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Cirillo v. Valley Baptist Health Sys. (In re Cirillo)

United States Bankruptcy Court for the Southern District of Texas, Brownsville Division

April 3, 2014, Decided; April 3, 2014, Entered

CASE NO: 09-10324, CHAPTER 13, ADVERSARY NO. 13-01002



This Report and Recommendation and Memorandum Opinion addresses the following:

• Accretive Health, Inc.'s Motion to Dismiss Adversary Proceeding (ECF No. 39);

• Financial Corporation of America's Motion to Dismiss for Failure to State a Claim Upon Which Relief May be Granted (ECF No. 45);

• CMRE Financial Services Inc.'s Motion to Dismiss Adversary Proceeding (ECF No. 57); and

• Accretive Health, Inc.'s Motion to Withdraw the Reference to the Bankruptcy Court (ECF No. 41).

For the reasons set forth below, the motions to dismiss are granted, in part, and denied, in part. The Court recommends against Accretive's motion to withdraw the reference. Mr. Cirillo is granted leave to amend his complaint.

General Background 1

On June 10, 2009, Martin and Phyllis Cirillo  [*3] filed a chapter 13 bankruptcy petition. ECF No. 30 at 9. Notice of the Cirillo's bankruptcy filing was provided to Defendant, Valley Baptist Health System on July 2, 2009. ECF No. 30 at 9. Valley Baptist was listed as an unsecured creditor, but did not file a proof of claim. ECF No. 30 at 9. The Cirillo's Second Amended Chapter 13 Plan was confirmed on January 9, 2010. ECF No. 30 at 10. On January 27, 2010, the Trustee filed a Notice of Intent to Pay Claims, notifying Valley Baptist that its unsecured claim would not be paid. ECF No. 30 at 10. The Cirillos received their discharge on January 12, 2011. ECF No. 30 at 10.

On May 20, 2011, four months after the Cirillos received their discharge, Valley Baptist sent Mr. Cirillo a statement referencing account number XXXXXXXXX-000 and demanding payment. ECF No. 30 at 10. On December 17, 2011, Accretive Health, Inc., doing business as Medical Financial Solutions, sent correspondence to Mr. Cirillo alleging a past due balance of $900.00 on account number XXXXX8703. ECF No. 30 at 10. On January 25, 2012, after discussions with an Accretive representative, Mr. Cirillo made a payment of $100.00. On February 1, 2012, Mr. Cirillo received additional  [*4] correspondence from Accretive alleging that $15,460.47 was due on his account, and indicating that $100.00 would be charged to Mr. Cirillo's credit card pursuant to an agreement with Mr. Cirillo. ECF No. 30 at 11. Mr. Cirillo received additional correspondence and made additional payments to Accretive. See ECF No. 30 at 12-13.

On April 21, 2012, Mr. Cirillo requested from Accretive a breakdown of the charges and expressed his belief that this debt was discharged in his bankruptcy. ECF No. 30 at 13. Mr. Cirillo did not receive the requested information from Accretive but continued to receive requests for payment. See ECF No. 30 at 13-14. These continued requests included a demand letter sent by Financial Corporation of America on August 9, 2012, and a collection letter sent by CMRE Financial Services, Inc. on April 30, 2013. ECF No. 30 at 13-14.

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2014 Bankr. LEXIS 1353 *; 2014 WL 1347362



adversary proceedings, injunction, allegations, bankruptcy court, contempt, motion to dismiss, withdrawal, violations, private right of action, punitive damages, discovery, motion to withdraw, contested matter, district court, collection, grant leave to amend, amended complaint, class member, discharged, recommends, courts, supplemental brief, bankruptcy judge, class action, court order, numerosity, provisions, sanctions, asserts, argues

Bankruptcy Law, Discharge & Dischargeability, Effect of Discharge, Protection of Debtors, Bankruptcy, Case Administration, Bankruptcy Court Powers, Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Class Actions, Prerequisites for Class Action, General Overview, Numerosity, Special Proceedings, Certification of Classes, Amendment of Pleadings, Leave of Court, Sanctions, Contempt, Business & Corporate Law, Duties & Liabilities, Knowledge & Notice, Agent Knowledge, Uncommunicated Information, Procedural Matters, Jurisdiction, Federal District Courts