Opinion ID: 1820187
Heading Depth: 1
Heading Rank: 1

Heading: Filing of Action on Consumer Loan in the Wrong County.

Text: All parties agree that the original action in Audubon County could not properly be maintained there by reason of the provisions of section 537.5113 which provides [a]n action by a creditor against a consumer arising from a consumer credit transaction shall be brought in the county of the consumer's residence . . . . Plaintiff urges, however, that this was not a violation of the type for which penalties and attorney fees can be awarded under section 537.5201(1), or (8). It is not entirely clear whether the partial award of attorney fees to the defendants made by the trial court was based on a belief that the filing of the action in the wrong county did provide a basis for relief under section 537.5201 or whether it was based on defendants' entitlement to recoup attorney fees under Iowa Rule of Civil Procedure 167(e) which was frustrated by plaintiff's dismissal of the Audubon County action before the court in that county ruled on the challenge to venue. In any event, plaintiff may seek to sustain the judgment of the district court without appealing by contending that no recovery of a statutory penalty or award of attorney fees was authorized for the type of violation involved. Review of the statutory scheme contained in section 537.5201 indicates that statutory penalties therein provided are not authorized for any violation of chapter 537 but only for those violations specifically enumerated in subsection (1) of section 537.5201. While nothing in that subsection directly pertains to the filing of a consumer credit action in the wrong county, item y provides for recovery of statutory penalties for violating the [p]rohibitions against unfair debt collections practices under section 537.7103. Section 537.7103 provides: A debt collector shall not collect or attempt to collect a debt by means of an illegal threat, coercion or attempt to coerce. The conduct described in each of the following paragraphs is an illegal threat, coercion or attempt to coerce within the meaning of this subsection: . . . . f. An action or threat to take an action prohibited by this chapter or any other law. Section 537.5113 requiring suit to be brought in the county where the debtors reside is in the same chapter of the Code as section 537.7103(1)(f). Filing a suit in the wrong county is an act prohibited by that chapter. In addition, we conclude that filing an action to collect money owed is debt collection as defined in section 537.7102(2). Based on the foregoing conclusions, we hold the defendants are entitled to recover a statutory penalty in some amount pursuant to subsection (1) of section 537.5201, together with their costs of action. In addition, the attorneys for the defendants are entitled to recover their reasonable fees as authorized by subsection (8) of section 537.5201. The trial court erred in not providing defendants and their attorneys with such a recovery. Section 537.5201(1) also permits an award of actual damages for a specified violation. We believe that the attorney fees awarded to defendants by the trial court for the defense of the Audubon County action are sustainable as such damages. The recovery allowed for those attorney fees, which we in no way disturb, shall not affect the right of the attorneys to recover their reasonable fees in the Pottawattamie County litigation.