Sinnet et al v. Empire Collection Authorities, Inc.

Filing 10

MEMORANDUM DECISION AND ORDER granting in part and denying in part 7 Motion for Default Judgment. Plaintiffs are awarded $1,000 in statutory damages, $4,107.50 in attorney fees, and $415 in costs, for a total judgment of $5,522.50. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjm)

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF IDAHO

CRAIG SINNET and DIANNE SINNET,
Case No. 2:11-cv-00248-BLW
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
EMPIRE COLLECTION AUTHORITIES,
INC.,
Defendant.

Before the Court is Plaintiffs’ Motion for Default Judgment (Dkt. 7), which
includes a request for attorney fees and costs. For the reasons stated below, the Court
will grant the Motion in part, and deny in part.
BACKGROUND
Plaintiffs filed this action alleging violations of the Fair Debt Collection Practices
Act (FDCPA), including that Defendant called and demanded payment from Plaintiffs for
an alleged debt, and threatened to take Plaintiffs to small claims court. Compl., Dkt. 1.
Defendant was personally served with the summons in this action on June 9, 2011 (Dkt.
3), and failed to answer or otherwise respond. On Plaintiffs’ motion (Dkt. 4), the Clerk

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of Court entered an order pursuant to Rule 55(a), defaulting Defendant (Dkt. 6).
Plaintiffs now bring this Motion seeking default judgment in the amount of $5,865.00, for
statutory damages, attorney fees, and costs of service.
DISCUSSION
1.

Default Judgment
A.

Legal Standard

Where a party against whom judgment is sought has failed to plead or otherwise
defend, the party seeking relief must first secure an entry of default, and then may apply
to the court for default judgment. Fed. R. Civ. P. 55. Where a party is in default, “the
factual allegations of the complaint, except those relating to the amount of damages, will
be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir.
1987) (quoting Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977)).
Thus, for purposes of default judgment, the court need not enter findings of fact, except
as to damages, which are not at issue here. Adriana Int’l Corp. v. Thoeren, 913 F.2d
1406, 1414 (9th Cir. 1990).
Whether to enter default judgment is in the sole discretion of the court. See Lau Ah
Yew v. Dulles, 236 F.2d 415 (9th Cir. 1956). In Eitel v. McCool, 782 F.2d 1470, 1471-72
(9th Cir. 1986), the Court identified seven factors for the court to consider in exercising
its discretion to enter default judgment: (1) potential prejudice to the plaintiff; (2) the
merits of plaintiff’s substantive claim; (3) the sufficiency of the Complaint; (4) the
amount at stake in the action; (5) the possibility of a dispute concerning material facts;

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(6) whether the default was due to excusable neglect; and (7) the strong policy underlying
the Federal Rules favoring a decision on the merits. Id. at 1471-72. “In applying this
discretionary standard, default judgments are more often granted than denied.” PepsiCo,
Inc. v. Triunfo-Mex, Inc., 189 F.R.D. 431, 432 (C.D. Cal. 1999).
B.

Default Judgment Is Appropriate

Applying the Eitel factors, the Court first examines the possible prejudice to
Plaintiffs if judgment is not entered. Plaintiffs cite the public policy favoring
enforcement of the FDCPA – “to eliminate abusive debt collection practices . . . [and]
protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). Also, the
FDCPA specifically provides that an award of fees is mandatory, so as to fulfill
Congress’s intent that debtors enforce the Act as ‘private attorneys general.’ Camacho v.
Bridgeport Financial, Inc., 523 F.3d 973, 978 (9th Cir. 2008). The Court here finds that
Plaintiffs would be prejudiced if judgment is not entered, from having undertaken the
costs and effort of pursuing this action. Thus, this factor weighs in favor of default
judgment.
The second and third factors “require that a plaintiff state a claim on which the
[plaintiff] may recover.” PepsiCo, Inc. v. California Sec. Cans, 238 F. Supp. 2d 1172,
1175 (C.D. Cal. 2002). The Court finds that the allegations in the Complaint adequately
establish the merits of Plaintiffs’ claim. Therefore these factors weigh in favor of
entering default judgment. Given that the well-pleaded allegations of the complaint are
taken as true, and since Defendant has failed to appear, respond, or defend against the

MEMORANDUM DECISION AND ORDER - 3

complaint, the likelihood of a dispute regarding the material facts is given little weight.
See Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002); Elektra
Entertainment Group, Inc. v. Crawford, 226 F.R.D. 388, 393 (C.D. Cal. 2005). As such,
the fifth factor – the possibility of a factual dispute – also weighs in favor of default
judgment.
As to the sum at stake, the fourth factor, Plaintiffs seek a minimal amount –
$5,865 – of which most is attorney fees. The Court thus finds that this factor does not
weigh against default judgment. There is no indication of excusable neglect by
Defendant, despite his having been properly served. The sixth factor therefore weighs in
favor of default judgment. Finally, the Court recognizes the policy favoring a decision on
the merits, but here finds that Defendant has had more than adequate time to come
forward and assert any claims or defenses it has in this matter. Plaintiffs should not be
impeded by Defendant’s continued failure to appear in this action.
On examination of each of the factors, the Court concludes that default judgment
against Defendant is appropriate.
C.

Judgment Amount

The FDCPA specifically provides for actual and statutory damages, as well as
recovery of fees. 15 U.S.C. § 1692k(a). The Ninth Circuit has held that a plaintiff need
not prove actual damages to be awarded statutory damages under the FDCPA. Baker v.
G.C. Serv. Corp., 677 F.2d 775, 780 (9th Cir. 1982). So long as the debt collector
defendant has violated the Act, the court may award additional damages of up to $1,000.

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Id. In light of the statutory language and Ninth Circuit precedent, and given Defendant’s
failure to appear or respond in this action, the Court will award the $1,000 in statutory
damages requested by Plaintiff.
2.

Attorney Fees and Costs
In addition to statutory damages, Plaintiff requests attorney fees and costs in the

amount of $4,865. The FDCPA is a ‘fee-shifting’ statute and provides that a successful
litigant is entitled to “the costs of the action, together with a reasonable attorney’s fee as
determined by the court.” 15 U.S.C. § 1692k(a)(3); Staton v. Boeing Co., 327 F.3d 938
(9th Cir. 2003). The Court agrees that Plaintiffs are a prevailing party, as discussed
above, and thus an award of attorney fees and costs is appropriate. The Court next looks
to whether the requested fees and costs are reasonable.
“A district court should calculate [a] reasonable hourly rate according to the
prevailing market ranges in the relevant community . . . which typically is the community
in which the district court sits.” Schwarz v. Sec’y of Health & Human Servs., 73 F.3d
895, 906 (9th Cir. 1995). Plaintiffs submitted documents in support of their attorney fee
request, including Declarations of counsel (Dkt. 7-3), timekeeping records (Dkt. 7-1),
attorney biographies (Dkt. 7-2), and a Survey Report of U.S. Consumer Law Attorney
Fees (Dkt. 7-4).
Having reviewed the documents, the Court finds that the services identified and
hours spent are reasonable. The hourly rate for attorney Robert Montgomery, who has
more than 35 years of experience, and attorney Mahadhi Corzano , with roughly 4 years

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of experience, are also appropriate. However, the Court will adjust downward the hourly
rate for attorney John Barker, who has been practicing for roughly 11 years – 7 as a
consumer attorney (Dkt. 7-2 at 2). Consistent with the Survey Report (Dkt. 7-4), and the
Court’s knowledge and familiarity with the prevailing rates in Idaho, the Court finds that
$300 is a more reasonable hourly rate than the $350 requested. Also consistent with the
Survey Report (Dkt. 7-4), the Court will adjust the hourly paralegal rate to $100 from the
$125 requested.
Plaintiffs argue that their higher proposed rates are supported by the Laffey Matrix.
However, courts in the Ninth Circuit have declined to apply that matrix; this Court
agrees, and will also decline to follow the matrix in setting Plaintiffs’ rates. With these
adjustments, the Court finds that the reasonable attorney fees to which Plaintiffs are
entitled totals $4,107.50.
In addition, Plaintiffs request $400 in filing fees and costs. Plaintiffs are entitled
to their filing fees of $350, and any service fees under Dist. Idaho Loc. Civ. R. 54.1(c)(1);
28 U.S.C. § 1920. Plaintiffs’ service fees in the amount of $65 are supported by an
invoice provided by counsel (Dkt. 9-1). The Court will therefore grant Plaintiffs $415 in
fees.
ORDER
IT IS ORDERED THAT:
1.

Plaintiffs’ Motion for Default Judgment (Dkt. 7) is GRANTED in part, and
DENIED in part.

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2.

Consistent with the above Memorandum Decision, Plaintiffs are awarded
$1,000 in statutory damages, $4,107.50 in attorney fees, and $415 in costs,
for a total judgment of $5,522.50.

3.

Judgment will be entered separately.

DATED: April 26, 2012

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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