Thomas v. Delivery Financial Services LLC

Filing 11

ORDER: Plaintiff's motion for default judgment (Doc. 9 ) is granted. A separate judgment shall issue, after which the Clerk shall terminate this action. Signed by Judge Dominic W Lanza on 1/6/25. (EJA)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Nelson Thomas,
Plaintiff,

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v.

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Delivery Financial Services LLC,

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No. CV-24-08196-PCT-DWL
ORDER

Defendant.

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Nelson Thomas (“Plaintiff”) has filed a motion for default judgment against

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Delivery Financial Services, LLC (“Defendant”). (Doc. 9.) For the reasons that follow,

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the motion is granted.

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I.

Background

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On October 22, 2024, Plaintiff initiated this action by filing the complaint. (Doc.

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1.) In a nutshell, Plaintiff alleges that Defendant, a “debt collector,” violated the Fair Debt

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Collection Practices Act (“FDCPA”) by sending a debt collection letter to Plaintiff

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claiming that Plaintiff owed $96.24 for services rendered by non-party Pioneer Hospitalists

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PLLC (“Pioneer”), when in fact Plaintiff owed no such debt because it “was based on

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medical services rendered in connection with an accepted worker’s compensation claim.”

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(Id. ¶¶ 7, 19-24.) The complaint further alleges that “Defendant’s collection efforts caused

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Plaintiff to suffer concrete and particularized injuries and harm. Defendant injured Plaintiff

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by trying to extract money from Plaintiff that he did not owe. Defendant’s collection efforts

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caused particular distress to Plaintiff, as he suffers mild memory loss and confusion as a

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result of his workplace accident and, upon receiving Defendant’s collection letters, worried

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that he owed a large sum of money for his medical treatment that he did not actually owe.

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Plaintiff was extremely distressed because he worried that he might have been mistaken

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about his legal obligation to pay the purported debt and might face legal consequences for

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not doing so.” (Id. ¶ 29.)

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On October 30, 2024, Defendant was served. (Doc. 5.)

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On November 21, 2024, after Defendant failed to timely respond to the complaint,

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Plaintiff filed an application for entry of default. (Doc. 7.) The next day, the Clerk entered

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default against Defendant. (Doc. 8.)

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On December 6, 2024, Plaintiff filed the pending motion for default judgment.

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(Doc. 9.) Defendant has not responded.

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II.

Default Judgment

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The “decision whether to enter a default judgment is a discretionary one.” Aldabe

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v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Although the Court should consider and

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weigh relevant factors as part of the decision-making process, it “is not required to make

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detailed findings of fact.” Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir.

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2002).

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The

following

factors

may

be

considered

when

deciding

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whether default judgment is appropriate under Rule 55(b): (1) the possibility of prejudice

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to the plaintiff, (2) the merits of the claims, (3) the sufficiency of the complaint, (4) the

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amount of money at stake, (5) the possibility of factual disputes, (6) whether the default

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was due to excusable neglect, and (7) the policy favoring decisions on the merits. Eitel v.

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McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In considering the merits and sufficiency

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of the complaint, the court accepts as true the complaint’s well-pled factual allegations, but

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the plaintiff must establish the damages sought in the complaint. Geddes v. United Fin.

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Grp., 559 F.2d 557, 560 (9th Cir. 1977).

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A.

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The first Eitel factor weighs in favor of default judgment.

Possible Prejudice To Plaintiff

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Defendant has not

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participated in this action at all—it has not responded to the complaint or to the motion for

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default judgment. In fact, it appears that Defendant made a conscious choice not to

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participate. (Doc. 9-4 [November 21, 2024 email from Defendant’s apparent counsel to

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Plaintiff’s counsel: “My client has directed me not to appear in the lawsuit.”].) If Plaintiff’s

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motion is not granted, Plaintiff will be without other recourse for recovery. PepsiCo, Inc.

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v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002).

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B.

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The second and third Eitel factors favor default judgment where, as in this case, the

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complaint sufficiently states a plausible claim for relief under the Rule 8 pleading

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standard. Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978). As noted, Plaintiff

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alleges that Defendant violated the FDCPA. (Doc. 1.) For the reasons stated in Plaintiff’s

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motion, the complaint alleges sufficient facts to establish Defendant’s liability. (Doc. 9-1

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at 2-3.) The second and third factors favor default judgment.

Merits Of Claims And Sufficiency Of Complaint

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C.

Amount At Stake

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Under the fourth Eitel factor, the Court considers the amount of money at stake in

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relation to the seriousness of the defendant’s conduct. The money at stake is relatively

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modest—Plaintiff seeks $1,000 in statutory damages and $3,000 in emotional distress

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damages. Thus, the fourth factor favors default judgment.

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D.

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Given the sufficiency of the complaint and Defendant’s lack of participation, “no

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genuine dispute of material facts would preclude granting [Plaintiff’s] motion.” PepsiCo,

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238 F. Supp. 2d at 1177. Thus, the fifth factor favors default judgment.

Possible Dispute Concerning Material Facts

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E.

Excusable Neglect

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There is no indication that Defendant failed to respond to the complaint due to

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excusable neglect—to the contrary, Defendant apparently made a conscious choice not to

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participate in this action after being served. Thus, the sixth factor favors default judgment.

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F.

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The last factor usually weighs against default judgment given that cases “should be

Policy Favoring Merits Resolution

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decided on their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472. The mere

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existence of Rule 55(b), however, “indicates that this preference, standing alone, is not

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dispositive.” PepsiCo, 238 F. Supp. 2d at 1177.

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G.

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Six of the seven Eitel factors favor default judgment.

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Conclusion As To Eitel Factors
The Court therefore

concludes that default judgment is appropriate.

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H.

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“The general rule of law is that upon default the factual allegations of the complaint,

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except those relating to the amount of damages, will be taken as true.” Geddes, 559 F.2d

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at 560. “A default judgment must not differ in kind from, or exceed in amount, what is

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demanded in the pleadings.”

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all damages sought in the complaint.” Philip Morris USA, Inc. v. Castworld Prod., Inc.,

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219 F.R.D. 494, 498 (C.D. Cal. 2003). “[A] default judgment for money may not be

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entered without a hearing unless the amount claimed is a liquidated sum or capable of

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mathematical calculation.” Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 1981). District

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courts within the Ninth Circuit have held that written affidavits or declarations are

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acceptable in lieu of a hearing. Yelp Inc. v. Catron, 70 F. Supp. 3d 1082, 1100-01 (N.D.

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Cal. 2014) (“To recover damages after securing a default judgment, a plaintiff must prove

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the relief it seeks through testimony or written affidavit.”); Wecosign, Inc. v. IFG Holdings,

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Inc., 845 F. Supp. 2d 1072, 1079 (C.D. Cal. 2012) (“[A] ‘hearing’ . . . need not include live

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testimony, but may instead rely on declarations submitted by the parties, so long as notice

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of the amount requested is provided to the defaulting party.”).

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Damages

Fed. R. Civ. P. 54(c).

A plaintiff must “prove

Plaintiff has submitted a declaration to substantiate his request for $3,000 in
emotional distress damages. In relevant part, it provides:
When I received the collection letter from [Defendant] seeking money for
medical bills, I became frantic and stressed as I could not afford to pay the
sum. While the balance requested may not seem like a large amount of
money, I have been unable to work since April 2022 due to the injuries I
suffered at my workplace, and thus am living on a very tight budget. I
became extremely worried because I knew I could not afford to pay the
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alleged balance with my current financial situation, and worried that I was
going to be sued, or that [Defendant] would take other action to collect the
balance. I also feared that the collections account would harm my credit
health, and negatively impact my ability to get credit that I will need in the
future. This stress was keeping me up at night, causing me to lose sleep, and
giving me anxiety, so I reached out to a lawyer to help me. Receiving the
collection letter from [Defendant] also distressed me, as it was a reminder of
my workplace injuries, which cause me great pain and discomfort to this day.

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(Doc. 9-3 ¶¶ 6-7.) The Court is satisfied that these avowals are sufficient to substantiate

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Plaintiff’s modest request for $3,000 emotional distress damages. Cf. Perkons v. Am.

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Acceptance, LLC, 2010 WL 4922916, *3 (D. Ariz. 2010) (awarding $5,000 in emotional

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distress damages in FDCPA action).

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In additional to emotional distress damages, Plaintiff seeks $1,000 in statutory

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damages. This approach is permissible, 15 U.S.C. § 1692k(a)(2)(A), and Plaintiff has

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adequately explained (Doc. 9-1 at 3-4) why such an award is warranted under the facts of

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this case.

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I.

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Finally, Plaintiff seeks to recover his attorneys’ fees and costs. Such fees and costs

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Attorneys’ Fees And Costs

are recoverable under the FDCPA. 15 U.S.C. § 1692k(a)(3).

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District courts in the Ninth Circuit employ the lodestar method in determining

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reasonable attorneys’ fees in FDCPA cases. Ferland v. Conrad Credit Corp., 244 F.3d

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1145, 1149 n.4 (9th Cir. 2001). “The lodestar is calculated by multiplying the number of

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hours the prevailing party reasonably expended on the litigation by a reasonable hourly

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rate. Although in most cases, the lodestar figure is presumptively a reasonable fee award,

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the district court may, if circumstances warrant, adjust the lodestar to account for other

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factors which are not subsumed within it.” Id. (cleaned up). Here, Plaintiff’s counsel

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charged an hourly rate of $350 and spent 13.7 hours working on the case (Doc. 9-2 ¶¶ 9-

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11), while Plaintiff’s counsel’s paralegal charged an hourly rate of $150 and spent 0.2 hours

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working on the case (Doc. 9-5 at 2). The Court is satisfied that those rates and hours-

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expenditures are reasonable.

Additionally, Plaintiff has adequately substantiated his

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request for $528.50 in costs. (Doc. 9-5 at 5.) Thus, Plaintiff’s request for an award of

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$5,353.50 in attorneys’ fees and costs is granted in full, bringing the overall award to

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$9,353.50.

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Accordingly,

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IT IS ORDERED that Plaintiff’s motion for default judgment (Doc. 9) is granted.

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A separate judgment shall issue, after which the Clerk shall terminate this action.
Dated this 6th day of January, 2025.

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