IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

MAHALA A. CHURCH, on behalf of )

herself and all others similarly situated, )

 )

Plaintiff, )

)

v. ) CIVIL ACTION 14-0057-WS-B

 )

ACCRETIVE HEALTH, INC., aka dba )

MEDICAL FINANCIAL SOLUTIONS, )

 )

Defendant. )

ORDER

This matter comes before the Court on defendant Accretive Health, Inc.’s Motion for 

Summary Judgment (doc. 91). The Motion has been briefed and is now ripe for disposition.1

I. Motions to Seal.

Before turning the Rule 56 Motion, the Court examines a quartet of Motions to Seal 

(docs. 93, 102, 105 and 109), through which the parties endeavor to place under seal their entire 

summary judgment briefs and the vast majority of the accompanying exhibits. As grounds for 

such a request, the parties contend that these filings “refer[] extensively” to matters marked 

“confidential” in discovery pursuant to protective order, that “much” of the information so 

designated “relates to personal health information,” and that these filings also contain “highly 

confidential and proprietary information” relating to the “operations, business model and 

financial information” of the defendant and/or nonparty Providence Hospital.

 1 Movant has requested oral argument. Review of the papers confirms that the 

parties have devoted in the aggregate more than 70 pages of briefing to a singular, narrow legal 

issue on largely undisputed facts. Moreover, the parties have already been heard once in this 

very case via another, similar set of briefs addressing precisely the same narrowly circumscribed 

legal question, albeit without the benefit of a developed factual record. Under the circumstances, 

oral argument would serve no constructive purpose; therefore, the Court in its discretion denies

defendant’s request. See Civil L.R. 7(h) (“In its discretion, the Court may rule on any motion 

without oral argument.”).

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Of course, federal courts have long recognized a strong presumption in favor of allowing 

public access to judicial records. See, e.g., Chicago Tribune Co. v. Bridgestone/Firestone, Inc., 

263 F.3d 1304, 1311 (11th Cir. 2001) (“The common-law right of access to judicial proceedings, 

an essential component of our system of justice, is instrumental in securing the integrity of the 

process. ... [T]he common-law right of access includes the right to inspect and copy public 

records and documents.”). “Indeed, the common law right of public access to judicial documents 

is said to predate the Constitution.” United States v. Byrd, 11 F. Supp.3d 1144, 1148 (S.D. Ala. 

2014) (citation and internal marks omitted). The presumption of access extends to “[m]aterial 

filed in connection with any substantive pretrial motion, unrelated to discovery,” and to any 

“motion that is presented to the court to invoke its powers or affect its decisions.” Romero v. 

Drummond Co., 480 F.3d 1234, 1246 (11th Cir. 2007) (citations and internal quotation marks 

omitted). “Litigants may not override that presumption by simply referencing a protective 

order.” Allstate Ins. Co. v. Regions Bank, 2015 WL 4073184, *2 n.3 (S.D. Ala. July 2, 2015); 

see also Suell v. United States, 32 F. Supp.3d 1190, 1192 (S.D. Ala. 2014) (“[t]the mere 

existence of a protective order does not automatically override the public’s right of access”).

The parties’ proffered justifications for the extraordinary “seal-everything” remedy they 

seek are too general, too conclusory, and altogether too skeletal. Inspection of the briefs and 

exhibits reveals minimal discussion of personal health information. While certain of Church’s 

medical information and billing records are included, she has not requested that such materials 

be sealed to protect her privacy interests; rather, it is defendant that appears to be leading the 

charge on the Motions to Seal.

2

 And the blanket assertion that across-the-board sealing is 

appropriate to safeguard “highly confidential and proprietary information” relating to the 

business practices of defendant and Providence Hospital appears to be breathtakingly overbroad. 

Not every internal billing procedure or policy of a company is automatically rendered “highly 

confidential and proprietary.” Not every page from a company’s internal policy manual is a 

 2 To the extent that billing records concerning other patients have been included, it 

appears that the requisite spreadsheet exhibits have redacted patient names and other identifiers, 

such that there would be no “personal health information” justification to maintaining sealed 

status for those exhibits. And the few billing letter exhibits that recite names of other consumers 

could be easily redacted because those consumers’ identities are unimportant to the issues joined 

in this action.

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trade secret that would confer an unfair advantage to competitors if placed in the public file. 

And not every word that a deponent utters in deposition testimony concerning corporate 

practices and interactions between a hospital and its vendors is necessarily so sensitive and 

proprietary that the public’s right of access must yield. Yet that is essentially all the parties have 

said – in sweeping, blanket, non-specific terms – to justify their Motions to Seal.

Upon scrutiny of the materials in question, the Court has no doubt that these filings do,

indeed, divulge commercially sensitive information that Providence Hospital and/or Accretive 

Health may have a legitimate interest in shielding from the public. For example, the inner 

workings (and, specifically, the financial terms) of the Providence / Accretive contractual 

relationship may well be commercially sensitive, thereby justifying sealed status. However, the 

Court also has no doubt that the universe of information and documents as to which any 

legitimate sealing interest under Rule 26 exists is considerably smaller than the parties have 

represented via their “seal-everything” philosophy.

As the party seeking to have all briefs and hundreds of pages of supporting exhibits 

restricted from public access,3 Accretive Health bears the burden of making a particularized 

showing that the Rule 26 good cause balancing test is satisfied with respect to each sealed item. 

See, e.g., Suell, 32 F. Supp.3d at 1192 (“The governing standard must be applied by the plaintiffs 

to each document, and to each portion of each document, separately.”); General L.R. 

5.2(b)(2)(B) (motion to seal must articulate “[t]he basis upon which the party seeks the order, 

including the reasons why alternatives to sealing are inadequate”). If Accretive Health really 

wishes to pursue sealed status for every word in every summary judgment brief, plus dozens of 

exhibits spanning hundreds of pages, then it must make a particularized showing, on a documentby-document basis (and even more disaggregated than that, as to briefs or exhibits covering 

multiple categories of information), why Accretive Health’s, Providence Hospital’s or a patient’s

 3 By all appearances, Church’s sole reason for requesting sealed status of her 

summary judgment submission was to accommodate Accretive’s wishes. See doc. 102 

(justifying plaintiff’s Motion to Seal by saying that “Accretive has filed a motion,” that 

information is included “which Accretive says is highly confidential and proprietary” and that 

plaintiff is filing under seal “based on ... Accretive’s representation that there is no alternative 

means to protect against the disclosure of the information it deems confidential”). Nothing 

before the Court suggests that Church independently seeks to have anything sealed; rather, her 

request seems derivative of, and animated exclusively by, Accretive Health’s hardline stance.

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interest in keeping that item/information sealed outweighs the public’s right of access. To date, 

it has not done so, and the Motions to Seal in their present form appear overinclusive to the 

extreme.

In short, the parties’ proposed kneejerk “seal-everything” approach, while perhaps 

expedient, is incompatible with Chicago Tribune, Rule 26, General L.R. 5.2, and this Court’s 

obligation to preserve the public’s right of access to court proceedings absent a specific showing 

that overriding private interests exist. Accordingly, Accretive Health is ordered to file a 

supplemental brief, on or before December 8, 2015, setting forth in detail, on an item-by-item 

basis, precisely which materials and categories of information it is claiming should be sealed, 

identifying the specific grounds for that contention, and specifying the reasons why redaction or 

other lesser measures are insufficient to protect those private interests in secrecy. Once 

Accretive Health has identified the specific items and categories of information that it,

Providence or Church has a legitimate interest in keeping confidential, an appropriate remedy 

can be fashioned to safeguard those private interests while preserving the public’s right of access 

to the maximum extent practicable.

II. Background.4

A. Nature and Procedural History of the Action.

Despite the voluminous briefs and evidentiary submissions by the parties on summary 

judgment, this case is actually straightforward. Plaintiff, Mahala A. Church, received medical 

treatment at a hospital in late 2012. More than a year later, Church received a letter from 

defendant, Accretive Health, Inc., stating that she had an active balance of slightly below $2,000 

and requesting payment. That letter lacked certain disclosures prescribed by the Fair Debt 

Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”). In her Second Amended 

 4 The Court is mindful of its obligation under Rule 56 to construe the record, 

including all evidence and factual inferences, in the light most favorable to the nonmoving party. 

See Skop v. City of Atlanta, GA, 485 F.3d 1130, 1136 (11th Cir. 2007). Thus, plaintiff’s evidence 

is taken as true and all justifiable inferences are drawn in her favor. Also, federal courts cannot 

weigh credibility at the summary judgment stage. See Feliciano v. City of Miami Beach, 707 

F.3d 1244, 1252 (11th Cir. 2013) (“Even if a district court believes that the evidence presented by 

one side is of doubtful veracity, it is not proper to grant summary judgment on the basis of 

credibility choices.”). Therefore, the Court will “make no credibility determinations or choose 

between conflicting testimony, but instead accept[s] [plaintiff’s] version of the facts drawing all 

justifiable inferences in [her] favor.” Burnette v. Taylor, 533 F.3d 1325, 1330 (11th Cir. 2008).

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Complaint (doc. 81), Church brings a putative class action against Accretive Health. The sole

cause of action advanced in plaintiff’s pleading is a claim that Accretive Health violated the 

FDCPA by “[f]ailing to make the disclosures required by 15 U.S.C. §§ 1692e and 1692g.” (Doc. 

81, ¶ 35(a).)

For its part, Accretive Health denies liability to Church, on the ground that the subject 

disclosures were not required because of a FDCPA exemption for “debt which was not in default 

at the time it was obtained.” The only issue presented on summary judgment – and, indeed, the 

only triable issue joined in this case – is whether Accretive Health’s letter concerned a debt that 

was in default. Church says it did. Accretive Health says it did not. Defendant’s Rule 56 

Motion hinges on resolution of that singular, narrow legal question. If the debt was not in 

default, as movant argues, then Church’s FDCPA claim fails as a matter of law and this action is 

properly dismissed. If, however, genuine issues of material fact exist as to whether Church’s 

debt was in default, then this action must proceed to disposition of plaintiff’s pending class 

certification motion and a trial on the merits.

The pending Motion for Summary Judgment, which defendant filed following the close 

of discovery, marks the second time the “default” issue has been presented for adjudication in 

this case. Last December, the undersigned entered an Order (doc. 56) ruling on Accretive 

Health’s Motion to Dismiss and, in the Alternative, for Summary Judgment (doc. 43). That 

Motion asserted, inter alia, that (i) Church had failed to state a plausible claim that her debt to 

Providence Hospital was in default, warranting dismissal under Rule 12(b)(6), and (ii) Accretive 

Health had submitted “undisputed facts” establishing that no such default had occurred. On the 

former question, the Court concluded that the Amended Complaint contained “a plausible factual 

predicate to support Church’s allegation that the account was in default at the time of the 

transfer, so as to render Accretive a debt collector for FDCPA purposes.” (Doc. 56, at 7.) On 

the latter question, the Court held that summary judgment was improper pursuant to Rule 56(d) 

because “[t]o force Church to go forward with summary judgment now would be unfair because 

it would deprive her of the tools and information she reasonably requires to prepare her 

opposition.” (Id. at 24.) After a vigorous discovery period, Accretive Health has renewed its 

Motion for Summary Judgment, contending that undisputed record facts establish that Church’s 

debt was not in default at the time Providence Hospital transferred it to Accretive Health, such 

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that the FDCPA is inapplicable and no FDCPA disclosures were necessary in the solitary letter at 

issue herein.

B. Plaintiff’s Dealings with Providence Hospital and Accretive Health.

The relevant facts are, in large part, undisputed and uncontroversial. In late 2012, 

plaintiff, Mahala Church, was scheduled for an inpatient surgical procedure at Providence 

Hospital in Mobile, Alabama. (Church Dep. (doc. 94, Exh. T), at 22.) Because of the nature of 

her medical condition, Church underwent a regimen of preoperative treatment at Providence on 

multiple occasions in November 2012, then returned to the hospital for surgery on December 18, 

2012. (Id. at 22-24.) At the time she received this medical care, Church was covered by two 

complementary forms of insurance, namely Medicare Part A and a BlueCross/BlueShield C+ 

Supplement. (Id. at 21.) Church had carefully planned the timing of her surgery to occur before 

the end of the calendar year so that her insurance would cover it completely, with no deductible

payment required. (Id. at 28-29.) Consequently, Church did not expect to make any out-ofpocket payments for this course of treatment, including both preoperative care and surgery. (Id.

at 29.)

Upon her discharge from Providence, Church was neither presented with a bill nor asked 

to make any payment. (Id. at 25-26.) Instead, Church received what is called a “courtesy 

discharge,” because the hospital anticipated that insurance would cover the balance owed for her 

medical care. (Bragg Dep. (doc. 94, Exh. B), at 22.) That is, Providence did not pursue payment 

arrangements with Church at the time of her discharge because hospital officials expected that 

there would be no remaining balance after payment by insurance. (Id. at 69-70, 98.) In fact, 

Providence never sent Church a bill and never contacted her directly to collect on her account. 

(Church Dep., at 26, 29.) Nonetheless, Providence assigned a balance of $31,724.66 to 

plaintiff’s surgery. (Doc. 94, Exh. E.) Over the next few weeks, after Medicare allowances and 

associated insurance payments, that balance was reduced to $656 as of early February 2013. 

(Id.; Bragg Dep., at 80.)

For her part, Church was on the cusp of filing for bankruptcy protection for reasons 

unrelated to her late-2012 medical treatment at Providence. While she understood that her 

December 2012 surgery and related care would be fully covered by insurance, Church also 

believed she owed Providence money for “something else” (i.e., for previous medical treatment 

unrelated to the December 2012 surgery). (Church Dep., at 29-30.) So Church initiated contact 

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with Providence’s business office in February 2013 to inquire about the status of those other 

charges. (Id. at 29-31.) At that time, Providence notified her for the first time that her account 

for the December 2012 surgery had an outstanding balance of $656. (Id. at 31; doc. 94, Exh. E.)

On June 7, 2013, Church filed a Voluntary Petition under Chapter 7 in the U.S. 

Bankruptcy Court for the Southern District of Alabama. (Doc. 94, Exh. X.) In her bankruptcy 

schedules, Church listed Providence as a creditor, with a balance owed of $656. (Id. at 29; 

Church Dep., at 35.) Unbeknownst to Church, however, two days earlier Providence had 

unilaterally cancelled that $656 balance and zeroed out her account for the December 2012 

surgery as part of BlueCross’s contractual allowance. (Doc. 94, Exh. E.; Bragg Dep., at 85-86.) 

In point of fact, then, Church owed no money to Providence for the December 2012 surgery at 

the time she filed her Chapter 7 petition. Be that as it may, the Bankruptcy Court granted Church 

a discharge pursuant to 11 U.S.C. § 727 on September 9, 2013. (Doc. 94, Exh. Z.)

On January 10, 2014, some four months after Church’s discharge in bankruptcy, a 

Providence employee observed that, while Church’s surgery account had a zero balance, a

separate account for Church’s preoperative lab charges incurred in November 2012 (in 

preparation for the December surgery) still showed an outstanding balance “pending insurance.” 

(Doc. 94, Exh. V.) At that time, Providence combined the two accounts into one, thereby 

reactivating Church’s account and showing a balance owed. (Bragg Dep., at 31-33, 81, 85 and 

98; doc. 94, Exh. E; Graves Dep., at 99.) For reasons not germane to the claims joined here, 

Providence (or, more accurately, Providence’s automated systems) did not recognize that Church 

had received a discharge in bankruptcy back in September 2013. Ultimately, a letter was 

generated by a third party seeking payment of what Providence’s records showed to be an unpaid 

balance of $1,944.80 on Church’s account. (Id. at 32-33.) Those charges related exclusively to 

the November 2012 lab work performed antecedent to Church’s surgery. (Bragg Dep., at 99-

100.) Church had never previously been billed by Providence Hospital for those outstanding 

amounts. (Church Dep., at 23, 25-26.)

The net result of the foregoing chain of events was that Church received a collection 

letter dated January 17, 2014. That single, one-page item of correspondence is the raison d’être 

for this litigation. The letter was sent by defendant, Accretive Health, Inc., and listed the sender 

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as “Medical Financial Solutions, a Division of Accretive Health.” (Doc. 102, Exh. B.)5 The 

letter reflected a date of service of December 18, 2012, a balance owed of $1,944.80, and a due 

date of “UPON RECEIPT.” (Id.) The January 17 letter read, in its entirety, as follows:

“Dear MAHALA CHURCH,

“You have an active balance of $1,944.80 with Providence Hospital. To assist 

you in resolving this balance, Providence Hospital has sent your account to 

Medical Financial Solutions. It is very important we hear from you.

“The hospital values you as a patient and would like to help you resolve this 

unpaid balance. If you are unable to remit payment in full at this time, please 

contact Medical Financial Solutions to discuss resolution options that may be 

available to you:

• Payment Arrangement

• Apply Insurance

• Financial Assistance

“Please call Medical Financial Solutions at 251-631-3550 or remit payment 

using the payment coupon above. Our office hours are listed at the bottom of this 

letter. If payment in full was sent before the date of this letter, please disregard 

this request and accept our gratitude.

“If this balance presents a financial hardship to you or your family, there are 

programs available to help. Please call the number above to find out more.

“Sincerely,

“Medical Financial Solutions

“Medical Financial Solutions is a non-credit reporting, third party agency. Our 

company works directly with Providence Hospital to ensure your account is 

protected from moving further into collections.

“Inbound and outbound calls may be monitored or recorded for quality purposes.”

(Doc. 102, Exh. B.) Everyone agrees that the January 17 letter did not contain certain

disclosures mandated by the FDCPA, specifically 15 U.S.C. §§ 1692e and 1692g.6

 5 Although the January 17 letter nominally originated from Accretive Health, in 

fact it was generated and mailed by an Accretive Health vendor called Rev Spring. (Graves 

Dep., at 21; Bragg Dep., at 32-33.) This appears to have been an entirely automated process.

6 In particular, nowhere did Accretive Health expressly state that the letter was sent 

by a “debt collector ... attempting to collect a debt and that any information obtained will be 

used for that purpose.” 15 U.S.C. § 1692e(11). “This warning is sometimes referred to as the 

‘mini-Miranda.’” Townsend v. Quantum3 Group, LLC, 535 B.R. 415, 420 (M.D. Fla. 2015) 

(citation omitted). Nor did the letter, or any follow-up correspondence from Accretive Health, 

alert Church that “unless the consumer, within thirty days after receipt of notice, disputes the 

(Continued)

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Prior to receiving the January 17 letter, Church had never heard of Medical Financial 

Solutions or Accretive Health, and had never interacted with or been contacted by those entities. 

(Church Dep., at 41; Graves Dep., at 74.) Upon reviewing the letter, Church surmised that its 

purpose was “[t]o collect money” on a medical debt, and that the sender was not “a consumer 

protections agency” trying to help her. (Church Dep., at 41-42.) She construed the letter as an 

indication that Providence had “turned me over to a collection agency.” (Id. at 42.) Church was 

“very angry and very emotional” to receive the letter. (Id. at 85.) She “cried a lot when this 

happened” and “felt like [her] world crashed that day.” (Id.) So Church notified her bankruptcy 

attorney. (Id. at 44.) She also called Providence Hospital’s business office to inform them that 

she owed no money on the subject account; however, the business office representative 

responded that Church actually did owe a deductible for the December 2012 surgery. (Id. at 46.) 

Church did not contact Accretive Health. (Id. at 45.) The January 17 letter marked the entirety 

of Church’s interactions with Accretive Health concerning the subject debt. Less than a month 

later, on February 11, 2014, Church filed suit against Accretive Health alleging, inter alia, 

violations of the FDCPA. (See doc. 1.)

By way of postscript, the outstanding charges on Church’s account were finally resolved 

on April 23, 2014, when Providence Hospital “took the 1,944 and adjusted it to the Medicare 

allowance.” (Graves Dep. (doc. 94, Exh. J), at 105; doc. 94, Exh. E.) To be clear, Providence 

received no additional payment from Medicare, Church or anyone else; however, as a matter of 

its contract with Medicare, “[t]hese charges should have been included in what Providence 

Hospital initially billed to Medicare,” so they were written off as an allowance. (Graves Dep., at 

105.) Aside from the January 17 letter, neither Providence nor Accretive Health made any 

attempt to collect all or part of the $1,944.80 balance from Church at any time.

 

validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt 

collector;” that if Church notified Accretive Health in writing “within the thirty-day period that 

the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt 

or a copy of a judgment;” or that if Church made a written request within 30 days, Accretive 

Health “will provide the consumer with the name and address of the original creditor.” 15 

U.S.C. § 1692g(a)(3)-(5).

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C. Providence Hospital’s Policies and Practices Concerning Unpaid Debts.

While the foregoing describes the sum total of Church’s dealings with Accretive and 

Providence Hospital giving rise to her FDCPA claims, the narrow legal issue presented on 

summary judgment requires examination of Providence’s practices and policies concerning 

patient accounts with outstanding balances.

As a matter of Providence’s written policy, the patient’s portion of a bill is due at the time 

of service. (Bragg Dep., at 53-54, 64-65. 69-70.) Indeed, a form given to patients before 

inpatient procedures specifically states, “The patient’s portion of the bill is due a [sic] the time of 

service. We accept Visa, Mastercard, American Express and Discover cards. We also can 

arrange a loan with a local bank.” (Doc. 102, Exh. C, at 37.)7 As a practical matter, where 

insurance coverage is involved, Providence sends the patient a bill only after it ascertains the 

patient portion (i.e., which charges insurance will not cover). (Bragg Dep., at 43-44.) Where a 

patient’s insurance appears to provide full coverage, Providence does not and would not expect 

any payment from the patient at the time of service. (Id. at 102-03.)

If Providence sends a bill to the patient and she does not pay, then Providence’s practice 

is to follow up by sending another bill the following month. (Bragg Dep., at 44.) If, after 60 

days and two billing statements to the patient, a balance remains outstanding, then Providence’s 

automated system would change the account’s financial classification from an A to an I. (Id. at 

45-46, 101.) Even with an “I” status, the patient account is still considered “an active open AR 

[Accounts Receivable] account” at Providence, and is treated as neither bad debt nor defaulted 

debt. (Bragg Dep., at 46; Graves Dep. (doc. 94, Exh. J), at 118.)

What does change with the transition from A to I financial class status, however, is that 

Accretive Health becomes involved. (Graves Dep., at 114-15.) Accretive Health provides 

“revenue cycle management services” to Providence, including “pre-collection of unpaid and 

 7 This point is echoed by Providence’s Policy & Procedure Manuals, which state, 

“All patient balances are due and payable in full at the time of service (Emergency Room or 

Outpatient) or at the time of patient discharge (Inpatient).” (Doc. 102, Exh. C, at 39.) Such 

Manuals further specify that “[u]pon discharge, the patient and/or guarantor should be asked for 

payment of the balance due in full.” (Id. at 40 & 41.) And the Manuals reflect that “[t]he patient 

Accounts Representative will exhaust every effort to collect any balance due at discharge.” 

(Doc. 102, Exh. D.)

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outstanding patient account balances.” (Bragg Aff. (doc. 92, Exh. A), ¶¶ 2-3.)8 Pre-collection 

activities are designed to “collect unpaid and outstanding patient account balances that are in the 

current hospital accounts receivable and have not yet been placed with a collection agency. 

These are active open accounts not yet in default.” (Id., ¶ 3.) When a patient account is assigned

from Providence to Accretive Health, the account enters the latter’s work flow for “early-out” 

services. This means that Accretive Health performs the same functions that Providence’s 

business office performs, and does so from a shared service environment. (Graves Dep., at 38.) 

Thus, Accretive Health does “all the things a business office would do while the account is still 

on the active AR, but after, usually, the hospital sent ... two statements or waited 60 days.” (Id.

at 39.)9 This involves “collection of active AR accounts that have gone unpaid for, usually, 60 

days that we try to help resolve in any way we can.” (Id. at 38-39.) During this process, the 

account remains active on Providence’s accounts receivable ledger, physically at Providence, 

and accessible to Providence, with the only difference being that it is assigned to Accretive

Health for servicing using a shared system. (Bragg Dep., at 34.)

Upon assignment of an account, Accretive Health performs pre-collection services in an 

attempt to obtain payment of the unpaid account balance. Typically, Accretive Health sends 

multiple billing statements to the patient, and otherwise works directly with the patient, the 

insurance company, the hospital and others to try to resolve the balance. (Graves Dep., at 65, 

116.) If such efforts do not succeed after some period of time, then Accretive Health notifies 

Providence and recommends reclassification of the account from “active” to “bad debt.” (Bragg 

 8 Accretive Health’s literature defines a “revenue cycle” as “the process by which 

charges are generated and payments are collected for an organization. It includes revenue, such 

as insurance payments and adjustments, patient payments, and financial assistance programs.” 

(Doc. 94, Exh. N, at 2.)

9 Donna Bragg, the Director of Providence Hospital’s Business Office, echoed this 

sentiment, testifying that Accretive Health “does the same thing we do, they just do it after 60 

days.” (Bragg Dep., at 33.) As she put it, “they’re doing the same thing, we’re both doing the 

same thing.” (Id. at 39-40.) Later in her deposition, Bragg reiterated that Accretive Health 

“works with us as an extended business office. ... They do the same thing we do, it’s just they 

start working it and we’re back on our other accounts.” (Id. at 107-08.)

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Aff., ¶ 7; Bragg Dep., at 56.)10 If Providence accepts that recommendation, then the unpaid 

account is reclassified as “bad debt” on the hospital’s financial records and is considered in 

default. (Bragg Aff., ¶ 7.)11 As a matter of Providence written policy, an account becomes bad 

debt when the hospital or Accretive Health “has exhausted all possible collection efforts and 

determined that the account is uncollectible or that the account should be referred to a 

commercial collection agency.” (Doc. 94, Exh. P.)12 At that point, Accretive Health’s 

involvement comes to an end, and Providence refers the “bad debt” account to a third-party 

primary collection agency, either AMCOL or ACSI. (Bragg Aff., ¶ 8; Bragg Dep., at 38-39.) 

Providence does not consider an account to be “bad debt” until it is actually placed with a 

collection agency, after Accretive Health’s work is concluded. (Bragg Dep., at 97.) As of 

January 2014, Accretive Health did not collect any Providence accounts that had been classified 

by the hospital as “bad debt” or in default. (Graves Dep., at 53-54.) And Providence’s policy 

has “always” been that “we don’t consider an account in default until we determine it’s 

uncollectible,” which coincides with the point at which it is reclassified as bad debt. (Bragg 

Dep., at 101-02.)

Applying these procedures to Church, defendant’s evidence is that her account was not in 

default when Accretive Health mailed the January 17 letter to her. (Bragg Dep., at 97-98.) 

According to defendant’s evidence, that account had only been reactivated for seven days at the 

time the letter was sent; moreover, Church had not previously been billed for those amounts

 10 There is no hard-and-fast rule dictating when Accretive Health and Providence 

decide that an account is to be reclassified as bad debt. Ordinarily, Accretive Health will keep 

the account for a minimum of 90 days. (Graves Dep., at 57.) Once Accretive Health and 

Providence “feel like we have taken every attempt to collect it,” then the account may be placed 

into bad debt and referred to one of Providence’s external collection agencies. (Id.)

11 Accretive Health likewise “define[s] the point of default to be once the account 

has entered – has become a bad debt in the hospital’s accounting system, yes.” (Graves Dep., at 

86.) Defendant’s Rule 30(b)(6) witness testified that “[b]ad debt means the same as default to 

Accretive Health.” (Id. at 112.)

12 The phrase “all possible collection efforts,” read in context, would not encompass 

judicial or garnishment proceedings. Indeed, the same written policy specifies that “[a]ny file 

placed with a collection agency or collection attorney will require additional approval for 

garnishment or suit request. ... The suit request must be signed by Executive Hospital 

Management or their designee.” (Doc. 94, Exh. P, at 3.)

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because everyone expected that her two forms of insurance (Medicare and BlueCross/ 

BlueShield) would cover the entire balance. (Id. at 98.) Church’s account moved into Accretive

Health’s work flow on January 12, 2014 because (i) it had been reactivated when Providence 

consolidated the pre-op account (which still showed a balance pending insurance) with the zerobalance surgery account on January 10, 2014; (ii) the balance had been outstanding for more than 

60 days (in that the medical services in question had been rendered in November 2012); and (iii) 

the account moved from Class A to Class I. The referral to Accretive Health’s work flow was 

automated, and resulted in the letter being generated five days later. (Graves Dep., at 104.) 

Church’s account remained active and accessible on Providence’s books even after being 

assigned to Accretive Health. (Bragg Dep., at 34.) And Providence Hospital never considered 

Church’s account to be in default or to be “bad debt.” (Bragg Aff., ¶ 11.)

III. Summary Judgment Standard.

Summary judgment should be granted only “if the movant shows that there is no genuine 

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Rule 

56(a), Fed.R.Civ.P. The party seeking summary judgment bears “the initial burden to show the 

district court, by reference to materials on file, that there are no genuine issues of material fact 

that should be decided at trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). 

Once the moving party has satisfied its responsibility, the burden shifts to the non-movant to 

show the existence of a genuine issue of material fact. Id. “If the nonmoving party fails to make 

'a sufficient showing on an essential element of her case with respect to which she has the burden 

of proof,' the moving party is entitled to summary judgment.” Id. (quoting Celotex Corp. v. 

Catrett, 477 U.S. 317 (1986)) (footnote omitted). “In reviewing whether the nonmoving party 

has met its burden, the court must stop short of weighing the evidence and making credibility 

determinations of the truth of the matter. Instead, the evidence of the non-movant is to be 

believed, and all justifiable inferences are to be drawn in his favor.” Tipton v. Bergrohr GMBHSiegen, 965 F.2d 994, 999 (11th Cir. 1992) (internal citations and quotations omitted). 

“Summary judgment is justified only for those cases devoid of any need for factual 

determinations.” Offshore Aviation v. Transcon Lines, Inc., 831 F.2d 1013, 1016 (11th Cir. 1987) 

(citation omitted).

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IV. Analysis.

A. The FDCPA Statutory Scheme: Necessity of Default.

Notwithstanding the extensive briefing and hundreds of pages of exhibits submitted on 

summary judgment, the parties’ dispute boils down to a discrete, singular question, namely, 

whether Church’s account with Providence Hospital was in default upon assignment to Accretive 

Health. Here is why: As noted, Church’s only claim is that Accretive Health violated the 

FDCPA by omitting from the January 17 letter certain disclosures required by 15 U.S.C. §§ 

1692e and 1692g. It is not – and cannot reasonably be – contested that the January 17 letter, in 

fact, lacked those FDCPA disclosures. Accretive Health’s position, however, is that it had no 

FDCPA disclosure obligations in the January 17 letter because the statute does not apply.

On their face, both § 1692e and § 1692g regulate only the conduct of “debt collectors.” 

See 15 U.S.C. § 1692e (providing that “[a] debt collector may not use any false, deceptive, or 

misleading representation or means in connection with the collection of any debt,” and reciting 

the failure to make mini Miranda disclosures in initial communication as a violation); 15 U.S.C. 

§ 1692g (mandating that, within five days after initial communication, “a debt collector shall ...

send the consumer a written notice” containing certain information). The point is simple: If 

Accretive is not a “debt collector,” then its failure to include statutory disclosures in the January 

17 letter to Church did not violate the FDCPA and Church’s claims must be dismissed. See, e.g., 

Davidson v. Capital One Bank (USA), N.A., 797 F.3d 1309, 1313 (11th Cir. 2015) (“There is no 

dispute that § 1692e applies only to debt collectors.”).

13

Unsurprisingly, “[a] ‘debt collector’ is a term of art in the FDCPA.” Ausar-El ex rel. 

Small, Jr. v. BAC (Bank of America) Home Loans Servicing LP, 448 Fed.Appx. 1, 2 (11th Cir. 

Sept. 21, 2011). The statutory definition of “debt collector” sets forth more than a half dozen

exclusions, only one of which is invoked by defendant here. The relevant exclusion states that 

the term “debt collector,” as used in the FDCPA, does not include “any person collecting or 

 13 See also Milijkovic v. Shafritz and Dinkin, P.A., 791 F.3d 1291, 1297 (11th Cir. 

2015) (“The FDCPA regulates what debt collectors can do in collecting debts.”); Harris v. 

Liberty Community Management, Inc., 702 F.3d 1298, 1302 (11th Cir. 2012) (observing that 

“[t]he Act’s restrictions apply only to ‘debt collectors,” as defined in the statute); White v. Bank 

of America Bank, NA, 597 Fed.Appx. 1015, 1020 (11th Cir. Dec. 29, 2014) (“The FDCPA 

imposes civil liability on ‘debt collectors’ for certain prohibited debt-collection practices.”).

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attempting to collect any debt owed or due or asserted to be owed or due another to the extent 

such activity ... concerns a debt which was not in default at the time was obtained by such 

person.” 15 U.S.C. § 1692a(6)(F)(iii) (emphasis added). Thus, a defendant is not a debt 

collector for FDCPA purposes – and is not obliged to make FDCPA disclosures to a consumer –

if the debt being collected was not in default at the time the defendant obtained it. See Davidson, 

797 F.3d at 1314 (“Subsection (F)(iii) excludes any person who is collecting or attempting to 

collect on any debt owed or due another from the term ‘debt collector’ if the debt was not in 

default at the time it was acquired.”); Fenello v. Bank of America, NA, 577 Fed.Appx. 899, 902 

(11th Cir. Aug. 12, 2014) (“the district court correctly concluded that Bank of America was not a 

‘debt collector’ for purposes of § 1692g(b) because its debt collection activities involved a debt 

that was not in default at the time Bank of America became the servicer”).

The critical, dispositive question in this case, then, is whether Church’s debt to 

Providence Hospital was “in default” when it was assigned to Accretive Health. See Ruth v. 

Triumph Partnerships, 577 F.3d 790, 796 (7th Cir. 2009) (“Where, as here, the party seeking to 

collect a debt did not originate it but instead acquired it from another party, we have held that the 

party’s status under the FDCPA turns on whether the debt was in default at the time it was 

acquired.”). The trick lies in the determination of whether a particular debt was in default. 

Regrettably, the term “default” is not defined in the FDCPA, leaving courts to apply the statute 

without congressional guidance as to the meaning of this pivotal term. In practice, where a 

contract between the originating creditor and the consumer delineates when the account will be 

deemed defaulted, or where some other applicable statute or regulation fixes the precise moment 

of default, courts have generally held that such agreements or legal provisions dictate when an 

account is “in default” for FDCPA purposes. However, where (as here) no such agreement or 

governing regulation exists or has been identified by the parties, the analysis becomes more 

complicated. See, e.g., Simmons v. Med-I-Claims, 2007 WL 486879, *7 (C.D. Ill. Feb. 9, 2007) 

(“[W]here there is no relevant contractual provision ... nor any governing regulation, courts have 

struggled to establish when a debt is in default for purposes of ... determining whether a party is 

a debt collector under the FDCPA.”).

That said, a helpful body of precedent developing useful principles for the FDCPA 

“default” analysis has emerged, and the Court finds such authorities instructive here. For 

example, “[i]n applying the FDCPA, courts have repeatedly distinguished between a debt that is 

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in default and a debt that is merely outstanding, emphasizing that only after some period of time 

does an outstanding debt go into default.” Alibrandi v. Financial Outsourcing Services, Inc., 333 

F.3d 82, 87 (2nd Cir. 2003) (citation and footnote omitted). Thus, case law rejects the proposition 

“that default occurs immediately after a debt becomes due.” Id.; see also Hamilton v. Avectus 

Health Care Solutions, LLC, 2015 WL 5693610, *8 (N.D. Ala. Sept. 29, 2015) (rejecting notion 

that “outstanding” and “in default” are synonymous under the FDCPA). Indeed, “[t]he Act’s 

legislative history is consistent with construing ‘in default’ to mean a debt that is at least 

delinquent, and sometimes more than overdue.” De Dios v. International Realty & Investments, 

641 F.3d 1071, 1075 n.3 (9th Cir. 2011). Additionally, courts (and the parties in this case) have 

recognized that “in the absence of a contractual definition or conclusive state or federal law, a 

creditor’s reasonable, written guidelines may be used to determine when an account is ‘in 

default,’” including such factors as “whether the guidelines are applied consistently and whether 

they are designed for administering accounts, rather than for circumventing the FDCPA.” Prince 

v. NCO Financial Services, Inc., 346 F. Supp.2d 744, 747 (E.D. Penn. 2004) (citation omitted); 

see also Bohringer v. Bayview Loan Servicing, LLC, --- F. Supp.3d ----, 2015 WL 6561419, *6 

(S.D. Fla. Sept. 10, 2015) (creditor’s written guidelines may be considered in determining 

whether debt is “in default” for FDCPA purposes).

14 Ultimately, “the determination of whether a 

debt is in default [for purposes of the FDCPA] is to be made by a court on a case-by-case basis.” 

Hamilton, 2015 WL 5693610, at *8 (citations omitted).15

The Court also bears in mind that the reasoning underlying the “not in default” exception 

to FDCPA coverage is as follows: “If the loan is current when it is acquired, the relationship 

between the assignee and the debtor is, for purposes of regulating communications and 

collections practices, effectively the same as that between originator and the debtor. If the loan 

 14 To illustrate the “circumvention” factor, an originating creditor’s policies that 

allow the creditor to transfer the loan to a third party for servicing one day, then declare it to be 

in default the next day in order to avoid FDCPA regulation, would not be entitled to any weight. 

See generally Magee v. AllianceOne, Ltd., 487 F. Supp.2d 1024, 1027-28 (S.D. Ind. 2007); 

Church v. Accretive Health, Inc., 2014 WL 7184340, *6 (S.D. Ala. Dec. 16, 2014) (“the law is 

clear that a third-party agency like Accretive has no power unilaterally to recharacterize a debt’s 

status into something it is not in order to remove it from the ambit of the FDCPA”). 

15 See also Bohringer, 2015 WL 6561419, at *6; Church, 2014 WL 7184340, at *3.

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is in default, no ongoing relationship is likely and the only activity will be collection.” F.T.C. v. 

Check Investors, Inc., 502 F.3d 159, 174 (3rd Cir. 2007) (quoting Schlosser v. Fairbanks Capital 

Corp., 323 F.3d 534, 538 (7th Cir. 2003)); see also Ruth, 577 F.3d at 797 (“The purchaser of an 

already-defaulted debt – like the debt collector, and unlike the originator and servicer of a nondefaulted debt – has no ongoing relationship with the debtor and, therefore, no incentive to 

engender good will by treating the debtor with honesty and respect.”).

B. Whether Defendant was a “Debt Collector” for FDCPA Purposes.

1. Record Evidence Establishes that Plaintiff’s Account was not in Default.

There is no dispute that Accretive Health “obtained” Church’s debt with Providence 

Hospital on or about January 12, 2014, when her account first moved into Accretive Health’s 

work flow. See, e.g., Carter v. AMC, LLC, 645 F.3d 840, 844 (7th Cir. 2011) (“A servicing agent 

‘obtains’ a debt in the sense that it acquires the authority to collect the money on behalf of 

another.”). As such, the only question presented on summary judgment is whether Church’s 

account was in default at that time.

Examining all record facts and circumstances, the Court finds that Accretive Health has 

made a compelling showing that Church’s debt to Providence was not in default as of January 

12, 2014. At that time, neither Providence nor anyone else had ever sent Church a bill or 

otherwise contacted her to request or demand that she pay that debt. No one at Providence had 

ever told Church either (i) that she owed anything for the November 2012 preoperative medical 

care, or (ii) what the amount outstanding was. It would defy logic, reason, and common sense 

for a consumer account to be classified as “in default’ when the creditor had never previously

sent a bill or otherwise contacted the consumer about the debt, and the consumer had no inkling

of the amount, or even the existence of, the debt. Furthermore, uncontroverted record evidence 

establishes that Providence had reactivated Church’s account on January 10, 2014, just two days 

before Accretive Health obtained the debt. It would be counterintuitive to the extreme for an 

account that had been active for only two days to be labeled “in default” for FDCPA purposes 

under any reasonable meaning of the term.

These common-sense observations are galvanized by consideration of record evidence 

concerning Providence Hospital’s policies. Defendant’s unchallenged evidence reveals that 

Providence has a three-step process for collecting debt from patients or guarantors after 

insurance has paid its portion. First, Providence attempts to collect the debt directly by sending 

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two monthly statements to the patient. Second, if those billing statements are unsuccessful, then 

Providence reclassifies the account’s financial class status from A to I, and assigns it to 

Accretive Health for “early-out” or pre-collection services, typically for a minimum of 90 days. 

During that period, Accretive Health performs the same activities that Providence does, and the 

account remains classified as an active account receivable on Providence’s financial ledger. 

Third, if Accretive Health’s pre-collection activities fail, if all possible collection efforts have 

been exhausted, and if Providence determines that the account is uncollectible, then the hospital 

reclassifies the account as bad debt and refers it to an outside commercial collection agency (not 

Accretive Health) with no further involvement from Accretive Health. The longstanding policy 

and practice of Providence is that an account is not deemed “in default” until it is determined to 

be uncollectible and is classified as “bad debt” in the hospital’s accounting system. Record facts 

establish that Church’s account had just barely reached the second stage of this three-step 

process (after skipping the first one); therefore, as a matter of Providence policy and procedure, 

that account could not have been “in default” when it was first assigned to Accretive Health. All 

collection efforts had not been exhausted at that time; to the contrary, no collection efforts had 

even been initiated. The January 17 letter marked the first collection effort directed at Church by 

anyone at any time vis a vis the subject account. As of January 12, hospital business office 

representatives had not reviewed Church’s account, deemed it uncollectible, or taken any steps to 

refer it to a collection agency. That account still was listed as an active AR account on 

Providence’s financial books. All of these facts and circumstances are flatly inconsistent with 

the notion that Church’s account was “in default” as of January 12, 2014, when it was first 

assigned to Accretive Health.

Further reinforcement of this conclusion may be found by reviewing Accretive Health’s 

role in Providence’s debt collection process, juxtaposed against the purposes animating the 

FDCPA statutory scheme. Recall that the “not in default” exemption is rooted in the distinction 

between originators of debt (who are likely to have an ongoing relationship with the consumer 

with a concomitant incentive to engender good will) and debt collectors (who have no such 

ongoing relationship with the consumer and no accompanying incentive – absent regulation – to 

treat the consumer with dignity and respect). All record facts before the Court establish that 

Accretive Health was closely aligned with Providence in performing pre-collection activities. 

The two entities worked from a shared system, with the account remaining at all times physically 

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housed at Providence on Providence’s books as an active, open account. The hospital’s business 

office director described Accretive Health as acting as Providence’s “extended business office,” 

with consultation between them as to when pre-collection activities should stop and the account 

should be moved to bad debt. The January 17 letter itself explained that Accretive Health

“works directly with Providence Hospital,” and reassured Church that “[t]he hospital values you 

as a patient and would like to help you resolve this unpaid balance.” Thus, Accretive Health was 

directly trading in the goodwill of Providence Hospital, portraying itself as an insider to the 

Providence – Church relationship, and holding itself out to Church as an extension of the 

hospital. Looking at the purposes of the “in default” requirement for FDCPA disclosures, the 

undersigned is of the opinion that they would not be advanced by deeming Accretive Health to 

be subject to the FDCPA’s restrictions here. Operating as an “extended business office” for 

Providence Hospital, and holding itself out as an extension of the hospital itself, Accretive 

Health already had every incentive to treat consumers with dignity and respect so as to preserve 

and foster those consumers’ ongoing relationships with Providence. There was no need for 

statutory compulsion to force Accretive Health to treat Church respectfully and fairly. Under the 

circumstances, Accretive Health was much more closely aligned with the status of a debt

originator than that of a debt collector; therefore, the FDCPA’s statutory purposes would not be 

promoted by regulating Accretive Health’s conduct in the January 17 letter.

In the aggregate, then, the summary judgment record weaves a highly persuasive 

narrative that Accretive Health is not a debt collector for FDCPA purposes because the

challenged collection activity (i.e., sending a single letter to Church on January 17, 2014) in this 

case concerns a debt that was not in default when Accretive Health obtained it. As of that time, 

Church had never been billed for the debt, Providence had made no attempt to collect it, and the 

account had been active for just two days. Although the debt was outstanding, it cannot 

reasonably be viewed on these facts to have been in default. Additionally, Providence’s policies 

and procedures would not and did not classify Church’s account as being in default at the time of 

the January 12 assignment to Accretive’s workflow queue. And Accretive’s hand-in-hand 

relationship with Providence Hospital renders it much more akin to an originator (as to whom 

FDCPA restrictions do not apply) than a debt collector (as to whom they do).

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2. Plaintiff’s Counterarguments are Unavailing.

Faced with this formidable collection of record facts favoring summary judgment for 

defendant, Church has the daunting task of identifying genuine issues of material fact as to 

whether her account was “in default,” such that denial of Accretive Health’s Rule 56 Motion 

might be warranted. She advances three categories of arguments in an effort to do so.

First, Church posits that Accretive Health’s evidence equating “bad debt” to “in default” 

at Providence Hospital is nowhere reflected in the hospital’s written policies, and that the 

testimony of Providence’s Business Office Director, Donna Bragg, to that effect should be 

discounted because she merely “parroted Accretive’s legal position.” (Doc. 102, at 14.)16 

Plaintiff is correct that Providence’s written policies are couched in the language of “bad debt,” 

without delineating a precise moment in time at which an account becomes “in default.” 

However, that omission is inconsequential for the summary judgment analysis. Despite 

extensive discovery and exhaustive production and review of Providence’s written policies and 

procedures, plaintiff has identified not a shred of evidence that is inconsistent with, or that tends 

to rebut or cast doubt on, Bragg’s testimony that the hospital has always equated “bad debt” with 

“in default,” and has never deemed a patient account to be in default until designating it “bad 

debt.” Insofar as plaintiff urges the Court categorically to reject Bragg’s testimony concerning 

hospital practices and policies because such testimony is not entirely duplicative of (and captured 

within) the four corners of Providence’s written policy manuals, this argument also fails. Courts 

in FDCPA cases have considered testimony – not just written policies – by a debt originator in 

evaluating whether a specific debt was in default at the time it was obtained by the defendant. 

The Court is aware of no persuasive reason favoring categorical rejection of witness testimony 

concerning unwritten policies or practices of a debt originator.17

 16 Of course, summary judgment is not the appropriate time to weigh a witness’s 

credibility. See, e.g., Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996) (“It is 

not the court’s role to weigh conflicting evidence or to make credibility determinations; the nonmovant’s evidence is to be accepted for purposes of summary judgment.”). Therefore, the Court 

declines any invitation to do so with respect to witness Bragg’s testimony.

17 In this section of her brief, Church suggests that Accretive Health’s inclusion of 

FDCPA disclosures in pre-collection letters transmitted to other consumers is somehow 

probative of its status as a debt collector covered by the FDCPA here. (Doc. 92, at 15.) Case 

law is clear, however, that a servicer not otherwise within the ambit of the statutory definition of 

(Continued)

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Second, Church asserts that even if defendant’s evidence that Providence equated 

“default” with “bad debt” is accepted, such a formulation is unreasonable (because it conflates a 

legal term with an accounting term), makes no sense (because it implies that an account is not in 

default until “all possible collection efforts are exhausted”), and conflicts with the FDCPA. 

(Doc. 102, at 15-17.) None of these contentions are persuasive.18

As to reasonableness, it is up to Providence Hospital (as originator of the debt) to 

promulgate policies establishing when an outstanding patient account is deemed “in default.” 

Whether plaintiff, this Court or anyone else agrees with those policies – or would have adopted 

different policies if standing in Providence’s shoes – is of no moment. We are not here to sit in 

 

“debt collector” does not thereby become a debt collector simply by calling itself one or abiding 

by statutory requirements applicable to debt collectors. See, e.g., Saint Vil v. Perimeter Mortg. 

Funding Corp., --- Fed.Appx. ----, 2015 WL 6575814, *2 (11th Cir. Oct. 30, 2015) (“The 

question in deciding whether a law firm acted as a debt collector is not simply what the firm 

called itself but rather whether the firm acted as a debt collector as that term is defined by the 

statute.”) (emphasis added); Fenello, 577 Fed.Appx. at 902 (“An entity cannot transform itself

into a ‘debt collector’ within the meaning of the FDCPA simply by noting in a letter that it may 

be considered one under the Act.”); Moore v. PNC Mortgage, N.A., 2015 WL 402264, *2 (S.D. 

Ga. Jan. 28, 2015) (“even if the servicer calls itself a collector, FDCPA plaintiffs must still plead 

that the debt was in default when the servicer began to service it”). To the extent, then, that 

plaintiff would derive a genuine issue of material fact from Accretive Health’s voluntary 

compliance with FDCPA disclosure requirements in other pre-collection letters sent to other 

consumers, such an argument fails as a matter of law.

18 Fundamentally, these arguments (as well as Church’s point that the hospital’s 

written policies do not expressly equate default with bad debt) cannot carry the day because, in 

some sense, they address the wrong question. The crucial issue in this case is not whether, in the 

abstract, a patient account at Providence Hospital should be declared “in default” at the moment 

the account is written off as “bad debt.” Rather, the singular issue on which defendant’s Motion 

for Summary Judgment turns is whether Church’s account was in default on January 12, 2014, 

when it entered Accretive Health’s work queue through the shared system. As already stated 

supra, no genuine issue of material fact exists on this point because undisputed record facts 

establish that Providence had never billed Church for any amount on that account, the account 

had been activated only two days earlier, the account was still listed as an active AR account on 

Providence’s accounts receivable ledger, and Accretive Health was acting as an extended 

business office of, and working directly with, Providence to service Church’s account. Given 

these facts, even if plaintiff’s critiques of Providence’s policy treating an account as “in default” 

only when it was shifted to “bad debt” were meritorious, such a victory would be pyrrhic 

because plaintiff still has not identified any genuine issues of material fact as to whether 

Church’s account was “in default” on January 12, 2014. It was not.

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judgment of Providence’s accounting practices or policies, or to ponder how a prudent or 

enlightened hospital might have structured those practices or policies differently. At any rate, 

the undersigned perceives nothing unreasonable about an organizational practice of considering 

an account to be in default at the time such account is taken off the active accounts receivable 

ledger, reclassified as “bad debt,” and referred to an outside collection agency. Certainly, 

nothing about that policy appears designed to circumvent or thwart the FDCPA.

As to whether equating “default” and “bad debt” makes sense, Church argues that it does 

not because Providence’s written policies provide that an account becomes “bad debt” only after 

the hospital or Accretive “has exhausted all possible collection efforts and determined that the 

account is uncollectible or that the account should be referred to a commercial collection 

agency.” (Doc. 94, Exh. P.) Plaintiff reasons that it cannot be true that an account is not “in 

default” until after the servicer had “exhausted all possible collection efforts,” inasmuch as “all 

possible collection efforts” would necessarily include litigation, which could not happen unless 

the debt were already in default. (Doc. 102, at 15.) This argument misses the mark because it 

distorts the phrase “all possible collection efforts” by excising it from the context of the written 

policy in which it is found. Reading that policy as a whole reveals that “all possible collection 

efforts” expressly do not include litigation which, the policy specifies, occurs only after referral 

to a third-party collection agency (i.e., after the debt has attained “bad debt” status) and after 

approval from Executive Hospital Management. (Doc. 94, Exh. P.) Thus, plaintiff’s argument 

that it makes no sense to equate “in default” with “bad debt” rests on an unreasonably literal 

reading of four words of a Providence written policy, divorced from the very context that defeats 

plaintiff’s proposed construction.

As for plaintiff’s contention that equating “in default” with “bad debt” conflicts with the 

FDCPA, the undersigned cannot agree. The discussion in Section IV.B.1., supra, demonstrates 

why it would be fully consistent with the purposes of the FDCPA to rule as a matter of law that 

Church’s debt was not in default when Accretive Health obtained it. Nothing in Church’s 

argument effectively rebuts that reasoning. To the contrary, plaintiff’s suggestion that 

Providence’s policy would allow “a collector or its client to wait until the end of the collections 

process to declare a debt in default” (doc. 102, at 16) misstates the facts. Church’s account was 

not at “the end of the collections process.” It was at the beginning, or even earlier. At the time 

that her account was assigned to Accretive Health’s work queue, Church had not been billed 

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even one time, by anyone, for the subject account. Even in a hypothetical “typical” case at 

Providence, an enormous amount of collection work remains to be done after the account is 

written off as “bad debt.” Moreover, plaintiff’s cries of “manipulation” are misguided. There is 

nothing manipulative about a policy distinguishing account servicing work done by a vendor that 

acts as an extension of the hospital’s business office (which, again, is not the sort of activity that 

the FDCPA was designed to regulate) from collection work done by a third-party commercial 

collection agency after the hospital has written off the account as bad debt (which is exactly the 

sort of activity that the FDCPA was designed to regulate).

Third, plaintiff maintains that summary judgment is inappropriate because the point of 

“default” actually occurs “at or prior to the change of status to ‘I’ and referral to” Accretive

Health. (Doc. 92, at 17.) Plaintiff reasons that altering the financial classification of an account 

from “A” to “I” and placing it in Accretive Health’s work flow “coincides with a fundamental 

change in the status of the account,” meaning that it must be in default. (Id.) Plaintiff cites no

evidence for this proposition, and the facts before the Court belie her contention. The summary 

judgment record unequivocally shows that modifying an account’s status to “I” means only that 

Accretive Health will perform exactly the same debt-service work on the account that 

Providence Hospital had been performing previously, using a shared system. These facts 

contradict plaintiff’s characterization of the “I” reclassification as a “fundamental change.” Her 

argument seems to be that shifting account responsibilities from the originating creditor to a 

servicer must necessarily constitute a “fundamental change” meaning that a default has occurred; 

however, neither record facts nor the statutory framework itself supports such a construction. 

Indeed, the FDCPA exemption at the heart of this lawsuit shows that Congress did not intend 

every transfer of an account from originator to servicer – evincing a “change in approach” by the 

originator – to be a FDCPA-triggering event. Rather, as the statutory language makes clear,

transfer of a non-defaulted debt to a servicer does not give rise to FDCPA coverage, even though 

it may well be symptomatic of a “change in approach” by the original creditor. Plaintiff’s 

argument would effectively write the exception out of the statute.

Besides, plaintiff’s supporting rhetoric that “[b]y demanding payment and sending the 

account to a third party agency for collections, Providence certainly treated the debt as in 

default” and that the debt was “seriously past due after multiple demands for payment” (doc. 92, 

at 18-19) is counterfactual. Once again, Providence never demanded payment from Church 

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before Accretive Health obtained the account. Accretive Health is not a “third party agency for 

collections,” but works directly with Providence as an extension of its business office, doing the 

same things Providence had been doing. Even if the Court were to embrace plaintiff’s premise

that default “certainly occurs once the creditor demands a past-due amount and the debtor fails to 

timely pay” (id. at 18), summary judgment would remain appropriate here. The record evidence 

is that the creditor did not demand a past-due amount from Church prior to the moment when

Accretive Health obtained the account for FDCPA purposes.

For all of these reasons, the Court determines that plaintiff has failed to show any genuine 

issue of material fact on the question of whether her account was “in default” as of January 12, 

2014. On this record, no reasonable finder of fact could conclude that such a default existed. 

Because Church’s account was not in default at the time Accretive Health obtained it, defendant 

is not a debt collector for FDCPA purposes pursuant to the “not in default” exemption found at 

15 U.S.C. § 1692a(6)(F)(iii). Because Accretive Health was not a “debt collector” in relation to 

Church’s debt, defendant was under no obligation to comply with FDCPA disclosures in its 

correspondence to Church dated January 17, 2014. Because Accretive Health was not obligated

to include such disclosures, its failure to do so cannot give rise to viable FDCPA claims 

predicated on failure to make those disclosures. Accordingly, summary judgment is properly 

granted for Accretive Health as to all claims presented in the Second Amended Complaint.19

 19 In so concluding, the Court does not endorse Accretive Health’s argument, 

apparently presented for the first time in its reply brief, that it is immune from FDCPA liability 

because Church did not actually owe a balance to Providence Hospital. (Doc. 106, at 11, 13-15.) 

In other words, defendant relies on facts showing that Church’s account was reactivated by 

mistake, that she did not actually owe money to Providence, and that the January 17 letter 

stemmed from an erroneous understanding that a balance remained outstanding on the account. 

Plaintiff has the better argument on this point. Multiple courts, including binding Circuit 

authority, have opined that a debt is in default under FDCPA if the servicer treats it as such, 

regardless of whether any debt was validly owed or not. It is the servicer’s treatment of the debt, 

rather than the debt’s actual status, that matters. See, e.g., Davidson, 797 F.3d at 1312 n.2 

(opining that it is of no consequence whether debt was actually in default, and that where 

defendant “has treated [plaintiff’s] debt as a debt that was in default at the time it was acquired

... we will do the same”); Bohringer, 2015 WL 6561419, at *6 (“Even if a debt is not actually in 

default at the time its servicing rights are transferred to a loan servicer, the debt is nevertheless 

‘in default’ under the FDCPA if the servicer treats the debt as in default at the time of transfer.”) 

(citations omitted); Salvato v. Ocwen Loan Servicing, LLC, 2012 WL 3018051, *5 (S.D. Cal. 

July 24, 2012) (“It follows from the statutory scheme as a whole that such inquiry into whether 

(Continued)

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V. Conclusion.

For all of the foregoing reasons, Defendant’s Motion for Summary Judgment (doc. 91) is 

granted. There being no genuine issues of material fact as to any claim or cause of action 

asserted herein, this action is dismissed with prejudice. A separate judgment will enter. 

Defendant is ordered to file a supplemental memorandum in support of the pending Motions to 

Seal (docs. 93, 102, 105 and 109) on or before December 8, 2015.

20

DONE and ORDERED this 24th day of November, 2015.

s/ WILLIAM H. STEELE 

CHIEF UNITED STATES DISTRICT JUDGE

 

the debt is ‘in default’ at the time of assignment should not depend on whether the Court 

ultimately finds the underlying debt to be valid or invalid.”). Thus, the fact that Providence and 

Accretive Health recognized some time after January 17 that Church owed nothing on the 

account is not relevant to the summary judgment analysis.

20 Plaintiff’s Motion to Exclude New Evidence Filed with Reply Brief (doc. 108) is 

denied. The challenged exhibits were properly submitted as rebuttal evidence in defendant’s 

reply. See, e.g., Hammons v. Computer Programs and Systems, Inc. (CPSI), 2006 WL 3627117, 

*14 (S.D. Ala. Dec. 12, 2006) (“But nothing in the extant authorities, or in the Federal Rules of 

Civil Procedure, forbids a movant from making supplemental record submissions in a reply brief 

to rebut specific arguments raised by the non-movant’s opposition brief.”) (collecting cases); see 

generally Sideridraulic System SpA v. Briese Schiffahrts GmbH & Co. KG, 2011 WL 3204521, 

*2 n.4 (S.D. Ala. July 26, 2011) (observing that “a party properly submits supplemental exhibits 

with a reply brief to rebut arguments made in the nonmovant’s response”). At any rate, 

Plaintiff’s Motion to Exclude is much ado about nothing. Simply put, the new exhibits do not 

materially affect the summary judgment analysis herein. The Court’s reasoning and conclusions 

on summary judgment would remain unchanged even if Exhibits JJ, KK, LL and MM were not 

part of the record.

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