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MI Law Firm Sued for Tacking on Attorney's Fees to Debt Collection Suits

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Case ID: 3957 | Credit / Debt | 11/15/2004

A class action lawsuit has been filed in the Western District Court of Michigan against the law firm of Muller, Muller, Richmond, Harms, Myers & Sgroi, PC for violations of the Fair Debt Collection Act. The class seeks a declaratory judgment, an injunction, damages, attorney's fees and costs of the action.

Specifically, the complaint alleges that the defendant lawfirm's debt collection practice involves the use of a limited number of computer-generated forms that are handled mostly by non-attorney staff. However, the firm often bills for attorney's fees.
The complaint alleges that, as a general rule, Michigan law does not allow for the recovery of attorneys fees as costs or damages unless expressly authorized by statute or court rule. In the event of a default judgment, Michigan Statute Section MCL 600.2441(2)(e) allows an attorney fee of $75.00. However, the defendant regularly includes a claim for "reasonable attorney fees" in its form complaint with is arbitrarily calculated as a percentage (often 25 percent) of the alleged debt which is later treated as damages.

The plaintiff, Sylvia Stolicker, incurred debt and become obligated to $3,106 to Capital One Bank and was sued by the Bank. However, the complaint sought damages in the amount of $3,985 – the difference being attorney's fees from the defendant, which she claims is unlawful under Michigan law and the Fair Debt Collection Act.


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