Posted: April 9, 2018
Rules of Civil Procedure – Comment Period Closed May 24, 2018
URCP073 Attorney Fees. Amend. An overwhelming number of cases filed in the courts, especially debt collection cases, result in the entry of an uncontested judgment. The work required in most cases to obtain an uncontested judgment does not typically depend on the amount at issue. The amendments eliminate the schedule of fees based on the amount of damages and replace it with a single fee upon entry of an uncontested judgment and a larger fee in contested cases. Where additional work is required to collect on the judgment, the amendments provide a default amount for writs and certain motions, and eliminate the “considerable additional efforts” limitation of the prior rule. The rule remains flexible so that when attorney fees exceed the scheduled amounts, a party remains free to file an affidavit requesting appropriate fees in accordance with the rule.
This amendment is a good idea. However, the scheduled fee amounts for post-judgment writs and motions need to be doubled.
I prefer a fee scale so that the attorney’s fees on small matters are not too high.
A much-needed change. I spent about five years in collections and the attorney’s fees under Rule 73 were not proportional to the amount of work. Also, the post-judgment fees were highly unregulated. Often the clerk would sign off on whatever additional fees we included in a writ of garnishment. Hopefully, under the new rule, the clerks will have the proper training and resources necessary to recognize abuse.
I’m glad to see the lower limit raised to $350.00. Obtaining a default judgment – although easy – required a good amount of drafting (Complaint, Summons, Default Certificate, Affidavit in Support of Damages, Proposed Judgment). Receiving an award of $250.00 was almost offensive in that regard.
I don’t practice in this area, and therefore have no stake in the rule change. The fee limit seems extremely wrong-headed. There is almost no way for an attorney to cover the costs of practice, staff, etc. with the fees set in this new rule. And rules change slowly. If the amounts are insufficient now, how much more of a problem will this become before the rule schedule is changes again. It would be better to either not set a schedule at all, or put an upper ceiling on fees for uncontested matters.
$75 to file a garnishment does not adequately take into account the additional time required to verify employment, receive and review answers to interrogatories over several weeks or months, receive and process garnishment payments, and draft, efile, and mail satisfaction of judgments. (And very often employers and debtors call with questions.) The default amounts seem too low, especially for solo practitioners who don’t have the luxury of secretaries, clerks, etc.
Just a non-substantive nit, but an important one, I think: In Proposed Subsection (f)(3) of Rule 73, it would seem the language in Proposed Subsection (f)(3)(B) that comes after “Utah Code § 35A-4-314,” beginning with “a party may request as part of its application,” should apply to Proposed Subsection (f)(3)(A) as well. As written, though, that language – and probably the chart that follows, too – seems to apply only to Proposed Subsection (f)(3)(B). I’m not sure what your manual dictates is the proper way to correct and clarify this. There should probably be a colon after “Utah Code § 35A-4-314” at the end of Proposed Subsection (f)(3)(B), rather than a comma, and then the language beginning with “a party may request as part of its application” put on the next line. It would then be clear that all of that provision, and the chart, as well, will apply both to Proposed Subsection (f)(3)(B) and to Proposed Subsection (f)(3)(A).
I am favor of this rule change for the following reasons:
1) It has been 20+ years since the Default Judgment fee was increased and it is long OVERDUE.
2) The amount of work in order to obtain a Default Judgment has increased immensely over the past several years.
Most courts now require:
• Default Certificate
• Proposed Default Judgment
• Memorandum of Costs
• Military Service Affidavit
• Affidavit in Support of Default Judgment
• Judgment Information Statement
• Affidavit of Collection Costs
This fee increase will help to more closely align the fee schedule with the amount of work required. The sliding scale didn’t make much sense. A higher principal balance doesn’t necessarily mean there is more work required.
3) I appreciate the fact that the committee is recognizing the additional time spent post-judgment in order to collect a judgment
It’s not going to make everyone happy but overall, I think it is a fair and much needed change.
I favor the current schedule (or some sort of tiered schedule) for the following reasons:
1. Small debts should not be strapped with another $100 in fees.
2. Larger debts most of the time do take more work to review, etc. For example, if a case has two notes or causes, it does takes more time and larger cases should carry a bigger burden.
3. In many cases, the amount of work done does depend on the amount in controversy.
4. Based on the reasoning in the Advisory Committee Notes, the fee schedule to file a complaint should be eliminated. Why are have three tiers of filing fees (i.e. claim for damages up to $2,000 is $75, greater than $2,000 up to $10,000 is $185 and over $10,000 is $360)? Most collection cases with the court require the same amount of work. To me it does seem more reasonable that smaller cases carry less fees and costs; it seems more equitable to those that owe the debts. If you owe more, you should bear more of the responsibility. Even the court’s tiered schedule to file cases acknowledges that.
It is true the current minimum fee of $250.00 does not cover the costs of cases anymore. Regulations on attorneys and the demand to meet them and train staff continue to grow. However, those that do collection work can recover that loss by the larger cases where the fee is increased according to the schedule.
As to the post judgment scale, the fees are MUCH too low. It is not just the preparation of the paperwork for filing it is all the work that needs to be done to verify amounts, documents, communicate with the client, to file the paperwork, follow-up with Garnishee’s, reports to clients, manage the file post judgment etc.
A. The flat fee schedule should be $550.
$350 for a base is too low. There are no attorneys outside of the debt collection field that can or would draft and or file: 1. summons, 2. complaint, 3. affidavit of service, 4. Proposed default Judgment, 5. Proposed default certificate, 6. Affidavit of collection fees, 7. Affidavit from Plaintiff per Rule 55, 8. Military Service Affidavit, 9. Produce a Military Status report, 11. some cases Military Service Order (and you have to know which courts require one and which do not because if it is/is not filed in error you may have to re-submit multiple documents) 12. Memorandum of costs, 13. Judgment information sheet (and you have to know the select courts which want this after the judgment is granted, not before). 14. contract (with certain language highlighted or otherwise noted for Clerk’s verification), 15. Certificate of mailing all the documents submitted to the court. 16. Actually mailing all the documents to the defendant. These are all currently REQUIRED. This list is always changing- for proof- there is another proposed amendment on the Rule 55 affidavit as well. The court’s are requiring more and more documents to be prepared for a default judgment and this is not likely to stop.
This is not including reviewing client’s notes, reviewing ledgers, reviewing contracts, fielding phone calls from defendants (they do call often even if they never file an answer or do anything with the case), fielding phone calls and emails from clients on the matter. Sending notices to the defendants, sending notices to the client, sending affidavits to be signed by the client, receiving the affidavits from the clients. It all takes time!
It takes me approximately two hours to just fill in the form documents for each case. It literally took me months of work to generate the forms, and still am modifying them almost weekly. I have over 100 hours in generating just these default judgment form documents and entering them in a computer program so that it takes less time to fill them in for each case. I have over 200 hours in modifying the computer program so that it can fill in the form documents appropriately and make sure that the court’s e-filing system will accept the documents.
As debt collection attorneys I believe that generally we do not want a default judgment. I would personally prefer that defendants answer the complaint. Historically, I get paid voluntarily when I am contacted by the defendants. I much prefer voluntary payments over rigid garnishments. It appears that there is more and more technology that is going to assist defendants in filing answers and maybe this will all become irrelevant. More likely is that the proposed $350 maximum (without an affidavit and motion) is going to become outdated very quickly and the purpose of the rule is going to be defeated, again, as attorney’s file motions and affidavits in order to receive just compensation for work performed.
I know that if the rule is passed with $350.00 flat attorney fee I will have to file a motion and affidavit for higher fees because I cannot work as many hours as it takes at that rate. The post-judgment augmentation helps that number, but it still doesn’t allow appropriate compensation.
B. Attorney’s time is not just the documents but also compliance to other state and federal requirements.
There are statutes, generally federal, with which we have to comply, which dictate that we attorneys have also to review the client’s notes on each case, thoroughly; we have to send proper notices, we have to ensure that any vendors (process servers, locators, etc.) are also complaint with federal statutes. An attorney can be and is held personally liable for errors at any time even before starting the litigation process. There are also other notices with which we have to comply as “debt collection” attorneys.
C. Utah should be more congruent to nearby states with attorney’s fees.
While Idaho does not have a fee schedule by statute, there is a strong tendency for judges to follow an ‘unwritten rule’ for a fee scale. Smaller principal balances under $350 attorney fees match the principal, $350-$600 principal $350 atty fees, $601-$1,000 principal $400 atty fees – every $500 in principal thereafter attorney fees allowed increases by $100. There is an affidavit required, but not one that breaks down time expended, just that the amount requested is congruent with what other attorney’s charge, the amount in controversy, the complexity of the case, etc. Honestly, Idaho is the only other state where I have personal experience but Idaho does most closely resemble Utah in population and income levels.
With the current proposed rule, Utah would compensate a case with $2,500 at controversy at the same level that Idaho places a suit for $350.00. Idaho, however, would allow that attorney to be compensated with $700 or twice as much.
D. A Fee scale is used by the courts for filing fees with reasons, so too the fee scale should be used for default attorney fees for the same reasons.
There are other comments in this section which point out that the fee scale is used by the courts for filing fees for a reason as well, and thus should be used for these cases. Larger sums do often times require more work. There are often more issues to present to the court. There are more facts to review from the client.
E. Post judgment augmentation needs to be clarified.
The language in post judgment augmentation of attorney’s fees is slightly ambiguous. The intent seems to say that the first application for a writ under Rule 64D PER EMPLOYER shall allow attorney’s fees to be augmented by $75 (if the attorney so requests). However, as it is currently proposed, it states, “including 1st application for a writ under Rule 64D”. Well, a 1st application for the 2nd employer is not the 1st application for a writ under Rule 64D, it is at least the 2nd. Also, if post judgment attorney fees “shall [be] allowed” what is the basis for that allowance? Is it the clerk or judge’s preference?
Proposed language:Perhaps it should be written more like, “Application for any writ under Rule 64, including 1st application for a writ under Rule 64D per unique employer in secession”. This way, if a judgment debtor changes employment, and it happens regularly, the attorney is not limited due to vague terms.
Proposed language: for 4-314 “…and the clerk or the court shall allow such augmented attorney fees request without a supporting affidavit if it otherwise approves the writ or motion:”
F. The bigger picture needs to be viewed to realize the situation.
Given that attorney’s fees at the time of default judgment is to allow for compensation for work to that point is key but misses the point slightly. Attorney’s fees awarded in the case in chief helps An attorney who then actually collects on that judgment and who recovers money that the Plaintiff is owed does much more work. While receiving a garnishment order is relatively easy, there is a lot of work that goes into: verifying employment, creating the documents for the order (Application and proposed order), then send all the required notices and instructions, sending the interrogatories, verifying the appropriate location for service of the garnishment order, receiving the interrogatories, answering employers’ questions on how to fill out the forms, answering defendant’s questions on what can be done/what all the documents mean, following up with employers on why they haven’t answered, monitoring employers on who and when answers are to be received, and again – relaying all the information to the client.
It all takes time. Most judges currently say that this isn’t ‘considerable efforts’. $75.00 doesn’t compensate even for the time that it takes to create the documents, let alone anything else that needs to be done in order to get paid by an employer for a wage garnishment. The attorney’s fees awarded during time of default helps make this all possible. With a slightly higher attorney’s fees awarded at the time of the judgment, post judgment work is possible. All the work on the front end ultimately carries some of the weight for post-judgment work and then the attorneys are under compensated for both. Just compensation for the work done to obtain the judgment make it possible for attorney’s to continue to work cases through post-judgment collection. Unjust compensation (250 especially but even 350) makes it difficult, if not impossible, to continue work on a case.
I second the proposed edit of Mr. Pettey. He is correct that there should be a hard return or other delineation after “35A-4-314,” in subsection (f)(3)(B) to make clear that the language that follows (beginning with “a party may request…”) applies to both the writs referenced in (f)(3)(A) and the motions in (f)(3)(B).
One other small edit to clarify the rule: in the first entry of the schedule in part (f)(3), it states “Application for any writ under Rule 64, including 1st application for a writ under Rule 64D.” This arguably leaves some question as to whether the schedule applies to writs under Rules 64A, 64B, 64C or 64E. For consistency, I suggest that entry repeat in full the list of writs as appears in part (f)(3)(A) so that the first entry in the schedule reads: “Application for any writ under Rules 64, 64A, 64B, 64C, 64D, or 64E, including 1st application for a writ under Rule 64D.”
But with those small edits, this proposed change deserves support. The prior rule provided fees under a schedule that in no way reflected the work required in the overwhelming majority of cases. These changes fix that, while also increasing the flexibility of the rule so that cases that fall outside of that mold can receive appropriate compensation. The comments suggesting the fee schedule is too low in the post-judgment context appear to overlook this new flexibility for those unusual cases where additional work is required. The new proposed rule makes fees much easier to secure in the majority of cases, eases the burden to secure additional fees in non-typical cases, and avoids excessive fees in cases where they are not merited. These are sound changes, and the Rules Committee is to be commended for its willingness to cogently address such a challenging set of issues.
Under proposed (f)(2), it says that “When a party seeks a judgment, (and) the responding party contests the judgment by presenting at a hearing either evidence or argument…” then is says that an attorney may request “up to $750 for such attorney fees without a supporting affidavit.”
When an answer is filed by or for a defendant, the plaintiff’s attorney has to prepare and provide Rule 26 Disclosures, and if it makes a motion for summary judgment, that should be sufficient to request an increase for attorney fees without the need for an affidavit or declaration.
There is enough work done to get to that point. If the attorney needs to be “(present) at a hearing to produce evidence or argument”, the amount of time will most likely far exceed the time to justify the $750 for attorney fees.
Of course, an attorney can request more by supporting affidavit, but that creates more work for the attorney and the court. It would make more sense to me at least, if a defendant files an answer and the court thereafter awards judgment to a plaintiff—even without a hearing—then the attorney fees award should then be $750 without the need to appear at a hearing.
That would save the court the time it is otherwise having to review declarations, etc. to determine whether it will award the higher attorney fees.
I disagree with this change and strongly urge the committee NOT to implement it.
We do some collections at our firm.
When we have to work on these cases, we often have to hunt down a defendant. We have to calculate the interest (or check staff’s work). These fees are too low and are inadequate.
They should be much higher or simply allow counsel to submit a fee affidavit.
We had our legitimate fees reduced on default because of the limiting rule.
Please do not implement.
This rule change is well overdue and makes sense based on the work that goes into securing and collecting on these judgments. The courts and the rules have increasingly required much more documentation be drafted and filed in order to secure default judgments.
Some questions and clarifications I have are as follows:
1. (f)(2) Why is there a need for a hearing at this point on all cases? Seems a burden on the court and unnecessary in all cases.
2. (f)(3) Under the table heading Action, I would suggest more clarification and specificity as follows:
-Application for any writ under Rule 64, including 1st application to a particular garnishee for a writ under Rule 64D.
-Any subsequent application for a writ under Rule 64D to the same garnishee, otherwise any subsequent application is considered a 1st application as stated above.
I see that Nick Babalis and Lacey Cherrington already mentioned something on which I planned to comment, but I’ll go ahead and share my thoughts.
In working with Charles Stormont on these amendments we recognized that when a garnishment expires with a balance due it is a relatively simple matter to prepare a subsequent garnishment to the same employer. If a judgment debtor quits his job with a balance owing, however, it can take significant time and effort to identify the new employer. Therefore, we agreed that any garnishment to a new employer should be awarded a higher attorney fee compared to subsequent garnishments to the same employer. My recollection is that the committee agreed to that approach.
However, I’m not sure we captured that intent in the wording of the proposed amendment. The schedule of post judgment collection fees contained in 73(f)(3) awards $75 for the 1st application for a writ under Rule 64D and continues to award $25 for any subsequent application for a writ to the same garnishee. Although the description of the $25 fee is consistent with a $75 fee being applied to each garnishment to a new employer, the description of the $75 fee will likely be read to apply only to the first garnishment issued, regardless of how often the judgment debtor may change jobs.
I propose that the wording of the first line in the schedule of post judgment fees be changed to “Application for any writ under Rule 64, including 1st application for a writ under Rule 64D to any particular garnishee.” That would capture the original intent for that line and make it consistent with the next line which awards $25 for garnishments to subsequent garnishments to the same garnishee.
Great effort. However, the danger I see in passage is that the courts may develop the “mindset” that $350 is “adequate compensation” for a default judgment and that $75 is adequate for a garnishment. Those in the trenches have spoken – the proposed revision, while a step in the right direction, falls short for most lawyers.
With that said, I am in favor of passage so long as the option to file motions remains viable and that the amounts granted pursuant to such motions are not unduly or unfairly limited by the “mindset.” that the fees in the proposed rule establish reasonable boundaries or even reasonable parameters for the average collection case.
The proposed amendments make sense. The increase to $350 more accurately reflects the minimum attorney fee amount expended in obtaining a default judgment. Also, I appreciate that the proposed rule will continue to provide flexibility so that when attorney fees exceed the scheduled amounts, a party can file an affidavit requesting the appropriate amount. Providing a scale for post-judgment attorney fees also makes sense. I suggest eliminating “at a hearing” in both proposed rule 73f(1) and 73f(2).
There is definitely a need for an amendment, however the $350 is still inadequate, primarily for the reasons stated by Nick Babilis and others. The number of documents required and the content of said documents seem to be ever-changing and what works for one court doens’t necessarily work for another court, requiring additional work etc. Something closer to the $550.00 range seems more reasonable, otherwise our office will look to file Affidavits requesting fees that represents the work done.