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Ruling tosses out sanction of lawyer

Sat., May 4, 2013

Attorney was originally fined $70,456 while trying to help indebted couple

The likelihood of finding an attorney willing to work for free got a boost this week.

Appellate judges overturned a $70,000 sanction imposed against a Spokane attorney who had volunteered his time to try to stop an Oklahoma collection agency from harassing a Stevens County couple over an $843 debt.

Superior Court Judge Rebecca Baker, who has since retired, levied the fine against attorney Robert Mitchell in 2011 as he represented Gregory and Catherine Rose when the couple fell behind in payments on a Kohl’s Department Store credit card.

Mitchell, on behalf of his clients, sued after the collection agency, Oklahoma FMS Inc., wrote several letters and placed 149 calls to the Roses in less than six weeks.

“If that isn’t harassment, I don’t know what is,” said Alan McNeil, a Gonzaga law professor who filed arguments in support of Mitchell during his appeal. “This case came to my attention. I was just appalled. That was ruinous to a practitioner.”

McNeil helps guide University Legal Assistance, which provides free or low-cost legal services to low-income Spokane County residents. He said he often finds more cases than his students can handle and he relies on attorneys like Mitchell who are willing to help represent residents caught up in the complicated laws surrounding debt collection.

“The premise of all these sanctions was just ill-advised,” McNeil said. “Even to have to fight something like this is a chilling effect. He won after two years of high anxiety.”

The case started after Catherine Rose made purchases on a Kohl’s credit card. In early 2010, the couple stopped making payments, and by March of that year the couple had missed several minimum payments.

They had $276 in late fees and owed a total of $843 when Kohl’s informed them that the case had been sent to collections.

The next day, FMS began sending letters and made the first of 149 phone calls to their home. The Roses asked Mitchell to intervene, and he filed a lawsuit in June 2010 under federal and state consumer protection laws designed to fight abusive collection practices.

State law presumes harassment from a collection agency if the person who owes the money receives more than three calls in a week, according to court records.

After legal arguments mostly about whether the debt had reached the key legal distinction of default, and an offer by Mitchell to settle the matter for $4,900, both sides filed motions asking Baker to decide the case on their respective arguments.

Baker sided with the collection agency attorneys and dismissed the suit. The collection agency attorneys then took it further and asked Baker to sanction Mitchell.

She agreed, saying Mitchell filed a lawsuit without proper research, and said he violated evidence rules by answering requests “in an offhand way, in a blatant attempt to thwart” efforts by the collection agency to obtain evidence. She ruled Mitchell made “misrepresentations of fact” in his oral statements.

Baker then issued a letter sanctioning Mitchell $70,456.

He appealed to the Division III Court of Appeals, and McNeil and University Legal Assistance filed arguments in support of overturning Baker’s ruling.

“This got turned on its head,” McNeil said, noting that state and federal consumer protection laws “are meant to encourage attorneys to take cases against agencies that call you 150 times.”

McNeil asked appellate judges to reverse Baker’s sanction because her “improper ruling will have a chilling effect on consumer advocacy in the future, contrary to the purpose of the Washington Consumer Protection Act and public policy,” court records state.

In a scathing response, Seattle attorney Richard Martens wrote that McNeil was ignoring the law and suggested he might be helping a Gonzaga grad and member of the clinic “or because (McNeil) actually believes that Civil Rules should apply differently to so-called ‘consumer attorneys’ than they do every other attorney in this state.”

“In short, it is an insult to the vast majority of attorneys, including ‘consumer attorneys,’ who – unlike Mr. Mitchell – represent their clients with at least the minimum level of honesty and professionalism,” Martens wrote.

In the end, appellate judges sided with Mitchell and McNeil, saying Baker abused her discretion in sanctioning Mitchell.

Judge Stephen Brown, who wrote the unanimous opinion, also noted McNeil’s argument about the chilling effect the case could have had on other attorneys considering whether to help low-income consumers in debt cases.

Martens said the reversal “speaks for itself” and declined further comment.

Efforts to reach Mitchell this week were unsuccessful.

Martens did note, however, that Baker retains jurisdiction, meaning that Mitchell would go before the same judge when the case is returned to Superior Court for further review.

“It will be a matter of public record … whatever she decides,” Martens said.

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