Baer v. Persels & Associates, LLC
Filing
42
MEMORANDUM AND ORDER granting in part and denying, without prejudice, in part 40 plaintiff's Motion for Default Judgment. Signed by Chief Judge J. Thomas Marten on 6/18/15. Mailed to pro se party Persels & Associates by regular mail. (mss)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
In re Nancy Eloise Chance,
Robert L. Baer, Trustee
Plaintiff,
vs.
Case No. 13-4011-JTM
Persels & Associates,
Defendant.
MEMORANDUM AND ORDER
The Clerk has previously entered default in this action by the bankruptcy trustee
plaintiff alleging violations of the Kansas Credit Services Organization Act (KCSOA) and
Kansas Consumer Protection Act (KCPA) by defendant Persels & Associates. (Dkt. 38). The
matter is now before the court on the plaintiff’s Motion for Default Judgment (Dkt. 40),
which seeks a declaratory judgment that Persels’ actions violated both statutes, as well as
a declaration that Persels’ contracts with Mr. Allen violate Kansas law and are therefore
void land unenforceable. Plaintiff seeks the costs of the action, as well as specific damages
in the following specific amounts:
Type of Damages
KCPA/KCSOA Section
Amount in Dollars
KCSOA compensatory
KCSOA punitive
KCPA Civil Penalties
Attorney Fees
1133(a)
1133(b)
634(b), 636(a), 636(d).
1133(a); 634(e)
2,662.45
7,500.00
10,000.00
2,500.00
The court hereby finds that the factual allegations advanced in plaintiff’s Motion
(Dkt. 41, pp. 3-7) are uncontested, and finds these allegations established as a matter of law.
The court further grants judgment to plaintiff, except as to the amounts sought as penalties,
punitive damages, and attorney fees.
Here the original petition alleges that the debtor made nine payments to Persels in
the amount of $2,096.55. The relevant portion of the KCPA appears to permit an award of
compensatory damages or a civil penalty, but not both. Thus, K.S.A. 50-634(b) provides that
a plaintiff may be awarded “damages or a civil penalty as provided in subsection (a) of
K.S.A. 50-636 and amendments thereto, whichever is greater.” (Emphasis added).
While K.S.A. 50-636(d) creates a multiplier effect for civil penalties for each day
where there is “a violation of this act not identified to be in connection with a specific
identifiable consumer transaction but which is continuing in nature.” However, this
provision “was not intended [to] apply when there [i]s an identifiable transaction” which
violates the KCPA. State ex rel. Morrison, v. Oshman Sporting Goods Co., 275 Kan. 763, 777,
69 P.3d 1087 (2003).
Further, both the respective Kansas statutes authorize the court to award plaintiff
“reasonable attorney fees.” Plaintiff has made no showing that would permit the court to
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determine the reasonableness of the requested attorney fees. The court notes that little of
consequence has occurred in the present action, and the present claim appears to be closely
related to other actions against the defendant, indicating a potential sharing in the costs of
advancing this action.
This court has also previously determined that the determination of an appropriate
amount of punitive damages “entails weighing numerous factors” such the assessment is
not “a sum certain” within the meaning of Rule 55, and accordingly that element of a valid
default judgment is absent. American Water Purification v. Barkley Mfg. & Eng’ng, No. 871003-C, 1989 WL 31397 (D. Kan. Mar. 2, 1989). “Punitive damages ... are not a sum certain
and often require evidentiary hearings to determine an appropriate amount.” Id. at *3. The
court finds no basis for distinguishing, for purposes of finding a “sum certain” for default
judgment, between punitive damages under the KCSOA, and the civil penalties under the
KCPA.
Accordingly, the court grants judgment to the plaintiff, and awards, at a minimum,
$2,662.45 in compensatory damages. The court will also grant plaintiff a reasonable
attorney fees, subject to documentary proof as the time and effort expended in the action.
In the event plaintiff serves notice to the court of an intent to obtain punitive damages, the
court will schedule a hearing for the submission of any evidence the plaintiff wishes to
present.
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IT IS ACCORDINGLY ORDERED this 18th day June, 2015, that the plaintiff’s Motion
for Default Judgment (Dkt. 40) is hereby granted in part and, without prejudice, denied
in part.
s/ J. Thomas Marten
J. THOMAS MARTEN, JUDGE
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