Nazario v. Professional Account Services, Inc. et al

Filing 49

ORDER granting in part and denying in part 45 Defendants' Motion to Dismiss. The motion is granted to the extent that Counts 4 and 5 are dismissed without prejudice; otherwise, the motion is denied. Signed by Judge Sheri Polster Chappell on 3/30/2017. (LMF)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
ELIAJALYN NAZARIO, individually and
on behalf of all others similarly situated,
Plaintiff,
v.

Case No: 2:16-cv-772-FtM-99MRM

PROFESSIONAL ACCOUNT
SERVICES, INC. and LEHIGH HMA,
LLC d/b/a LEHIGH REGIONAL
MEDICAL CENTER,
Defendants.
/
OPINION AND ORDER1
This matter comes before the Court on Defendants’ Motion to Dismiss (Doc. #45)
filed on February 14, 2017. Plaintiff Eliajalyn Nazario (Plaintiff or Nazario) filed a response
in opposition (Doc. #48) on March 15, 2017. For the reasons set forth below, the motion
is granted in part and denied in part.
BACKGROUND
Hospital liens act as a claim against a personal injury recovery that a former patient
might recover from a tortfeasor that caused the patient’s injuries. The liens are an effort
by hospitals to get paid for the services they provide. The Florida Hospital Lien Act was

1

Disclaimer: Documents filed in CM/ECF may contain hyperlinks to other documents or websites.
These hyperlinks are provided only for users’ convenience. Users are cautioned that hyperlinked
documents in CM/ECF are subject to PACER fees. By allowing hyperlinks to other websites, this
Court does not endorse, recommend, approve, or guarantee any third parties or the services or
products they provide on their websites. Likewise, the Court has no agreements with any of these
third parties or their websites. The Court accepts no responsibility for the availability or
functionality of any hyperlink. Thus, the fact that a hyperlink ceases to work or directs the user to
some other site does not affect the opinion of the Court.

enacted in 1951 and repealed in 1971, but liens may now exist by virtue of a county
ordinance. See Palm Springs General Hospital, Inc. of Hialeah v. State Farm Mut. Auto.
Ins. Co., 218 So. 2d 793 (Fla. 3d DCA 1969), decision aff’d, 232 So. 2d 737 (Fla. 1970)
(decided under the Hospital Lien Act, enacted in 1951 and repealed in 1971 but later
adopted as a Dade County ordinance); Shands Teaching Hosp. and Clinics, Inc. v.
Mercury Ins. Co. of Florida, 97 So. 3d 204 (Fla. 2012). This case involves whether
Defendants had the authority to file hospital liens for Plaintiff’s (and others) unpaid
hospital charges.
On or about November 7, 2015, Nazario was injured in a motor vehicle accident
and treated at Lehigh Regional Medical Center. (Doc. #37, ¶¶ 22-23). Lehigh Regional
apparently billed Plaintiff $3,374.68 for the medical services she was provided. On
January 11, 2016, Lehigh Regional, through Defendant Professional Account Services,
Inc. (PASI), which is a debt collection agency, filed a “Notice of Hospital Lien” against
Allstate Insurance for the services provided to Nazario at Lehigh Regional in the amount
of $3,374.68 in the official records of Lee County, Florida.2 (Doc. #37, Ex. A, “the Lien”).
The Lien was subsequently mailed to Plaintiff with a cover letter. (Id. at ¶ 29).
Plaintiff alleges that Defendants created and filed hospital liens against Lehigh
Regional’s former patients’ third-party liability or other insurance benefits to collect on
outstanding debts owed for the hospital’s services without the statutory authority to do so.
On October 18, 2016, Plaintiff filed a nine-count Class Action Complaint (Doc. #1), and is
currently proceeding on a nine-count Second Amended Complaint (Doc. #37), alleging
that the hospital liens constitute an attempt to collect a debt in violation of the Florida

The Lien is dated December 1, 2015, but was recorded on January 11, 2016, as stated by the
document stamp at the top of the document. (Doc. #37, Ex. A).
2

2

Consumer Collection Practices Act, Fla. Stat. § 559.55 et seq. (FCCPA); the Florida
Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq. (FDUTPA); and
the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA).
Upon information and belief, Nazario alleges that it is Defendants’ routine practice
to treat a patient, and then file a lien. (Doc. #37, ¶ 25). Plaintiff alleges that these liens
are “counterfeit” and “illegal” because only non-profit, public hospitals operated by Lee
Memorial Health System (which Lehigh Regional is not) are legally authorized to file
hospital liens pursuant to a special act - Lee County’s hospital lien act, Ch. 78-552, §§ 17, at 185-87, Laws of Fla. For Lee Memorial Health Sys. (Id. at ¶ 1). Plaintiff believes
that Defendants have made hundreds, if not thousands, of similar communications in an
attempt to collect consumer debts from Florida consumers. (Id. at ¶ 32). Therefore,
Nazario files this suit on behalf of a class consisting of:
(i) all Florida citizens (ii) who were the subject of a counterfeit lien
recordation by LEHIGH REGIONAL and/or PROFESSIONAL
ACCOUNT SERVICES, INC. (iii) in an attempt to collect a debt
incurred for medical bills (iv) during the five year period prior to the
filing of the original complaint in this action through the date of class
certification.
(Id. at ¶ 35).
DISCUSSION
Defendants move to dismiss the Second Amended Complaint for lack of subject
matter jurisdiction and failure to state a claim upon which relief can be granted on multiple
grounds. First, and most importantly, Defendants assert that Plaintiff’s jurisdictional
allegations are deficient. Defendants state that Plaintiff alleges diversity, federal question,
and supplemental jurisdiction, none of which is applicable or sufficiently pled.

3

I.

Subject Matter Jurisdiction

Under a Rule 12(b)(1) motion, a claim’s subject matter jurisdiction may be
challenged both facially and factually. McMaster v. United States, 177 F.3d 936, 940
(11th Cir. 1999). According to the Eleventh Circuit, in cases such as this, facial attacks
“require the court merely to look and see if the plaintiff has sufficiently alleged a basis of
subject matter jurisdiction, and the allegations in his complaint are taken as true.” Id.
Plaintiff alleges one count of a violation of federal law against PASI – the FDCPA
(Count 3) – and the remaining eight counts allege violations of Florida’s counterpart to
the FDCPA, the FCCPA, as well as violations of FDUTPA.3 The Court clearly has federal
question jurisdiction over the FDCPA claim, and may exercise supplemental jurisdiction
over the remaining state law claims “that are so related to claims in the action within [the
court’s] original jurisdiction that they form part of the same case or controversy under
Article III of the United States Constitution.” 28 U.S.C. § 1367(a). Such power arises
where the state and federal claims “derive from a common nucleus of operative fact” and
“are such that [the plaintiff] would ordinarily be expected to try them all in one judicial
proceeding.” United Mine Workers of America v. Gibbs, 383 U.S. 715, 725 (11th Cir.
1966). A state cause of action which requires more proof than the federal claim is still

3

The claims are:
Count 1 – FCCPA v. Lehigh Regional
Count 2 – FCCPA v. PASI
Count 3 – FDCPA v. PASI
Count 4 – FDUTPA v. Lehigh Regional
Count 5 – FDCUTPA v. PASI
Count 6 – FCCPA for injunctive relief v. Lehigh Regional
Count 7 – FCCPA for injunctive relief v. PASI
Count 8 – FCCPA for declaratory relief v. Lehigh Regional
Count 9 – FCCPA for declaratory relief v. PASI
(Doc. #37).

4

within the court’s supplemental jurisdiction if “both claims clearly arise from the same set
of facts.” Milan Exp., Inc. v. Averitt Exp., Inc., 208 F.3d 975, 980 (11th Cir. 2000); Tamiami
Partners, Ltd. ex rel. Tamiami Dev. Corp. v. Miccosukee Tribe of Fla., 177 F.3d 1212,
1223-24 (11th Cir. 1999).
That power, however, “need not be exercised in every case in which it is found to
exist,” as supplemental jurisdiction is a “doctrine of discretion, not of plaintiff’s right.”
Gibbs, 383 U.S. at 726. “The breadth of discretion afforded federal courts in these cases
has been codified by section 1367(c),” which “provides for four occasions when a federal
court may decline to exercise supplemental jurisdiction otherwise within its power.”
Palmer, 22 F.3d at 1569. Specifically:
district courts may decline to exercise supplemental jurisdiction over a claim
under subsection (a) if - (1) the claim raises a novel or complex issue of
State law, (2) the claim substantially predominates over the claim or claims
over which the district court has original jurisdiction, (3) the district court has
dismissed all claims over which it has original jurisdiction; or (4) in
exceptional circumstances, there are other compelling reasons for declining
jurisdiction.
28 U.S.C. § 1367(c).
“[W]hile supplemental jurisdiction must be exercised in the absence of any of the
four factors of section 1367(c), when one or more of these factors is present, the
additional Gibbs considerations may, by their presence or absence, influence the court in
its decision concerning the exercise of such discretion.” Palmer, 22 F.3d at 1569. Such
factors include comity, judicial economy, convenience, fairness to the parties, and
whether all the claims would be expected to be tried together. Id. (citing Gibbs, 383 U.S.
at 725-26); see also Baggett v. First Nat’l Bank of Gainesville, 117 F.3d 1342, 1353 (11th
Cir. 1997)

5

Here, Defendants argue that the Court should decline to exercise supplemental
jurisdiction over the state law claims joined with the FDCPA claim because the state law
claims substantially predominate over the one federal claim. Upon consideration of the
claims asserted by Plaintiff, the Court finds that the exercise of supplemental jurisdiction
is warranted. All claims arise from the same set of operative facts contesting the validity
of the hospital liens; thus, the Court has the power to exercise supplemental authority
pursuant to 28 U.S.C. § 1367(a). Moreover, the Court finds that although issues of state
law will likely predominate in this case, the Gibbs factors, as well as consideration of
judicial economy, weigh in favor of exercising supplemental jurisdiction over Plaintiff’s
FCCPA and FDUTPA claims. If this Court were to dismiss the state law claims, the parties
to this action would be subjected to litigating the claims stemming from the same set of
facts in two separate forums. Additionally, the separation of Plaintiff’s claims in multiple
forums would open all parties to the possibility of inconsistent rulings. 4

Therefore, the

Court finds that it has subject matter jurisdiction.
II.

Failure to State a Claim

Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a complaint must
contain a “short and plain statement of the claim showing that the pleader is entitled to
relief.” Fed. R. Civ. P. 8(a)(2). This obligation “requires more than labels and conclusions,
and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). In addition, to survive a motion
to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the factual

4

Although not advanced by Plaintiff in their response, the Court rejects any notion that diversity
of citizenship currently exists as Plaintiff and Lehigh Regional are both citizens of Florida. (Doc.
#37, ¶¶ 3, 5).

6

allegations must be “plausible” and “must be enough to raise a right to relief above the
speculative level.” Id. at 555; see also Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th
Cir. 2010). Like its counterpart above, Rule 12(b)(6) requires more than “unadorned, thedefendant-unlawfully-harmed-me” accusations. Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citations omitted).
In deciding a Rule 12(b)(6) motion to dismiss, the Court must accept all factual
allegations in a complaint as true and take them in the light most favorable to plaintiff.
See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam). But, “[l]egal conclusions
without adequate factual support are entitled to no assumption of truth.” Mamani v.
Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted). “Threadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Iqbal, 556 U.S. at 678. “Factual allegations that are merely consistent with a
defendant's liability [also] fall short of being facially plausible.” Chaparro v. Carnival Corp.,
693 F.3d 1333, 1337 (11th Cir. 2012) (internal citations omitted).

Thus, the Court

engages in a two-step approach: “When there are well-pleaded factual allegations, a court
should assume their veracity and then determine whether they plausibly give rise to an
entitlement to relief.” Iqbal, 556 U.S. at 679.
A. FCCPA and FDCPA
Defendants argue that Plaintiff’s claims under the FCCPA and FDCPA fail because
recording a hospital lien does not constitute “debt collection” as required to invoke the
statutes. See Fla. Stat. § 559.72(9); 15 U.S.C. § 1692e. Section 559.72(9) of the FCCPA
prohibits a debt collector from “asserting the existence of [a] legal right when such person
knows that the right does not exist.” Plaintiff responds that Defendants miss the point as

7

she is arguing that the hospital lien is in fact invalid and such activities are unauthorized
debt collection activities under the statutes. The Court agrees that Plaintiff has stated a
plausible claim at the motion to dismiss stage for violation of the FCCPA and the FDCPA.
Plaintiff alleges that through their illegal hospital liens, Defendants are asserting a legal
right which they do not have and are attempting to enforce that right. The cases cited by
Defendants at Doc. #45, p. 12-13, which held that the filing of a statutory hospital lien is
not debt collection involved valid hospital liens where there was no dispute about the
lien’s validity. Such is not the case here as Plaintiff is alleging different conduct altogether
and challenging Defendants’ authority to file a hospital lien in the first instance.
Defendants further argue in support of dismissal that Plaintiff fails to state a claim
under the FCCPA because she has not alleged any actual knowledge that Defendants
had no legal right to record a lien, citing LeBlanc v. Unifund CCR Partners, 601 F.3d 1185,
1193, n.12 (11th Cir. 2010). But LeBlanc only stated that the FCCPA requires a plaintiff
to “demonstrate that the debt collect defendant possessed actual knowledge that the
threatened means of enforcing the debt was unavailable.” (Id.) (emphasis in original).
LeBlanc does not set forth the pleading requirements for a FCCPA action, only what
Plaintiff is required to ultimately prove.

Plaintiff’s Second Amended Complaint is

sufficiently pled. Defendants may of course re-raise the issue at summary judgment.
B. FDUTPA
Defendants also argue that Plaintiff fails to state a claim under FDUTPA because
recording a hospital lien does not constitute “trade or commerce,” as necessary to invoke
the statute, and because Plaintiff fails to identify any actual damages suffered.

8

FDUPTA is a Florida statute that protects consumers “from the illegal and/or
unscrupulous practices of debt collectors and other person.” Schauer v. General Motors
Acceptance Corp., 819 So. 2d 809, 811–12 (Fla. 4th DCA 2002) (citation omitted); Fla.
Stat. § 501.202. In order to properly state a claim pursuant to FDUPTA, a plaintiff must
allege a deceptive act or unfair practice, causation, and actual damages. Scantland v.
Jeffry Knight, Inc., No. 8:09–CV–1985–T– 17TBM, 2010 WL 4117683, at *7 (M.D. Fla.
Sept. 29, 2010). A deceptive act or unfair practice may be found when “there is a
representation, omission, or practice that is likely to mislead the consumer acting
reasonably in the circumstances, to the consumer's detriment.” Blair v. Wachovia Mortg.
Corp., No. 5:11–cv–566–Oc–37TBS, 2012 WL 868878 *1 (M.D. Fla. Mar. 14, 2012) (citing
Sundance Apartments I, Inc. v. General Elec. Capital Corp., 581 F. Supp. 2d 1215, 1220
(S.D. Fla. 2008)) (quoting Beacon Prop. Mgmt., Inc., 842 So. 2d 773, 777 (Fla. 2003));
see also Scantland, 2010 WL 4117683 at *8 (“A deceptive practice is one that is likely to
mislead consumers, and an unfair practice is one [that] offends established published
policy, 'or is immoral, unethical, oppressive, unscrupulous, or substantially injurious to
consumers.' ”) (quoting Rollins, Inc. v. Butland, 950 So. 2d 850, 869 (Fla. 2d DCA 2006)).
FDUTPA affords civil private causes of action for both declaratory and injunctive relief
and for damages.
The Court agrees with Defendants that there is a “trade or commerce” component
in FDUPTA claims that must also be satisfied. Economakis v. Butler & Hosch, P.A., No.
2:13-CV-832-FTM-38DN, 2014 WL 820623, at *2-3 (M.D. Fla. Mar. 3, 2014); Kelly v.
Palmer, Reifler, & Associates, P.A., 681 F. Supp. 2d 1356, 1374 (S.D. Fla. 2010)
(“FDUPTA prohibits unfair or deceptive acts or practices 'in the conduct of any trade or

9

commerce.' ”); Fla. Stat. § 501.204(1). This “trade or commerce” component is defined
as “the advertising, soliciting, providing, offering, or disturbing, whether by sale, rental, or
otherwise, of any good or service, or any property, whether tangible or intangible, or any
other article, commodity, or thing of value, wherever situated.” Economakis, 2014 WL
820623, at *2-3 (citing Kelly, 681 F. Supp. 2d at 1374) (quoting Fla. Stat. § 501.203(8)).
Courts have found that legitimate debt collection is generally not within the scope
of the term “trade or commerce.” See Trent v. Mortgage Electronic Registration Systems,
Inc., 618 F.Supp.2d 1356, 1365 n. 12 (M.D.Fla.2007) (“The MERS communicated presuit with plaintiffs that it was a ‘creditor' or ‘owned’ the debt does not fall within the purview
of 'trade or commerce.’”); Acosta v. James A. Gustino, P.A., No. 6:11–cv–1266–Orl–
31GHK, 2012 WL 4052245, at *1 (M.D. Fla. Sept. 13, 2012) (finding that the defendants
were not engaged in “trade or commerce” because “attempt[ing] to collect a debt by
exercising one’s legal remedies does not constitute ‘advertising, soliciting, providing,
offering, or distributing’ as those terms are used in Fla. Stat. § 501.203(8)”). Courts have
also held that “[a] person is not engaged in trade or commerce merely by the exercise of
contractual or legal remedies.” Economakis, 2014 WL 820623, at *2-3 (citing Begelfer v.
Najarian, 381 Mass. 177, 191, 409 N.E.2d 167 (1980)); Acosta, 2012 WL 4052245, at *1.
Here, in support of her FDUTPA claims, Plaintiff alleges that as a result of
Defendants’ illegal actions she was damaged by the filing of her private health
information,

indebtedness,

invasion

of

her

privacy,

slander

of

credit

and

misrepresentation of Defendants’ rights, and by the false assertion of the lien rights. (Doc.
#37, ¶ 79). Although Defendants argue that they were not engaged in trade or commerce
as they were simply trying to protect their legal rights, Plaintiff is alleging that they did this

10

illegally. The Court understands that it is Defendants’ position that they had every right
to attempt to collect on Plaintiff’s unpaid hospital bills, but Plaintiff has plausibly alleged
that Defendants did so in an illegal and/or unscrupulous manner, which is within the
purpose of the FDUPTA. As such, the FDUTPA claims will not be dismissed on this basis.
With regard to damages, a claim for damages under FDUTPA has three elements:
“(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” City First
Mortg. Corp. v. Barton, 988 So. 2d 82 (Fla. 4th DCA 2008) (citation omitted); see also KC
Leisure, Inc. v. Haber, 972 So. 2d 1069, 1073-74 (Fla. 5th DCA 2008). Proof of actual
damages is necessary to sustain a FDUTPA claim. See Rollins, Inc. v. Heller, 454 So.2d
580, 585 (Fla. 3d DCA 1984). The statute does not allow the recovery of other damages,
such as consequential damages. See Fort Lauderdale Lincoln Mercury, Inc. v. Corgnati,
715 So. 2d 311 (Fla. 4th DCA 1998).
The Court agrees with Defendants that Plaintiff has failed to allege any actual
damages for violation of FDUTPA, instead Plaintiff only alleges damages as a
consequence of Defendants’ actions such as slander of credit and invasion of privacy.5
(Doc. #37, ¶¶ 79, 91). The amount of the Lien would not be considered actual damages
as Plaintiff does not dispute that this amount was in fact owed to Defendants. Therefore,
the FDUTPA claims will be dismissed without prejudice on this basis. As Plaintiff has
already amended her Complaint twice, the Court will not afford Plaintiff the opportunity to
amend.

5

Unfortunately, Plaintiff does not address this argument in its response brief.

11

III.

Deficient Class Allegations

Finally, Defendants argue that Plaintiff’s class allegations in the Second Amended
Complaint are deficient. The Court finds that these arguments are premature and best
raised and addressed after the issues have been fully briefed at the class certification
stage.
Accordingly, it is now
ORDERED:
Defendants’ Motion to Dismiss (Doc. #45) is GRANTED in part and DENIED in
part. The motion is granted to the extent that Counts 4 and 5 are dismissed without
prejudice; otherwise, the motion is denied.
DONE and ORDERED in Fort Myers, Florida this 29th day of March, 2017.

Copies: All Parties of Record

12