Johnson v. Statewide Collections, Inc., 88-285

Decision Date21 July 1989
Docket NumberNo. 88-285,88-285
Citation778 P.2d 93
PartiesFreddie D. JOHNSON, Petitioner, v. STATEWIDE COLLECTIONS, INC., a/d/b/a CheckRite, Respondent.
CourtWyoming Supreme Court

John I. Henley, Vlastos, Brooks & Henley, P.C., Casper, for petitioner.

John C. Hoard, Casper, for respondent.


THOMAS, Justice.

This case, one of first impression in Wyoming, presents questions relating to the applicability of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 to 1692o (1977), relating to abusive, deceptive, and unfair debt collection practices to the efforts of a Wyoming collection agency to collect a check upon which the drawer had stopped payment. A threshold question challenges the jurisdiction of the district court to review a decision of a county court in a case brought under the small claims statutes, §§ 1-21-201 to 1-21-205, W.S.1977. In addition, an issue is asserted with respect to whether § 1-1-115, W.S.1977, which prescribes the notice requirements for collection of dishonored checks and justifies attorney fees, could be invoked to award attorney fees to anyone other than a collection agency.

Freddie Johnson (Johnson) obtained a judgment in county court against Statewide Collections, Inc. d/b/a CheckRite (CheckRite) for various violations of the federal statutes. CheckRite appealed that judgment to the district court, and that court reversed the judgment of the county court. Johnson then sought review in this court by a Petition for Writ of Certiorari, which was granted. We hold that the district court did have jurisdiction to review this case on appeal from the county court; the provisions of § 1-1-115, W.S.1977, require no construction in this instance; and, while we agree with the district court that some of the violations found by the county court are not established by the record in this case, there were violations of the federal statutes. We reverse the decision of the district court and reinstate the judgment entered in the county court.

In his brief as Petitioner, Johnson stated the issues presented for review to be "I. Whether non-verification of a debt by the debt collector is in violation of 15 U.S.C. § 1692g, which mandates that a debt collector obtain verification of an alleged debt, if put on notice by the alleged debtor or his agent, that the debt is in dispute.

"II. Whether the debt collector breached 15 U.S.C. § 1692f(2) by attempting to collect more than it statutorily or contractually could when such statute specifically prohibits such conduct and there was no testimony at the trial level that this was merely an inadvertent clerical error, nor was there any such factual finding by the trial court.

"III. Whether the debt collector violated 15 U.S.C. § 1692c(a)(2) in that it sent an additional demand letter to the alleged debtor with knowledge that the alleged debtor was represented by an attorney.

"IV. Whether the debt collector violated 15 U.S.C. § 1692e(14) by failing to advise the alleged debtor of its true name when the debt collector sent its initial demand letter.

"V. Whether the debt collector violated 15 U.S.C. § 1692j and/or acted in bad faith by failing to give notification to the alleged debtor that the debt collector was not in fact the true holder of the instrument after it had represented that it was and was authorized to attempt to collect the alleged debt.

"VI. Whether Wyoming Statute 1-1-115 was enacted for the exclusive use of debt collection agencies.

"VII. Whether the District Court of the Seventh Judicial District had any jurisdiction to consider an appeal from the small claims division of Natrona County Court.

Alluding to the Order Granting Petition for Writ of Certiorari in which the issues were framed in accordance with the petition, CheckRite adopted the same issues for purposes of its brief.

On November 11, 1986, Johnson purchased an inexpensive shotgun from a retail store in Casper, and he paid for the shotgun by drawing a check. The shotgun was purchased in the evening, and Johnson attempted to clean it after he had taken it home. He found that the action was defective and would not open. Early the next morning, he returned the shotgun to the seller and requested the return of his check or a refund. An employee of the store accepted the shotgun, but Johnson's request for a refund or the return of his check was refused. The employee advised that refunds or returns of checks were not permitted by store policy. The record does not establish what the store intended to do about the transaction, but Johnson, after advising the store employee of his course of action, contacted his bank and stopped payment of his check. The bank followed Johnson's instruction and returned the check when it was presented. The store then sent the check to CheckRite for collection.

In the meantime, Johnson attempted to resolve the matter by contacting the store. Instead of working things out with Johnson, the store simply referred him to CheckRite. When Johnson contacted CheckRite, he was referred back to the store with the advice that he must take up any problems about either the merchandise or his check directly with the store personnel. At this juncture, Johnson did not have the shotgun, he did not have his check back, and he had no satisfactory information from the store as to what it proposed to do about the defective merchandise.

On November 21, CheckRite sent a "Return Check Notice" to Johnson stating that $144.99 was due and that he should make an immediate payment in that amount directly to CheckRite. The $15 difference between the amount demanded and the $129.99 for which the check originally had been drawn was attributable to a "service charge." This notice did not, in any way, refer to the corporate name of CheckRite, which is Statewide Collections, Inc. Johnson promptly contacted his attorney, and the attorney wrote a letter to the store stating that Johnson disputed the alleged debt. That letter was sent by certified mail, and a copy was sent, also by certified mail, to CheckRite.

After it received the attorney's letter, CheckRite sent a second notice directly to Johnson, using certified mail, in which it referred to § 1-1-115, W.S.1977, and, again, demanded payment. In this notice, the name of the sender was Statewide Collections, Inc. d/b/a CheckRite. By this demand, Johnson was advised that the amount due was $148.16 if paid by January 8, 1988 but, after that date, the amount would increase to $293.15.

The two notices sent to Johnson were the only communications from either CheckRite or the retail store. Verification of the alleged debt was never furnished to Johnson, and no correspondence was sent to Johnson's attorney despite his letter to the store with a copy to CheckRite. CheckRite did contact the retail store after receiving the attorney's letter and was advised that the store wanted the check pursued. Subsequently, the store reached a different decision, deciding not to pursue the collection, and asked CheckRite to return the check to it. CheckRite did return the check, but it never advised Johnson, or his attorney, of this fact, which was disclosed for the first time at the trial.

This action then was initiated in the County Court of Natrona County. Johnson alleged that CheckRite had violated the FDCPA, 15 U.S.C. §§ 1692 to 1692o, and that he had been damaged in the amount of $738 plus court costs as a result. Because the amount of damages claimed was less than $750, Johnson proceeded in Natrona County Court pursuant to §§ 1-21-201 to 1-21-205, W.S.1977 (June 1988 Repl.), which provide the procedure for small claims cases. We understand that Johnson intentionally limited his claim to keep it within the small claims statutes, even though the FDCPA provides authority for recovery of actual damages plus attorney fees plus an additional civil penalty of up to $1000. 15 U.S.C. § 1692k. After trial, the county court adopted the "Findings of Fact and Conclusions of Law" proposed by Johnson and entered its order and judgment accordingly. It was this ruling that CheckRite appealed to the district court, and that court, finding error, reversed the county court and dismissed all claims on October 17, 1988. Johnson pursued a "Petition for a Writ of Certiorari" in accordance with Rule 13.01, W.R.A.P. and § 5-2-119, W.S.1977 (Cum.Supp.1988). We deemed the resolution of certain issues in this case to be important and granted Johnson's petition, ordering that briefs be submitted on specified questions.

With respect to the threshold question of the jurisdiction of the district court to review on appeal a case brought within the small claims statutes, Johnson's position in attempting to preserve his judgment from appellate review in the district court was that there is no statutory authority that expressly authorizes such review, and that the legislative policy in providing an expedited and informal procedure for the adjudication of claims that did not exceed $750 assumes that no appeal would follow. 1 CheckRite counters with the proposition that such a case is no different than any other case within the civil jurisdiction of a county court set forth in § 5-5-131, W.S.1977, and that the power to review on appeal is inherent in the district court.

We acknowledge and accept Johnson's premise that, if the jurisdiction to review on appeal is absent, then the order by the district court reversing the judgment of the county court would be a nullity. Fauntleroy v. Lum, 210 U.S. 230, 28 S.Ct. 641, 52 L.Ed. 1039 (1908); Earle v. McVeigh, 91 U.S. 503, 23 L.Ed. 398 (1875); See Matter of Contempt Order Issued Against Anderson, 765 P.2d 933 (Wyo.1988). We have no equivocation, however, in recognizing the jurisdiction of the district court to review this judgment on appeal.

Appeals from courts of limited jurisdiction, including both county courts and justice of the peace courts, are...

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