LOS ANGELES (Legal Newsline) - A neurosurgeon who outsources all of his billing to a debt-collection firm isn’t subject to California’s Rosenthal Fair Debt Collection Practices Act, an appeals court ruled, rejecting a lawsuit by a woman who claimed she was harassed over a bill stemming from her husband’s trip to the emergency room.
Raquel Olson sued La Jolla Neurological Associates and Dr. Frank Coufal after WRS, a third-party billing service, attempted to collect $1,700 for treatment Dr. Coufal provided after her husband Richard suffered a hemorrhagic stroke in February 2017. WRS issued an invoice in March 2018 and the following month, LJNA received a letter from “The Olson Family” saying any bills should be submitted to Medicare or the Veterans Administration.
The letter didn’t give any identifying information for Olson, didn’t state he had died, and ended with a note: “This considered harassment. I know the law, do you?”
Over the next few months, LJNA received more letters, including one stating Olson’s street address was “Miramar Cemetery” and his employer “God in Heaven.” In June 2018, WRS asked LJNA for help in obtaining Olson’s insurance information and the clinic called Mrs. Olson, who said her husband had died and all charges had been paid by the VA.
Insurance paid the remaining balance in September 2018 and the following month Mrs. Olson sued.
In January 2021, the trial court clerk recorded a judgment in favor of LJNA, although it wasn’t filed with the court. In July 2021, Olson filed to appeal before the trial court had issued a final judgment.
California’s Fourth Appellate District Court of Appeal refused to hear it until the judgment was issued in August 2021. Then it upheld the judgment in a Nov. 23 decision.
The Rosenthal Act defines a “debt collector” as “any person who, in the ordinary course of business, regularly, on behalf of that person or others, engages in debt collection.” While the law applies to businesses that collect debts on behalf of themselves, it requires that the defendant must regularly and in the ordinary course of business “engage in” debt collection, the appeals court said.
“To `engage in” an activity does not ordinarily mean to hire someone else to do it; it means to take part in doing it oneself,” the court concluded. “Thus, the most natural reading of the statutory language is that a `debt collector’ must personally participate in consumer debt collection.”
The court awarded costs to the defendant. Olson was represented by Kazerouni Law Group and Ryan L. McBride. LJNA was represented by Hegeler & Anderson.