Can debtors sue collection agencies for alleged professional misconduct? Haymond v. Bonneville Billing & Collections Explained

Background and Facts

In Haymond v. Bonneville Billing & Collections, two women who had issued dishonored checks sued a collection agency and its attorney after their individual collection cases were resolved. Haymond paid the merchant directly and the collection suit was dismissed over her objection. Lloyd settled her case by paying $200.20, including $150 in attorney fees. The plaintiffs then filed suit alleging that the defendants engaged in illegal attorney fee-splitting and improper collection of treble damages that belonged to merchants rather than collection agencies.

Key Legal Issues

The central issue was whether the plaintiffs had standing to challenge the defendants’ alleged misconduct under either the traditional standing test or Utah’s public interest standing doctrine. The court applied both the requirement that plaintiffs suffer legal injury to personal or property rights and the alternative test for matters of great public importance.

Court’s Analysis and Holding

The Utah Supreme Court affirmed the dismissal, finding neither plaintiff suffered sufficient legal injury. Haymond’s claimed injuries of “expenses, lost time, aggravation and distress” were largely self-inflicted consequences of writing bad checks. Lloyd voluntarily agreed to her settlement and could not later complain of injury. Even if fee-splitting occurred, Lloyd was responsible for at least $150 in attorney fees under Utah law, making any external illegality irrelevant to her case. The court also found that other parties—merchants entitled to treble damages and the Utah State Bar’s Office of Professional Conduct—were better-suited to challenge the alleged misconduct.

Practice Implications

This decision reinforces that Utah courts strictly apply standing requirements, particularly in cases involving professional misconduct claims. Practitioners should carefully analyze whether their clients suffered actual legal injury from the specific conduct complained of, rather than general inconvenience from legitimate debt collection activities. The case also demonstrates Utah’s preference for having appropriate regulatory bodies address professional misconduct rather than allowing tangentially affected parties to pursue such claims.