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Medical Recovery Services, LLC v. Merritt

Court of Appeals of Idaho

May 7, 2018

MEDICAL RECOVERY SERVICES, LLC, an Idaho limited liability company, Plaintiff-Appellant,
v.
MARY LOU MERRITT, Defendant-Respondent.

         2018 Opinion No. 23

          Appeal from the District Court of the Sixth Judicial District, State of Idaho, Caribou County. Hon. Mitchell W. Brown, District Judge. Hon. David R. Kress, Magistrate.

         Judgment denying request for post-judgment attorney fees and costs, affirmed; judgment denying request for attorney fees and costs on appeal, affirmed; request for fees and costs on instant appeal, denied; case remanded.

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

          Mary Lou Merritt, Soda Springs, pro se respondent. Respondent did not participate on appeal.

          GRATTON, Chief Judge

         Medical Recovery Services, LLC (MRS) appeals from the district court's judgment denying its request for post-judgment attorney fees and costs and further denying its request for post-judgment attorney fees and costs on appeal. We affirm.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On August 15, 2013, MRS filed a complaint to collect on a debt owed by Mary Lou Merritt. MRS alleged that Merritt owed approximately $680.22, which included attorney fees in the amount of $350.00.[1] Merritt failed to respond, and MRS filed an application for entry of default. On December 11, 2013, the magistrate entered a default judgment, which specified that Merritt owed MRS $651.22, plus interest and costs. Subsequently, the magistrate entered a writ of execution and order for continuing garnishment.

         The Caribou County Sheriff served the writ of execution on Merritt's employer. However, it was returned unsatisfied on July 23, 2014, having garnished $131.57, which was applied to the judgment. On August 14, 2014, the magistrate issued an order of examination after MRS filed an application requesting the examination. On September 2, 2014, counsel for MRS met with Merritt and agreed upon a payment plan. Thereafter, Merritt made voluntary payments on September 22, 2014, October 3, 2014, October 24, 2014, November 17, 2014, and December 1, 2014. MRS subsequently filed its second application for order of continuing garnishment, and on January 21, 2015, the magistrate entered a writ of execution and order for continuing garnishment. However, Merritt began making voluntary payments again on January 26, 2015, February 26, 2015, and two payments on April 1, 2015. MRS filed a third application for order of continuing garnishment, and on July 13, 2015, the magistrate entered a writ of execution and order for continuing garnishment. Merritt paid off the remaining balance on August 28, 2015.

         On September 8, 2015, MRS filed an application for an award of supplemental attorney fees and costs in the amount of $1, 323.74. The basis for the application was that MRS continued to incur attorney fees while attempting to collect on the default judgment. The magistrate denied the request. The magistrate's order consisted of a one sentence decision that provided "based on the defendants [sic] payment record [on] the original debt owed, Court denied application for supplemental fees." MRS appealed. The district court, acting in its appellate capacity, remanded the case to the magistrate court with instructions to make specific findings of fact on the issue of attorney fees. Thereafter, on August 18, 2016, the magistrate issued its findings of fact and again denied MRS's request for post-judgment attorney fees and costs. MRS filed a motion for reconsideration, which the magistrate denied.

         MRS again appealed to the district court. On March 7, 2017, the district court affirmed in part and reversed in part the magistrate's order. The district court essentially ruled that the magistrate committed error in not awarding any attorney fees to MRS with respect to its post-judgment collection efforts. The district court concluded that, based upon Idaho Code § 12-120(5), reasonable attorney fees should be awarded. However, the district court declined to award MRS attorney fees after September 2, 2014, when MRS had met with Merritt for the debtor's examination. Thereafter, MRS filed a second application for an award of supplemental attorney fees and costs on appeal in the amount of $3, 343.90. On May 10, 2017, the district court issued a second memorandum decision and order denying MRS's request for attorney fees and costs on appeal. MRS timely appeals.

         II.

         ANALYSIS

         On appeal, MRS asserts that the district court erred when it determined that MRS was not entitled to supplemental attorney fees for post-judgment collection efforts after September 2, 2014. MRS further asserts that, as the prevailing party, MRS is entitled to an award of costs and attorney fees on appeal under Idaho Code § 12-120(1), (3), and (5) and Idaho Appellate Rules 40 and 41.

         A. Default Judgment--Introduction

         Although I.C. § 12-120 authorizes attorney fees in certain types of cases, I.R.C.P. 54(e)(4) limits an award of fees in cases involving default judgments. Rule 54(e)(4)(B) provides: "An award of attorney fees under Idaho Code section 12-120 in default judgments where the defendant has not appeared must not exceed the amount of the judgment for the claim, exclusive of costs." The original complaint against Merritt was to recover on a debt Merritt incurred in the amount of $216.96. The complaint also alleged entitlement to $17.26 in prejudgment interest, and requested attorney fees pursuant to I.C. § 12-120(1), and (3). With respect to attorney fees, MRS asserted it was entitled to recover fees "in the sum of $350.00 if judgment is taken by default and such greater amounts as may be evidenced to the court if this claim is contested." MRS also requested costs pursuant to I.R.C.P. 54(d)(1) in the amount of $96.00 for its filing fee. The total requested judgment was $680.22.

         Between the filing of the complaint and MRS's application for default, Merritt paid $109.00 toward the original debt, reducing the amount owed on the claim to $107.96, plus $17.26 in prejudgment interest. MRS's application for default after the $109.00 payment requested the balance due on the debt plus $17.26 in interest, $350.00 in attorney fees, the $96.00 filing fee, and an additional service fee of $80.00. Pursuant to I.R.C.P. 54(e)(4)(B), MRS was not entitled to attorney fees beyond the amount of the judgment for the claim, i.e., beyond the balance of the debt due and the interest, which totaled $125.22. Nevertheless, the default judgment MRS requested, which the magistrate granted, included an attorney fee award of $350.00, more than twice the amount of the judgment for the claim.

         B. Post-judgment Attorney Fees Incurred after September 2, 2014

         1.District court's decision was not ...


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