Opinion ID: 182440
Heading Depth: 2
Heading Rank: 1

Heading: Plaintiff's Debt

Text: In July 2006, Plaintiff Owen brought her cat to All About Animals Veterinary Services, P.C. (AAA) for medical treatment. Six years prior, Owen registered her cat at AAA and signed a one-page registration form (the agreement) stating, in relevant part, that she would pay interest at 1.5% per month or 18% per year and reasonable collection fees: In the event this account goes to collection, I understand I am responsible for any and all interest charges incurred and reasonable collection fees that will be added. Interest charges accrue at the rate of 1.5% per month or 18% per year. On July 24, 2006, AAA charged Owen $780.10 for veterinary services, $100 of which Owen paid. Because Owen could not pay the remaining balance, her husband signed a promissory note that day pledging that he and Owen would pay $100 every two weeks until the bill was paid in full. Owen made two more payments of $100, leaving a balance of $480.10. Owen failed to meet her next $100 payment obligation. On September 27, 2006, AAA imposed a 1.5% interest charge ($7.20) on Owen's balance of $480.10, pursuant to her agreement. This made Owen's balance $487.30. On September 30, 2006, Owen received an additional $42.79 in veterinary services and made a $145 payment. This left Owen's balance as $385.09. Owen made no payment thereafter, and AAA periodically imposed 1.5% interest charges. The unpaid interest charges were added to the running balance due, resulting in Owen being charged interest on previous interest due. Owen's agreement stated that interest charges accrue at the rate of 1.5% per month or 18% per year, which reflects a simple interest rate of 1.5% over 12 periods (1.5% x 12 = 18%). Owen, however, was charged compound interest ( i.e., interest on interest). [1] Additionally, AAA levied a 33% collection charge, along with a 7% Interest fee. The basis of this latter fee is somewhat unclear, but it does not reflect any of the authorized charges mentioned in Owen's agreement. In a deposition, AAA representative Susan Ellis stated that the 7% Interest fee was the interest that [ICS] ha[s] always told us to put on when AAA places accounts for collection. She further testified that this practice was what I've always been taught from the previous [AAA] managers. The following chart reflects AAA's debit and credit entries on Owen's account statement: ------------------------------------------------------------------ Date Description Charges Payments Run. Bal. ------------------------------------------------------------------ 7/24/06 Veterinary Services $780.10 $780.10 ------------------------------------------------------------------ 7/24/06 Cash $100.00 $680.10 ------------------------------------------------------------------ 8/08/06 Check $100.00 $580.10 ------------------------------------------------------------------ 8/25/06 Check $100.00 $480.10 ------------------------------------------------------------------ 9/27/06 Finance Charge [2] $ 7.20 $487.30 ------------------------------------------------------------------ 9/30/06 Veterinary Services $ 42.79 $530.09 ------------------------------------------------------------------ 9/30/06 Cash $145.00 $385.09 ------------------------------------------------------------------ 11/4/06 Finance Charge $ 5.78 $390.87 ------------------------------------------------------------------ 12/29/06 Finance Charge $ 5.86 $396.73 ------------------------------------------------------------------ 2/9/07 Finance Charge $ 5.95 $402.68 ------------------------------------------------------------------ 3/27/07 Finance Charge $ 6.04 $408.72 ------------------------------------------------------------------ 3/27/07 33% Collect Charge $134.87 $543.59 ------------------------------------------------------------------ 3/27/07 7% Interest $ 28.61 $572.20 ------------------------------------------------------------------