Mabeza v. Ashfield Management Services, Inc. et al

Filing 14

ORDER granting 8 Motion for Default Judgment in the amount of 13,050; granting 9 Motion for Attorney Fees. The Court awards $13,050. The Clerk is directed to enter judgment consistent with this order. Signed by Judge Anthony J. Battaglia on 3/20/2018. (acc)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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Adriano Mabeza,

Case No.: 17-cv-1946-AJB-KSC
Plaintiff,

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v.

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ORDER GRANTING PLAINTIFF’S
MOTIONS FOR DEFAULT
JUDGMENT, ATTORNEY’S FEES

Ashfield Management Services, Inc. and
Lenny Credit, Inc.

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(Docs. Nos. 8, 9)

Defendants.

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Before the Court is plaintiff Adriano Mabeza’s motion for default judgment against

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Ashfield Management Services, Inc. (Doc. No. 8.) Mabeza also filed a motion for

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attorney’s fees and costs. (Doc. No. 9.) Having reviewed the parties’ arguments in light of

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controlling authority, and pursuant to Local Civil Rule 7.1.d.1, the Court finds the matter

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suitable for disposition without oral argument. Accordingly, the March 22, 2018 hearing is

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VACATED. For the reasons set forth herein, Mabeza’s motions for default judgment and

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attorney’s fees are GRANTED. (Doc. Nos. 8, 9.)

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I.

BACKGROUND

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After filing for bankruptcy, Mabeza notified defendants he had retained an attorney

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and requested Ashfield and Lenny Credit cease contacting him. (Doc. No. 1 ¶ 1–4.)

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Nevertheless, Mabeza alleges, defendants contacted him five additional times, violating
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the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, and the

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Rosenthal Fair Debt Collection Practices Act. (Id. ¶ 4–5, 40.) During each call, Mabeza

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informed defendants he had retained an attorney and that any communications should be

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directed towards them. (Id. ¶ 43.)

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The Court Clerk filed an entry of default on January 2, 2018, after the defendants

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were served, but never answered. (Doc. No. 6.) Subsequently, Mabeza settled with

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defendant Lenny Credit, Inc. and it was dismissed from the case. (Doc. Nos. 11, 13.)
II.

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LEGAL STANDARDS

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Federal Rule of Civil Procedure 55(b)(2) permits a court, following default by a

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defendant, to enter default judgment in a case. It is within the sound discretion of the district

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court to grant or deny an application for default judgment. Aldabe v. Aldabe, 616 F.2d

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1089, 1092 (9th Cir. 1980). In making this determination, the Court considers the following

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factors, commonly referred to as the Eitel factors: (1) “the possibility of prejudice to the

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plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint,

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(4) the sum of money at stake in the action, (5) the possibility of a dispute concerning

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material facts, (6) whether the default was due to excusable neglect, and (7) the strong

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policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.”

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Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). “In applying this discretionary

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standard, default judgments are more often granted than denied.” Philip Morris USA, Inc.

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v. Castworld Prods., Inc., 219 F.R.D. 494, 498 (C.D. Cal. 2003) (citation omitted).

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Generally, once the court clerk enters default, the factual allegations of the complaint

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are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. v.

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Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). However, although well-pleaded

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allegations in the complaint are admitted by a defendant’s failure to respond, “necessary

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facts not contained in the pleadings, and claims which are legally insufficient, are not

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established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267

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(9th Cir. 1992), superseded by statute on other grounds, Pub. L. No. 100-702, 102 Stat.

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4669.
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III.

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DISCUSSION

Mabeza’s claims include the TCPA, FDCPA, and the Rosenthal Act. Mabeza’s
motion discusses each of the Eitel factors.
1. Possibility of Prejudice to the Plaintiff

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There is a possibility of prejudice to a plaintiff when denying default judgment

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would leave them without an alternate recourse for recovery. See PepsiCo Inc. v. Cal. Sec.

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Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). Mabeza argues he would be

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significantly prejudiced if he was not allowed the right to judicial resolution of his claims.

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(Doc. No. 8 at 8.) The Court agrees with his reasoning that “[w]ithout a judgement [sic],

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Plaintiff will be without recourse to resolve his claims and would receive no compensation

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for the unlawful conduct he has been subject to.” (Id.) Thus, this factor weighs in favor of

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granting Mabeza a default judgment.

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2. Substantive Merits and Sufficiency of Claim

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Under the second and third Eitel factors, the Court must examine whether the

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plaintiff has pled facts sufficient to establish and succeed on its claims. See Eitel, 782 F.2d

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at 1471. These factors require the complaint “state a claim on which the plaintiff may

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recover.” PepsiCo, 238 F. Supp. 2d at 1175. Mabeza argues he had sufficiently pled facts

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necessary to meet the TCPA, FDCPA, and Rosenthal Act elements.

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a. TCPA

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Under the TCPA, Mabeza must establish that (1) the phone calls were made using

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an automatic telephone dialing system (“ATDS”); (2) he was the “called party;” and (3)

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that Ashfield did not have Mabeza’s prior consent to make the calls. 47 U.S.C.

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§ 227(b)(1)(A)(iii); Meyer v. Portfolio Recovery Associates, LLC, 77 F.3d 1036, 1043

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(9th Cir. 2012).

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Under the first element, Mabeza sufficiently alleged Ashfield’s calls to him were

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made using an ATDS. (Doc. No. 1 ¶¶ 48–51.) Although these are general allegations,

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Mabeza is correct that his complaint “supports a reasonable inference that the phone calls

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were sent using an ATDS.” (Doc. No. 8 at 9 (see Robbins v. Coca-Cola-Co., No. 13-cv3
17-cv-1946-AJB-KSC

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132-IEG NLS, 2013 WL 2252646, at *2 n. 3 (S.D. Cal. May 22, 2013) (finding that general

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allegations in a TCPA case are sufficient in the pre-discovery phase)).) Regarding the

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second element, Mabeza alleges he is the “called party” because the phone number

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Ashfield dialed “was assigned to a cellular telephone service for which Plaintiff incurs a

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charge for incoming calls pursuant to 47 U.S.C. § 227(b)(1).” (Doc. No. 1 ¶ 50.) As for the

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last requirement, Mabeza alleges he never gave Ashfield consent, but that in any event,

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that consent was expressly revoked during at least two phone calls. (Id. ¶ 37, 39, 42–43,

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52–54.) Thus, the Court finds Mabeza pled sufficient facts to succeed on his TCPA claim.

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b. FDCPA and Rosenthal Act

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Under the FDCPA, a plaintiff must prove “(1) the plaintiff is a ‘consumer’ under 15

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U.S.C. § 1692a(3); (2) the debt arises out of a transaction entered into for personal

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purposes; (3) the defendant is a ‘debt collector’ under 15 U.S.C. § 1692a(6); and (4) the

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defendant violated one of the provisions contained in 15 U.S.C. §§ 1692a–1692o.” Wheeler

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v. Premiere Credit of North America, LLC, 80 F. Supp. 3d 1108, 1112 (S.D. Cal. 2015).

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The Rosenthal Act has the same elements, except plaintiff must show he is a “debtor.”

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Mannello v. Residential Credit Sols., Inc., No. 2:15-cv-07674-CAS-AJW, 2016 WL 94236,

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at *4 (C.D. Cal. Jan. 7, 2016).

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Mabeza argues he has adequately alleged he is both a debtor and a consumer,

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meeting the first elements under both statutes. His complaint states he is a debtor

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and a consumer, as defined by Cal. Civ. Code § 1788.2(h) and 15 U.S.C. § 192a(3).

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(Doc. No. 1 ¶ 18.) Next, Mabeza alleges “[t]he debt was incurred primarily for personal,

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family or household purposes and is therefore a ‘consumer debt’ . . . .” (Id. ¶ 34.) As to the

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third element, Mabeza alleges Ashfield is a debt collector as defined by the statute.

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(Id. ¶ 22.) Last, the complaint sufficiently alleges Ashfield violated § 1692(c)(a)2, which

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forbids contact with consumers who are known to be represented by an attorney;

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§ 1692c(c), by contacting Mabeza after such consent was revoked; § 1692d, for “engaging

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in any conduct the natural consequence of which is to harass, oppress, or abuse any person

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in connection with the collection of a debt;” and § 1692f, which makes it unlawful to use
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unfair or unconscionable means to collect a debt. (Id. ¶ 46.) Thus, the Court finds Mabeza

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has also sufficiently pled facts to succeed on both his FDCPA and Rosenthal Act claims.

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3. Sum of Money at Stake

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Here, Mabeza seeks a total judgment amount of $13,450. This includes TCPA

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statutory damages for $7,500, FDCPA statutory damages of $1,000, and attorney’s fees

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and costs of $4,950.

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“[T]he court must consider the amount of money at stake in relation to the

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seriousness of Defendant’s conduct.” PepsiCo, 238 F. Supp. 2d at 1176. Default judgment

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is disfavored where the sum of money at stake is too large or unreasonable in light of

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defendant’s actions. See Totten v. Hurrell, No. 00–2718, 2001 U.S. Dist. LEXIS 20259, at

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*2 (N.D. Cal. Nov. 28, 2001) (stating that “the ‘sum of money at stake’ factor [under Eitel]

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is meant to focus on the size of the award requested, as courts are hesitant to enter default

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judgments where large sums of money are at stake,” and finding an award of $19,977.74

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not a “large money judgment” in today’s world). The Court considers Mabeza’s

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declarations, calculations, and other documentation of damages in determining if the

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amount at stake is reasonable. See Walters v. Shaw/Guehnemann Corp., No. C 03-04058

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WHA, 2004 U.S. Dist. LEXIS 11992, at *7 (N.D. Cal. Apr. 15, 2004) (finding plaintiff’s

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calculations of damages and attorney fees reasonable, based on plaintiff’s sworn

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declarations and pay stubs and other documentation submitted by plaintiffs).

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First, Mabeza requests $7,500 for Ashfield’s TCPA violations. The TCPA allows

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$500 for each violation. 47 U.S.C. § 227(b)(3)(B). Mabeza alleges Ashfield placed five

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calls to his “phone using an ATDS” after he “expressly revoked consent to be contacted.”

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(Doc. No. 8 at 11.) However, Mabeza argues the Court should treble his damage award

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because Ashfield acted “willfully or knowingly” when it contacted him in violation of the

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statute, in which case $1,500 per violation can be awarded. (Doc. No. 8 at 11; 47 U.S.C. §

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227(b)(3).) Taking Mabeza’s allegations as true, the Court finds Ashfield had sufficient

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knowledge of Mabeza’s revoked consent as of the September 15, 2016 telephone call, in

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which Mabeza revoked consent over the phone and served a bankruptcy notice through an
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attorney. (Doc. No. 8 at 5, 11.) Ashfield then made five more phone calls throughout 2017,

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a willing violation of the TCPA. Thus, the Court grants Mabeza’s request for $7,500 in

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treble statutory damages.

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Next, Mabeza seeks $1,000 in statutory damages under the FDCPA. (Doc. No. 8 at

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12.) A court may award up to $1,000 for FDCPA violations. 15 U.S.C. § 1692k(a). Under

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the statute, the Court is to consider “the frequency and persistence of noncompliance by

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the debt collector, the nature of such noncompliance, and the extent to which such

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noncompliance was intentional. . . .” Id. at (b)(1). Courts have awarded $250 for a de

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minimus one time violation, $350 for three voicemail violations, and the maximum penalty

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for 20 calls after plaintiff revoked consent. See, respectively, Davis v. Hollins Law, 25 F.

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Supp. 3d 1292, 1296 (E.D. Cal. 2014); Freligh v. Roc Asset Solutions, LLC, Case No. 16-

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cv-00653-MEJ, 2016 WL 3748723, at *8 (N.D. Cal. June 8, 2016); Mulvihill v. St. Amant

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& Assocs., No. 2:13–cv–0080 TLN DAD, 2014 WL 1665229, at *2 (E.D. Cal. Apr. 24,

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2014).

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Here, Ashfield’s actions are not so egregious as to warrant the maximum penalty.

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Even five calls—including threats of wage garnishment and legal action—did not warrant

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a maximum penalty in one case. Evans v. Creditor’s Specialty Service, Inc., Case No. 15-

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cv-03355-BLF, 2016 WL 730227, at * 3 (N.D. Cal. Feb. 24, 2016) (granting an award of

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$700 under the FDCPA). Although Mabeza revoked consent orally, in writing, and through

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an attorney, Ashfield only made five additional phone calls and there was no inherent

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threatening or misleading nature about the calls justifying the maximum penalty. See

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Ortega v. Girggs & Associates LLC, No. 5:11-cv-02235-EJD, 2012 WL 2913202, at *1

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(N.D. Cal. Jul. 13, 2012) (finding maximum statutory damages were owed when defendant

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made two calls, threatened criminal prosecution, and called plaintiff’s work pretending to

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be from the district attorney’s office). Thus, the Court finds $600 is a reasonable penalty

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under the FDCPA for knowingly violating the statute after Mabeza revoked consent and

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hired an attorney.

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Last, Mabeza requests $4,950 in attorney’s fees and costs. (Doc. No. 9 at 2.) The

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FDCPA allows recovery of attorney’s fees. 15 U.S.C. § 1692k(a)(3). Counsel spent twelve

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hours litigating this case. (Doc. No. 9 at 4.) The lead attorney’s rate is $400, and his

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associate’s rate is $300. The Court finds these rates and hours reasonable for the work done,

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and well supported by declarations and a detailed timesheet. (Doc. Nos. 9-2, 9-3, 9-5.)

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Thus, the Court awards $4,950 in attorney’s fees.

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Together, the TCPA statutory penalties, FDCPA penalties, and attoney’s fees total
$13,050.
4. Possibility of Dispute Concerning Material Facts

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The next pertinent Eitel factor considers whether there are disputed material facts.

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“Upon entry of default, all well pleaded facts in the complaint are taken as true, except

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those relating to damages.” PepsiCo, 238 F. Supp. 2d at 117. Here, Mabeza has alleged

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sufficient facts to support its claims as analyzed above. Moreover, because Ashfield failed

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to participate in litigation, the clerk entered default against it, submitting all well pleaded

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facts as true. Thus, there is no dispute of material facts and this factor favors the entry of

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default judgment against Ashfield.

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5. Excusable Neglect

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There is no indication that defendants allowed its default to be taken as a result of

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excusable neglect. After being served with the complaint, Ashfield simply failed to respond

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or even participate in defending itself. The Court simply has nothing to support a finding

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that Ashfield’s neglect was excusable. Consequently, this factor weighs in favor of the

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entry of default judgment.

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6. Policy Favoring Decisions on the Merits

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Although default judgment is disfavored, a decision on the merits is impractical, if

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not impossible, when the defendant takes no part in the action. Penpower Technology Ltd.

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v. S.P.C. Technology, 627 F. Supp. 2d 1083, 1093 (N.D. Cal. 2008). Given that Ashfield

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has failed to respond, the general preference for resolution on the merits is not equally

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applicable. See, e.g., id. In sum, the relevant considerations weigh in favor of entry of

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default judgment against Ashfield.
IV.

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CONCLUSION

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For the reasons set forth above, the Motion for Default Judgment and Attorney Fees

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against Ashfield, (Doc. Nos. 8, 9), are GRANTED. The Court awards $13,050. The Clerk

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is directed to enter judgment consistent with this order.

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IT IS SO ORDERED.

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Dated: March 20, 2018

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