What collection costs can be recovered in Utah dishonored check lawsuits? Checkrite Recovery Services v. King Explained

When pursuing collection on dishonored checks in Utah, understanding what costs can be recovered is crucial for effective collection strategy. The Utah Supreme Court’s decision in Checkrite Recovery Services v. King provides important guidance on interpreting Utah’s dishonored check statute.

Background and Facts

Checkrite Recovery Services obtained a default judgment against Deborah King for $245.04 representing nine dishonored checks. While the trial court awarded damages, court costs of $76, and $150 in attorney fees, it refused to include $180.72 in collection costs ($20.08 per check). The trial court followed a Third District policy limiting recoverable costs to court costs only.

Key Legal Issue

The sole issue was interpreting Utah Code section 7-15-1(7)(b)(iii), which allows recovery of “all costs of collection, including all court costs and reasonable attorneys’ fees” in dishonored check actions.

Court’s Analysis and Holding

The Supreme Court examined Utah’s entire dishonored check statutory scheme, noting its escalating recovery structure. Early in the collection process, only a $20 service charge plus limited collection costs are recoverable. However, when civil action becomes necessary, the statute allows “all costs of collection.” The Court reasoned it would be anomalous to allow collection costs early in the process but deny them when litigation increases collection efforts. Applying established statutory interpretation principles, the Court held that “including” is a word of enlargement, not limitation, citing Colorado Supreme Court precedent and numerous authorities.

Practice Implications

This decision clarifies that Utah’s dishonored check statute permits recovery of collection costs beyond court costs when litigation is necessary. Practitioners should carefully document all collection expenses and present them separately from court costs. The ruling reinforces that statutory language using “including” typically expands rather than limits recoverable items, a principle applicable beyond dishonored check actions to other fee-shifting statutes.