In what I imagine is a scenario that is all-too familiar inside collection agencies across the country, a District Court judge in Washington has granted a defendant’s motion for summary judgment after it was sued for violating the Fair Debt Collection Practices Act because it attempted to collect on an unpaid healthcare debt before it was forgiven as part of a completed charity care application from the plaintiff.
The plaintiff incurred a debt to a hospital when she gave birth to her daughter in 2015. The hospital’s attempts to bill the plaintiff’s insurance in the months that followed failed. The hospital attempted to contact the plaintiff to resolve the situation, but the letters it sent were returned as undeliverable. The account was then placed for collections. When the accounts were placed with the defendant, “Medicaid Washington” was listed in the insurance field. The defendant began furnishing information about the debt to the credit reporting agencies. The debts were never disputed by the plaintiff.
In December 2020, the plaintiff submitted a charity care application, but the request was denied because some information was missing from the document. Ultimately, the plaintiff submitted a completed application in January 2021 and it was approved. By January 6, the accounts had been recalled from the defendant and by January 18, the requests to delete the tradelines had been submitted to the credit reporting agencies.
The plaintiff filed suit, accusing the collector of violating Sections 1692e and 1692f(1) of the FDCPA by reporting a debt that was not owed to the credit reporting agencies. The defendant argued — and Judge Lauren King of the District Court for the Western District of Washington agreed — that when it was attempting to collect on the accounts, the debts were still technically valid.
There was “undisputed” evidence submitted by both the plaintiff and the defendant that the hospital had reason to believe that the plaintiff had third-party insurance when she gave birth to her daughter.
The plaintiff made other arguments why she did not owe the debt, but Judge King rejected all of them.