Opinion ID: 1268943
Heading Depth: 3
Heading Rank: 3

Heading: Collection Costs

Text: Defendants argue the trial judge erred by holding claimant agencies were not entitled to add collection costs to Plaintiffs' underlying debts. Since its inception in 1988, the Setoff Debt Collection Act has provided that claimant agencies may submit for collection under the procedure established by this article all delinquent debts which they are owed. Act No. 474, 1988 S.C. Acts 4022 (underline added); Act No. 76, 1995 S.C. Acts 521 (substituted chapter for article). As originally enacted, the Setoff Debt Collection Act did not include the Associations within the definition of claimant agency. S.C.Code Ann. § 12-54-420(1) (Supp.1989). In 1992, the General Assembly amended the definition of claimant agency. Under the amended provision, the MASC and SCAC were defined as political subdivisions (and, therefore, claimant agencies) when these organizations submit claims on behalf of their members. S.C.Code Ann. § 12-54-420(1) (Supp.1993). In 1994, the legislature again amended the Setoff Debt Collection Act, adding the MASC and SCAC are political subdivisions (and, therefore, claimant agencies) when these organizations submit claims on behalf of their members and other political subdivisions. Act No. 516, 1994 S.C. Acts 5916. Originally, the Setoff Debt Collection Act defined delinquent debt as: [A]ny liquidated sum due and owing any claimant agency, including court costs, fines, penalties, and interest which have accrued through contract, subrogation, tort, operation of law, or any other legal theory regardless of whether there is an outstanding judgment for that sum which is legally collectible and for which a collection effort had been or is being made. Act No. 474, 1988 S.C. Acts 4022. In 1994, the General Assembly amended the definition of delinquent debt as follows: [A]ny liquidated sum due and owing any claimant agency, including collection costs, court costs, fines, penalties, and interest which have accrued through contract, subrogation, tort, operation of law, or any other legal theory regardless of whether there is an outstanding judgment for that sum which is legally collectible and for which a collection effort has been or is being made. Act No. 516, 1994 S.C. Acts 5916 (underline added). [8] Since 1992 the MASC and SCAC have participated in the setoff collection process by consolidating and forwarding delinquent debts on behalf of claimant agencies to the DOR. In exchange for their collection efforts, the MASC and SCAC add $25 and $15, respectively, as an administrative fee to each successful setoff submitted on behalf of a claimant agency to the DOR. Some claimant agencies which avail themselves of the Associations' procedures also add a collection fee to the underlying debt. Not all claimant agencies pursue collection through the MASC or SCAC. Some agencies which pursue tax setoffs on their own add a collection fee. The trial judge ruled the 1995 Act did not permit automatic recovery of collection costs or administrative fees assessed by the Associations or claimant agencies. Instead, he held the recovery of costs or fees was permissible only if they accrued through contract, subrogation, tort, operation of law, or any other legal theory .... Defendants argue the trial judge misconstrued the provisions permitting recovery of collection costs. Specifically, they claim the statute provides for the recovery of any liquidated sum due and owing a claimant agency and collection costs is not limited by the phrase accrued through contract, subrogation, tort, operation of law, or any other legal theory. We disagree. The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature. Mid-State Auto Auction of Lexington v. Altman, supra . Where the terms of the relevant statute are clear, there is no room for construction. Parsons v. Georgetown Steel, supra . The language of the 1995 Act indicates the legislature's clear intent to define delinquent debts expansively. As originally provided by the Setoff Debt Collection Act, delinquent debt was defined as any liquidated sum due and owing any claimant agency, including ... which have accrued through contract, subrogation, tort, operation of law, or any other legal theory . . .. Act No. 474, 1998 S.C. Acts 4022 (underline added). The only limitation is that the cost be legally recognizable (i.e., that the cost accrues through a legal theory). The legislature later added collection costs to its definition of recoverable debt and retained the legally recognizable requirement. Act No. 516, 1994 S.C. Acts 5916. Accordingly, we conclude the trial judge did not err by holding, in order to be recoverable through the Setoff Debt Collection Act, collection costs must accrue via some legal theory.