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58-2312. Stipulation for attorney fees void. Except as otherwise provided by law, any note, mortgage or other credit agreement may provide for the payment of reasonable costs of collection, including, but not limited to, court costs, attorney fees and collection agency fees, except that such costs of collection: (1) May not include costs that were incurred by a salaried employee of the creditor or its assignee; and (2) may not include the recovery of both attorney fees and collection agency fees.

History: L. 1876, ch. 77, § 1; R.S. 1923, 67-312; L. 1994, ch. 276, § 3; July 1.

Cross References to Related Sections:

Contracts and promises, see ch. 16.

Law Review and Bar Journal References:

Secured transactions under UCC, J. Eugene Balloun, 5 W.L.J. 192, 215 (1966).

Impact of the Uniform Consumer Credit Code upon Kansas, Barkley Clark, 18 K.L.R. 277, 291 (1970).

Prohibition against provision allowing creditor to collect attorney fees on promissory note, does not change law hereunder, Barkley Clark, 42 J.B.A.K. 147, 199 (1973).

"Recovery of Attorney Fees in Kansas," Mark A. Furney, 18 W.L.J. 535, 538, 543, 544, 545 (1979).

"The U.C.C.C. and Real Estate Financing: A Square Peg in a Round Hole," Thomas L. Griswold, 28 K.L.R. 601, 614 (1980).

"Unauthorized Corporate Law Practices in Small Claims Court: Should Anybody Care?" Ron Smith, 33 W.L.J. 345, 360 (1994).

"New Legislation Affects the Collection of Unpaid Debts," Wayne T. Stratton, 95 Kan. Med. No. 9, 182 (1994).

"Will Debtors Win the Battle as Creditors Win the War?: Retroactive Recovery of Attorney Fees in Consumer Credit Contracts in Kansas," Tamara Putnam and Jonathan Lautt, 34 W.L.J. 556, 559, 561, 564 (1995).

"Recovery of Attorney's Fees in Kansas," Jerry D. Fairbanks, 77 J.K.B.A. No. 4, 20 (2008).

CASE ANNOTATIONS

1. Provisions in bond which violate this section cannot be enforced. Singer Co. v. Armstrong, 7 K.A. 314, 54 P. 571.

2. Stipulation for 10 percent attorney's fees void; not interest. Leach v. Urschel, 112 K. 629, 633, 212 P. 111.

3. Right to recover fee charged and collected in foreclosure action considered. Wingrove v. Peoples Nat'l Bank, 127 K. 722, 275 P. 150.

4. Stipulation for attorney fees made and payable in Indiana not enforceable. Young v. Nave, 135 K. 23, 10 P.2d 23.

5. Usurious interest and provision for attorney fee as affecting recovery. Marksheffel-Sill Motors v. Popejoy, 135 K. 624, 626, 11 P.2d 693.

6. Compensation to trustee under trust deed not allowable. Hall v. Goldsworthy, 136 K. 247, 253, 14 P.2d 659.

7. Cited but not construed. Hamilton v. Talbot, 140 K. 20, 34 P.2d 553. Rehearing denied: 140 K. 282, 283, 36 P.2d 529.

8. Cited, compared in holding automobile guest statute inapplicable to foreign action. Pool v. Day, 141 K. 195, 197, 40 P.2d 396.

9. Provision in note for attorney fees secured by mortgage on Kansas property held void. Rubenstein v. Nourse, 70 F.2d 482.

10. Under indemnification contract, principal's promise to pay surety is a "promissory note." In Re Woerner, 19 B.R. 708, 709, 710, 712 (1982).

11. Contract for payment of attorney's fees contained in guaranty agreement for note prohibited by statute. Iola State Bank v. Biggs, 233 K. 450, 459, 463, 662 P.2d 563 (1983).

12. Whether 1994 amendment to section was remedial requiring application even though lease executed prior to amendment's effective date examined. Benedictine College, Inc. v. Century Office Products, 868 F.Supp. 1239, 1241 (1994).

13. Statutory allowance for attorney fees is substantive and must be applied prospectively. Ryco Packaging Corp. v. Chapelle Int'l., Ltd., 23 K.A.2d 30, 34, 926 P.2d 669 (1996).

14. Provision allowing notes and credit agreements to provide for reasonable attorney fees may not be applied retroactively. Baxter State Bank v. Bernhardt, 985 F.Supp. 1259, 1270 (1997).

15. Costs of collection on mortgage note include recovery of attorney fees. Moritz Implement Co. v. Matthews, 265 K. 179, 190, 959 P.2d 886 (1998).

16. Pre-1994 version of statute did not nullify attorney fee provisions in pre-1994 indemnity agreement. Hartford Fire Ins. Co. v. P & H Cattle Co., 451 F.Supp.2d 1262, 1282 (2006).

17. Statute prohibiting attorney fees in debt instruments amended to allow parties to contract for attorney fees. Santa Rosa KM Assocs. v. Principal Life Ins. Co., 41 K.A.2d 840, 206 P.3d 40 (2009).


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