-2; Doc. 73-4 at 4. UAB West’s
agreement with Franklin directed Franklin to add a 30% collection charge to all
accounts UAB West referred for collection and gave Franklin the right to pursue
collection lawsuits on UAB West’s behalf. Doc.73-20 at 16-17, 33. Although
UAB West agreed to raise the collection charge to 35% in 2006 and drafted an
appropriate agreement, UAB West and Franklin continued to operate under the
terms of the original contract. Doc. 73-20 at 20.
In 2007, Calma incurred a $735 bill when he took his daughter to UAB West
for treatment. Doc. 1 at ¶ 15; Doc. 1-1 at 1. When Calma failed to pay the bill,
UAB West sent Calma three separate statements and warned Calma that, pursuant

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to their agreement,2 UAB West would send his account to a collection agency if he
failed to pay. Doc. 79-6 at 50, 81. Eventually, UAB West sent Calma’s account to
Franklin for collection. Doc. 79-6 at 82.
On December 12, 2007, Franklin sent Calma a letter directing him to submit
a check to it for $992.25 made payable to UAB West. Doc. 79-6 at 82. Franklin
sent a second letter a month later, again requesting a $992.25 payment. After he
received the second letter, Calma emailed his insurance company regarding the
“severely past due” bill. Doc. 79-6 at 50, 19. That same day, Calma spoke with
Franklin and stated that “if I had known that I did owe something, obviously I
would’ve paid it at that point.” Doc. 79-6 at 26. Calma testified that “I needed to
pay [the bill] because I was trying to secure a home loan . . . and didn’t want them
to turn this over to a credit bureau and it affect my credit score and ultimately my
chances of getting my home loan.” Id. In light of his desire to avoid a negative
credit report, Calma asked “when’s the latest I have to have this thing paid so it
doesn’t hit my credit score?” and authorized a post-dated full payment when
Franklin responded that he needed to at least schedule a payment that day. Id. at

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The agreement Calma signed with UAB West stated, in part: “I agree that if this account
is not paid when due, and the hospital should retain an attorney or collection agency for
collection, I agree to pay all costs of collection including reasonable interest, reasonable
attorney’s fees (even if suit is filed) and reasonable collection agency fees.” Doc. 79-6 at 45.
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26-27. Ultimately, Franklin debited a total of $1002.25 from Calma’s bank account
– the $992.25 owed plus a $10.00 convenience fee for accepting the payment over
the telephone. Doc. 79-6 at 57-58. However, Franklin failed to disclose the
convenience fee and purportedly reprimanded the employee at fault. Doc. 80-1
*SEALED* at 1; Doc. 73-14 at 23. Franklin contends that the fee covers its
transactional costs for processing electronic payments. Doc. 73-14 at 24.
B.

Bradley and North Alabama Urology, PC
Urology is a healthcare provider that also uses Franklin to collect unpaid

bills. Doc.1 at ¶ 21. The collection contract between Urology and Franklin
stipulated for Urology to add 33 1/3% to a debt prior to transferring it to Franklin.
Doc. 61-3 at 16-17; see also doc. 62-1*SEALED* at 3-13. The contract also
stipulated that Franklin is entitled to 30% of the total collected from each debt. Id.
Bradley visited Urology and signed a patient registration form in April 2009
stating, in part, that “[i]n the event of non-payment, either by insurance or myself, I
agree to pay all costs of collection, including a reasonable attorney fee in the event
it is necessary to employ an attorney to enforce any provision of this contract.”
Doc. 61-2 at 5, 35. Thereafter, Bradley incurred a $861.96 bill for treatment. Doc.
61-2 at 8, 36. When Bradley failed to pay the bill, Urology submitted it to Franklin
for collection. Doc. 62-1 *SEALED* at 17.
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Franklin sent Bradley a letter on December 11, 2009 to notify him that
Urology had turned over his debt for collection and that Bradley owed $1155.02.
Doc. 61-7 at 11; Doc. 61-2 at 8. The letter identified Franklin as “The Collection
Firm of Franklin Collection Service, Inc.,” but directed Bradley to make checks
payable to “Franklin Collection Service, Inc.” and was signed “Sincerely, Franklin
Collection Service, Inc.” Id. The letter also stated “BEWARE, OUR CLIENT,
PENDING NOTIFICATION, MAY AUTHORIZE A LAW FIRM TO FILE A CIVIL LAWSUIT
AGAINST YOU.” Id. (emphasis in original). Perhaps in response to an inquiry from
Bradley, Franklin requested that Urology verify the debt amount in late December.
Doc.61-8 at 6, 14-16. In response, Urology faxed an itemized statement showing
that Bradley’s debt was $861.96, plus a $293.06 collection fee for a total debt of
$1155.02. Id. at 16-17.
After retaining counsel when he received Franklin’s letter, Bradley called
Urology and attempted to pay the original $861.96 debt. Doc. 61-2 at 14.
However, Urology informed him it had already turned the debt over to Franklin and
added a $293.06 collection fee and that Bradley would still owe the collection fee
even if he paid the original balance. Doc. 61-2 at 9; Doc.67-3 at 4; Doc.61-8 at 78, 16. As a result, Bradley opted to “just deal with collection company then.” Doc.
61-2 at 10.
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Thereafter, Bradley called Franklin to contest the debt amount and sent
Franklin a copy of his original Urology statement showing only the $861.96. Doc.
61-2 at 14, 39. Bradley informed Franklin that he would pay the $861.96 balance
when Franklin sent him a corrected statement. Id. Franklin, in turn, sent Bradley
an “Itemization Verification and Validation of Debt” letter that listed both the
original and current balance as $1155.02. Doc.61-4 at 19; Doc.63-1 *SEALED* at
1-2; Doc.61-2 at 14-15, 40. However, in light of Bradley’s continued assertion that
he did not owe $1155.02, Franklin contacted Urology again to verify the debt.
Doc. 67-3 at 4; Doc. 61-8 at 16-17. Urology confirmed the debt and added that it
had informed Bradley that he owed a collection fee pursuant to the agreement
Bradley signed. Id. Franklin then sent Bradley another letter threatening litigation
if Bradley failed to pay. Doc.61-11 at 28; Doc.61-12 at 23; Doc. 61-2 at 22, 33, 41;
Doc. 61-7 at 12. To avoid being sued, Bradley paid the $1155.02 and reserved his
right to recover overcharges. Doc. 61-2 at 14, 38. Franklin remitted $808.52 to
Urology and retained $346.51, or 30%, as payment for services rendered. Doc. 613 at 27.
III. ANALYSIS
Plaintiffs assert RICO, FDCPA, and state law claims against Franklin and
assert that they are due summary judgment on their FDCPA claims. Franklin
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disagrees and asserts that it is due summary judgment on all claims. The court will
address the RICO claims in section A, followed by the FDCPA claims in section B
and the state law claims in section C.
A.

Racketeer Influenced and Corrupt Organizations Act3
Plaintiffs allege §§ 1962(c) and (d) and 18 U.S.C. § 2 RICO violations.

Doc.1 at ¶ 51. RICO’s civil provision provides that “[a]ny person injured in his
business or property by reason of a violation of section 1962 of this chapter may
sue therefor in any appropriate United States district court and shall recover
threefold the damages he sustains and the cost of the suit, including a reasonable
attorney’s fee.” 18 U.S.C. § 1964(c). “Thus, to recover on a civil RICO claim, the
plaintiffs must prove, first, that § 1962 was violated; second, that they were injured
in their business or property; and third, that the § 1962 violation caused the injury.”
Cox v. Administrator U.S. Steel & Carnegie, 17 F.3d 1386, 1396 (11th Cir. 1994)
(citation omitted).
1.

§ 1962(c)

RICO makes it “unlawful for any person employed by or associated with any
enterprise engaged in, or the activities of which affect, interstate or foreign

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The court dismissed Plaintiffs’ RICO claims under 18 U.S.C. § 1962(a) and § 1962(d),
to the extent it alleges a conspiracy to violate (a). See docs. 19, 20.
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commerce, to conduct or participate, directly or indirectly, in the conduct of such
enterprise’s affairs through a pattern of racketeering activity or collection of
unlawful debt.” 18 U.S.C. § 1962(c). The court addresses these elements and the
parties’ contentions below.
a.

Existence of a RICO “Enterprise”

The term enterprise “include[s] any individual, partnership, corporation,
association, or other legal entity, and any union or group of individuals associated
in fact although not a legal entity.” 18 U.S.C. § 1961(4). Given this expansive
reach, the Supreme Court explained that “an enterprise includes any union or group
of individuals associated in fact and that RICO reaches a group of persons
associated together for a common purpose of engaging in a course of conduct.”
Boyle v. U.S., 556 U.S. 938, 944 (2009) (internal citation and quotation marks
omitted). The existence of an enterprise “is proved by evidence of an ongoing
organization, formal or informal, and by evidence that the various associates
function as a continuing unit.” Id. at 945.
Plaintiffs allege that Franklin is a member of the “UAB Enterprise” and the
“Urology Enterprise.” These enterprises allegedly conspired to mark-up patient
debts by an undisclosed, unreasonable percentage and pass off this increased
amount as the original balance so that the enterprise members receive additional
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charges they are not otherwise entitled to receive. Doc. 1 at ¶¶ 14, 21.
i.

Governmental Entities

Franklin challenges Plaintiffs’ contention, in part, on the basis that UAB
West is a governmental entity that cannot be a member of an association-in-fact
enterprise. To support its contention, Franklin relies on cases holding that health
care authorities, including affiliates of the UAB System, are governmental entities
entitled to state immunity. See Todorov v. DCH Healthcare Auth., 921 F.2d 1438,
1461 (11th Cir. 1991); Health Care Auth. for Baptist Health v. Davis, 2011 WL
118268 (Ala. 2011); Tenn. Valley Printing Co. v. Health Care Auth. of Lauderdale
Cnty, 61 So. 3d 1027 (Ala. 2010). Franklin overlooks, however, that immunity
from suit does not prevent the governmental entity from being part of an enterprise.
See U.S. v. Stratton, 649 F.2d 1066, 1074 (5th Cir. 1981) (finding that RICO’s
definition of “enterprise” is broad enough to include government entities).
Therefore, the court rejects Franklin’s contention that UAB West’s status as a
government entity precludes its association with Franklin from constituting a RICO
enterprise.
ii.

Illegal Purpose

Franklin asserts next that Plaintiffs cannot show the illegal purpose
necessary to establish the existence of an “enterprise.” Although RICO defines
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“enterprise” broadly, Eleventh Circuit “precedent indicates that a RICO enterprise
exists where a group of persons associates, formally or informally, with the purpose
of conducting illegal activity.” U.S. v. Hewes, 729 F.2d 1302, 1311 (11th Cir.
1984) (quoting U.S. v. Elliott, 571 F.2d 880 (5th Cir.), cert. denied, 439 U.S. 953
(1978)) (emphasis added). Plaintiffs do not dispute that the underlying business
relationship is legitimate, but allege nonetheless that Franklin conspires with
creditors to illegally “collect[] amounts far in excess of the original debts without
disclosing the nature and the extent of . . . additional charges.” Doc. 1 at ¶ 13.
Plaintiffs further allege that this illegal practice results in Franklin and its clients
obtaining more money and property than they are rightfully or legally entitled to
from debtors. Doc. 1 ¶¶ 13, 25, 26. In other words, Plaintiffs assert that Franklin is
using its legitimate business as a vehicle for the illegal purpose of obtaining excess
money from debtors.
Although such an allegation may ordinarily satisfy the “purpose of
conducting illegal activity” requirement, Hewes, 729 F.2d at 1311, there is
undisputed evidence here that Franklin lacked an “illegal purpose” and made good
faith efforts to ensure it complied with state and federal laws. Doc. 61-4 at 6; Doc.
61-6 at 25. For example, Franklin hired counsel to draft contracts for it to use that
complied with applicable law. Doc.61-5 at 17-18. Franklin’s counsel also
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periodically reviewed the contracts and drafted and reviewed debtor letters. Doc.
61-4 at 4; Doc. 61-5 at 17-18; Doc. 61-6 at 25. Moreover, while Franklin sets the
fee it charges for its services, the clients actually determine the collection fee
Franklin charges delinquent debtors. Doc. 61-3 at 16-17; Doc. 62-1*SEALED* at
3-13; Doc.73-20 at 16-17, 33. In fact, the clients add the collection fee to the
delinquent accounts prior to sending them to Franklin for collection. Doc. 61-3 at
16-17; Doc. 62-1*SEALED* at 3-13; Doc.73-20 at 16-17, 33. In short, based on
the uncontroverted evidence showing that Franklin’s purpose was merely to collect
its clients’ debts in accordance with the law, Plaintiffs failed to show the existence
of a RICO “enterprise” involving Franklin.
b.

Predicate Acts: Mail and Wire Fraud

In order to establish a RICO violation, Plaintiffs must prove the existence of
a “pattern of racketeering activity” through predicate acts such as mail or wire
fraud, see 18 U.S.C. § 1962(c), which “consist of intentional participation in a
scheme to defraud another of money or property” through use of the mails or
electronic forms of communication. Beck v. Prupis, 162 F.3d 1090, 1095 (11th Cir.
1998). “Mail and wire fraud are analytically identical save for the method of
execution,” U.S. v. Bradley, 644 F.3d 1213, 1238-39 (11th Cir. 2011), and occur
“when a person (1) intentionally participates in a scheme to defraud another of
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money or property and (2) uses the mails or wires in furtherance of that scheme.”
American Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010)
(quoting Pellitier v. Zweifel, 921 F.2d 1465, 1498 (11th Cir. 1991). “To
demonstrate a violation of the mail or wire fraud statutes, Plaintiffs must show that
[a defendant] had a conscious, knowing intent to defraud and that a reasonably
prudent person would have been deceived by its misrepresentations.” Green Leaf
Nursery v. E.I. DuPont De Nemours and Co., 341 F.3d 1292, 1306 (11th Cir.
2003).
Plaintiffs raise four grounds to support their contention that they satisfy the
“conscious, knowing intent to defraud” element: that Franklin (1) misstated the
amount of their debts, (2) misrepresented the character of their debts by failing to
itemize, (3) falsely threatened civil litigation, and (4) misleadingly used letterhead
suggesting Franklin was a law firm. Doc. 78 at 19-20. However, none of these
contentions carry Plaintiffs’ burden.
i.

Alleged Misstatement of Plaintiffs’ Debt Amounts

Plaintiffs’ allegation that Franklin misstated their debt is based on Franklin’s
inclusion of the collection charges in the total amount owed. Plaintiffs contend
that the inclusion amounts to a misrepresentation sufficient to adequately
demonstrate mail or wire fraud. However, the evidence, viewed in a light most
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favorable to Plaintiffs, shows that, although their original bills totaled $735 and
$861.96 for Calma and Bradley respectively, UAB West directed Franklin to
collect $992.25 from Calma and Urology directed Franklin to collect $1155.02
from Bradley. Doc.73-20 at 20; Doc. 79-6 at 82; Doc. 61-3 at 16-17; Doc. 67-3 at
4; Doc. 61-8 at 16-17. In other words, contrary to Plaintiffs’ contention, UAB
West and Urology added the collection fee to the balance owed before transmitting
the debts to Franklin for collection. Moreover, when Franklin inquired, Urology
and UAB West verified the “amounts due” as $992.25 and $1155.02 – further
demonstrating that Urology and UAB West included the collection fees in the
amounts they asked Franklin to collect. See docs. 67-3 at 4, 61-8 at 16-17, 73-20 at
16-17 and 20, 79-6 at 82. Based on these facts, Plaintiffs have failed to
demonstrate that Franklin misstated the amount of Plaintiffs’ debts.
ii.

Alleged Mischaracterization of Plaintiffs’ Debts

Alternatively, Plaintiffs allege that Franklin’s failure to itemize the balance
to show the amount added for a collection fee is a material misrepresentation. Such
an omission can form the basis for mail and/or wire fraud-based RICO liability if
the defendant had an affirmative duty to disclose the information and “if [the
omissions] are intended to create a false impression.” Langford v. Rite Aid of Ala.,
Inc., 231 F.3d 1308, 1312 (11th Cir. 2000); Kemp v. American Tel. & Tel. Co., 393
15

F.3d 1354, 1359 (11th Cir. 2004), citing Ayres v. Gen. Motors Corp., 234 F.3d 514,
521 (11th Cir. 2000). A duty to disclose can be created judicially or “where there
is a special relationship of trust between the parties, or may be based on other
circumstances.” Kemp, 393 F.3d at 1359. Generally, however, a creditor-debtor
relationship does not create a duty to disclose absent a showing of some other
special relationship. See, e.g., Bank of Red Bay v. King, 482 So. 2d 274, 285 (Ala.
1985); Castleberry v. Goldome Credit Corp., 408 F.3d 773 (11th Cir. 2005).
Instead, to determine whether the circumstances impose a duty to disclose, the
court evaluates factors such as “the relationship of the parties[,] the relative
knowledge of the parties[, and] the plaintiff’s opportunity to ascertain the
undisclosed fact[.]” Castleberry, 408 F.3d at 787.
Unfortunately for Plaintiffs, they failed to show the existence of any
circumstances that created an affirmative duty for Franklin to disclose the amount
of the collection fees through itemization. As a threshold matter, the court notes
that Calma and Bradley each signed contracts agreeing to pay collection costs.
Thus, even if they disagreed with the actual amount Franklin requested from them,
they had notice from their healthcare provider that their original debt would include
a collection fee. See docs. 79-6 at 45 and 61-2 at 5, 35. More importantly,
Plaintiffs could, and in Bradley’s case did, inquire about the increased debt amount
16

by contacting Franklin and the health care provider who originated the debt.
Indeed, Urology informed Bradley that it added a $293.06 collection fee to his
original bill and that he was responsible for paying the full $1155.02 because
Urology had to turn the account over to collections. Doc. 61-8 at 7; Doc. 61-2 at 9.
Therefore, the court finds that Plaintiffs have failed to establish that Franklin had a
duty to disclose the added collection fee or that the failure to itemize is a sufficient
misrepresentation to warrant RICO liability for mail and wire fraud.
iii.

Alleged Improper Threat of Civil Litigation

Plaintiffs allege next that Franklin committed mail and wire fraud by falsely
threatening civil litigation because “[t]he facts are undisputed that [UAB West] had
not given [Franklin] authority to file against Calma specifically as the January 15,
2008 letter represented” and “[w]ith regard to Bradley, regardless of whether
[Franklin] had the right to pursue a lawsuit on Urology’s behalf, with prior
approval from Urology, [Franklin] made the threat of civil litigation when counsel
had not been retained[.]” Doc. 94 at 24-25. The court finds these contentions
unavailing. The uncontroverted evidence shows that UAB West expressly
authorized Franklin to pursue civil lawsuits on its behalf in connection with its
collection efforts. Doc. 73-20 at 16-17, 33. Under their agreement, Franklin may
file suit if necessary and without first having to seek permission from UAB West to
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file a lawsuit against each individual debtor. Therefore, Franklin’s failure to seek
specific permission to sue Calma is irrelevant and its letter stating it would file a
civil lawsuit if Calma failed to pay was not a misrepresentation. Likewise, Urology
authorized Franklin to file civil lawsuits against debtors, albeit with prior approval.
Doc. 61-3 at 16-17. Nonetheless, that Franklin needed approval from Urology to
file suit does not mean that it needed to first retain counsel before informing
Bradley that one potential consequence of his failure to pay his debt is litigation.
After all, the statement is an accurate factual representation because one
consequence for failing to pay may indeed be litigation. In fact, under the FDCPA,
a creditor may inform a debtor that it will file a lawsuit for failure to pay where, as
here, it legally can do so. See 18 U.S.C. § 1692e(5); LeBlanc v. Unifund CCR
Partners, 601 F.3d 1185, 1196 (11th Cir. 2010). Accordingly, Franklin’s use of
language regarding possible civil suits does not qualify as a misrepresentation.
iv.

Alleged Misrepresentation of Franklin as a Law Firm

Plaintiffs allege that Franklin misrepresented itself as a law firm in its letters
to Bradley when it used letterhead that contained the term “The Collection Firm of
Franklin Collection Services, Inc.” Doc. 94 at 25. Apparently, Plaintiffs contend
that inclusion of the term “the collection firm” next to the actual name of Franklin
is misleading and only draws one conclusion, i.e. that Franklin is a law firm. The
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court disagrees because the term “collection firm” is merely a descriptive term used
to explain Franklin’s business. Indeed, terms such as “firm” or “associates,”
although often used by attorneys, are used by a wide variety of businesses that are
not engaged in the practice of law. See In re Cheaves, 439 B.R. 220, 227 (Bankr.
M.D. Fla. 2010). Moreover, “[t]o demonstrate a violation of the mail or wire fraud
statutes, Plaintiffs must show . . . that a reasonably prudent person would have been
deceived by [the defendant’s] misrepresentations.” Green Leaf Nursery, 341 F.3d
at 1306. For that reason, a reasonable consumer is expected to read an entire
collection notice and place its descriptive terms in context. See CampazanoBurgos v. Midland Credit Mgmt., 550 F.3d 294, 299 (3d Cir. 2008); LeBlanc v.
Unifund CCR Partners, GP, 552 F. Supp. 1327, 1336 (M.D. Fla. 2008), rev’d in
part, on other grounds, 601 F.3d 1185 (11th Cir. 2010). Here, the term “The
Collection Firm of Franklin Collection Service, Inc.” is not misleading when put in
context with the rest of the letter that clearly identifies the sender as “Franklin
Collection Service” and references unequivocally that the client may authorize “a
law firm” to institute a lawsuit, further implying that the sender of the letter, “The
Collection Firm of Franklin Collection Service, Inc.,” is not a law firm. Based on
these facts, the court finds that Plaintiffs have failed to establish that Franklin
misrepresented itself as a law firm.
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c.

Pattern of Racketeering Activity

To establish a pattern of racketeering activity sufficient to create liability
under RICO, “a plaintiff must show at least two racketeering predicates that are
related, and that they amount to or pose a threat of continued criminal activity.”
American Dental Ass’n, 605 F.3d at 1291. Because the court finds that Plaintiffs
failed to demonstrate that Franklin engaged in the predicate acts of mail or wire
fraud, Plaintiffs likewise failed to establish a “pattern of racketeering activity.”
Alternatively, the alleged instances of mail and wire fraud are insufficient to prove
a “pattern of racketeering” warranting RICO liability because “[p]redicate acts
extending over a few weeks or months and threatening no future criminal conduct
do not satisfy this requirement[.]” H.J. Inc. v. Northwestern Bell Telephone Co.,
492 U.S. 229, 242 (1989). Rather, to prevail, “[a] party alleging a RICO violation
[must] demonstrate continuity over a closed period by proving a series of related
predicates extending over a substantial period of time.” Id. (emphasis added).
Plaintiffs failed to do so here. In fact, they presented no evidence suggesting a
threat that this alleged “criminal conduct” will continue to occur in the future.
Accordingly, Plaintiffs also failed to establish a pattern of racketeering activity as

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required by § 1962(c).4
d.

Proximate Cause

Franklin argues also that it is due summary judgment on the § 1962(c) RICO
claim because Plaintiffs failed to establish proximate causation. Doc. 78 at 19-20.
“It is well-established that RICO plaintiffs must prove proximate causation in order
to recover . . . [and that] causation principles generally applicable to tort liability
must be considered applicable[.]” Cox, 17 F.3d at 1399 (internal citations and
quotation marks omitted). “A proximate cause is not, however, the same thing as a
sole cause. Instead, a factor is a proximate cause if it is a substantial factor in the
sequence of responsible causation.” Id. (quoting Hecht v. Commerce Clearing
House, Inc., 897 F.2d 21, 23-24 (2nd Cir. 1990) (internal quotation marks omitted).
To establish proximate cause, Bradley asserts he paid the debt because he
mistakenly believed that Franklin was a law firm. However, the evidence belies
this contention. The record shows instead that after he received the first collection
notice from Franklin, Bradley called Urology directly and Urology informed him

4

Since Plaintiffs failed to establish the existence of an enterprise or a pattern of
racketeering activity, the court finds that they also failed to show that Franklin “conduct[ed] or
participate[d], directly or indirectly, in the conduct of [the] enterprise’s affairs” because such
must be done “through a pattern of racketeering activity or collection of unlawful debt.” 18
U.S.C. § 1962(c). Accordingly, the court will not further address Franklin’s alternative
contention that it cannot be held liable under RICO because Plaintiffs failed to present evidence
that Franklin conducted or participated in the affairs of the enterprise. Doc. 78 at 18-19.
21

that it had turned his account over to a “collection company.” Urology further
informed Bradley that even if he paid Urology the original amount, as Bradley
offered to do, he still owed the collection fee. Doc. 61-8 at 7-8, 16; Doc. 61-2 at 9;
Doc. 67-3 at 4. As a result, Bradley relayed that “I will just deal with [the]
collection company then.” Doc. 61-2 at 10 (emphasis added). The evidence also
shows that Bradley understood that his Urology account was delinquent and was
turned over to a “collection agency.” Id. at 11. Moreover, Bradley retained
counsel soon after receiving the first collection notice and subsequently paid
Franklin with a “reservation of rights” at the advise of counsel. Id. at 14. Based on
this evidence, even assuming Bradley was initially misled, it is clear that by the
time Bradley paid Franklin, he knew Franklin was a collection agency rather than a
law firm. Put differently, the misrepresentation did not cause Bradley to pay or
lead to his alleged injury. The court thus finds that Bradley failed to establish
proximate cause and Franklin’s motion is due to be granted.
Calma likewise cannot establish that Franklin proximately caused his alleged
injury. Calma asserts that he paid Franklin based on its “threats” of civil litigation.
However, after Franklin sent the first collection notice, Calma called Franklin and
stated: “I needed to pay [the debt] because I was trying to secure a home loan for
my – for my house and I didn’t want them to turn this over to a credit bureau and it
22

affect my credit score and ultimately affect my chances of getting my home loan.”
Doc. 79-6 at 26. At no point did Calma express any concern over an alleged threat
of civil litigation. Indeed, Calma authorized a postdated payment specifically to
prevent the debt from appearing on his credit report and “affect[ing] the [home]
loan.” Id. The court thus finds that Calma also failed to establish proximate cause.
While they may be a partial cause for Plaintiffs alleged injuries, the evidence
taken in a light most favorable to Plaintiffs fails to establish that Franklin’s
purported misrepresentations, regarding its status as a law firm and/or ability to file
suit, are “substantial factors” in the sequence of causation. Plaintiffs also failed to
establish the existence of a RICO “enterprise” or that Franklin engaged in the
predicate acts of mail or wire fraud. Accordingly, Franklin’s motion on the RICO §
1962(c) claim is GRANTED.
3.

§ 1962(d) RICO Conspiracy

Plaintiffs assert that Franklin may still be liable for a RICO conspiracy5 even
if it is not liable for the substantive RICO offense. Doc. 94 at 28, citing Jackson v.
BellSouth Telecommunications, 372 F.3d 1250, 1269 (11th Cir. 2004). As one

5

“To establish a RICO conspiracy violation under 18 U.S.C. § 1962(d), the [plaintiff]
must prove that the defendants objectively manifested, through words or actions, an agreement to
participate in the conduct of the affairs of the enterprise through the commission of two or more
predicate crimes.” US v. Starrett, 55 F.3d at 1543.
23

court aptly stated in addressing a similar argument, “the plaintiffs’ argument fails
to acknowledge that what is required to support a claim of RICO conspiracy is that
plaintiffs allege an illegal agreement to violate a substantive provision of the RICO
statute.” Jackson, 372 F.3d at 1269. Put differently, “[i]f the underlying cause of
action is not viable, the conspiracy claim must also fail.” Spain v. Brown &
Williamson Tobacco Corp., 363 F.3d 1183, 1199 (11th Cir. 2004) (emphasis
added) (internal quotation marks and citation omitted).6 As discussed previously,
the underlying § 1962(c) RICO claim fails because the evidence, viewed in a light
most favorable to Plaintiffs, fails to establish the existence of an enterprise, a
pattern of racketeering activity, or proximate causation for Plaintiffs’ alleged
injuries. Since the underlying RICO claim is not viable, the RICO conspiracy
claim also fails as a matter of law.
4.

§ 2 Aiding and Abetting

Plaintiffs’ final RICO claim is under 18 U.S.C. § 2, which provides that
“[w]hoever commits an offense against the United States or aids, abets, counsels,

6

Plaintiffs also cite to U.S. v. Browne, 505 F.3d 1229 (11th Cir. 2007), which states that
“[a] a defendant may be guilty of conspiracy even if he did not commit the substantive acts that
could constitute violations of § 1962(a), (b), or (c).” Id. at 1264. This statement, however,
presumes the establishment of a violation under one of the applicable RICO provisions.
Plaintiffs must still establish the existence of “substantive acts that could constitute violations” of
RICO, id., before a defendant can be held liable for a RICO conspiracy. Here, because no such
violation is established, the conspiracy claim fails.
24

commands, induces or procures its commission” or “willfully causes an act to be
done which if directly performed by him or another would be an offense against the
United States, is punishable as a principal.” Id. “To establish civil liability for
aiding and abetting, the plaintiffs must show: (1) that the defendant was generally
aware of the defendant’s role as part of an overall improper activity at the time that
he provides the assistance; and (2) that the defendant knowingly and substantially
assisted the principal violation.” Cox, 17 F.3d at 1410. However, “to be liable for
aiding and abetting a crime, there must be an underlying crime to aid and abet.”
Rogers v. Nacchio, 241 Fed. Appx. 602, 609 (11th Cir. 2007).
The § 2 claim rests on Plaintiffs’ contention that a jury question remains
regarding whether Franklin “knowingly and substantially assisted.” Doc. 94 at 3031. In light of the court’s finding that Plaintiffs failed to establish a “principal
violation” or “overall improper activity” under RICO or that UAB West or Urology
engaged in a “principal violation,” the court finds that Plaintiffs failed to establish
wrongful conduct for Franklin to have “aided and abetted.”
For these reasons, the court GRANTS summary judgment on the RICO
claims.
B.

Fair Debt Collection Practices Act
Bradley alleges also that Franklin violated §§ 1692e(2)(A), 1692e(5),
25

1692e(10), 1692e(3), 1692e(14), and 1692f(1) of the FDCPA.7 The FDCPA aims,
in part, to “eliminate abusive debt collection practices by debt collectors[.]” 15
U.S.C. § 1692(e). To achieve this purpose, the FDCPA prohibits debt collectors
from using “false, deceptive, or misleading representations or means” or “unfair or
unconscionable means” in connection with the collection or attempted collection of
any debt. Id. at §§1692e, 1692f. Bradley claims he is due summary judgment on
his FDCPA claims under §§ 1692c(2)(a), 1692f(1), and 1692e(14), and Franklin
claims it is due to prevail on all the FDCPA claims. The court address both
contentions with respect to each alleged violation below.
1.

Claims Under § 1692e

In analyzing Bradley’s § 1692e claims, the court must “employ the ‘least
sophisticated consumer’ standard to evaluate whether a debt collector’s
communication violates § 1692e of the FDCPA.” LeBlanc, 601 F.3d at 1193
(citations omitted). “The least sophisticated consumer can be presumed to possess
a rudimentary amount of information about the world and a willingness to read a
collection notice with some care.” Id. at 1194. This standard is an objective test
that “protect[s] naive consumers, . . . [but] also prevents liability for bizarre or

7

Based on the complaint, Calma does not appear to raise claims under the FDCPA.
Instead, the FDCPA claims are alleged with reference to “Bradley and class members.” See doc.
1 at ¶ 65.
26

idiosyncratic interpretations of collection notices by preserving a quotient of
reasonableness.” Id.
a.

§ 1692e(2)(A)

A violation of § 1692e(2)(A) requires a plaintiff to show that the defendant
made a “false representation of . . . the character, amount, or legal status of any
debt.” 15 U.S.C. § 1692e(2)(A). Bradley asserts that Franklin misrepresented the
“character and amount” of his debt by “representing that the original debt plus the
mark-up fee was the original balance.” Doc. 61 at 17. Bradley essentially alleges
that Franklin violated § 1692e(2)(A) by failing to itemize the collection costs in the
letters it sent Bradley.
It is undisputed that Bradley incurred a $861.96 bill from Urology, and that
Bradley agreed “to pay all costs of collection.” Doc. 61-2 at 5, 8, 35-36. It is also
undisputed that Urology’s agreement with Franklin stipulated that Urology would
add 33 1/3% to its delinquent accounts prior to sending them to Franklin for
collection. Doc. 61-3 at 16-17 and doc. 62-1 *SEALED* at 3-13. Consistent with
this practice, Urology instructed Franklin to collect $1155.02 from Bradley, doc.
61-7 at 11, and confirmed this amount twice with Franklin and Bradley. Doc.61-8
at 6-7, 14-17; Doc. 61-2 at 9; Doc. 67-3 at 4. Based on this evidence, to the extent
anyone misrepresented the debt, it was Urology. However, there was no
27

misrepresentation here of the amount Bradley owed. While the $1155.02 exceeded
the original bill, Bradley failed to present evidence that this amount “was a false
representation of the total amount then due on the debt.” Sanchez v. United
Collection Bureau, Inc., 649 F. Supp. 2d 1374, 1380 (N.D. Ga. 2009) (emphasis in
original). To the contrary, the amount Franklin conveyed was the actual amount
Bradley owed based on Bradley’s agreement to pay collection costs. Critically,
Urology instructed Franklin to collect $1155.02 on its behalf pursuant to its
agreement with Bradley. In other words, Franklin’s notices correctly stated the
amount of Bradley’s debt. As such, Bradley failed to establish the falsity of the
amount – an essential element of his claim.
The evidence likewise does not establish that Franklin misrepresented the
character of Bradley’s debt. Although itemization allows the debtor to adequately
investigate and verify the debt, despite Franklin’s failure to itemize, Bradley was
able to obtain the necessary information by calling Franklin and Urology. In light
of the agreement Bradley signed to pay collection costs and Bradley’s knowledge
that Urology sent his bill to a debt collector, the court disagrees with Bradley that
Franklin’s failure to itemize would mislead the least sophisticated consumer. After
all, Bradley knew the original amount he owed and could easily surmise that the
rest of the amount Franklin sought consisted of the collection costs Bradley agreed
28

to pay. Moreover, Bradley owed the entire amount, including the collection costs,
and, as such, a failure to itemize in no way misrepresents the character of the debt.
As the court in Sanchez held, when a plaintiff fails to show that the amount sought
by the debt collector is false, there is no violation of § 1692e(2)(A) even if the debt
collector fails to itemize the collection notice to differentiate collection fees from
the original debt. 649 F. Supp. 2d at 1380. This court agrees with the Sanchez
court and finds that, in light of Bradley’s failure to establish the falsity of the
amount Franklin sought to collect, Bradley failed to establish an essential element
of his claim. Accordingly, the court DENIES Bradley’s motion and GRANTS
Franklin’s motion on the § 1692e(2)(A) claim.
b.

§ 1692e(5)

Bradley alleges that Franklin violated § 1692e(5) by sending him a letter
stating “BEWARE, OUR CLIENT, PENDING NOTIFICATION, MAY AUTHORIZE A LAW
FIRM TO FILE A CIVIL LAWSUIT AGAINST YOU.” Doc. 61-7 at 11; Doc. 61-2 at 8.
Section 1692e(5) prohibits debt collectors from “threat[ening] to take any action
that cannot legally be taken or that is not intended to be taken.” 15 U.S.C. §
1692e(5). Critically, this section “does not require application of the [least
sophisticated consumer] standard. . . . The sophistication, or lack thereof, of the
consumer is irrelevant[.]” Jeter, 760 F.2d at 1175. To prevail under § 1692e(5),
29

Bradley must show that Franklin threatened to take an action that Franklin was not
legally entitled to take or never intended to take. 15 U.S.C. § 1692e(5). Bradley
cannot make this showing. Again, Franklin’s agreement with Urology provided
that Franklin could potentially seek a civil lawsuit with prior approval of Urology.
In fact, Bradley’s agreement with Urology placed Bradley on notice of potential
lawsuits by stating “in the event it is necessary to employ an attorney to enforce
any provision of this contract.” See doc. 61-2 at 5, 35. Consequently, Franklin’s
statement that Urology “may authorize” a civil lawsuit to collect the debt was a true
statement advising Bradley of one possible outcome. See LeBlanc, 601 F.3d at
1196. As such, Bradley cannot establish that Franklin made a threat it was not
legally entitled to make. Therefore, Franklin’s motion on the § 1692e(5) claim is
GRANTED.
c.

1692e(10)

Bradley’s claim under § 1692e(10) – which prohibits “[t]he use of any false
representation or deceptive means to collect or attempt to collect any debt or to
obtain information concerning a consumer” – is factually identical to his claim
under § 1692e(5). However, Bradley failed to address this issue in his response to
Franklin’s motion for summary judgment or in his own motion for summary
judgment. Therefore, the court presumes that he concedes this claim. See Fed. R.
30

Civ. P. 56(e). Alternatively, Franklin’s motion is GRANTED for the same reasons
as the § 1692e(5) claim.
d.

1692e(3)

Bradley alleges that the title “The Collection Firm of Franklin Collection
Service, Inc.” in Franklin’s letterhead violates § 1692e(3), which prohibits debt
collectors from falsely representing or implying that an “individual is an attorney or
that a communication is from an attorney.” 15 U.S.C. § 1692e(3). Bradley’s
contention is unavailing because the least sophisticated consumer test “prevents
liability for bizarre or idiosyncratic interpretations of collection notices by
preserving a quotient of reasonableness.” LeBlanc, 601 F.3d at 1194. Indeed, even
“[t]he least sophisticated consumer can be presumed to possess a rudimentary
amount of information about the world and a willingness to read a collection notice
with care” and in its entirety. Id.; see also Campazano-Burgos, 550 F.3d at 299.
As the court discussed previously in section A(1)(b)(iv), the term “the collection
firm” in Franklin’s letterhead is not misleading when read in context with the rest
of the letter, which plainly identifies the sender as “Franklin Collection Service,
Inc.,” instructed Bradley to make checks payable to “Franklin Collection Service,
Inc.,” and stated that the client may authorize “a law firm” to institute a lawsuit.
Doc. 61-7 at 11; Doc 61-2 at 8. Moreover, the term “firm” is not exclusive to the
31

legal profession and is used by many other businesses to describe a professional
association. See In re Cheaves, 439 B.R. at 227. Based on these facts, especially
the full text of the letter Franklin sent to Bradley, the court finds that Bradley failed
to establish that Franklin falsely represented or implied that it was a law firm.
Accordingly, Franklin’s motion on this claim is GRANTED.
e.

1692e(14)

Based also on Franklin’s “collection firm” letterhead, Bradley alleges that
Franklin violated § 1692e(14), which prohibits debt collectors from “us[ing] [] any
business, company, or organization name other than the true name of the debt
collector’s business, company, or organization.” 15 U.S.C. § 1692e(14). Bradley
asserts that Franklin violated this section as a matter of law because “The
Collection Firm of Franklin Collection Service, Inc.” is not Franklin’s “full
business name, the name under which it usually conducts business, a commonly
used acronym, a trade name, nor a name under which it was licensed to do
business.” Doc. 61 at 27-28. To establish a violation of this section, Bradley must
also show that the least sophisticated consumer would be misled by Franklin’s
alleged use of a false name. See Starsota v. MBNA America Bank, N.A., 244 F.
App’x 939, 941 (11th Cir. 2007). Again, as the court found with respect to the §
1692e(3) claim, based on the contents of the letter Bradley received, Bradley failed
32

to meet his burden of establishing that the term “collection firm” was misleading.
Moreover, “the cases in which a violation of § 1692e(14) have been found typically
involve a debt collector misrepresenting its identity, such as by purporting to be the
creditor when it is not, purporting to be a government agency when it is not, or
purporting to be distinct from the creditor when it is not.” Mahan v. RetrievalMasters Credit Bureau, Inc., 777 F. Supp. 2d 1293, 1300 (S.D. Ala. 2011).
Nothing in this record establishes that Franklin’s letterhead, when read in context
with the actual letter, would mislead the least sophisticated consumer regarding the
true identity of the entity collecting the debt. Therefore, the court DENIES
Bradley’s motion and GRANTS Franklin’s motion.
2.

Claims Under § 1692f

Section 1692f prohibits unfair or unconscionable collection means, and
subsection (1) specifically prohibits “collection of any amount (including any
interest, fee, charge, or expense incidental to the principal obligation) unless such
amount is expressly authorized by the agreement creating the debt or permitted by
law.” 18 U.S.C. § 1692f(1). In that regard, Bradley contends that the collection
fee he paid violates the FDCPA as a matter of law because the fee was actually
liquidated damages rather than the actual cost of collection and was unreasonable
because it was based on a percentage of his outstanding debt. See doc. 61 at 25.
33

The argument is unavailing because the costs of collection, which Bradley agreed
to pay, fall within § 1692f’s exception for amounts “expressly authorized by the
agreement creating the debt.” Again, Bradley’s agreement with Urology states that
“[i]n the event of non-payment, either by insurance or myself, I agree to pay all
costs of collection, including a reasonable attorney fee in the event it is necessary
to employ an attorney to enforce any provision of this contract.” Doc. 61-2 at 5,
35. Moreover, the evidence establishes that Urology actually paid Franklin
$346.51 for its services, and that Bradley paid only $293.06 of that fee. Doc. 61-3
at 27. In other words, Bradley paid less “collection fees” than his agreement with
Urology authorized. Critically, Bradley does not allege that Urology breached its
agreement with him by adding this allegedly unreasonable fee to the amount it
asked Franklin to collect from Bradley. See doc. 61-2 at 6. Therefore, Bradley has
failed to establish that Franklin violated § 1692f(1).
In sum, Bradley’s motion for partial summary judgment is DENIED in its
entirety and Franklin’s motion is GRANTED on all of Plaintiffs’ FDCPA claims.
C.

State Law Claims
In addition to their federal RICO and FDCPA claims, Plaintiffs also assert

34

claims under state law for unjust enrichment, civil conspiracy, and fraud.8
1.

Unjust Enrichment

“The doctrine of unjust enrichment is an old equitable remedy permitting the
court in equity and good conscience to disallow one to be unjustly enriched at the
expense of another.” Mantiply v. Mantiply, 951 So. 2d 638, 654 (Ala. 2006)
(quoting Avis Rent A Car Sys., Inc. v. Heilman, 876 So. 2d 1111, 1123 (Ala.
2003)). “In order for a plaintiff to prevail on a claim of unjust enrichment, the
plaintiff must show that the defendant holds money which, in equity and good
conscience, belongs to the plaintiff or holds money which was improperly paid to
defendant because of mistake or fraud.” Id. (internal quotation marks and citations
omitted). However, “it is . . . a complete defense to an unjust enrichment claim that
a defendant is not in possession of money that does not rightfully belong to it.”
White v. Microsoft Corp., 454 F. Supp. 2d 1118, 1135 (S.D. Ala. 2006); see also
Dickinson v. Cosmos Broadcasting Co., Inc., 782 So. 2d 260, 266 (Ala. 2000).
As discussed previously, the evidence establishes that Franklin properly
collected debts Plaintiffs owed, which included collection fees expressly authorized
by the agreements that created the debts. With respect to Bradley then, Franklin is

8

The court previously dismissed Plaintiffs claims for declaratory and injunctive relief,
aiding and abetting, and Calma’s claim for fraud. See docs. 19 and 20.
35

not “in possession of money that does not rightfully belong to it” and Bradley’s
unjust enrichment claim fails. However, Franklin collected a $10 convenience fee
from Calma for a telephone payment but failed to inform Calma that it would
charge him this fee. Doc. 79-6 at 57-58; Doc. 73-14 at 23. While Franklin says the
fee gave Calma the benefit of an immediate payment over the phone and allowed
Franklin to pay for the costs associated with processing telephone payments, the
law is clear that retention of a benefit is unjust if “(1) the donor of the benefit acted
under a mistake of fact or in misreliance on a right or duty, or (2) the recipient of
the benefit engaged in some unconscionable conduct, such as fraud, coercion, or
abuse of a confidential relationship.” Mantiply, 951 So. 2d at 654-55. In light of
Franklin’s failure to disclose the $10 fee, an issue of fact exists regarding whether
Calma “acted under a mistake of fact or in misreliance” when he paid the fee or
whether Franklin’s failure to disclose the fee constitutes unconscionable conduct or
fraud. Accordingly, Franklin’s motion is GRANTED with respect to Bradley but
DENIED as to Calma.
2.

Fraud

Bradley asserts also that Franklin is liable for fraud because Franklin
“misrepresented the amount and character of the actual debt owed to Urology by
masquerading the original debt plus the unreasonable mark up as the original debt.”
36

Doc.94 at 32. “In order to prove fraud, the plaintiff must establish that there was a
misrepresentation of a material fact, that it was made willfully to deceive or
recklessly without knowledge, that it was justifiably relied upon, and that it thereby
proximately caused damage to the plaintiff.” McLemore v. Ford Motor Co., 628
So. 2d 548, 550 (Ala. 1993). Bradley failed to make the necessary showing.
Again, Bradley’s agreement with Urology expressly authorized Urology to charge a
collection fee if Bradley failed to pay his bill. Therefore, Franklin did not
misrepresent the amount or character of Bradley’s debt by including a collection
fee or failing to itemize its statements, especially since Bradley had the ability to
calculate the collection fee by subtracting the actual overdue bill he failed to pay
from the total amount Franklin sought to collect. Moreover, this alleged
misrepresentation is not “material” because Bradley was already contractually
obligated, through his agreement with Urology, to pay his debt – including “all
costs of collection.” Bama Budweiser of Montgomery, Inc. v. Anheuser-Busch,
Inc., 611 So. 2d 238, 244 (Ala. 1992) (“A representation that causes a person to do
nothing more than he was already contractually obligated to do before the
representation was made is not material and therefore cannot support a fraud
action”).
Bradley’s claim fails also because he unreasonably relied on this alleged
37

misrepresentation. Bradley had reason to doubt the veracity of the representation
and challenged it, which led to him learning that the debt included a collection fee
before he actually paid the debt. Therefore, to the extent Bradley felt the amount
was incorrect, Bradley had full knowledge of the alleged falsity of the information
before he paid the amount. As such, he unreasonably relied on the alleged
misrepresentation. See Patterson v. United Companies Lending Corp., 4 F. Supp.
2d 1349, 1354 (M.D. Ala. 1998) (“Where one has knowledge of the falsity of a
representation or even reason to doubt the truth of a representation, however,
reliance is not reasonable”); Ramsay Health Care, Inc. v. Follmer, 560 So. 2d 746,
748 (Ala. 1990) (finding that if a party is informed of the truth regarding a
misrepresentation prior to acting, he may not reasonably act or rely on that
representation). Finally, Bradley failed to establish that he was damaged because
he paid only the amount he was contractually obligated to pay, or that Franklin’s
alleged misrepresentation proximately caused his damage. Therefore, the court
finds that Bradley’s fraud claim fails as a matter of law and Franklin’s motion is
GRANTED.
3.

Civil Conspiracy

Finally, Plaintiffs assert a civil conspiracy claim against Franklin for
allegedly contracting with Urology and UAB West to “add a mark-up to the
38

amounts of debts owed by Bradley and Calma” and then “send letters to the
corresponding debtor with inflated, and excessive charges which were not
explained to Bradley and Calma.” Doc. 94 at 37. “Civil conspiracy is a
combination of two or more persons to accomplish an unlawful end or to
accomplish a lawful end by unlawful means.” Hooper v. Columbus Regional
Healthcare System, Inc., 956 So. 2d 1135, 1141 (Ala. 2006) (internal quotation
marks and citations omitted). Thus, Plaintiffs’ claim is based on their contention
that Franklin unlawfully collected collection fees from them. As discussed
previously, Plaintiffs failed to establish that Franklin unlawfully collected a
collection fee given that they both agreed to pay such a fee. Moreover, although a
question of fact remains about whether Franklin was unjustly enriched in retaining
the $10 convenience fee it collected from Calma, Calma presented no evidence that
Franklin conspired with anyone to collect this fee. As such, Franklin’s motion on
the civil conspiracy claims is GRANTED.
IV. CONCLUSION
In sum, Bradley’s partial motion for summary judgment, doc. 61, is
DENIED and, except for Calma’s unjust enrichment claim, Franklin’s motion for
summary judgment, doc. 77, is GRANTED.

39

DONE this 28th day of March, 2013.

________________________________
ABDUL K. KALLON
UNITED STATES DISTRICT JUDGE

40