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Medical Recovery Services, LLC v. Bonneville Billing & Collections, Inc.

Supreme Court of Idaho

August 21, 2014

MEDICAL RECOVERY SERVICES, LLC, Plaintiff-Respondent,
v.
BONNEVILLE BILLING AND COLLECTIONS, INC., Defendant-Appellant

2014 Opinion No. 85.

As Amended August 28, 2014.

SUBSTITUTE OPINION, THE COURT'S PRIOR OPINION DATED AUGUST 1, 2014 IS HEREBY WITHDRAWN

Appeal from the District Court of the Seventh Judicial District of the State of Idaho, Bonneville County. Hon. Dane H. Watkins, Jr., District Judge. Hon. Linda J. Cook, Magistrate Judge.

The district court's decision on intermediate appeal is reversed. This case is remanded to the district court with instructions.

Todd R. Erikson, P.A., Idaho Falls, for appellant. Todd Erikson argued.

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

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

OPINION

Page 803

[157 Idaho 396] HORTON, Justice.

This is an appeal from the district court sitting in its appellate capacity and comes before this Court on review from the Idaho Court of Appeals. We reverse the decision of the district court and remand with instructions.

I. FACTUAL AND PROCEDURAL BACKGROUND

This is a dispute between two collections agencies, Medical Recovery Services, LLC (MRS) and Bonneville Billing and Collections, Inc. (BBC), who both had outstanding accounts relating to the same debtor, Stacie Christ. On June 4, 2008, MRS obtained a judgment against Christ for $1,868. MRS then obtained an order for continuing garnishment on June 12, 2008. The garnishment order instructed the Bonneville County Sheriff to garnish Christ's wages at her place of employment, Western States Equipment Company (WSEC), until the judgment, plus interest, was satisfied. On June 18, 2008, MRS obtained a writ of execution requiring the Bonneville County Sheriff to collect on MRS' judgment. On the same day, the Bonneville County Sheriff served WSEC, the garnishee, with the writ. WSEC returned an acknowledgement of receipt of garnishment

Page 804

[157 Idaho 397] to the Bonneville County Sheriff on June 23, 2008.

WSEC intended to make the first payment on the continuing garnishment on July 10, 2008. However, an employee in WSEC's payroll department, instead of selecting " BCS," for Bonneville County Sheriff, on a computer dropdown menu, inadvertently selected " BBC" and sent the first payment of $331.00 to BBC. WSEC repeated the same mistake on two subsequent occasions and sent checks for $394.83 and $357.38 to BBC instead of the Bonneville County Sheriff.

BBC had been assigned two accounts involving Christ as the debtor. The first account was assigned on May 7, 2007, in the amount of $325.50. BBC filed a complaint in connection with this account on May 8, 2008, but did not obtain a judgment. The second account was assigned on April 24, 2008, in the amount of $966.86, and BBC had not yet initiated legal efforts to collect on this account.

Due to WSEC's payroll mistake, BBC received three checks from WSEC: $331.00 on July 22, 2008; $394.83 on July 28, 2008; and $357.38 on August 12, 2008. In total, WSEC mistakenly sent BBC $1,083.21, which BBC applied to Christ's outstanding accounts.

On August 20, 2008, MRS received a letter from the Bonneville County Sheriff alerting MRS to WSEC's errors. The letter indicated that WSEC had also notified BBC of the error but that BBC refused to return the money. After learning of WSEC's payroll mistake, MRS contacted WSEC and instructed WSEC to discontinue the garnishment.

MRS sent BBC a demand letter on August 21, 2008, asking for a return of the $1,083.21. BBC responded on August 28, 2008. In that response, BBC acknowledged receiving the checks and stated that it intended to keep the funds since Christ owed on accounts held by BBC. BBC further indicated that, at the time the checks were received, it believed that the ...


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