Plank v. St. Anthony's Medical Center et al

Filing 9

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants Motion to Dismiss or alternative Motion to Stay Proceedings is DENIED. [Doc. 5.]IT IS FURTHER ORDERED that an Order Setting Rule 16 Conference will be filed contemporaneously with this Memorandum and Order. 5 Signed by Magistrate Judge Nannette A. Baker on 1/29/19. (CLA)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
PATTY PLANK,

)
)
Plaintiff,
)
)
v.
)
)
ST. ANTHONY’S MEDICAL CENTER, et al., )
)
Defendants.
)

Case No. 4:18-CV-726 NAB

MEMORANDUM AND ORDER 1
This matter is before the Court on Defendants’ Motion to Dismiss or in the Alternative to
Stay the Proceedings. [Doc. 5.] Plaintiff filed a response in opposition. [Doc. 7.] The motion is
now fully briefed. Based on the following, the Court will deny Defendants’ Motion to Dismiss
and deny the alternative Motion to Stay.
I.

Plaintiff’s Complaint
Plaintiff Patty Plank brought this action against Defendants St. Anthony’s Medical Center

and HLO Collection Services, LLC alleging that Defendant HLO Collection Services, LLC
(“HLO”) violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692k(d) (“FDCPA”), by
attempting to collecting a debt while she, the debtor, was enrolled in bankruptcy protection.
Compl. ¶¶ 1-19. Plank alleges that the dunning letter seeking to collect the medical debt was
sent on or about October 31, 2017. Plank also alleges that Defendants HLO and St. Anthony’s
Medical Center (“SMC”) violated the Missouri Merchandising Practices Act by engaging in
conduct that harassed, oppressed, or abused her and used false, deceptive, or misleading
representation or means in debt collection of an amount not authorized by law or agreement.
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The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28
U.S.C. § 636(c).

Compl. ¶¶ 20-21.

Finally, Plank alleges that Defendant SMC failed to properly supervise

Defendant HLO and their failure to supervise caused damage to her. Compl. ¶¶ 23-26. Plaintiff
alleges that she filed for bankruptcy protection in September 2017. Compl. ¶ 10. The parties’
pleadings implied that Plaintiff’s bankruptcy case was closed, but do not explicitly make that
allegation. The Court confirmed through Pacer, the federal court case filing and record system,
that Plaintiff’s bankruptcy case was discharged on January 3, 2018 and closed on January 18,
2018. The Court takes judicial notice of this fact.
Defendants filed a motion to dismiss asserting that this court does not have jurisdiction in
this action, because Plank is alleging that Defendants violated a bankruptcy stay order and the
appropriate jurisdiction is the bankruptcy court where the stay order was issued.
II.

Motion to Dismiss Standard
A defendant may file a motion to dismiss for failure to state a claim upon which relief

can be granted. Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its
face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). “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 claim has facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678. While a complaint attacked by a Rule 12(b)(6)
motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide
the grounds for entitlement to relief [as required in Fed. R. Civ. P 8(a)] require more than labels
and conclusions, and formulaic recitation of the elements of a cause of action will not do.

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Twombly, 550 U.S. at 555. “Factual allegations must be enough to raise a right to relief above
the speculative level.” Id. Also, “[w]hile legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations.” Iqbal, 556 U.S. at 679. “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.” Id.
III.

Discussion
There is a split in the federal circuit courts regarding whether and when the Bankruptcy

Code precludes FDCPA claims arising from debt collection during bankruptcy proceedings. See
Simon v. FIA Card Servs., 732 F.3d 259 (3d 2013), Simmons v. Roundup Funding, LLC, 622 F.
92 (2d Cir. 2010), Randolph v. IMBS, Inc., 368 F.3d 726 (7th Cir. 2004), Walls v. Wells Fargo
Bank, 276 F.3d 502 (9th Cir. 2002). The Eighth Circuit has not decided the issue. Although the
Motion to Dismiss was filed on behalf of both defendants, the FDCPA claim is only against
HLO. After considering the cases, including the district court cases in our Circuit that have
addressed the issue, the Court finds that Plaintiff’s action can proceed.
The purpose of the FDCPA is to eliminate abusive debt collection practices by debt
collectors. Dunham v. Portfolio Recovery Associates, 663 F.3d 997, 1000 (8th Cir. 2011). Debt
collectors are liable for failure to comply with any provision of the Act. Richmond v. Higgins,
435 F.3d 825, 828 (8th Cir. 2006) (quoting 15 U.S.C. § 1692k(a)). A central purpose of the
Bankruptcy Code, 11 U.S.C. § 101, et seq., is “to provide a procedure by which certain insolvent
debtors can reorder their affairs, make peace with their creditors, and enjoy a new opportunity in
life with a clear field for further effort, unhampered by the pressure and discouragement of
preexisting debt.” Grogan v. Garner, 498 U.S. 279, 286 (1991). During bankruptcy all efforts
to collect on a debt are “stayed” during the pendency of the bankruptcy proceeding. 11 U.S.C.

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§ 362(a). Under the Bankruptcy Code, if a creditor violates the provisions of the automatic stay,
the debtor may seek a contempt proceeding in bankruptcy court. 11 U.S.C. § 105.
In this case, Plank alleges that HLO violated the FDCPA by engaging in conduct to
harass, oppress, or abuse her, used false, deceptive, or misleading representation or means in
collection of a debt, and took action that cannot legally cannot be taken by attempting to collect a
debt enrolled in bankruptcy protection. Specifically, Plank alleges that she filed for bankruptcy
protection in September 2017 and HLO sent a dunning letter to Plank in an attempt to collect a
medical debt owed to SMC. HLO seeks to dismiss Plank’s complaint, because it states that the
court lacks jurisdiction and Plank’s claim must be brought in bankruptcy court as a violation of
the automatic stay and not under the FDCPA.
“No statutory provision expressly indicates that FDCPA claims cannot arise from the
filing of a claim in bankruptcy.” Carranza v. Midland Funding, LLC, No. 4:15-CV-559 CEJ,
2015 WL5008462 at *3 (E.D. Mo. Aug. 20, 2015). While a later enacted statute, in this case the
Bankruptcy Code, can sometimes operate to amend or even repeal earlier statutory provisions,
the repeal of statutes by implication is not favored.

National Ass’n of Home Builders v.

Defenders of Wildlife, 551 U.S. 644, 662 (2007). “A new statute will not be read as wholly or
even partially amending a prior one unless there exists a ‘positive repugnancy’ between the
provisions of the new and those of the old that cannot be reconciled.” In re American River
Transp. Co., 800 F.3d 428, 433 (8th Cir. 2015) (citing Blanchette v. Connecticut Gen. Ins. Corp.,
419 U.S. 102, 134 (1974)). “Where provisions in the two acts are in irreconcilable conflict, the
later act to the extent of the conflict constitutes an implied repeal of the earlier one.” American
River, 419 U.S. at 433. “When two statutes are capable of coexistence, however, it is the duty of
the courts, absent an clearly expressed congressional intention to the contrary, to regard each as

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effective.” Id. “The rule is to give effect to both if possible.” Id. A statute “dealing with a
narrow, precise, and specific subject is not submerged by a later enacted statute covering a more
generalized spectrum.” Home Builders, 551 U.S. at 663.
The Court finds that the Bankruptcy Code and the FDCPA do not irreconcilably conflict
with each other so as to repeal the FDCPA by implication. Debt collectors can comply with each
statute simultaneously. Randolph, 368 F.3d 730. “When, as here, FDCPA claims arise from
communications a debt collector sends a bankruptcy debtor in a pending bankruptcy proceeding,
and the communications are alleged to violate the Bankruptcy Code or Rules, there is no
categorical preclusion of the FDCPA claims.” Simon, 732 F.3d at 274. “[T]he statutes offer
different sanctions, and Plaintiff chose the statute that ostensibly provides her with the best
remedy.” Drnavich v. Cavalry Portfolio Service, LLC, No. Civ. 05-1022 PAMRLE, 2005 WL
2406030 at *2 (M.D. La. Sept. 29, 2005).
Accordingly,
IT IS HEREBY ORDERED that Defendants’ Motion to Dismiss or alternative Motion
to Stay Proceedings is DENIED. [Doc. 5.]
IT IS FURTHER ORDERED that an Order Setting Rule 16 Conference will be filed
contemporaneously with this Memorandum and Order.
Dated this 29th day of January, 2019.

/s/ Nannette A. Baker
NANNETTE A. BAKER
UNITED STATES MAGISTRATE JUDGE

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