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COA: Debt collector not entitled to attorney fees under agreement

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A company assigned to collect on a woman’s medical debt cannot also collect attorney fees, the Indiana Court of Appeals ruled Friday. The agreement the woman signed with a medical provider that allows for the collection of attorney fees did not apply to the physician group which assigned her debt to the collections company.

Tina Gray received medical services from physicians employed by Emergency Medicine of Indiana P.C. while she was a patient at Dupont Hospital. During her hospital stay she entered into an agreement with Dupont regarding payment. An unpaid $300 balance to Emergency Medicine was assigned to DECA Financial Services for collection. DECA sought the unpaid balance, $150 in attorney fees and $94 in court costs. The small claims judge ordered Gray to pay the unpaid balance and court costs, but found the agreement she entered into with the hospital did not give Emergency Medicine, a separate entity from the hospital, the ability to recover attorney fees.

The Court of Appeals affirmed in DECA Financial Services, LLC v. Tina Gray, 02A04-1311-SC-595.

“DECA asserts that Emergency Medicine’s employees are “facility-based physicians” and that Gray and Dupont’s intent to make Emergency Medicine a third party beneficiary of the attorney’s fees provision is evidenced by the inclusion of ‘facility-based physicians’ in Paragraph 1. Specifically, DECA contends that, because ‘Gray agrees to authorize payment “directly to ... any facility-based physicians”’ in Paragraph 1, Emergency Medicine is inherently authorized to recover attorney’s fees for non-payment under Paragraph 2,” Judge Cale Bradford wrote.

“DECA’s contention overlooks the context of Paragraph 1, which states: ‘I hereby assign and authorize payment directly to the Facility, and to any facility-based physician, all insurance benefits ... .’ Thus, even if we were to conclude that Emergency Medicine is a third party beneficiary under Paragraph 1, its third party benefits would be limited to the provisions of that paragraph. Nothing in the language of Paragraph 1 indicates an intent to make Emergency Medicine a third party beneficiary under Paragraph 2. Therefore, we conclude that the agreement does not entitle Emergency Medicine to attorney’s fees.”



 

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  1. Your article is a good intro the recent amendments to Fed.R.Civ.P. For a much longer - though not necessarily better -- summary, counsel might want to read THE CHIEF UMPIRE IS CHANGING THE STRIKE ZONE, which I co-authored and which was just published in the January issue of THE VERDICT (the monthly publication of the Indiana Trial Lawyers Association).

  2. Thank you, John Smith, for pointing out a needed correction. The article has been revised.

  3. The "National institute for Justice" is an agency for the Dept of Justice. That is not the law firm you are talking about in this article. The "institute for justice" is a public interest law firm. http://ij.org/ thanks for interesting article however

  4. I would like to try to find a lawyer as soon possible I've had my money stolen off of my bank card driver pressed charges and I try to get the information they need it and a Social Security board is just give me a hold up a run around for no reason and now it think it might be too late cuz its been over a year I believe and I can't get the right information they need because they keep giving me the runaroundwhat should I do about that

  5. It is wonderful that Indiana DOC is making some truly admirable and positive changes. People with serious mental illness, intellectual disability or developmental disability will benefit from these changes. It will be much better if people can get some help and resources that promote their health and growth than if they suffer alone. If people experience positive growth or healing of their health issues, they may be less likely to do the things that caused them to come to prison in the first place. This will be of benefit for everyone. I am also so happy that Indiana DOC added correctional personnel and mental health staffing. These are tough issues to work with. There should be adequate staffing in prisons so correctional officers and other staff are able to do the kind of work they really want to do-helping people grow and change-rather than just trying to manage chaos. Correctional officers and other staff deserve this. It would be great to see increased mental health services and services for people with intellectual or developmental disabilities in the community so that fewer people will have to receive help and support in prisons. Community services would like be less expensive, inherently less demeaning and just a whole lot better for everyone.

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