C. Kathryn Preston, United States Bankruptcy Judge.
This cause came on for consideration of William Sijan's (the "Debtor") Motion for Summary Judgment Denying United States Trustee's Motion to Dismiss (Doc. #20) (the "Motion for Summary Judgment"), filed on October 18, 2019; the United States Trustee's Response to Debtor's Motion for Summary Judgment on Issue Concerning Nature of Medical Debts (Doc. #21), filed by the United States Trustee (the "UST") on November 1, 2019; and the Debtor's Reply to Response of United States Trustee to Debtor's Motion for Summary Judgment (Doc. #22), filed on November 8, 2019. The Court having considered the record and the arguments of the parties, makes the following findings and conclusions.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and Amended General Order 05-02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is properly before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
The facts relevant to this matter are without serious dispute and may be summarized as follows: In January 2018, the Debtor arrived at the emergency room at Broward Health Medical Center in Florida with a fever and breathing difficulty. There, he was diagnosed with severe pneumonia, and after initially refusing admission to the hospital, the medical care providers informed the Debtor that he would die within hours if not hospitalized. He agreed to be admitted to the hospital and was treated in the intensive care unit (the "ICU") for a total of six weeks. For two weeks, he was intubated and placed on a
The Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on May 21, 2019. The schedules reflect total liabilities of $409,527.25, of which $34,193 is described as secured debt and $375,334.25 as nonpriority unsecured debt. The debts consist of an automobile loan ($34,193), credit card debts (approximately $43,248.03), a tax lien ($290), business debt (approximately $6,319.25), and various medical bills (approximately $324,605.97). The medical bills make up nearly three-fourths of the total debt owed; of that, the Debtor owes $300,550.99 for emergency medical treatment. In the Voluntary Petition (Part 6, section 16), the Debtor classified his debts as primarily "medical."
On August 5, 2019, the UST filed its Motion of the United States Trustee to Dismiss Pursuant to 11 U.S.C. §§ 707(b)(2) or 707(b)(3) with Memorandum and Affidavit in Support Thereof (Doc. #15) (the "Motion to Dismiss"). The UST sought dismissal of this case on the basis that the Debtor's debts are primarily consumer debts, and that a presumption of abuse arises in this case and/or the totality of the circumstances of the Debtor's financial situation demonstrates abuse. The Debtor argued in his Objection and Response to Trustee's Motion to Dismiss (Doc. #17) and his Motion for Summary Judgment, that 11 U.S.C. § 707(b) does not apply in this case because the majority of his total debt is not consumer debt as defined under 11 U.S.C. § 101(8), because he did not voluntarily incur the majority of his debt, the emergency medical bills.
Rule 56 of the Federal Rules of Civil Procedure, made applicable to contested matters by Federal Rule of Bankruptcy Procedure 9014, provides that the Court "shall grant summary judgment 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." Fed. R. Civ. P. 56(a). The party seeking summary judgment bears the initial burden of "informing the ... court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See also Fed. R. Civ. P. 56(c)(3).
If the movant satisfies this burden, the nonmoving party must then assert that a fact is genuinely disputed and must support the assertion by citing to particular parts of the record. Fed. R. Civ. P. 56(c)(1). The mere allegation of a factual dispute is not sufficient to defeat a motion for summary judgment; to prevail, the nonmoving party must show that there exists some genuine issue of material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). When deciding a motion for summary judgment, all justifiable inferences must be viewed in a light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Anderson, 477 U.S. at 255, 106 S.Ct. 2505.
Hall v. Tollett, 128 F.3d 418, 422 (6th Cir. 1997) (citations omitted). A material fact is one whose resolution will affect the determination of the underlying action. See Tenn. Dep't of Mental Health & Mental Retardation v. Paul B., 88 F.3d 1466, 1472 (6th Cir. 1996). An issue is genuine if a rational trier of fact could find in favor of either party on the issue. See Schaffer v. A.O. Smith Harvestore Prods., Inc., 74 F.3d 722, 727 (6th Cir. 1996). "The substantive law determines which facts are `material' for summary judgment purposes." Hanover Ins. Co. v. Am. Eng'g Co., 33 F.3d 727, 730 (6th Cir.1994). In determining whether each party has met its burden, the court must keep in mind that "[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses...." Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548.
One of the primary goals of Chapter 7 relief is to offer debtors a "fresh start" through discharge "in exchange for liquidation of the debtor's assets for the benefit of his creditors." In re Krohn, 886 F.2d 123, 125 (6th Cir. 1989). The remedy of bankruptcy is intended to relieve honest debtors from indebtedness and provide a "fresh start." Id. The bankruptcy system balances the goal of providing a "fresh start" with the desire to prevent abuse. In re Hardigan, 490 B.R. 437, 458 (Bankr. S.D. Ga. 2013).
For this reason, the Bankruptcy Code includes provisions, such as 11 U.S.C. § 707(b), which is intended to prevent debtors from obtaining Chapter 7 shelter if they have an ability to pay their creditors, and § 727, which is intended to keep unscrupulous debtors from obtaining bankruptcy relief. In re Krohn, 886 F.2d 123, 126 (6th Cir. 1989); Wise v. Wise (In re Wise), 590 B.R. 401, 429 (Bankr. E.D. Mich. 2018) (citing Robin Singh Educ. Servs., Inc. v. McCarthy (In re McCarthy), 488 B.R. 814, 825 (1st Cir. BAP 2013)); see also H.R. REP. NO. 109-31, pt. 1, at 2 (2005) (stating that the provisions Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 were enacted to deter abuse in consumer bankruptcy filings).
The Debtor moves for summary judgment denying the UST's Motion to Dismiss brought under 11 U.S.C. § 707(b)(2) or (3), on the grounds that § 707(b) does not apply. Section 707(b)(1) states in pertinent part:
11 U.S.C. § 707(b)(1) (emphasis added).
A pre-trial conference was held in this matter on September 18, 2019. At the pre-trial, the parties agreed that the debts for the Debtor's emergency medical treatment are higher than all other types of debts and are the Debtor's primary type of debt. See In re Hlavin, 394 B.R. 441, 446-47 (Bankr. S.D. Ohio 2008) (stating that "primarily consumer debts" means the aggregate dollar amount of consumer debts exceeds 50% of the debtor's total liabilities). Thus, the critical determination here is whether the Debtor's emergency medical debts are considered consumer debts for purposes of 11 U.S.C. § 707(b).
The term "consumer debt" is defined as "debt incurred by an individual primarily for a personal, family, or household purpose." 11 U.S.C. § 101(8). The Bankruptcy Code refers to "consumer debt" in various sections. See, e.g., 11 U.S.C. § 1301(a) (staying creditor actions against codebtors to collect consumer debts); 11 U.S.C. § 524(c)(6)(B) (providing that court approval is not required for reaffirmation agreements with an individual debtor not represented by an attorney, to the extent the debt is a consumer debt secured by real property). "[T]here is a natural presumption that identical words used in different parts of the same act are intended to have the same meaning." Swartz v. Strausbaugh (In re Strausbaugh), 376 B.R. 631, 636 (Bankr. S.D. Ohio 2007) (quoting Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433, 52 S.Ct. 607, 76 S.Ct. 1204 (1932)). Therefore, to determine the meaning of "consumer debt" for the purposes of applying 11 U.S.C. § 707(b), the Court may look to the use or interpretation of the term "consumer debt" in other contexts within the Code. See IRS v. Westberry (In re Westberry), 215 F.3d 589, 592 (6th Cir. 2000); Strausbaugh, 376 B.R. at 636.
The term "consumer debt" must be narrowly construed. See In re White, 49 B.R. 869, 872 (Bankr. W.D.N.C. 1985) (stating that the sparse legislative history on the definition of consumer debt implies that a more narrow interpretation is favored).
There is no doubt that most medical debts are considered consumer debts, as most are incurred voluntarily. See In re Martinez, 171 B.R. 264, 267 (Bankr. N.D. Ohio 1994) (finding that the debtors' medical debts were consumer debts). Medical debts incurred through routine doctor's visits and cosmetic surgery would be examples of medical debts that are consumer debts. A patient walks into a doctor's office with a treatment plan, that is usually discussed prior to the visit, and discussions of cost and/or payment plans are tended to before treatment. Moreover, if a patient has past due bills for treatment, the doctor may turn that patient away until her payments become current. This is not so when it comes to emergency medical treatment.
Emergency medical services are differentiated from ordinary medical services. Congress viewed emergency medical services differently than ordinary medical services when it enacted the Emergency Medical Treatment & Active Labor Act ("EMTALA"), which requires hospital emergency departments to provide treatment regardless of an individual's ability to pay. 42 U.S.C. § 1395dd (2011). Similarly, the Florida legislature also enacted a law ensuring that emergency medical services and care are available to the public; section § 395.1041 of the Florida Statutes states, "[T]he provision of emergency services and care ... [shall not] be based upon, or affected by, the person's ... insurance status, economic status, or ability to pay for medical services...." FLA. STAT. ANN. § 395.1041 (West 2017). Broward Health Medical Center was required to treat the Debtor for his pneumonia regardless of his ability to pay, as he was hours from death. The UST argues that the Debtor incurred this debt because he voluntarily consented to treatment. And, indeed he did; however, an act that leads to indebtedness may be undertaken voluntarily but the attendant debt may result involuntarily and is not the type of debt that a debtor would expect to incur in his daily affairs. In re Peterson, 524 B.R. 808, 813 (Bankr. S.D. Ind. 2015) (finding that an intentional tort judgment was not consumer debt because it arose involuntarily); In re White, 49 B.R. 869, 872 (Bankr. W.D.N.C. 1985) (stating that an automobile accident liability was not consumer debt because it occurred incidental to and not first and foremost to achieving a personal aim). As such, the Debtor's medical debts arising from emergency medical services cannot be included in the limited class of consumer debts within the meaning of 11 U.S.C. § 101(8) that individuals willingly incur in their daily affairs.
The UST also argues that medical debts are consumer debts because, by their very nature, they are incurred for a personal purpose, and suggests that civil judgments and tax liens are distinguishable from the Debtor's medical debts. The UST's argument is unpersuasive. The fact that this medical debt is not a civil judgment or tax lien (or even business debt) does not mean it per se fits the definition of "consumer debt." Cf. Peterson, 524 B.R. at 812-13 ("The mere fact that the [civil] [j]udgment is not a `business' debt does not mean it per se fits the definition of a `consumer debt.'"). Nearly all debts have some kind of personal, family, or household purpose, even those incurred with an eye for profit
Furthermore, the Debtor did not voluntarily incur the debt arising out of his emergency medical treatment at Broward Health Medical Center. The Debtor did not intend to have a near death experience and be subjected to six weeks of medical treatment after visiting the emergency room. This is more akin to judgment from a tort action, in which some sort of accident occurs and the debtor is found liable for the unforeseen damages.
For the reasons set forth above, the Court finds that there are no genuine issues of material fact and that the Debtor is entitled to judgment as a matter of law. The debt arising out of the Debtor's emergency medical treatment at Broward Health Medical Center is not a consumer debt in nature as defined under 11 U.S.C. § 101(8), because he did not voluntarily incur the debt. The Debtor's Chapter 7 case will not be dismissed pursuant to 11 U.S.C. § 707(b) because his debt is not primarily consumer debt. Accordingly,
