Court Opinion

ID: 9797438
Source: CourtListenerOpinion
Date Created: 2023-08-31 04:20:38.203078+00
Date Added: 2024-06-11T08:55:12.214617
License: Public Domain

ORME, Judge
(concurring):
19 I coneur in what is said in the lead opinion, but write separately to address two issues Express raises that the lead opinion essentially ignores,1 namely that the trial court erred (1) by "invad[ing] the province of the Legislature" when, pursuant to a policy agreed upon by the district court judges at one court location, the court required Express to file an affidavit setting forth certain facts and details in order to recover both collection costs and attorney fees and (2) by not adopting the policy of the bad check statute and of other jurisdictions allowing recovery of collection costs, attorney fees, and damages. This opinion treats them in reverse order.
" 10 The trial court did not err in rejecting the applicability of chapter 15, title 7, of the Utah Code-which specifically deals with dishonored instruments, or bad checks-when *455rendering its decision. See generally Utah Code Ann. §§ 7-15-1 to -3 (2006 & Supp. 2007). First, these sections of the Utah Code clearly do not deal with penalty provisions in contracts. See id. Furthermore, while section 7-15-1 does allow recovery of a service charge, collection costs, attorney fees, and treble damages when a party presents a bad check, this section also specifically states that the aggrieved party can only recover a maximum of $20 for collection costs. See id. § (60(@@®, M®)@. This amount is clearly not excessive; rather, it is definite and reasonable. And even though the statute allows recovery of treble damages, the statute caps the total amount in "damages" that a party can recover at specified amounts, depending on the extent of the delinquency, with the highest damages amount "not to exceed the check amount plus $500." Id. § 7-15-1(7)(b)(vi). Thus, while the statute does allow a party to recover a service charge, collection costs, attorney fees, and treble damages, the Legislature took pains to make sure that the collection of these costs would not be excessive or unreasonable in any given case. No such safeguards are in the contractual provision at issue here. Indeed, charging a debtor 50% of the actual debt as a collection cost could quickly become an excessive penalty, well beyond the amount originally owed and the actual costs of collection.
T11 As to the policies of other jurisdictions, Express primarily relies on a case from Arizona. In that case, the plaintiffs actually filed affidavits setting forth the collection costs they incurred and "had to make a prima facie showing that the collection costs they claimed were reasonable" in order for their summary judgment motion to be granted. Grant Rd. Lumber Co. v. Wystrach, 140 Ariz. 479, 682 P.2d 1146, 1147-48 (Ct.App.1984). The Arizona Court of Appeals stated that a collection fee paid on a contingency fee basis "[was] not prima facie reasonable." Id. at 1148. Rather, the parties had to present "other evidence such as the reasonable amount for a contingency fee charged [by others] in the community for similar work and the reasonableness of the amount in turn collected from the debtor based upon prevailing practices in the community." Id. While that court said that "no other evidence is necessary" if the parties had agreed in advance to a percentage that would be charged, id., I join my colleagues in declining to adopt such a rule. If any such agreed upon percentage is disproportionate to the actual damages and has no reasonable relationship to the collection costs, the amount owed by the debtor would be excessive or exorbitant, contrary to Utah's public policy against contractual penalties See Woodhaven Apartments v. Washington, 942 P.2d 918, 921 (Utah 1997); Young Elec. Sign Co. v. United Standard W., Inc., 755 P.2d 162, 164 (Utah 1988); 11 Joseph M. Perillo, Corbin on Contracts § 58.11, at 456-57 (rev. ed.2005). Furthermore, the contractual percentage agreed upon in Wystrach was 20%-consgiderably less than the 50% surcharge at issue here. See 682 P.2d at 1148.
12 The remaining argument, that the trial court "invaded the province of the Legislature" in adopting a policy on collection costs,2 is also without merit. The Utah Rules of Civil Procedure govern the procedure that attorneys and courts must follow in civil cases. These provisions may be supplemented by the Rules of Judicial Administration, adopted by the Judicial Council and applicable statewide. See Utah Code of Jud. Admin., introduction.3 The affidavit require*456ment mandated in the local policy is either a matter of judicial procedure or of judicial administration-most likely the former. As such, it is a matter for the judiciary rather than the Legislature under our constitutional scheme.
113 By the express terms of the Utah Constitution, the Utah Supreme Court has the authority to "adopt rules of procedure," Utah Const. art. VIII, § 4, while the Judicial Council has the power to "adopt rules for the administration of the courts of the state." Utah Const. art. VIII, § 128). Fully consistent with the familiar separation of powers doctrine, there is only a limited role for the Legislature in all of this, and that is the authority to "amend the Rules of Procedure . adopted by the Supreme Court upon a vote of two-thirds of all members of both houses of the Legislature." Utah Const. art. VIII, § 4.
€ 14 Basically, then, the local policy requiring an affidavit justifying an award of collection costs would "invadel[ ] the province of the Legislature" only if the Legislature, by the requisite super-majority, were to amend the Utah Rules of Civil Procedure to enact a procedure relative to collection costs that was inconsistent with the local policy. Express has not claimed, much less demonstrated, that such is the case. Accordingly, the local policy on collection costs readily withstands the specific challenge advanced by Express.

. One argument is summarily dispatched in footnote 1 of the lead opinion. The other argument is simply never mentioned again after it is identified in the first paragraph of that opinion.

. The "Policy on Collection Costs," adopted by the judges of the Third District Court's West Jordan location, provides that for a creditor to recover collection costs
1. The costs must be specifically provided for by statute or contract;
2. The costs must be "reasonable";
3. The costs must be actually incurred by the creditor;
4. The collection costs sought must be verified by the creditor in a detailed Affidavit setting forth the itemized costs sought to be recovered, that such costs were actually incurred and attaching that portion of the contract or statute which provides for recovery of collection costs.
Court personnel sent this policy to "Collection Attorneys and Litigants." This policy was not merely advisory, but was tantamount to a local rule, as shown by the trial court's response when Express refused to file an affidavit as required by the policy.

. While the Rules of Judicial Administration allow courts to adopt supplemental rules, their *456authority to do so is expressly limited to subject matter "govern[ing] the administration of their courts," Utah R. Jud. Admin. 2-204(1), and does not include the authority to modify procedural requirements. Furthermore, when creating a supplemental local rule, courts must follow a prescribed procedure, which requires not only "approv[al] by the presiding judge after consultation with the other judges of the court," id. 2-204(2), apparently on a district-wide basis, but also approval by the appropriate Board of Judges, see id. 2-204(3)-(4), and the Judicial Council, see id. 2-204(4)-(5), (7). Express has not argued that the West Jordan judges' policy runs afoul of these requirements.