Ohio doesn't allow attorney fees for consumer debt

[VexatiousLitigant]

Didn't know that... more states need this.

Quote:

Law firm, as debt collector, used deceptive means to collect or attempt to collect debt, in violation of Fair Debt Collection Practices Act (FDCPA), by filing complaint in Ohio lawsuit against consumer debtor that included attached affidavit from creditor which declared that creditor was entitled to recover, to extent permitted by applicable law, its reasonable attorney's fees as stated in contract, since Ohio statute precluded collection of attorney fees from consumer debtors. Gionis v. Javitch, Block & Rathbone, S.D.Ohio 2005, 405 F.Supp.2d 856, reconsideration denied.

[centex]

What does the law itself state? I cannot imagine that they completely precluded a company from recouping its costs incurred in collection where the agreement included provisions for such...

[jlynn]

I'd like to see that full case. I'm not seeing how the affidavit would make the firm deceptive, as the affidavit stated "to extent permitted by law".

I'd also like to see the Ohio statute itself.

[VexatiousLitigant]

I can see how it's deceptive. You can strong arm a LSC into paying a higher settlement by giving the appearance that they will need to pay attorney fees also. They should know the law precludes attorney fees entirely, so even mentioning them is deceptive.

When your average consumer hears attorney fees, they are thinking big $$$.

[jlynn]

I'm not seeing your argument as this appears (from the very limited info) that the affidavit was part of the court filing. I don't guess we've ever talked about it. At what point does LSC get thrown out the window? Seems like once you go to lawsuit, an LSC has to choose to be pro se or hire an attorney. Interesting...

I'd like to see the OC, and the Ohio statute...seems we might be missing something.

[VexatiousLitigant]

Quote:

Law firm, as debt collector, threatened to take action that it could not legally take or that it did not intend to take, in violation of Fair Debt Collection Practices Act (FDCPA), by filing complaint in Ohio lawsuit against consumer debtor that included attached affidavit from creditor which declared that creditor was entitled to recover, to extent permitted by applicable law, its reasonable attorney's fees as stated in contract, since Ohio statute precluded collection of attorney fees from consumer debtors. Fair Debt Collection Practices Act, § 807(5), 15 U.S.C.A. § 1692e(5); Ohio R.C. § 1301.21.

There's the Ohio statute to look up.

Court held they violated 1692e(5) and e(10) because of that affidavit.

Quote:

In Ohio, creditors are not permitted to recover attorney fees incurred in connection with debt collection suits involving “personal, family or household” debt. See Ohio Revised Code § 1301.21. The parties have stipulated that Plaintiff's credit card debt falls within this definition. (Stip. of Facts ¶ 4). It is undisputed that, in the state court action filed by Defendant on behalf of Direct Merchants, the complaint did not include a claim for attorney fees in its prayer for relief. Direct Merchants sought $2,040.98, the exact balance due on Plaintiff's credit card account, plus interest and costs. However, Defendant attached to the state court complaint Erica Vick's affidavit which stated that, pursuant to the terms of the cardmember agreement, Direct Merchants was entitled to recover reasonable attorney fees “to the extent permitted by applicable law.” The question in this case is whether Defendant violated either the FDCPA or the OCSPA by attaching the affidavit containing that statement to the complaint.

[VexatiousLitigant]

Quote:

1301.21 Enforcement of commitment to pay attorneys' fees (A) As used in this section: (1) "Contract of indebtedness" means a note, bond, mortgage, conditional sale contract, retail installment contract, lease, security agreement, or other written evidence of indebtedness, other than indebtedness incurred for purposes that are primarily personal, family, or household.

Pretty clear cut.

[VexatiousLitigant]

Quote:

Originally Posted by jlynn I'm not seeing your argument as this appears (from the very limited info) that the affidavit was part of the court filing. I don't guess we've ever talked about it. At what point does LSC get thrown out the window? Seems like once you go to lawsuit, an LSC has to choose to be pro se or hire an attorney. Interesting... I'd like to see the OC, and the Ohio statute...seems we might be missing something.

I don't think LSC ever gets thrown out of the window. The LSC is a hypothetical, the sophistication of the actual debtor is irrelevant. Courts have held that even though the consumer didn't read a particular letter mailed by the CA, that letter would have confused a LSC and hence is a violation.

A summons is generally sent directly to the consumer, who has to make a determination of what to do right then. If you are unsophisticated, the mention of paying attorney fees in addition to some $2000 debt is going to make you see stars.

I can very easily see how mentioning that when you know you aren't entitled to recover attorney fees would strong arm a consumer into paying a higher settlement.

[VexatiousLitigant]

Quote:

As noted earlier, creditors, in Ohio, are not permitted to recover attorney fees in connection with debt collection actions involving personal, family, or household debt. Plaintiff concedes that the complaint Defendant filed against her in state court does not mention attorney fees. On its face, it prays only for damages “in the amount of $2,040.98 with interest ··· and costs of the within action.” Plaintiff also admits that $2,040.98 is the exact balance she owed to Direct Merchants on her credit card account; therefore, it is impossible that the amount of the debt was padded to include hidden attorney fees. The affidavit attached to the complaint, however, states that the cardmember agreement provides that Direct Merchants “is entitled to recover, to the extent permitted by applicable law, its reasonable attorney's fees.” Plaintiff argues that, after reading the complaint in conjunction with the affidavit, the “least sophisticated consumer” would be confused about whether she might be held liable for Direct Merchant's attorney fees in addition to the other relief sought.

My point exactly.

[VexatiousLitigant]

Quote:

For several reasons, the Court rejects this argument as unduly simplistic. In the Court's view, the “least sophisticated consumer,” reading the complaint in conjunction with the affidavit, would be confused about whether she might be held liable for Direct Merchants' attorney fees if she did not immediately pay the debt allegedly owed. Notably, the affidavit does not assert a right to recover attorney fees “ if permitted by applicable law.” Instead, it asserts a right to recover attorney fees “ to the extent permitted by applicable law.” A consumer would not necessarily interpret this statement to mean that attorney fees may not be recoverable at all in some jurisdictions. A consumer could just as easily interpret this language to mean only that there might be a cap on the amount of attorney fees that Direct Merchants could recover, or that a judge would later decide to what extent Plaintiff would be indebted to Defendant for attorney fees.

I should be a judge.

[jlynn]

Quote:

Originally Posted by VexatiousLitigant A summons is generally sent directly to the consumer, who has to make a determination of what to do right then. If you are unsophisticated, the mention of paying attorney fees in addition to some $2000 debt is going to make you see stars. I can very easily see how mentioning that when you know you aren't entitled to recover attorney fees would strong arm a consumer into paying a higher settlement.

See, when you put it that way - it does make a bit more sense to me. Forgot that an OC would be part of the summons.

[VexatiousLitigant]

So I guess we need to start shouting this from the rooftops, or are no CAs taking advantage of unsophisticated consumers in Ohio?

[hannah]

Here's the cases in full...