Jacobs et al v. Ocwen Loan Servicing, LLC

Filing 114

ORDER That Defendant Lawrence E. Castles Motion for Attorney Fees 109 filed August 21, 2014, is granted; That under 42 U.S.C. § 1988, defendant Lawrence E. Castle is awarded attorney fees of 5,260.00 dollars; That Defendant Vaden Law Firm, LLCs Motion for Attorneys Fees 112 filed August 29, 2014, is granted; That under 42 U.S.C. § 1988, §12-14-113 (1.5), C.R.S., 15 U.S.C. § 1692k(a)(3), and §6-1-113(3), C.R.S., defendant Vaden Law Firm, LLC is awarded attorney fees of 29,310.00 dollars; That the plaintiffs, Dean L. Jacobs and Marcielle S. Jacobs, shall be jointly and severally liable for the attorney fees awarded in this order; and That on or before April 24, 2015, the plaintiffs, Dean L. Jacobs and Marcielle S. Jacobs, shall pay to the defendants, Lawrence E. Castle and the Vaden Law Firm, LLC, the reasonable attorney fees awarded to those defendants in this order. By Judge Robert E. Blackburn on 3/26/2015.(evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 13-cv-02518-REB-BNB
DEAN L. JACOBS, and
MARCIELLE S. JACOBS,
Plaintiffs,
v.
OCWEN LOAN SERVICING, LLC,
FEDERAL HOME LOAN MORTGAGE CORPORATION,
VADEN LAW FIRM, LLC,
LAWRENCE E. CASTLE, in his individual capacity,
MEGASTAR FINANCIAL CORP.,
YVONNE G. SMITH,
GORDON D. SMITH,
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. “MERS”,
MERSCORP HOLDINGS, INC.,
Defendants.

ORDER GRANTING MOTIONS FOR ATTORNEY FEES
Blackburn, J.
The matters before me are: (1) Defendant Lawrence E. Castle’s Motion for
Attorney Fees [#109]1 filed August 21, 2014; and (2) Defendant Vaden Law Firm,
LLC’s Motion for Attorneys’ Fees [#112] filed August 29, 2014. No response was
filed addressing either motion. I grant both motions.
I. JURISDICTION
I have subject matter jurisdiction under 28 U.S.C. § 1331 (federal question) and
28 U.S.C. § 1367 (supplemental jurisdiction).

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“[#109]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

II. STANDARD OF REVIEW
The generally applicable “American Rule” provides that “the prevailing litigant is
ordinarily not entitled to collect a reasonable attorneys' fee from the loser” unless
specifically authorized by statute. Alyeska Pipeline Service Co. v. Wilderness
Society, 421 U.S. 240, 247 (1975); see also Federal Trade Commission v.
Kuykendall, 466 F.3d 1149, 1152 (10th Cir. 2006). However, in this case attorney fees
may be awarded under 42 U.S.C. § 1988 to the extent those fees are related to claims
asserted under 42 U.S.C. § 1983. In addition, attorney fees may be awarded under the
fee shifting provisions of §12-14-113 (1.5), C.R.S. (a part of the Colorado Fair Debt
Collections Practices Act); 15 U.S.C. § 1692k(a)(3) (a part of the Federal Fair Debt
Collections Practices Act); and §6-1-113(3), C.R.S. (a part of the Colorado Consumer
Protection Act).
The fee shifting provisions above involve both federal law and the law of the
State of Colorado. Under Colorado law, if a statute providing for an award of
reasonable attorney fees does not provide a definition of reasonableness, “the amount
of the award must be determined in light of all the circumstances, based upon the time
and effort reasonably expended by the prevailing party's attorney.” Tallitsch v. Child
Support Services, Inc., 926 P.2d 143, 147 (Colo. App.1996) (internal quotation and
citation omitted). The statutes at issue here do not provide a definition of
reasonableness. Thus, “[i]n awarding attorney fees, the trial court may consider, among
other factors, the amount in controversy, the duration of representation, the complexity
of the case, the value of the legal services to the client, and the usage in the legal
community concerning fees in similar cases. No one of these factors is conclusive.”
Melssen v. Auto-Owners Ins. Co., 285 P.3d 328, 339 (Colo. App.,2012) (citation
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omitted).2 “The party requesting an award of attorney fees bears the burden of proving
by a preponderance of the evidence its entitlement to such an award.” American
Water Development, Inc. v. City of Alamosa, 874 P.2d 352, 383 (Colo. 1994)
The Colorado and federal standards for calculating a reasonable attorney fee are
essentially identical. The starting point for any calculation of a reasonable attorney fee
is the “lodestar,” that is, the number of hours reasonably expended multiplied by a
reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Malloy v.
Monahan, 73 F.3d 1012, 1017-18 (10th Cir. 1996). In determining the reasonable
number of hours spent on the litigation, the applicant must exercise the same “billing
judgment” as would be proper in setting fees for a paying client. Hensley, 461 U.S. at
437; Malloy, 73 F.3d at 1018. “‘Hours that are not properly billed to one’s client also
are not properly billed to one’s adversary pursuant to statutory authority.’” Hensley,
461 U.S. at 434 (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980) (en
banc)) (emphases in Copeland). Counsel, therefore, must make a good faith effort to
exclude hours that are “excessive, redundant or otherwise unnecessary.” Id.
III. ANALYSIS
This case concerned a foreclosure by a lender on the home once owned by the
plaintiffs, Dean and Marcielle Jacobs. In their amended complaint [#24], the Jacobs
asserted claims against various entities and persons allegedly involved in the

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Rule 1.5 of the Colorado Rules of Professional Conduct provides a similar list of factors. "The
factors to be considered in determining the reasonableness of a fee include the following:(1) the time and
labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the
legal service properly;(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;(3) the fee customarily charged in the locality
for similar legal services;(4) the amount involved and the results obtained;(5) the time limitations imposed
by the client or by the circumstances;(6) the nature and length of the professional relationship with the
client;(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and(8)
whether the fee is fixed or contingent."

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foreclosure proceedings. Their claims included: (1) 42 U.S.C. § 1983 (due process); (2)
42 U.S.C. § 1983 (equal protection); (3) 42 U.S.C. § 1983 (civil conspiracy); (4) fraud;
(5) violation of the federal Fair Debt Collection Practices Act; (6) violation of the
Colorado Fair Debt Collection Practices Act; (7) violation of the Colorado Consumer
Protection Act; (8) negligence per se; (9) intentional infliction of emotional distress; (10)
negligence; and (11) violation of the Colorado statute which prohibits spurious lien
documents.
All of the claims of the Jacobs were dismissed for failure to state a claim on
which relief can be granted. The claims and bases for dismissal are detailed in
recommendations [#57, #84, #85, #86, & #87] of the United States Magistrate Judge
assigned to this case and in my order [#105] adopting those recommendations and
granting the corresponding motions to dismiss. To rehearse,there is no arguable basis
for any of the claims of the Jacobs.
A. Entitlement to Award of Attorney Fees
1. Lawrence E. Castle
Defendant Lawrence E. Castle seeks an award of attorney fees under 42 U.S.C.
§ 1988. Under § 1988, "the court, in its discretion, may allow the prevailing party, other
than the United States, a reasonable attorney's fee as part of the costs." The threshold
for awarding attorney fees to a prevailing defendant under § 1988 is high:
While a prevailing plaintiff ordinarily is entitled to attorney
fees, a prevailing defendant in a civil rights action may
recover attorney fees only if the suit was vexatious, frivolous,
or brought to harass or embarrass the defendant. This is a
difficult standard to meet, to the point that rarely will a case
be sufficiently frivolous to justify imposing attorney fees on
the plaintiff.
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Mitchell v. City of Moore, Oklahoma, 218 F.3d 1190, 1203 (10th Cir. 2000) (citations
and internal quotation marks omitted). Moreover, “[i]n applying these criteria, it is
important that a district court resist the understandable temptation to engage in post hoc
reasoning by concluding that, because a plaintiff did not ultimately prevail, his action
must have been unreasonable or without foundation.” Christiansburg Garment Co. v.
EEOC, 434 U.S. 412, 421-22 (1978). See also Mitchell, 218 F.3d at 1203 (“The
dismissal of claims at the summary judgment stage does not automatically meet this
stringent standard.”)
The only claims asserted against Lawrence E. Castle were claims under 42
U.S.C. § 1983. For a variety of reasons, the § 1983 claims asserted against Mr. Castle
are groundless. Summarizing the recommendation [#84] of the magistrate judge, I
stated in my order [#105], “the allegations of the plaintiffs concerning Mr. Castle are
vague and conclusory, and the plaintiffs aver no plausible factual allegations which
show that Mr. Castle is a state actor, as that term applies under § 1983.” Order [#84],
p. 5. The claims asserted against Mr. Castle are facially baseless, and there is no
reasonable argument to be made in support of those claims. At minimum, the filing of
such a facially baseless complaint against Mr. Castle is vexatious and frivolous. Thus, I
conclude that Mr. Castle is entitled to an award of attorney fees under § 1988.
2. Vaden Law Firm, LLC
In their amended complaint [#24], the Jacobs asserted eleven claims. The
Vaden Law Firm, LLC was named as a defendant in all of the claims, except claim ten.
The first, second, third, fifth, sixth, and seventh claims in the amended complaint are
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asserted under a statutory scheme with a provision for an award of attorney fees. In its
motion, the Vaden firm seeks an award of attorney fees under each of those fee shifting
provisions.
Summarizing the recommendation [#86] of the magistrate judge, I stated in my
order [#105]:
For the reasons detailed by the magistrate judge in his recommendation
[#86], claims one, two, and three (§ 1983 - due process, equal protection,
civil conspiracy) must be dismissed because these claims are barred by
the applicable statute of limitations, because the plaintiffs make no
plausible factual allegations which show that the Vaden Law Firm is a
state actor, as that term applies under § 1983, and because otherwise the
factual allegations in the amended complaint [#24] are not sufficient to
state a claim on which relief can be granted under § 1983. Claim four
(fraud) must be dismissed because this claim is barred by the applicable
statute of limitations and because otherwise the factual allegations in the
amended complaint [#24] are not sufficient to state a claim for fraud.
Claims five and six (federal and Colorado Fair Debt Collections Practices
Acts) must be dismissed because they are barred by the applicable
statutes of limitations.
Claim seven (Colorado Consumer Protection Act (CCPA)) must be
dismissed because the allegations in the amended complaint [#24] are not
sufficient to state a CCPA claim. Specifically, the allegations of the plaintiff
are not sufficient to plausibly allege an impact on the public, an essential
element of a CCPA claim. Rhino Linings USA, Inc. v. Rocky Mountain
Rhino Lining, Inc., 62 P.3d 142, 149 (Colo. 2003). Claims eight
(negligence per se), nine (intentional infliction of emotional distress), and
eleven (spurious lien documents) must be dismissed because these
claims are barred by the applicable statute of limitations. In addition, the
factual allegations in the amended complaint [#24] are not sufficient to
state a claim on which relief can be granted.
Addressing the § 1983 claims, those claims are facially baseless, and there is no
reasonable argument to be made in support of those claims. The filing of such facially
baseless claims against the Vaden firm is vexatious and frivolous. Thus, I conclude that
the Vaden firm is entitled to an award of attorney fees under § 1988.
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Section 12-14-113 (1.5), C.R.S., part of the Colorado Fair Debt Collections
Practices Act, provides relevantly: “In the case of any unsuccessful action brought
under this section, the plaintiff shall be liable to each defendant in an amount equal to
that defendant's cost incurred in defending the action, together with such reasonable
attorney fees as may be determined by the court.” The Colorado Fair Debt Collections
Practices Act claim of the Jacobs was not successful. Thus, the Vaden firm is entitled
to an award of attorney fees under this statute.
15 U.S.C. § 1692k(a)(3), part of the Federal Fair Debt Collections Practices Act,
provides for an award of attorney fees against a plaintiff if the court finds that the “action
under this section was brought in bad faith and for the purpose of harassment . . . .”
When a reasonable investigation would reveal that factual allegations in a complaint or
available evidence do not support a Federal Fair Debt Collections Practices Act claim,
pursuit of such a claim is in bad faith. See, e.g., Rhinehart v. CBE Group, Inc., 714
F.Supp.2d 1183, 1186 (M.D.Fla. 2010).
Section 6-1-113(3), C.R.S., part of the Colorado Consumer Protection Act,
provides for an award of attorney fees against a plaintiff if the court finds the claim “to
be groundless and in bad faith or for the purpose of harassment . . . .” In Wheeler v.
T.L. Roofing, Inc., the court found an award of attorney fees to be appropriate when
the plaintiff “did not allege, nor is there any showing in any factual material submitted by
the parties that the alleged conduct of [defendant] significantly impacts the public as an
actual or potential consumer.” 74 P.3d 499, 506 (Colo. App. 2003). As noted above,
the claim of the Jacobs under the Colorado Consumer Protection Act was dismissed on

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the same basis.
Under Fed. R. Civ. P. 11, a party who signs a pleading “certifies that to the best
of the person's knowledge, information, and belief, formed after an inquiry reasonable
under the circumstances” that “the claims . . . and other legal contentions are warranted
by existing law or by a nonfrivolous argument for extending, modifying, or reversing
existing law or for establishing new law” and that “the factual contentions have
evidentiary support . . . .” Filing a complaint without conducting such a reasonable
inquiry and asserting claims which have no arguable basis in fact or law results in the
imposition of a needless burden on the defendants.
Having reviewed the record, I find and conclude that the claims of the Jacobs
under the Federal Fair Debt Collections Practices Act and the Colorado Consumer
Protection Act both are groundless and were filed in bad faith. This is true because, at
minimum, the Jacobs filed these claims without any reasonable investigation of the
factual and legal bases for these claims. Notwithstanding the lack of any investigation,
the Jacobs asserted claims against the Vaden firm that were not reasonably plausible or
arguable. Instead, those claims were and are facially invalid. As a consequence, the
Vaden firm is entitled to an award of attorney fees under both 15 U.S.C. § 1692k(a)(3)
and § 6-1-113(3), C.R.S.
B. Reasonable Attorney Fees
Both Mr. Castle and the Vaden firm have included with their motions billing
records of their attorneys, which billing statements document the number of hours their
attorneys spent defending against the claims of the Jacobs and detailing how those
hours were spent in defending those claims. The hours spent by counsel for Mr. Castle
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and for the Vaden firm are reasonable. Counsel for Mr. Castle billed at an hourly rate of
200 dollars. The two attorneys for the Vaden firm billed at hourly rates of 225 dollars
and 175 dollars. These hourly rates are very reasonable. Obviously, counsel for Mr.
Castle and the Vaden firm were successful in this litigation. All of the claims of the
Jacobs against these two defendants were dismissed with prejudice.
Based on the lodestar calculation detailed in the motion filed by Mr. Castle, he is
entitled to an award of reasonable attorney fees in the amount of 5,260.00 dollars.
Based on the lodestar calculation detailed in the motion filed by the Vaden firm, it is
entitled to an award of reasonable attorney fees in the amount of 29,310.00 dollars.
None of the other relevant factors augurs toward a downward or upward adjustment of
these lodestar figures. The difference in the amount of attorney fees incurred by these
two defendants is explained in large part, if not totally, by the number and complexity of
the claims asserted against the Vaden firm, as opposed to the two § 1983 claims
asserted against Mr. Castle.
THEREFORE, IT IS ORDERED as follows:
1. That Defendant Lawrence E. Castle’s Motion for Attorney Fees [#109]
filed August 21, 2014, is granted;
2. That under 42 U.S.C. § 1988, defendant Lawrence E. Castle is awarded
attorney fees of 5,260.00 dollars;
3. That Defendant Vaden Law Firm, LLC’s Motion for Attorneys’ Fees [#112]
filed August 29, 2014, is granted;
4. That under 42 U.S.C. § 1988, §12-14-113 (1.5), C.R.S., 15 U.S.C. §

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1692k(a)(3), and §6-1-113(3), C.R.S., defendant Vaden Law Firm, LLC is awarded
attorney fees of 29,310.00 dollars;
5. That the plaintiffs, Dean L. Jacobs and Marcielle S. Jacobs, shall be jointly
and severally liable for the attorney fees awarded in this order; and
6. That on or before April 24, 2015, the plaintiffs, Dean L. Jacobs and Marcielle
S. Jacobs, shall pay to the defendants, Lawrence E. Castle and the Vaden Law Firm,
LLC, the reasonable attorney fees awarded to those defendants in this order.
Dated March 26, 2015, at Denver, Colorado.
BY THE COURT:

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