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Medical Recovery Services, LLC v. Strawn

Supreme Court of Idaho

March 19, 2014

MEDICAL RECOVERY SERVICES, LLC, an Idaho limited liability company, Plaintiff-Appellant,
STEPHANIE STRAWN and JASON STRAWN, wife and husband, Defendants-Respondents, and BRANDON LEWIS and RENEE LEWIS, husband and wife, Defendants-Respondents, and JOSEPH KNIGHT, Defendant-Respondent

2014 Opinion No. 32

Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. Michelle Mallard, Magistrate Judge; Hon. Dane H. Watkins, Jr., District Judge.

The decision of the district court is affirmed.

Smith, Driscoll & Associates, PLLC, Idaho Falls, for appellant. Bryan N. Zollinger argued.

Stephanie Strawn and Jason Strawn, Idaho Falls, respondents Pro se.

Brandon Lewis and Renee Lewis, Idaho Falls, respondents Pro se.

Joseph Knight, Idaho Falls, respondent, Pro se.

J. JONES, Justice. Chief Justice BURDICK, and Justices EISMANN, W. JONES, and HORTON CONCUR.


Page 704

[156 Idaho 154] J. JONES, Justice.

Medical Recovery Services, LLC (MRS), a licensed collection agency, appeals from the district court's order affirming default judgments entered by the magistrate court. MRS asserts that the magistrate erred in awarding attorney fees in the amount of the principal owed by the Respondents for medical services, as opposed to $350, which was the minimum amount that each Respondent contracted to pay.



MRS filed three separate complaints--one against Jason and Stephanie Strawn, one against Brandon and Renee Lewis, and one against Joseph Knight--seeking to recover amounts due for medical services provided by Community Care Center, as well as interest, costs and attorney fees. MRS has included in the record only those documents pertaining to the Strawns, explaining that " each of the three cases appealed from have the same exact course of proceedings and same exact documents filed." None of the Respondents answered below or filed a response brief on appeal.

The relevant, albeit limited, facts are as follows: each Respondent received medical services from Community Care, a medical services provider. At the time the services were provided, each Respondent signed a Patient Sign-In Form, which included the following provision:

I agree to pay my account in full at the time of services unless before services are performed Community Care agrees to other payment arrangements. I understand that Community Care will submit insurance benefits for payment only as a courtesy for me. I agree to pay 18% interest on the outstanding balance on my account with interest to commence 60 days after services even if payment from my insurance company is pending. I also agree to pay an additional service charge of 50 cents per month on my account. If Community Care assigns my account to a collection agency for collection [sic] all reasonable cost and attorney's fees incurred to collect on my account. I agree that a $20.00 collection fee shall be added to my account as a reasonable cost if Community Care assigns my account to a collection agency. I agree to pay as a reasonable attorney's fee $350 or 35% of the principal and interest on my account balance, whichever is greater, if my account is assigned to a collection agency and suit is filed to recover payment on my account.

Page 705

[156 Idaho 155] Each Respondent's account indebtedness was assigned to MRS. MRS filed suit to recover payment from each Respondent and also sought $350 in attorney fees from each, based on the contractual provision above. None of the Respondents answered the complaints filed by MRS, so MRS filed for default judgments to be entered in each case.

The magistrate court entered default judgments as to all Respondents but granted attorney fees in amounts less than the $350 that MRS was requesting under the contracts. The exact amounts of attorney fees awarded were $268.40 in the Strawn case, $192.98 in the Lewis case, and $300 in the Knight case. These amounts corresponded with the principal indebtedness owed by each Respondent. Specifically as to the Strawns, MRS asserted that they owed the following amounts:





Attorney's fee:


Filing fee:


Service fee:




It appears that the magistrate struck out the $350 figure on each of the proposed judgments prepared by MRS and inserted the indicated fee award by a handwritten, initialed annotation. No explanation for the court's action is contained on the face of the Strawn judgment. The record before the Court indicates that MRS filed a motion for reconsideration on April 17, 2012, but that motion is not included in the record on appeal. MRS asserts that the magistrate denied the motion on April 20, 2012, but no evidence of such order is contained in the record.

MRS appealed the cases to the district court where they were consolidated. MRS argued to the district court that the magistrate court committed reversible error by failing to award the $350 fee called for in the Community Care contracts and by relying upon a provision of the Idaho Collection Agency Act (ICAA) (I.C. § § 26-2221-2251). On November 8, 2012, the district court entered its Memorandum Decision and Order, affirming the default judgments, including the fee awards. MRS filed a motion for reconsideration on November 21, 2012, which is not contained in the record. In its June 22, 2013 Memorandum ...

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