Lundsted v. JRV Holdings, LLC et al

Filing 46

ORDER Denying 27 Motion to Vacate, Determining Setoff Rights, Granting in Part 37 Motion for Attorneys' Fees, and Directing Compensation. Signed by District Judge Thomas L. Ludington. (Sian, M)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
CRAIG LUNDSTED,
Plaintiff,
v.

Case No. 14-cv-13981
Honorable Thomas L. Ludington

JRV HOLDINGS, LLC, et al.,
Defendants.
_______________________________________/
ORDER DENYING MOTION TO VACATE, DETERMINING SETOFF RIGHTS,
GRANTING IN PART MOTION FOR ATTORNEYS’ FEES, AND DIRECTING
COMPENSATION
Plaintiff Craig Lundsted filed this case against Defendants JRV Holdings, LLC and
Roosen, Varchetti & Oliver, PLLC on October 15, 2014. He alleged that Defendants violated the
Fair Debt Collection Practices Act (“FDCPA”) and the Truth in Lending Act (“TILA”).
Defendants filed a motion to dismiss Lundsted’s TILA claims on March 16, 2015. Lundsted
responded by filing an amended complaint that removed his TILA claims, leaving only his
claims under the FDCPA. On April 24, 2015, within three weeks of filing his amended
complaint, Lundsted accepted an offer of judgment from Defendants for the $1,000.00 statutory
damages amount provided in the FDCPA.
In an effort to bring the case to a final resolution, the Court solicited closing documents
from the parties. Those documents were due on August 28, 2015. A consent judgment, titled
“partial consent judgment” was submitted that day by Lundsted. Without any reference to the
inclusion of “partial” in the documents title, but otherwise purporting to close the case, the

Consent Judgment was entered on August 31, 2015 without inclusion of the term “partial” and
the case was closed.
I.
The August 31, 2015 Consent Judgment provided that Plaintiff recover $1,000 from
Defendants jointly and severally and further provided that Plaintiff had twenty-one days to
submit a motion for attorneys’ fees and a bill of costs. See Consent J., ECF No. 26. The day after
the Consent Judgment was filed Defendants filed a motion to vacate the judgment. They alleged
that the Consent Judgment omitted the following language: “This offer is made without regard to
and does not impact JRV’s rights to set-off the judgment it holds against Plaintiff.” Defs.’ Mot.
Vacate Cons. J. 2, ECF No. 27. This language was originally included in Defendants’ offer of
judgment and it was intended to preserve Defendants’ right to offset a judgment Defendant JRV
Holdings obtained against Plaintiff in January of 2014 for $8,603.31. See Defs.’ Mot. Vac. J,
ECF No. 27.
An in person status conference was held on November 30, 2015, at which Defendants
explained that their desire to include the language concerning the offset in the Consent Judgment
arose as a result of Plaintiff’s right to attorney’s fees. At the conference, neither party disputed
that Plaintiff’s money judgment would be offset against Defendant JRV Holdings’ prior
judgment. The parties could not reach agreement as to whether the non-prejudice language
included in the offer of judgment but excluded from the Consent Judgment would have any
effect on whether Defendants could offset any of Plaintiff’s attorney’s fees (as opposed to
levying on the proceeds of the attorneys’ fees once in Plaintiff’s possession). Nevertheless, the
parties agreed that the question of offset was unresolved.

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Briefing was directed on two issues: Plaintiff’s right to attorneys’ fees and Defendants’
right to setoff. The parties timely briefed both issues. Lundsted claims that he is entitled to
approximately $16,630.50 in attorneys’ fees and costs. Defendants dispute that figure. Lundsted
also claimed in his briefing on setoff, that Defendants cannot offset JRV’s underlying judgment
against his attorneys’ fees and costs award or his statutory judgment of $1,000.00 (a change in
his position from the November 30, 2015 status conference). Defendants argue that they can set
off JRV’s underlying judgment against both amounts.
II.
The first issue that needs attention is Defendants’ unopposed motion to vacate the
consent judgment entered on August 31, 2015. As explained in a prior order of this Court, there
is no conceivable rationale for vacating the consent judgment on the basis of the language
dispute between the parties. The addition of the non-prejudice language1 would have no effect on
the ability of Defendants, or at least JRV Holdings (the only Defendant with a judgment against
Lundsted), to offset their judgment against the consent judgment. The desire to include the nonprejudice language likely arises from the fact that Defendants interposed setoff as an affirmative
defense to Lundsted’s claims. Defendants perhaps fear, understandably, that leaving any mention
of setoff out of the consent judgment forecloses their ability to do so. It does not.
“The right to setoff is a widely recognized common law right which allows entities that
owe each other money to apply their mutual debts against each other, thereby avoiding ‘the
absurdity of making A pay B when B owes A.’” In re Gordon Sel-Way, Inc., 270 F.3d 280, 290
(6th Cir. 2001) (quoting Citizens Bank of Md. v. Strumpf, 516 U.S. 16, 18 (1995)). Thus, it would
be illogical that the very thing that creates the mutual indebtedness between Plaintiff and
1

“This offer is made without regard to and does not impact JRV’s rights to set-off the judgment it holds
against Plaintiff.” Defs.’ Mot. Vacate Cons. J. 2, ECF No. 27.

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Defendants—the consent judgment—also extinguishes Defendants’ right to setoff those two
debts against each other. Plaintiff does not contend that the consent judgment does so without the
non-prejudice language and Defendants have no reason to fear that it does. The non-prejudice
language is unnecessary to the consent judgment and its addition would add nothing material.
The motion to vacate the consent judgment will be denied.
III.
The next, and perhaps most important issue to be considered is the right of Defendants’
(again, just JRV Holdings) to set off against the present judgment a prior state court judgment
against Lundsted. Defendant JRV argues that it can set off the state court judgment against both
the judgment in this case and Lundsted’s reasonable attorneys’ fees (to be discussed below).
Lundsted argues that JRV cannot set off its state court judgment against either.
Both parties have thoroughly briefed this issue. Neither party has, however, been able to
furnish authority in full support of its position. The relevant question is whether judgment
debtors in an action under the Fair Debt Collection Practices Act can set off that judgment
against a state court judgment held against the FDCPA judgment creditor. More directly, if JRV
holds a state court judgment against Lundsted, as it does, can it set off that judgment against
Lundsted’s FDCPA judgment and his statutory entitlement to reasonable attorneys’ fees?
The limited caselaw that exists addressing this question suggests an answer between the
parties’ positions. The state court judgment held by JRV can be set off against the FDCPA
judgment. It may not be set off against Lundsted’s reasonable attorneys’ fees. Both of these
issues were discussed in Brown v. Mandarich Law Grp., LLP, No. 13-CV-04703, 2014 WL
2860631 (N.D. Cal. June 23, 2014). The reasoning of the Brown court is persuasive and will be
adopted here. A short discussion of the principles behind the conclusions reached in Brown

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follows, but the Brown court’s full explanation of the reasons for why set off does or does not
apply will not be repeated in its entirety.
A.
The procedure used in executing a judgment “must accord with the procedure of the state
where the court is located, but a federal statute governs to the extent it applies. Fed. R. Civ. P.
69(a)(1). No federal statute governs the execution of the two judgments at issue here. As
explained above, the principle that countervailing judgments may be set off against one another
is rooted in common law. See In re Gordon Sel-Way, Inc., 270 F.3d 280, 290 (6th Cir. 2001).
Lundsted argues that this generally applicable common law rule conflicts with the broad
purpose of the FDCPA and should be disregarded in this case.2 He does not provide authority
wherein a federal court agreed with his contention. He argues that this Court has previously
disallowed set off against FDCPA judgments in Isa v. Law Office of Timothy Baxter &
Associates, No. 13-CV-11284, 2013 WL 5692850 (E.D. Mich. Oct. 21, 2013). But Isa is
inapposite. Isa concerned an FDCPA judgment debtor satisfying its judgment by paying the
FDCPA plaintiff’s underlying creditor. That is, there was no setoff at issue in Isa. The issue in
Isa was whether an FDCPA judgment debtor could satisfy an FDCPA judgment by making a
transfer payment to the plaintiff’s creditor. This Court held that it could not.
As Isa observes, allowing such transfer payments would defeat the purpose of the
FDCPA. That same logic does not apply where the FDCPA judgment debtor is also a judgment
creditor from an underlying state court action, as is the case here. The court in Brown concluded
rightly that “[p]ermitting an offset of statutory damages here does not take the sting out of the
FDCPA damages against Defendant[s]. Defendant [JRV] collects $[1],000.00 less of the
2

It should be noted that during a status conference with the Court, Lundsted represented that he did believe
the FDCPA judgment was subject to setoff. He changed that position later during his briefing.

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judgment legally owed by Plaintiff, representing a substantial penalty that will deter Defendant
from repeating the same actions in the future.” Brown, 2014 WL 2860631, at *3.
Lundsted goes on to cite a case from the Northern District of California that stated “setoff
appears contrary to the established policies of FDCPA.” Reed v. Glob. Acceptance Credit Co.,
No. C-08-01826, 2008 WL 3330165, at *7 (N.D. Cal. Aug. 12, 2008). But that quote, relied upon
by Lundsted, is unhelpful out of context. The case itself, and other cases from that district
similarly holding, are inapposite as well because they address the ability of a creditor to bring a
counterclaim for the underlying debt in an FDCPA action. Cases such as Reed have held that a
counterclaim for the underlying debt must be dismissed when brought against an FDCPA claim
since the counterclaim is not compulsory and, for policy reasons, should not be permitted.
Whatever the merits of those cases, they do not address the present situation, where the FDCPA
judgment debtor has a prior state court judgment against the plaintiff for the underlying debt.
There are no policy reasons for disregarding the common law rule of setoff. Defendant
JRV is entitled to set off its liability against the state court judgment it holds against Lundsted on
the underlying debt.
B.
For different, but equally sensible reasons, Lundsted’s award of reasonable attorneys’
fees is not subject to offset against the FDCPA judgment. The Brown court reviewed four factors
in deciding that attorneys’ fees are not subject to setoff: public policy, priority in time of the
competing claims, separateness of the two actions seeking to be offset, and the nature of the
attorney-client contract. Brown, 2014 WL 2860631, at *3–5. The Brown court concluded that the

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factors weighed against setoff in a case with an identical fact pattern to the present case. Id. at
*5.3
First, public policy does not favor set off of attorneys’ fees. Unlike set off of the statutory
penalty, allowing set off of attorneys’ fees would chill future FDCPA actions and discourage
attorneys from taking FDCPA cases. See Brown, 2014 WL 2860631, at *3–4. Further, as the
Brown court recognized, “[o]ffset is . . . patently unfair where it would effectively force
attorneys to satisfy the debts of their clients.” Id. at *3 (internal quotation marks omitted). It is
not hard to envision a case where the underlying state court judgment exceeds the FDCPA
judgment and its attendant attorneys’ fees. In such a circumstance, the setoff would swallow the
FDCPA award and leave the FDCPA plaintiff’s attorney without any compensation for reaching
a successful result. No attorney would bring an FDCPA claim when faced with such a prospect.
3

Defendants argue that Brown is inapplicable because it applies California state law. But the Brown court
explains that it looked to California law because “neither the Ninth Circuit nor the California Supreme Court provide
a definitive answer as to whether attorney’s fee awards have priority over offset in an FDCPA claim.” Brown, 2014
WL 2860631, at *3. Since setoff is a creature of common law, it was appropriate for the Brown court to look to
California law on setoff in reaching its conclusions. Nevertheless, setoff is recognized under Michigan law. See
Walker v. Farmers Ins. Exch., 572 N.W.2d 17, 20 (Mich. Ct. App. 1997). Defendants do not explain how Michigan
law on setoff would vary (save for one instance) such that Brown’s holding is inapplicable.
Defendants only claim that Michigan law differs from California law, such that Brown is inapplicable,
relies on Mich. Comp. Laws § 600.6008(b). That statute sets forth generally for the possibility of offsetting
judgment executions: “Executions between the same parties may be set off one against another, if required by either
party as follows.” Mich. Comp. Laws § 600.6008. Subsection (b) provides:
Such set off shall not be allowed unless all the parties are mutual debtors and creditors. Nor shall
set off be allowed where the sum due on the first execution shall have been lawfully assigned to
another person before the creditor in the second execution becomes entitled to the sum due
thereon, or as to so much of the first execution as may be due to the attorney in that suit for his
taxable fees and disbursements.
Id. (emphasis added). Defendants argue that this provision bars setoff of the first judgment creditor’s attorneys’ fees,
it says nothing about barring the setoff of the second judgment creditor’s attorneys’ fees. Accordingly, Defendants
conclude, the statute permits it.
But the statute does not control all setoff claims under Michigan law. Rather, it encodes a means by which
countervailing judgments may be executed. Setoff itself is still an equitable tool arising from the common law.
Michigan courts have recognized the difference and acknowledged that § 600.6008 does not govern claims of
equitable setoff: “Although there is no statute specifically authorizing courts to order judgments satisfied by setoff, §
6008 . . . specifically authorizes the setoff of mutual executions. As such, § 6008 provides support for the notion that
equitable setoff is an appropriate method of satisfying judgments.” Mahesh v. Mills, 602 N.W.2d 618, 620 (Mich.
Ct. App. 1999). Accordingly, § 600.6008 does not explicitly permit the setoff of attorneys’ fees by a second-in-time
judgment creditor and it does not govern the applicability of the equitable setoff rule.

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Second, the Brown court noted that attorneys have a lien against the proceeds of a
judgment at the time the attorney is retained. Thus, the attorney lien predates, and takes priority
over, the setoff claim. Although the Brown court was applying California law, the same rule
applies in Michigan. See Doxtader v. Sivertsen, 455 N.W.2d 437, 439 (Mich. Ct. App. 1990)
(“This state recognizes a common-law attorney’s lien on a judgment or fund resulting from the
attorney’s services.”).
Third, the Brown court expanded upon the notion of the priority attorney lien by noting
that the two judgments sought to be offset arise from wholly different actions. The court
acknowledged the fact that the defendant’s state court judgment was secured first “appears to
weigh in favor of prioritizing offset.” Brown, 2014 WL 2860631, at *4. Ultimately, however, the
attorneys’ fees claim had priority because the two actions were “wholly independent.” Id. Here,
like in Brown, the two judgments arise from wholly independent actions. As a result, the attorney
lien retains priority over the offset claim.
Finally, in this case, Lundsted and his attorney have a contingency fee agreement. The
Brown court noted that it did not have any information about the plaintiff’s fee agreement with
his attorney but that irrespective of the agreement it would not sway the inquiry. The same can
be said here. A contingency fee agreement does to some degree favor setoff because a portion of
the attorneys’ fees obtained (perhaps a good majority) will remain with Lundsted. But this alone
is insufficient to overcome the other three factors that do not favor offset. Further, to the extent
Lundsted retains any portion of the fee award, it is money in his possession that he will apply to
his expenses, including debt expenses. While this result does border on the very problem that
setoff seeks to avoid (A paying B for B to pay A), setoff remains an equitable remedy and the
equities favor not allowing setoff to apply to attorneys’ fees.

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IV.
The final issue raised by the parties is Lundsted’s entitlement to a “reasonable attorney’s
fee as determined by the court.” 15 U.S.C.A. § 1692k(a)(3).
The starting point in determining the reasonableness of attorneys’ fees is the “lodestar”
method. Wayne v. Vill. of Sebring, 36 F.3d 517, 531 (6th Cir. 1994). Under this method, a
reasonable rate is calculated by multiplying “the number of hours reasonably expended” by “a
reasonable hourly rate.” Id. (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)) (internal
quotation marks omitted). “Next, the resulting sum should be adjusted to reflect the result
obtained.” Id. (internal quotation marks omitted). Adjustments may be made “to reflect relevant
considerations peculiar to the subject litigation.” Adcock-Ladd v. Sec’y of Treasury, 227 F.3d
343, 349 (6th Cir. 2000).
Lundsted seeks an award of $13,113.50 in attorneys’ fees in compensation for 54.2 hours
of work performed by his attorneys on this case. Pl.’s Mot. Att’y Fees 5, ECF No. 37. In his
reply brief in support of his motion for attorneys’ fees Lundsted asks for “approximately $3000
extra in fees that Defendants’ arguments caused Plaintiff to incur” as compensation for spending
“3.7 hours preparing the reply brief on offset, and almost 8 hours in preparing this reply brief.”
Pl.’s Reply Br. 8 n.4, ECF No. 42.
A.
Lundsted’s request to be compensated for 54.2 hours of work is facially reasonable.
Defendants make allegations that Lundsted’s attorneys “work[ed] up the file” after the case was
settled. Defs.’ Resp. Br. 11, ECF No. 40. Defendants support this claim by arguing that two
thirds of the hours Lundsted seeks to have compensated were accrued after the case settled.

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Defendants also claim that they sought to resolve the question of Lundsted’s reasonable
attorneys’ fees but Lundsted would not disclose his attorneys’ invoices.
There is no evidence, however, that Lundsted’s attorneys “worked up the file” after
settlement. Indeed, in the context of this FDCPA action, the “settlement” between the parties was
only as to liability and the statutory damage amount. Both parties were aware that Lundsted’s
entitlement to reasonable attorneys’ fees remained unresolved. The consent judgment submitted
by the parties reflected as much. Similarly, the question of what portion of the monetary award
received by Lundsted could be offset against JRV’s underlying judgment also was unresolved.
Thus, the “settlement” referenced by JRV did not resolve the case and make any further work by
Lundsted’s attorneys “waste.” Rather, the “settlement” signaled the resolution of a core issue in
the case—liability—and the beginning of litigation over two important issues that liability gave
rise to—attorneys’ fees and offset.
Considering the posture of the case at the time Lundsted accepted JRV’s offer of
judgment, the hours expended by JRV’s counsel were not unreasonable. While there may be
reason for imposing a reduction on the lodestar figure, the hours used to produce that figure are
reasonable.
B.
Lundsted explains that his attorneys and their paralegals charged four different rates for
the work they performed on his case. The two partners that worked on his case billed $300.00
per hour, the one associate billed $250.00 per hour, and the two paralegals billed $135.00 per
hour. Defendants claim these figures are unreasonable.
The rates are not unreasonable. Although Defendants selectively cite to one case from
this district that denied such rates, many cases from this district have approved these rates and

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even rates in excess of these. See, e.g., Litt v. Portfolio Recovery Associates, LLC, No. 13-12462,
2015 WL 1849267, at *3–4 (E.D. Mich. Apr. 22, 2015). The rates charged to Lundsted are
reasonable.
C.
The last step in the lodestar analysis is determining if any reductions to the lodestar figure
are warranted. The Sixth Circuit has incorporated the twelve factors set forth by the Fifth Circuit
in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–19 (5th Cir.1974), as a starting
point for determining if adjusting the lodestar figure is warranted. Adcock-Ladd, 227 F.3d at
349.4 “Accordingly, modifications [to the lodestar] are proper only in certain ‘rare’ and
‘exceptional’ cases, supported by both ‘specific evidence’ on the record and detailed findings by
the lower courts.” Adcock-Ladd v. Sec’y of Treasury, 227 F.3d 343, 349-50 (6th Cir. 2000)
(quoting Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546, 565
(1986)). A district court awarding fees “must provide a clear and concise explanation of its
reasons for the fee award.” Wayne, 36 F.3d at 533 (quoting Hadix v. Johnson, 65 F.3d 532, 535
(6th Cir. 1995)).
Lundsted’s fee award will be reduced for four reasons.
1.
First, Lundsted has billed for clerical tasks performed by paralegals and lawyers.
“[P]urely clerical or secretarial tasks should not be billed at a paralegal rate, regardless of who
performs them.” Missouri v. Jenkins by Agyei, 491 U.S. 274, 288 n.10 (1989). Defendants
4

“These factors are: (1) the time and labor required by a given case; (2) the novelty and difficulty of the
questions presented; (3) the skill needed to perform the legal service properly; (4) the preclusion of employment by
the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time
limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the
experience, reputation, and ability of the attorneys; (10) the ‘undesirability’ of the case; (11) the nature and length of
the professional relationship with the client; and (12) awards in similar cases.” Reed v. Rhodes, 179 F.3d 453, 471–
72 n.3 (6th Cir. 1999) (citing Johnson, 488 F.2d at 717–19).

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catalog thirteen hours that they believe to have been spent on purely clerical tasks. That number
is excessive.
In lieu of closely scrutinizing billing records and identifying specific hours to be
eliminated, courts are permitted to simply reduce the award amount to account for any billing
discrepancies. See Helfman v. GE Grp. Life Assur. Co., No. 06-13528, 2011 WL 1464678, at *1
(E.D. Mich. Apr. 18, 2011) (discussing across-the-board reductions in the context of a party only
achieving limited success). Rather than performing an itemized deduction as Defendant chose to,
or assigning a percentage to this single discrepancy, all justifications for a reduction will be
considered before any reduction is assigned.
2.
Next, Lundsted’s attorneys billed at a full hourly rate for travel time. The Sixth Circuit
has held that a court may apply a “relevant community” fee to an attorney’s representation where
“a counselor has voluntarily agreed to represent a plaintiff in an out-of-town lawsuit[.]” See
Adcock-Ladd v. Sec’y of Treasury, 227 F.3d 343, 350 (6th Cir. 2000). This principle is
appropriately applied to transportation costs when billed at a full hourly rate by an attorney
travelling from outside the court’s territorial jurisdiction.5 See Smith v. Freeman, 921 F.2d 1120,
1122 (10th Cir. 1990) (finding no abuse of discretion where the district court compensated an
attorney at a reduced rate for driving time). The billing of driving time at a full hourly rate favors
some modest reduction.
3.
Third, Lundsted’s attorneys engaged in block billing. While not particularly egregious
here, the block billing by Lundsted’s attorneys include some tasks that are clerical and some that
5

Lundsted’s attorney that billed for driving time, Ronald Weiss, is located within this district’s territorial
jurisdiction but outside of the division where the case has been heard. The same principal applies for attorneys from
outside of the division.

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are not. The practice of block-billing prevents accurately determining how much time was spent
on tasks appropriately billed at a full rate and how much time was spent on purely clerical tasks.
Block-billing falls below the standard of “sufficient detail” required to avoid a reduction of
award. See Welch v. Metro. Life Ins. Co., 480 F.3d 942, 948 (9th Cir. 2007) (explaining how a
reduction for block-billing is reasonable because it “makes it more difficult to determine how
much time was spent on particular activities”). A small reduction of Plaintiff’s award is
warranted.
4.
Lastly, some of the itemized tasks submitted by Lundsted are incomplete. These entries
total 3.8 hours. Billing records must “describe the work performed in sufficient detail to establish
that the work is reasonably related” to the matter for which the fee is requested. In re Pierce, 190
F.3d 586, 593-94 (D.C. Cir. 1999). Where the detail in the billing records is insufficient the
Court has discretion to reduce the award accordingly. See Reed v. Rhodes, 179 F.3d 453, 472
(6th Cir. 1999) (quoting Hensley, 461 U.S. at 433). Lundsted’s incomplete entries do not meet
this billing standard. Accordingly, a reduction is warranted.
5.
In light of the foregoing adjustments, Lundsted’s reasonable attorneys’ fees will be
reduced by a percentage reflecting those adjustments. Lundsted’s fees will be adjusted
downwards by 15%. Thus, Lundsted’s total fee award is $11,145.63.
D.
The next topic that must be addressed is Lundsted’s request for additional fees related to
his reply briefing on both topics under consideration. In his reply brief in support of his motion
for attorney fees, Lundsted writes:

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Plaintiff’s counsel spent 3.7 hours preparing the reply brief on offset, and almost
8 hours in preparing this reply brief in effort to address all of the points argued by
Defendants. This time was also necessarily spent on the reasonable prosecution of
this case, and Plaintiff would request leave from the Court to supplement the
motion to detail these fees and obtain the approximately $3000 extra in fees that
Defendants’ arguments caused Plaintiff to incur in reply.
Pl.’s Reply Br. 8 n.4, ECF No. 42.
Plaintiff’s request will be denied. First, under the local rules, parties may not file countermotions in reply briefs. Eastern District of Michigan Electronic Filing Policies and Procedures
R5(e) (cannot have a counter-motion in a reply). Nor may a party raise an argument for the first
time in a reply brief. Second, the request made in Lundsted’s footnote, falls below the required
specificity for submitting itemized fee bills. Finally, Lundsted’s reply brief in support of his
motion for attorneys’ fees does not comport with the local rules formatting requirements. Under
the local rules, reply briefs are limited to seven pages, E.D. Mich. LR 7.1(d)(3)(B), and all
submissions must be in 14-point proportional font, E.D. Mich. LR 5.1(a)(3). Lundsted’s reply
brief, which is the bulk of the hours he seeks to have compensated, is ten pages long and in 12point font. If considered on the merits, Lundsted’s claim for additional fees would warrant
significant reduction on that basis, if not complete denial.
E.
The last issue of compensation is the costs billed by Lundsted. Lundsted billed
Defendants for $518.00 in costs. Bill of Costs, ECF No. 38. This figure included $400.00 for
“Fees of the Clerk” and $118.00 for “[f]ees for service of summons and subpoena.” Id.
Defendants argue that they should not be billed for service fees because they waived service.
Lundsted argues that irrespective of Defendants’ waiver, the costs were incurred and should be
billed. The dispute over service costs arises out of an earlier dispute about whether service was

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properly effectuated on Defendants. Defendants argued that they were not properly served but
then eventually waived service.
Lundsted will be compensated for service costs where service was effectuated but
Defendants claimed it was not done properly and then Defendants ultimately waived service.
This circumstance differs from a situation where a defendant waives service before it is even
attempted. In such a situation imposing service costs would likely be unequitable. Here,
imposing service costs is fair.
V.
Accordingly, it is ORDERED that Defendants’ motion to vacate the consent judgment,
ECF No. 27, is DENIED.
It is further ORDERED that Defendants are permitted a right to set off their liability in
this matter against the underlying judgment they hold to the extent explained herein.
It is further ORDERED that Plaintiff Craig Lundsted’s motion for attorneys’ fees, ECF
No. 37, is GRANTED in part.
It is further ORDERED that Defendants are DIRECTED to compensate Plaintiff Craig
Lundsted $11,663.63 for costs and fees incurred in this matter.
Dated: April 27, 2016

s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on April 27, 2016.
s/Michael A. Sian
MICHAEL A. SIAN, Case Manager

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