Collection – Attorney’s Fees:

Attorney’s fees can only be collected in Colorado if there is a written agreement allowing the recovery of attorney fees or if there is a statute that allows their recovery. The following suggested language (or something similar) should be included on contract documents, credit agreements, invoices, delivery tickets, and work orders:

“Payment in full is due on the fifteenth day of the month. Interest of 24% per annum will be charged on all past-due balances. In the event of non-payment, customer will pay all costs of collection, including reasonable attorney fees and costs.”

OR

“The prevailing party in any litigation is entitled to attorney fees and costs including expert witness fees and costs.”

The same language should also be included on invoices and delivery tickets. The inclusion of this language may allow collection of interest and attorneys’ fees even without a signed Credit Application or contract. Offen, Inc. v. Rocky Mountain Constructors, Inc., 765 P.2d 600 (Colo. App. 1988) (delivery tickets supplied contract terms for recovery of interest and attorneys’ fees); Murray Equipment Co. v. Curtis, Inc., 725 P.2d 35 (Colo. App. 1986) (quotation from supplier established terms of contract including delivery schedule, interest and consequential damages).

A debt collector or attorney cannot threaten a recovery of attorney’s fees unless allowed by the underlying documents and state law, and the amount cannot be stated until reduced to judgment. 15 U.S.C. 1692g(b) and Aramburu v. Healthcare Financial Services, F. Supp. 2d 21 (D. Conn. 2005).

An attorney can engage in collection action on a contingency fee basis so long as the requirements of Rule 1.5, C.R.P.C. are followed along with the Rules Governing Contingent Fees, Chapter 23.3. Chapter 23.3 includes Colorado Supreme Court approved contingent fee agreements and disclosure statements.

By Jean C. Arnold, Esq. Copyright 2013 Arnold & Arnold, LLP