AN ACT Relating to the small claims department of the district court; amending RCW 12.40.020, 12.40.040, 12.40.060, 12.40.100, 12.40.110, 12.40.800, and 19.16.250; adding a new section to chapter 6.01 RCW; and adding a new section to chapter 12.40 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 2, chapter 187, Laws of 1919 as amended by section 58, chapter 258, Laws of 1984 and RCW 12.40.020 are each amended to read as follows:

A small claims action shall be commenced by the plaintiff filing a claim, in the form prescribed by RCW 12.40.050, in the small claims department. A filing fee of ((~~ten~~)) twelve dollars shall be paid when the claim is filed. A small claims informational brochure shall be made available to the plaintiff at this time.

Sec. 2. Section 4, chapter 187, Laws of 1919 as last amended by section 61, chapter 258, Laws of 1984 and RCW 12.40.040 are each amended to read as follows:

The notice of claim can be served either as provided for the service of summons or complaint and notice in civil actions or by registered or certified mail if a return receipt with the signature of the party being served is filed with the court. ((~~No other paper is to be served with the notice.~~)) The officer serving the notice shall be entitled to receive from the plaintiff, besides mileage, the fee specified in RCW 36.18.040 for such service; which sum, together with the filing fee named in RCW ((~~12.40.030~~)) 12.40.020, shall be added to any judgment given for plaintiff.

Sec. 3. Section 6, chapter 187, Laws of 1919 as last amended by section 63, chapter 258, Laws of 1984 and RCW 12.40.060 are each amended to read as follows:

The notice of claim directed to the defendant shall contain: (1) The name and address of the plaintiff; (2) a brief and concise statement of the nature and amount of the claim; (3) a statement directing and requiring defendant to appear personally in the small claims department at a time certain, which shall not be less than five days from the date of service of the notice; ((~~and~~)) (4) a statement advising the defendant that in case of his or her failure to appear, judgment will be given against defendant for the amount of the claim; and (5) a small claims informational brochure.

Sec. 4. Section 10, chapter 187, Laws of 1919 as last amended by section 67, chapter 258, Laws of 1984 and RCW 12.40.100 are each amended to read as follows:

If a monetary judgment or order is entered, it shall be the judgment debtor's duty to pay the judgment upon such terms and conditions as the judge shall prescribe. If the judgment is not paid to the prevailing party at the time the judgment is entered and the judgment debtor is present in court, the court may order a payment plan. If the judgment debtor is not present, the court shall mail a copy of the judgment to the debtor along with a form, instructing the judgment debtor to pay in full within twenty days.

Sec. 5. Section 11, chapter 187, Laws of 1919 as last amended by section 68, chapter 258, Laws of 1984 and RCW 12.40.110 are each amended to read as follows:

(1) If the losing party fails to pay the judgment according to the terms and conditions thereof within twenty days or is in arrears on any payment plan, and the prevailing party so notifies the court with a payment form indicating nonpayment, the judge before whom such hearing was had shall certify the judgment in substantially the following form:

Washington.

In the District Court of .......... County.

......................... Plaintiff,

!sc ,013vs.

......................... Defendant.

In the Small Claims Department.

This is to certify that: (1) In a certain action before me, the undersigned, had on this the ..... day of .......... 19.. , wherein ............... was plaintiff and ............... defendant, jurisdiction of said defendant having been had by personal service (or otherwise) as provided by law, I then and there entered judgment against .......... in the sum of .......... Dollars; (2) the judgment has not been paid within twenty days or the period otherwise ordered by the court; and (3) pursuant to RCW 12.40.105, the amount of the judgment is hereby increased by any costs of certification under ((~~this section~~)) RCW 12.40.110, and the amount specified in RCW 36.18.020(3).

Witness my hand this ..... day of .......... , 19.. .

!ix!tn1!tl!il*!ss1@w1

District Judge sitting in the Small Claims Department.!te

(2) The judge shall forthwith enter the judgment transcript on the judgment docket of the district court; and thereafter garnishment, execution, and other process on execution provided by law may issue thereon, as in other judgments of district courts.

(3) Transcripts of such judgments may be filed and entered in judgment lien dockets in superior courts with like effect as in other cases.

Sec. 6. Section 3, chapter 85, Laws of 1988 and RCW 12.40.800 are each amended to read as follows:

The administrator for the courts and the magistrates association shall prepare a model small claims informational brochure and a model payment form, and distribute the model brochure and model form to all small claims departments in the state. This brochure and form may be modified as necessary by each small claims department and shall be made available immediately to all parties in any small claims action. In addition, the court shall provide the judgment creditor with a return envelope for the purposes of enclosing a completed payment form, which may indicate partial payment or nonpayment. When the judgment debtor has paid the judgment in full, the judgment creditor shall indicate so on the payment form and mail the form in the provided return envelope within fifteen days from receipt of final payment.

NEW SECTION. Sec. 7. A new section is added to chapter 12.40 RCW to read as follows:

The court shall inform the judgment debtor of the consequences of failure to pay the judgment in full or according to the court-ordered payment plan. The consequences to be outlined include, but are not limited to, garnishment of wages, attachment of property, and an imposition of an amount up to one-half of the judgment, exclusive of costs and interest to cover the judgment creditor's costs of enforcing the judgment. This warning shall be incorporated into the notice of judgment, and if the court orders a payment plan, shall also be incorporated into the payment form.

NEW SECTION. Sec. 8. A new section is added to chapter 6.01 RCW to read as follows:

In an action to enforce a judgment rendered in small claims court the judgment creditor may receive reasonable attorneys' fees or reasonable collection service fees incurred in seeking enforcement of the judgment not to exceed one-half of the judgment, exclusive of costs and interest: PROVIDED, That where a small claims judgment creditor has assigned the judgment to a collection service in seeking collection, the assignee may not receive any of the enforcement costs added to the small claims judgment amount under this section: PROVIDED FURTHER, That the reasonableness of collection service fees is to be determined by the court under the same standards as for attorneys' fees: PROVIDED FURTHER, That an award of attorneys' fees under this section precludes the award of attorneys' fees provided elsewhere in Title 6 RCW.

Sec. 9. Section 16, chapter 253, Laws of 1971 ex. sess. as last amended by section 1, chapter 107, Laws of 1983 and RCW 19.16.250 are each amended to read as follows:

No licensee or employee of a licensee shall:

(1) Directly or indirectly aid or abet any unlicensed person to engage in business as a collection agency in this state or receive compensation from such unlicensed person: PROVIDED, That nothing in this chapter shall prevent a licensee from accepting, as forwardee, claims for collection from a collection agency or attorney whose place of business is outside the state.

(2) Collect or attempt to collect a claim by the use of any means contrary to the postal laws and regulations of the United States postal department.

(3) Publish or post or cause to be published or posted, any list of debtors commonly known as "bad debt lists" or threaten to do so. For purposes of this chapter, a "bad debt list" means any list of natural persons alleged to fail to honor their lawful debts. However, nothing herein shall be construed to prohibit a licensee from communicating to its customers or clients by means of a coded list, the existence of a check dishonored because of insufficient funds, not sufficient funds or closed account by the financial institution servicing the debtor's checking account: PROVIDED, That the debtor's identity is not readily apparent: PROVIDED FURTHER, That the licensee complies with the requirements of subsection (9)(e) of this section.

(4) Have in his possession or make use of any badge, use a uniform of any law enforcement agency or any simulation thereof, or make any statements which might be construed as indicating an official connection with any federal, state, county, or city law enforcement agency, or any other governmental agency, while engaged in collection agency business.

(5) Perform any act or acts, either directly or indirectly, constituting the practice of law.

(6) Advertise for sale or threaten to advertise for sale any claim as a means of endeavoring to enforce payment thereof or agreeing to do so for the purpose of soliciting claims, except where the licensee has acquired claims as an assignee for the benefit of creditors or where the licensee is acting under court order.

(7) Use any name while engaged in the making of a demand for any claim other than the name set forth on his or its current license issued hereunder.

(8) Give or send to any debtor or cause to be given or sent to any debtor, any notice, letter, message, or form which represents or implies that a claim exists unless it shall indicate in clear and legible type:

(a) The name of the licensee and the city, street, and number at which he is licensed to do business;

(b) The name of the original creditor to whom the debtor owed the claim if such name is known to the licensee or employee: PROVIDED, That upon written request of the debtor, the licensee shall make a reasonable effort to obtain the name of such person and provide this name to the debtor;

(c) If the notice, letter, message, or form is the first notice to the debtor or if the licensee is attempting to collect a different amount than indicated in his or its first notice to the debtor, an itemization of the claim asserted must be made including:

(i) Amount owing on the original obligation at the time it was received by the licensee for collection or by assignment;

(ii) Interest or service charge, collection costs, or late payment charges, if any, added to the original obligation by the original creditor, customer or assignor before it was received by the licensee for collection, if such information is known by the licensee or employee: PROVIDED, That upon written request of the debtor, the licensee shall make a reasonable effort to obtain information on such items and provide this information to the debtor;

(iii) Interest or service charge, if any, added by the licensee or customer or assignor after the obligation was received by the licensee for collection;

(iv) Collection costs, if any, that the licensee is attempting to collect;

(v) Attorneys' fees, if any, that the licensee is attempting to collect on his or its behalf or on the behalf of a customer or assignor;

(vi) Any other charge or fee that the licensee is attempting to collect on his or its own behalf or on the behalf of a customer or assignor.

(9) Communicate or threaten to communicate, the existence of a claim to a person other than one who might be reasonably expected to be liable on the claim in any manner other than through proper legal action, process, or proceedings except under the following conditions:

(a) A licensee or employee of a licensee may inform a credit reporting bureau of the existence of a claim: PROVIDED, That if the licensee or employee of a licensee reports a claim to a credit reporting bureau, the licensee shall upon receipt of written notice from the debtor that any part of the claim is disputed, forward a copy of such written notice to the credit reporting bureau;

(b) A licensee or employee in collecting or attempting to collect a claim may communicate the existence of a claim to a debtor's employer if the claim has been reduced to a judgment;

(c) A licensee or employee in collecting or attempting to collect a claim that has not been reduced to judgment, may communicate the existence of a claim to a debtor's employer if:

(i) The licensee or employee has notified or attempted to notify the debtor in writing at his last known address or place of employment concerning the claim and the debtor after a reasonable time has failed to pay the claim or has failed to agree to make payments on the claim in a manner acceptable to the licensee, and

(ii) The debtor has not in writing to the licensee disputed any part of the claim: PROVIDED, That the licensee or employee may only communicate the existence of a claim which has not been reduced to judgment to the debtor's employer once unless the debtor's employer has agreed to additional communications.

(d) A licensee may for the purpose of locating the debtor or locating assets of the debtor communicate the existence of a claim to any person who might reasonably be expected to have knowledge of the whereabouts of a debtor or the location of assets of the debtor if the claim is reduced to judgment, or if not reduced to judgment, when:

(i) The licensee or employee has notified or attempted to notify the debtor in writing at his last known address or last known place of employment concerning the claim and the debtor after a reasonable time has failed to pay the claim or has failed to agree to make payments on the claim in a manner acceptable to the licensee, and

(ii) The debtor has not in writing disputed any part of the claim.

(e) A licensee may communicate the existence of a claim to its customers or clients if the claim is reduced to judgment, or if not reduced to judgment, when:

(i) The licensee has notified or attempted to notify the debtor in writing at his last known address or last known place of employment concerning the claim and the debtor after a reasonable time has failed to pay the claim or has failed to agree to make payments on the claim in a manner acceptable to the licensee, and

(ii) The debtor has not in writing disputed any part of the claim.

(10) Threaten the debtor with impairment of his credit rating if a claim is not paid.

(11) Communicate with the debtor after notification in writing from an attorney representing such debtor that all further communications relative to a claim should be addressed to the attorney: PROVIDED, That if a licensee requests in writing information from an attorney regarding such claim and the attorney does not respond within a reasonable time, the licensee may communicate directly with the debtor until he or it again receives notification in writing that an attorney is representing the debtor.

(12) Communicate with a debtor or anyone else in such a manner as to harass, intimidate, threaten, or embarrass a debtor, including but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of force or violence, by threats of criminal prosecution, and by use of offensive language. A communication shall be presumed to have been made for the purposes of harassment if:

(a) It is made with a debtor or spouse in any form, manner, or place, more than three times in a single week;

(b) It is made with a debtor at his or her place of employment more than one time in a single week;

(13) Communicate with the debtor through use of forms or instruments that simulate the form or appearance of judicial process, the form or appearance of government documents, or the simulation of a form or appearance of a telegraphic or emergency message.

(14) Communicate with the debtor and represent or imply that the existing obligation of the debtor may be or has been increased by the addition of attorney fees, investigation fees, service fees, or any other fees or charges when in fact such fees or charges may not legally be added to the existing obligation of such debtor.

(15) Threaten to take any action against the debtor which the licensee cannot legally take at the time the threat is made.

(16) Send any telegram or make any telephone calls to a debtor or concerning a debt or for the purpose of demanding payment of a claim or seeking information about a debtor, for which the charges are payable by the addressee or by the person to whom the call is made.

(17) In any manner convey the impression that the licensee is vouched for, bonded to or by, or is an instrumentality of the state of Washington or any agency or department thereof.

(18) Collect or attempt to collect in addition to the principal amount of a claim any sum other than allowable interest, collection costs or handling fees expressly authorized by statute, and, in the case of suit, attorney's fees and collection costs awarded to the small claims judgment creditor under section 8 of this act, and taxable court costs.

(19) Procure from a debtor or collect or attempt to collect on any written note, contract, stipulation, promise or acknowledgment under which a debtor may be required to pay any sum other than principal, allowable interest, and, in the case of suit, attorney's fees and collection costs awarded to the small claims judgment creditor under section 8 of this act, and taxable court costs.