Robinson v. Accelerated Receivables Solutions (A.R.S.),Inc. et al

Filing 73

MEMORANDUM AND ORDER that the Motion for Judgment on the Pleadings, ECF No. 37 , filed by Defendants Accelerated Receivables Solutions, Inc., and David Brostrom, is granted. The Motion for Leave to File Amended Answer, ECF No. 53 , filed by Defendants Accelerated Receivables Solutions, Inc., and David Brostrom, is denied, as moot. The Motion to Stay Discovery, ECF No. 54 , filed by Defendants Accelerated Receivables Solutions, Inc., and David Brostrom, is denied, as moot. The above-captioned action is dismissed, with prejudice. A separate judgment will be entered. Ordered by Chief Judge Laurie Smith Camp. (LAC)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA

TRISHA ROBINSON, on behalf of herself
and all others similarly situated;
8:17CV56
Plaintiff,
MEMORANDUM
AND ORDER

v.
ACCELERATED RECEIVABLES
SOLUTIONS (A.R.S.), INC., and DAVID
W. BROSTROM,
Defendants.

This matter is before the Court on the Motion for Judgment on the Pleadings,
ECF No. 37, filed by Defendants Accelerated Receivables Solutions, Inc. (ARS), and
David Brostrom. For the reasons stated below, the motion will be granted.
BACKGROUND
On September 20, 2016, ARS filed a complaint (County Court Complaint) in the
County Court of Thayer County, Nebraska. ECF No. 1-1. The County Court Complaint,
a standard form used by ARS, see Compl. ¶ 20–21, ECF No. 1, Page ID 6, alleged
fifteen causes of action against Plaintiff Trisha Robinson for unpaid medical debts,
assigned to ARS from Thayer County Health Services. In total, ARS sought “$3,692.85
in principal, $257.39 in interest and/or check fees, costs of this action, and a reasonable
attorney’s fee and post judgment interest as provided by statute.” ECF No. 1-1. Page
ID 17.
On February 23, 2017, Robinson filed this action against ARS on behalf of
herself and a class of similarly situated persons, alleging violations of the Fair Debt

Collection Practices Act, 15 U.S.C. § 1692 et seq. (FDCPA), and the Nebraska
Consumer Protection Act, Neb. Rev. Stat. § 59-1601 et seq. (NCPA). Specifically,
Robinson alleged that ARS was liable for “deceptive acts or practices” under Neb. Rev.
Stat. § 59-1602,1 for “miscast[ing] the cause of action is [sic] for ‘services and supplies’
for the purpose of availing Defendants of attorney’s fees and interest pursuant [to] Neb.
Rev. Stat. § 25-1801, when in fact Defendants do not meet the statutory requirements,”
Compl. ¶ 22, ECF No. 1, Page ID 6, and “seek[ing] . . . sums in addition to principal,
including prejudgment interest and statutory attorney fees even though their standard
collection complaints do not meet the requirements for being awarded either attorney
fees or prejudgment interest,” id. ¶ 23.
Neb. Rev. Stat. § 25-1801 states2:

1

“Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any
trade or commerce shall be unlawful.” Neb. Rev. Stat. § 59-1602.
2

Although not applicable to the current case, § 25-1801 was recently amended, pursuant to
2018 Nebraska Laws L.B. 710, to read:
(1) On any lawsuit of four thousand dollars or less, regardless of whether the claims are
liquidated or assigned, the plaintiff may recover costs, interest, and attorney’s fees in
connection with each claim as provided in this section. If, at the expiration of ninety days
after each claim accrued, the claim or claims have not been paid or satisfied, the plaintiff
may file a lawsuit for payment of the claim or claims. . . . If the plaintiff secures a
judgment thereon, the plaintiff shall be entitled to recover:
(a) The full amount of such judgment and all costs of the lawsuit thereon;
(b) Interest at the rate of six percent per annum. Such interest shall apply to the amount
of the total claim beginning thirty days after the date each claim accrued, regardless of
assignment, until paid in full; and
(c) If the plaintiff, has an attorney retained, employed, or otherwise working in connection
with the case, an amount for attorney’s fees as provided in this section.
...
(4) For purposes of this section, the date that each claim accrued means the date the
services, goods, materials, labor, or money were provided, or the date the charges were
incurred by the debtor, unless some different time period is expressly set forth in a written
agreement between the parties.

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Any . . . corporation in this state having a claim which amounts to four
thousand dollars or less against any person . . . doing business in this
state for . . . services rendered [or] material furnished . . . may present the
same to such person . . . for payment in any county where suit may be
instituted for the collection of the same. If, at the expiration of ninety days
after the presentation of such claim, the same has not been paid or
satisfied, [the corporation] may institute suit thereon in the proper
court. . . . If [the corporation] establishes the claim and secures judgment
thereon, [the corporation] shall be entitled to recover the full amount of
such judgment and all costs of suit thereon, and, in addition thereto,
interest on the amount of the claim at the rate of six percent per annum
from the date of presentation thereof, and, if [the corporation] has an
attorney employed in the case, an amount for attorney's fees as provided
in this section. . . .
Robinson also alleged that “Defendants’ routine practices of collecting
unauthorized charges violates the FDCPA by seeking and collecting amounts, including
interest, fees and costs, which are not permitted by law in violation of 15 U.S.C. §1692f
and 1692f(1).[3]” Compl. ¶ 24, ECF No. 1, Page ID 7.
Defendants filed the current motion, seeking judgment in their favor on the
grounds that they could not have violated the FDCPA or NCPA because they were
permitted “to seek attorney fees and pre-judgment interest when collecting debts as an
assignee of a health care provider that provided medical services and supplies to the
consumer” and “to seek and recover attorney fees for services performed by attorneys
employed as in-house counsel and appearing as counsel of record when attempting to
collect debts arising from medical services and supplies provided by Defendants’
assignor.”

ECF No. 37, Page ID 90–91.

Defendants alternatively sought the

(5) This section shall apply to original creditors as well as their assignees and
successors.
2018 Nebraska Laws L.B. 710.
3

“A debt collector may not use unfair or unconscionable means to collect or attempt to collect any
debt,” 15 U.S.C. § 1692f, including “[t]he 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,” 15 U.S.C. § 1692f(1).

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certification of several questions of law to the Nebraska Supreme Court. Id., Page ID
91–92.
STANDARD OF REVIEW
“Judgment on the pleadings is appropriate where no material issue of fact
remains to be resolved and the movant is entitled to judgment as a matter of law.”
Minch Family LLLP v. Buffalo-Red River Watershed Dist., 628 F.3d 960, 965 (8th Cir.
2010) (citing Faibisch v. Univ. of Minn., 304 F.3d 797, 803 (8th Cir. 2002)). This is “the
same standard used to address a motion to dismiss for failure to state a claim under
Rule 12(b)(6).” Ashley Cnty., Ark. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). “To
survive a motion to dismiss, the factual allegations in a complaint, assumed true, must
suffice ‘to state a claim to relief that is plausible on its face.’” Northstar Indus., Inc. v.
Merrill Lynch & Co., 576 F.3d 827, 832 (8th Cir. 2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).
DISCUSSION
I. Claims for Services Rendered versus Claims on Accounts under § 25-1801
In its motion, ARS argues that Robinson’s claims fail because ARS’s County
Court Complaint was for “services rendered” and qualifies for prejudgment interest and
attorney’s fees under § 25-1801. Robinson argues that the County Court Complaint
represents a claim on an “account” and as such doesn’t qualify under § 25-1801. For
support, Robinson relies on Powers v. Credit Mgmt. Servs., Inc., No. 8:11CV436, 2016
WL 612251, at *1 (D. Neb. Feb. 2, 2016). In Powers, the defendants were a debt
collecting corporation (CMS) and two of its employees, including an in-house attorney.
CMS filed claims in Nebraska county court, using standard-form complaints, seeking

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payment for medical services debts it purchased from a medical care provider. CMS’s
standard-form complaint stated that the medical provider “provided goods, services
and/or labor to Defendant(s) and/or family members of Defendant(s)” and sought
prejudgment interest and attorney’s fees. Powers, 2016 WL 612251, at *2. Plaintiffs
brought suit alleging violations of the FDCPA and NCPA, similar to those at bar.
The court in Powers held that “[a]n action to collect on a past due amount for
services is properly characterized as an action on an account.” 2016 WL 612251, at
*10 (D. Neb. Feb. 2, 2016) (citing Thomas & Thomas Court Reporters, L.L.C. v. Switzer,
810 N.W.2d 677, 686 (Neb. 2012); Sodoro, Daly & Sodoro, P.C. v. Kramer, 679 N.W.2d
213, 219 (Neb. 2004)). The court distinguished between actions based on quantum
meruit, which are based on the implied promise to pay the reasonable value of
furnished labor and materials, and actions on accounts, which are “appropriate where
the parties have conducted a series of transactions for which a balance remains.” Id.
(quoting Kramer, 679 N.W.2d at 219) (citing Hancock v. Parks, 110 N.W.2d 69, 74
(Neb. 1961)). Thus, the two types of actions needed to be pleaded separately and
“[m]isrepresenting the nature of a debtor’s debts as debts for materials or services
rendered, rather than actions on accounts, in order to deceive state courts and debtors
and collect impermissible fees and prejudgment interest is a violation of the FDCPA.”
Id. (citing Jenkins v. General Collection Co., 538 F.Supp.2d 1165, 1174 (D. Neb. 2008);
American. Title, Inc. v. Genisys Fin. Corp., No. 8:03 CV 463, 2005 WL 2388038, at *3
(D. Neb. Sept. 28, 2005)).
Plaintiffs rely on Powers for the proposition that “actions on accounts” do not
qualify under § 25-1801. Opp. Brief, ECF No. 50, Page ID 230 (“Defendants do not

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collect on ‘goods and services’ but rather defaulted accounts or accounts stated. This
Court [has] consistently held that such accounts do not fit under . . . § 25-1801.”). Yet
Powers never reached this holding, and the Court must look to the Nebraska Supreme
Court when interpreting § 25-1801. In Thomas & Thomas Court Reporters, L.L.C. v.
Switzer, 810 N.W.2d 677, 686 (Neb. 2012), the Nebraska Supreme Court analyzed
whether various groupings of invoices were within the $4,000 limit of § 25-1801. The
court held that because the plaintiff’s claim was best characterized as “an action on an
account”4 the amount of the invoices should be aggregated, disqualifying the claim
under § 25-1801. Switzer, 810 N.W.2d at 686. If the claim’s designation as an action
on an account was sufficient to disqualify the claim under § 25-1801, the Nebraska
Supreme Court would not have addressed the issue of aggregate value. The Nebraska
Supreme Court’s analysis suggests that “actions on accounts” are proper under § 251801 if they otherwise qualify under the statute’s criteria. Thus, regardless of whether
the County Court Complaint is an action on an account, the debts at issue were incurred
for services rendered or materials furnished, and otherwise appear to fall within the
scope of § 25-1801.
II. Original Submission of Claim by Thayer County Health Services
Robinson argues that ARS is liable for violations of the FDCPA and NCPA
because ARS alleged it filed the County Court Complaint at least ninety days after the
4

In reaching its conclusion, the court in Swtizer cited to Kramer, 679 N.W.2d at 219. In Kramer,
the court stated:
An “action on account” has been defined as an action of assumpsit or debt for the
recovery of money only for services performed, property sold and delivered, money
loaned, or damages for the nonperformance of simple contracts, expressed or implied,
when the rights of the parties will be adequately conserved by the payment and receipt of
money.
679 N.W.2d at 219 (quoting 1 C.J.S. Account, Action on § 2).

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claim was presented to Robinson, although the original claim was presented by Thayer
County Medical Services—not ARS. Robinson contends that the original presentment
by Thayer was insufficient under § 25-1801.
Neither this Court, nor counsel, has identified Nebraska case law directly
addressing this issue. However, the Court’s analysis is informed by the longstanding
legal principle that an assignee acquires all the rights and obligations of an assignor.
See Zapata v. McHugh, 893 N.W.2d 720, 727 (Neb. 2017) (citing Ehlers v. Perry, 494
N.W.2d 325 (Neb. 1993)) (“An assignee stands in the shoes of the assignor . . . .”);
Kasel v. Union Pac. R.R. Co., 865 N.W.2d 734, 738 (Neb. 2015) (citing Spanish Oaks v.
Hy–Vee, 655 N.W.2d 390 (Neb. 2003); Hansen v. E.L. Bruce Co., 77 N.W.2d 458 (Neb.
1956)) (“An assignment does not affect or change any of the provisions of the
contract.”).

Following this principle, ARS acquired all the rights of Thayer County

Medical Services to pursue collection of the debts assigned—including the right to file in
county court ninety days after Thayer’s presentment of the claim.

The Court finds

nothing in the language of § 25-1801 limiting this right.
In Powers, the court analyzed a similar issue under the “unsophisticated
consumer” standard. 2016 WL 612251, at *14; see Duffy v. Landberg, 215 F.3d 871,
873 (8th Cir. 2000) (citing Jang v. A.M. Miller and Assocs., 122 F.3d 480, 483 (7th Cir.
1997)) (“In evaluating whether a debt collection letter is false, misleading or deceptive
[under the FDCPA], the letter must be viewed through the eyes of the unsophisticated
consumer.”).

“[The unsophisticated consumer] standard protects the uninformed or

naive consumer, yet also contains an objective element of reasonableness to protect
debt collectors from liability for peculiar interpretations of collections letters.” Duffy, 215

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F.3d at 874–75 (8th Cir. 2000) (citing Jang, 122 F.3d at 483–84); see id. at 874 (quoting
Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1236 (5th Cir. 1997))
(noting that the standard is “designed to protect consumers of below average
sophistication or intelligence without having the standard tied to the very last rung on
the sophistication ladder”).
The court in Powers found “as a matter of law that from the perspective of the
least sophisticated consumer, the representation implies that the demand for payment
had been presented by the plaintiff in the collection action.” 2016 WL 612251, at *14.
As with the County Court Complaint at issue here, the Powers court noted that “nothing
in the state-court collection complaints . . . indicates that the demand had been made by
the original creditor.” Id. The Powers court also noted that the state-court collection
complaint was devoid of any mention of the medical services or the date on which they
were provided. The County Court Complaint here identifies each date of service and
that Thayer County Health Services was the health care provider. See, e.g., ECF No.
1-1, Page ID 13 (“Prior to and or on March 20, 2014 Plaintiff’s assignor, Thayer County
Health Services at the special insistence and request of Defendant (s), furnished
Defendant (s) on account services and supplies and there is now due on said account
the principal sum of $478.00 . . . . Said account has been presented and payment
thereof refused . . . . Said account has been assigned to Plaintiff for collection.”). The
Court finds that based on the language in the County Court Complaint, an
unsophisticated consumer would not be misled.

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III. Attorney’s Fees for In-house counsel
Robinson alleges that ARS violated the FDCPA and NCPA by seeking attorney’s
fees. Robinson argues that because ARS employed in-house counsel, attorney’s fees
are not allowed under § 25-1801. According to Robinson, ARS is “tantamount to a law
firm suing pro se,” ECF No. 50, Page ID 250, and attorney fees are not recoverable by
pro se litigants, even those who are attorneys. Robinson presents extensive authority
that pro se litigants cannot recover attorney’s fees in Nebraska, but Robinson presents
no authority for her characterization of ARS as a “pro se law firm,” id. In fact, authorities
cited by Robinson support the availability of fees for in-house counsel. In Young v.
Midwest Family Mut. Ins. Co., 753 N.W.2d 778 (Neb. 2008), the Nebraska Supreme
Court disallowed the recovery of pro se attorney’s fees, even to licensed attorneys,
while explicitly recognizing it allowed fee recovery for in-house counsel under Neb. Rev.
Stat. § 44–359. Id. at 782 (citing Dale Electronics, Inc. v. Federal Ins. Co., 286 N.W.2d
437, 443 (Neb. 1979)); see also Hage v. Gen. Serv. Bureau, 306 F. Supp. 2d 883, 888
n.2 (D. Neb. 2003) (citing Dale Electronics, 286 N.W.2d at 443) (“[E]mployment of inhouse, as opposed to retained, counsel would not affect the allowance of a fee.”).
Although Robinson is correct that Hage and Dale Electronics did not concern § 251801, Robinson offers no colorable reason for a different result under § 25-1801.
Robinson’s proposition that this Court should treat ARS as pro se litigant runs
counter to the long-standing axiom that corporations cannot appear pro se. Niklaus v.
Abel Const. Co., 83 N.W.2d 904, 910 (Neb. 1957) (“[A] corporation cannot appear in its
own person. It must appear by a member of the bar.”); see also Steinhausen v.
HomeServices of Nebraska, Inc., 857 N.W.2d 816, 826 (Neb. 2015) (“[L]ike a

9

corporation, an LLC is an abstraction, and ‘abstractions cannot appear pro se.’” (quoting
Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423, 1427 (7th Cir. 1985))).
The Court finds no basis for disallowing attorney’s fees under § 25-1801 by
reason of ARS’s employment of in-house counsel.
CONCLUSION
Because the Court finds that ARS’s County Court Complaint did not improperly
seek remedies or amounts disallowed under Nebraska law as alleged by Robinson,
ARS could not have violated the FDCPA or the NCPA. The Motion for Judgment on the
Pleadings will be granted, and the above-captioned action will be dismissed, with
prejudice. The Court does not find certification of questions to the Nebraska Supreme
Court necessary or appropriate at this time. Accordingly,
IT IS ORDERED:
1. The Motion for Judgment on the Pleadings, ECF No. 37, filed by Defendants
Accelerated Receivables Solutions, Inc., and David Brostrom, is granted;
2. The Motion for Leave to File Amended Answer, ECF No. 53, filed by Defendants
Accelerated Receivables Solutions, Inc., and David Brostrom, is denied, as moot;
3. The Motion to Stay Discovery, ECF No. 54, filed by Defendants Accelerated
Receivables Solutions, Inc., and David Brostrom, is denied, as moot;
4. The above-captioned action is dismissed, with prejudice; and
5. A separate judgment will be entered.

Dated this 19th day of April, 2018.

BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge

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