All Of The Consumer Statutes Required Bad Faith, Found Not To Exist And Affirmed Under Appellate Abuse Of Discretion Standard.
Above: chiropractic adjustment of horse. Wikpedia. Photographer: Dr. Dennis Eschbach. Wikipedia Creative Commons License.
In Libman v. Bondarev Chiropractic, Inc., Case No. B259498 (2d Dist., Div. 2 July 7, 2016) (unpublished), personal injury plaintiffs netted a small recovery, plaintiffs did not pay their medical bills, and the chiropractor sued the lawyer in small claims court for those unpaid bills, with chiropractor prevailing to the tune of $5,085. Lawyer then sued chiropractor, “civilly” (Court of Appeal’s wording), for improper debt collection under the Fair Debt Collection Practices Act (FDCPA), Rosenthal Fair Debt Collection Practices Act (California somewhat statutory equivalent of FDCPA), and California’s Consumer Credit Reporting Agencies Act. All of them, by the way, have fee-shifting statutes allowing a prevailing party to recover unless the action was brought in bad faith/with lack of good faith (with the appellate court treating these constructs, probably correctly, as the same), with chiropractor seeking $14,102 under all of the fee-shifting statutes. Even though lawyer ultimately lost on a second demurrer round without leave to amend, the trial judge did not award frees to chiropractor based on the belief the action was not brought in bad faith.
The fee denial was affirmed on appeal.
This case is must reading for debtor/creditor improper debt collection attorneys, because several cutting-edge issues seemed to be involved. However, when all was said and done, the appellate court, as did the trial judge, felt that the issues were close enough under the fee-shifting statutes to justify a denial of fee recovery to chiropractor.
BLOG COMMENT–However, we will have to observe after reading the decision carefully, was this case really worth it, given only a little over $14,000 in upside recovery was involved?