Eaton v. Broken Spoke Cycles, Inc.
Filing
13
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT 12 , by Judge William J. Martinez on 5/18/2015.(dhans, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 14-cv-2898-WJM-KMT
SHEENA EATON,
Plaintiff,
v.
BROKEN SPOKE CYCLES, INC.,
Defendant.
ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT
Plaintiff Sheena Eaton initiated this action on October 23, 2014, and bring s
claims for violations of the Truth in Lending Act, 15 U.S.C. § 1601 et seq. (“TILA”) and
the Colorado Consumer Credit Code, C.R.S. § 5-1-101 et seq. (ECF No. 1.) Plaintiff
alleges that she purchased a vehicle from Defendant Broken Spoke Cycles, Inc., which
provided her with an amortization schedule and a sales contract. (Id. at 2.) However,
Plaintiff alleges that the amortization schedule and sales contract did not com ply with
the terms of TILA or the Colorado Consumer Credit Code. (Id. at 2-4.) This matter is
before the Court on Plaintiff’s Motion for Default Judgment (“Motion”). (ECF No. 12.)
For the reasons set forth below, the Motion is granted in part and denied in part.
I. ANALYSIS
Before granting a motion for default judgment, the Court must take several steps.
First, the Court must ensure that it has personal jurisdiction over the defaulting
defendants and subject matter jurisdiction over the action. See Williams v. Life Sav. &
Loan, 802 F. 2d 1200, 1202-03 (10th Cir. 1986). Next, the Court should consider
whether the well-pleaded allegations of fact, which are deemed admitted by a
defendant in default, support a judgment on the claims against the defaulting
defendants. See Fed. Fruit & Produce Co. v. Red Tomato, Inc., 2009 WL 765872, at *3
(D. Colo. March 20, 2009) (“Even after entry of default, however, it remains for the court
to consider whether the unchallenged facts constitute a legitimate basis for the entry of
a judgment.”) (citations omitted). “In determining whether a claim for relief has been
established, the well-pleaded facts of the complaint are deemed true.” Id. (citing
Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th
Cir. 1983)).
Once the Court is satisfied that default judgment should be entered, it has the
discretion to hold a hearing to determine the amount of damages. See Fed. R. Civ. P.
55(b)(2). Generally, a damages hearing is not needed when the damages requested
are for a sum certain. See United States v. Craighead, 176 F. App’x 922, 925 (10th Cir.
2006). In this matter, the Court will therefore determine: (1) whether the Court’s
jurisdiction over the Defendant and claims is proper; (2) whether the well-pleaded
allegations of fact support a judgment on the claims against Defendant; and (3) the
damages to which Plaintiff is entitled, if any. The Court discusses each issue below.
A.
The Court’s Jurisdiction
The Court must first determine whether it has personal jurisdiction over
Defendant, and subject matter jurisdiction over this action. The Court finds that it has
proper subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because Plaintif f’s TILA
2
claim arises under federal law. The Court also finds it has personal jurisdiction over the
Defendant because Defendant is located in Colorado, and negotiated and entered into
a contract with a Colorado resident. (ECF Nos. 1 & 8.) Lastly, pursuant to 28 U.S.C.
§ 1367, the Court finds that it has supplemental jurisdiction over Plaintiff’s related
claims brought under Colorado law. Therefore, the Court has jurisdiction over all claims
and parties in this action.
B.
Plaintiff’s Claims
Plaintiff asserts that Defendant violated both TILA and the Colorado Consumer
Credit Code. (ECF No. 1.) Treating all well-pled facts in the Plaintiff’s Complaint as
true, the Court finds that Plaintiff has alleged a sufficient basis on which to impose
liability on Defendant. The Court discusses both claims below.
1. TILA Violation
Plaintiff asserts that Defendant violated the following TILA provision:
For each consumer credit transaction other than under an open
end credit plan, the creditor shall disclose each of the following
items, to the extent applicable:
...
(5) The sum of the amount financed and the finance charge, which
shall be termed the “total of payments”. . . .
(8) Descriptive explanations of the terms “amount financed”,
“finance charge”, “annual percentage rate”, “total of payments”, and
“total sale price” as specified by the Bureau. The descriptive
explanation of “total sale price” shall include reference to the
amount of the down payment.
15 U.S.C. §§ 1638(a)(5), (8). Plaintiff alleges that Defendant is a “creditor” as defined
in TILA, and that neither the amortization schedule nor the sales contract disclosed to
Plaintiff the “total of payments” as required by § 1638(a)(5). (ECF No. 1.) The
3
amortization schedule (ECF No. 1-2) states the amount financed and finance charge
separately, the sum of which is termed “Beginning Balance,” which does not comply
with the statute. See Jager v. Boston Rd. Auto Mall, Inc., 2015 WL 235342, at *2
(S.D.N.Y. Jan. 16, 2015) (“The sum of the amount financed and the finance charge,
which should be the ‘total of payments,’ is termed the ‘Balance Due.’ That does not
comply with § 1638(a)(5).”). Based on Plaintiff’s well-pled allegations, the Court finds
that Plaintiff has shown that Defendant violated its duties under TILA. The Court further
finds that, because the violation of § 1638(a)(5) allows Plaintiff to recover the sum
certain damages she seeks, the Court need not determine whether Defendant also
violated § 1638(a)(8).
2.
Colorado Credit Code Violation
Plaintiff’s second claim alleges that Defendant’s violation of TILA is also a
violation of the Colorado Consumer Credit Code, specifically Colorado Revised Statute
§ 5-3-101(2), which states: “The creditor shall disclose to the consumer to whom credit
is extended with respect to a consumer credit transaction the information, disclosures,
and notices required by the federal ‘Truth in Lending Act’ . . . and any regulation
thereunder.” Therefore, based on Defendant’s TILA violation outlined above, Plaintiff
has shown that Defendant violated the Colorado Consumer Credit Code as well.
C.
Damages for a Sum Certain
Plaintiff has shown that she is entitled to judgment in her favor on both her TILA
and Colorado Consumer Credit Code claims. However, because Plaintiff’s claims give
rise to partially overlapping damages between state and federal statutes, the Court
must limit any double recovery. See Mason v. Okla. Turnpike Authority, 115 F.3d 1442,
4
1459 (10th Cir. 1997) (“[i]f a federal claim and a state claim arise from the same
operative facts, and seek identical relief, an award of damages under both theories will
constitute double recovery”), overruled on other grounds by TW Telecom Holdings Inc.
v. Carolina Internet Ltd., 661 F.3d 495 (10th Cir. 2011).
Plaintiff has failed to cite to this Court any authority in support of her claimed
entitlement to receive damages under both statutes. Therefore, the Court will only
award Plaintiff damages on the statute which provides the greater relief. In this case,
although both statutes’ measure of damages is “twice the amount of any finance charge
in connection with the transaction,” TILA provides Plaintiff the greater relief. Compare
15 U.S.C. § 1640(a)(2)(A) (capping damages at $2,000.00), with C.R.S. § 5-5-202(1)(a)
(capping damages at $1,000.00); see also Koons Buick Pontiac GMC, Inc. v. Nigh, 543
U.S. 50, 62 (2004). The Court accordingly awards Plaintiff damages pursuant to TILA
in the amount of twice the finance charge in this case, or $1,618.22. (ECF No. 1-2.)
D.
Attorneys’ Fees and Costs
Plaintiff also seeks $3,500.00 in attorneys’ fees in connection with this matter.
(ECF No. 12-1.) To determine a reasonable attorneys’ fee, the court must calculate a
“lodestar figure” by multiplying a reasonable hourly rate by the hours reasonably
expended. Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1257 (10th Cir. 2005) (citing
Case v. Unified Sch. Dist. No. 233, 157 F.3d 1243, 1249 (10th Cir. 1998)). However,
Plaintiff has not submitted sufficient documentation to allow the Court to make its
required findings. Plaintiff’s affidavit recites the total fees requested, but not counsel’s
hourly rate or the number of hours expended. (ECF No. 12-1.) The Court therefore
5
denies Plaintiff’s request for attorneys’ fees at this time, without prejudice to refiling with
more detailed billing information.
The Court will, however, award Plaintiff her costs. Federal Rule of Civil
Procedure 54(d) provides that costs, other than attorneys’ fees, should be awarded to a
prevailing party. Plaintiff’s affidavit states that she expended $483.00 in costs for filing
the complaint and service of process, which the Court accordingly awards pursuant to
Rule 54(d).
IV. CONCLUSION
For the reasons set forth above, the Court ORDERS as follows:
1.
Plaintiff’s Motion for Entry of Default Judgment Against Defendant (ECF No. 12)
is GRANTED IN PART AND DENIED IN PART as more specifically set forth in
this Order;
2.
The Clerk shall enter Judgment in favor of Plaintiff and against Defendant
Broken Spoke Cycles, Inc. in the amount of $1,618.22 in damages and $483.00
in costs; and
3.
Plaintiff shall file a motion for attorneys’ fees with appropriate supporting
documentation, including a detailed and legally sufficient affidavit, no later than
May 29, 2015.
6
Dated this 18th day of May, 2015.
BY THE COURT:
_______________________
William J. Martínez
United States District Judge
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?