Opinion ID: 2186989
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Heading Rank: 1

Heading: Should the ICCC be Applied Retrospectively?

Text: IECU argues that, Gutshall notwithstanding, it was not the legislative intent that the ICCC provisions be applied retrospectively. It relies on section 4.5, The Code, adopted in 1971: A statute is presumed to be prospective in its operation unless expressly made retrospective. § 4.5, The Code. Culvers assert this claim never was advanced in trial court. However, we find the issue was raised in the district court controversy surrounding interpretation of Gutshall, which did not purport to turn on the constitutional issue. Following enactment of section 4.5, and without reference to it, we have held remedial statutes are to be applied retrospectively. Jones v. Bowers, 256 N.W.2d 233, 235 (Iowa 1977); State ex rel. Turner v. Limbrecht, 246 N.W.2d 330, 332-33 (Iowa 1976); cf. Walker State Bank v. Chipokas, 228 N.W.2d 49, 51-52 (Iowa 1975) (rule of civil procedure). In In re Estate of Parsons, 272 N.W.2d 16, 19 (Iowa 1978), the majority analyzed a number of these decisions, noting that in several the statutes applied retrospectively actually created an additional remedy, or dealt with remedy in the strict sense of that term, and did not reduce or eliminate a right a person had. In any event, it is obvious trial court's retroactive application of ICCC in this case deprived IECU of rights it had when the ICCC was adopted: the right to attorney fees and the right to sue without giving a notice to cure on a note seven years delinquent. Aside from general principles that influence the retrospective-prospective determination, it is clear that in the final analysis we look to the legislative intent in the particular enactment. Limbrecht, 246 N.W.2d at 333; Chipokas, 228 N.W.2d at 51. The language of section 537.2507, relied on by Culvers, indicates a legislative intent that the act was to have a prospective operation only: With respect to a consumer credit transaction, the agreement may not provide for the payment by the consumer of attorney's fees. A provision in violation of this subsection is unenforceable. § 537.2507, The Code 1981. When ICCC was adopted, the legislature must have known there were thousands of outstanding contracts and notes in Iowa that provided for attorney fees to be paid by the consumer. Therefore, the mandate of section 537.2507 that the agreement may not provide for the payment by the consumer of attorney's fees (emphasis added) was obviously designed to control future agreements, not existing contracts with attorney fee clauses. We further find the reference in the last sentence of section 537.2507 to a violation of this subsection refers to an agreement arising after adoption of the act and containing a prohibited attorney fee provision. Our determination that the legislature did not intend the ICCC to have retrospective application is fortified by the history of this enactment in Iowa. We may resort to this source of information. See Burke v. Board of Trustees, 308 N.W.2d 21, 24 (Iowa 1981). In Norton v. Local Loan, 251 N.W.2d 520, 522 (Iowa 1977), we note that chapter 537 is a uniform act and its language was adopted rather than drafted by the legislature. It was reported out of the Senate Committee on Commerce as Senate File 1405 and became chapter 1250 of the Acts of the 65th General Assembly, 1974. The following statement appears as a part of the explanation to the bill: This bill enacts a Consumer Credit Code for the state of Iowa which is based upon the Uniform Consumer Credit Code. The format of the Uniform Act is retained, but various provisions are amended, modified or essentially rewritten. S.F. 1405, at 114. One of the provisions in the Uniform Consumer Credit Code that was deleted by the Iowa legislature was the following portion of article 9, entitled Effective Date and Repealer: § 9.101 . . . . . . . (3) . . . this Act applies to: . . . . (c) all credit transactions entered into before this Act takes effect insofar as the Article on Remedies and Penalties (Article 5) limits the remedies of creditors. Uniform Consumer Credit Code § 9.101(3)(c), 7 Uniform Laws Ann., Bus. & Fin. Laws (1978); Uniform Consumer Credit Code, § 9.101(3)(c) (Tent. Final Draft No. 5, Nov. 1973) (CCH). We can only conclude the legislature deliberately elected to reject these provisions, which would have made the ICCC sections that Culvers rely on retrospective in operation. An overview of the legislative history of the ICCC and its language above analyzed convinces us the legislature intended the act to apply only prospectively. Nor do we believe Gutshall is controlling here. In Gutshall the defendant maker of a promissory note executed a reaffirmation agreement to the plaintiff bank after the original debt was discharged in his bankruptcy proceedings. The promissory note was executed before adoption of the ICCC; the reaffirmation agreement was executed after the ICCC became law. Gutshall's contention was that the ICCC and the Federal Truth-in-Lending Act were applicable because the reaffirmation agreement established a new credit obligation. We initiated our analysis of the notice-to-cure issue with the observation that Gutshall contends chapter 537 is applicable to his default of the reaffirmation agreement and that he should have been informed of his right to cure default. Gutshall, 274 N.W.2d at 721 (emphasis added). We held that the notice of right to cure default provisions of §§ 537.5110 and 537.5111 are applicable to reaffirmation agreements which go into default subsequent to July 1, 1974, the effective date of chapter 537. Id. at 722-23. That holding disposed of the issue before us, but in a summarizing statement we said the notice-to-cure provisions are to be applied retrospectively to include within their coverage credit transactions entered into before July 1, 1974, as to collection proceedings initiated or reinitiated after that date. Id. at 723. We now are convinced that statement plunged beyond the issues before us in Gutshall and would nullify the legislature's intent when it enacted the ICCC. We overrule any language in Gutshall that does not conform to our holding in this case.