Action Collection Serv., Inc. v. Black
411 P.3d 312
| Idaho Ct. App. | 2017Background
- In 2007 a juvenile was placed in custody of the Idaho Department of Juvenile Correction (IDJC). IDJC sent Black periodic notices claiming she owed $235/month for her child’s support and treatment but no court ever ordered such payments. Black made two $235 payments in the final months and alleged they were ransom for release.
- IDJC unilaterally calculated $4,465 as reimbursement (using the $235 rate less the two payments) without initiating a court hearing under I.C. § 20-524 to set a reasonable sum.
- IDJC assigned the alleged debt to Action Collection Service, Inc. (ACS) in December 2009 under a blanket assignment agreement between IDJC and ACS. ACS sued Black in 2012 seeking the amount plus a 33% collection fee and interest.
- Magistrate entered judgment for ACS, which was vacated on appeal and remanded. After further proceedings, the district court entered judgment for ACS for $3,546.40 (including a 33% collection fee) but denied pre-judgment interest.
- On appeal to the Court of Appeals, Black argued the debt was never validly created (I.C. § 20-524 requirements not met), the assignment was invalid/terminated, the district court’s trial did not satisfy I.C. § 20-524, and raised (too late) a constitutional challenge to IDJC’s creation.
- The Court of Appeals concluded IDJC never followed I.C. § 20-524 (no IDJC-initiated hearing and no court order setting a reasonable sum), so no assignable debt existed in 2009; it vacated the district court judgment and awarded costs to Black (but no attorney fees).
Issues
| Issue | Plaintiff's Argument (ACS) | Defendant's Argument (Black) | Held |
|---|---|---|---|
| Whether IDJC’s existence is unconstitutional | Not directly argued below; ACS proceeded under agency status | IDJC’s creation after constitutional cut-off renders it invalid | Not considered on appeal (not preserved) |
| Whether the blanket assignment agreement was still in force in 2009 | The contract continued (termination provision not invoked); thus assignment valid | Contract either terminated or not a valid written contract as statute requires | Court did not decide on contract validity because assignment failed for other reasons (declined to address) |
| Whether IDJC created an assignable debt before assigning to ACS | A debt existed by IDJC’s notices, the claimed obligation, and ACS’s collection efforts; debt definition can be broad | Under I.C. § 20-524 a debt for reimbursement arises only after IDJC gives notice, initiates a hearing, and a court orders a reasonable sum; none occurred before assignment | Held for Black: IDJC did not initiate the § 20-524 hearing and no court order set a debt, so no valid debt existed to assign in 2009 |
| Whether the district court trial satisfied I.C. § 20-524’s hearing requirement | The subsequent judicial proceedings constituted the required hearing | The statutory hearing must be initiated by IDJC before assignment; ACS-initiated litigation years later cannot cure the defect | Held for Black: the later trial did not satisfy § 20-524 because IDJC never initiated the prerequisite hearing; district court erred |
Key Cases Cited
- Sun Valley Shopping Ctr., Inc. v. Idaho Power Co., 119 Idaho 87, 803 P.2d 993 (1991) (standard for reviewing discretionary decisions)
- Staggie v. Idaho Falls Consol. Hosps., 110 Idaho 349, 715 P.2d 1019 (1986) (appellate review distinguishes fact-finding and law-applying functions)
- Desfosses v. Desfosses, 120 Idaho 354, 815 P.2d 1094 (1991) (trial court’s credibility determinations and weighing of evidence are deferred to on appeal)
- Kawai Farms, Inc. v. Longstreet, 121 Idaho 610, 826 P.2d 1322 (1992) (appellate courts review conclusions of law freely)
- Cole v. Kunzler, 115 Idaho 552, 768 P.2d 815 (1989) (standards for reviewing legal questions)
- Sanchez v. Arave, 120 Idaho 321, 815 P.2d 1061 (1991) (issues not raised below are generally not considered on appeal)