Adams v. Bureau of Collection Recovery, LLC

Filing 30

ORDER granting in part Motion for Attorney Fees 27 . Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

JASON ADAMS,
Plaintiff,
Case No. 10-cv-12818
HON. GEORGE CARAM STEEH

v.

BUREAU OF COLLECTION RECOVERY, LLC,
Defendant.
_____________________________/
ORDER GRANTING DEFENDANT’S APPLICATION IN PART FOR ATTORNEYS’
FEES UNDER THE FAIR DEBT COLLECTION PRACTICES ACT [DOC. # 27]
This action arises out of plaintiff’s complaint alleging defendant violated the Fair Debt
Collection Practices Act, 15 U.S.C. § 1692 (FDCPA) and the Michigan Occupational Code,
M.C.L. § 339.915 (MOC). On May 16, 2011, this court granted defendant’s motion for
summary judgment. Defendant filed a motion for attorneys’ fees and costs on June 13,
2011, pursuant to 15 U.S.C. § 1692k(a)(3). Defendant alleges plaintiff’s actions were
brought in bad faith and for the purposes of harassment, and requests $20,714.33 in fees
and costs. Plaintiff argues his claim was not brought in bad faith nor to harass, and that
defendant’s request is unreasonable. For the reasons that follow, the court awards
defendant a portion of the attorneys’ fees requested.
Background
On July 16, 2010, defendant removed this lawsuit from state district court where
plaintiff originally alleged defendant’s violation of FDCPA and MOC. Defendant filed a
motion for summary judgment, and oral argument was heard on March 24, 2011. On May

16, 2011, this court granted defendant’s motion noting plaintiff’s lack of evidentiary support
for both claims. On June 13, 2011, defendant filed a motion for attorneys’ fees pursuant
to 15 U.S.C. § 1692k(a)(3). Plaintiff answered on July 1, 2011, one day late in violation of
Local Rule 54.1.2(b).1
Defendant requests an award of $20,714.33 in legal fees, expenses and costs.
Defendant retained Jeffrey Smolek, Esq., as local counsel at $165 an hour. Mr. Smolek
invoiced legal fees and expenses totaling $3,646.86. The rest of defendant’s fees and
expenses breaks down as follows: attorney Jeffrey Turner .3 hours at $195 an hour;
associate attorney Boyd Gentry 33.8 hours at $175 an hour; associate attorney Melanie
Frankel 41.2 hours at $175 an hour; associate attorney John Langenderfer 11.7 hours at
$175 an hour; paralegal Katie Widmyer 1.1 hours at $95 an hour; and $1,731.97 in costs
and expenses totaling $17,067.47.
Analysis
A court may award defendant reasonable attorneys’ fees and costs under 15 U.S.C.
§ 1692k(a)(3), “[o]n a finding by the court that an action under this section was brought in
bad faith and for the purpose of harassment . . . .” To prevail, defendant must prove that
plaintiff’s entire lawsuit, not just a single claim, was brought in bad faith and to harass.
Horkey v. J.V.D.B. & Assocs., 333 F.3d 769, 775 (7th Cir. 2003). At the least, “minimally
colorable” claims are not considered bad faith or harassing. Guerrero v. RJM Acquisitions,
LLC, 499 F.3d 926, 940 (9th Cir. 2007).

1

Even though plaintiff was one day late, defendant was not prejudiced. Therefore
the court will not address this issue further.
2

Defendant’s Attorneys are Entitled to Fees and Costs
Defendant’s request relies on this court’s determination at summary judgment that
plaintiff’s claims lacked evidentiary support.

In Rhinehart v. CBE Group, Inc., 714

F.Supp.2d 1183, 1186 (M.D. Fla. 2010), the court granted fees and held, “[p]laintiff’s
counsel failed to dismiss any of the claims when it became clear during discovery that they
had no factual basis whatsoever, forcing Defendant to file a summary judgment motion.”
Also, the plaintiff in Rhinehart had contradicting testimony in her complaint and depositions.
Id. at 1185-86. Failure to dismiss an unmerited claim and contradicting testimony led the
Rhinehart court to conclude that the claim was brought in bad faith and warranted
attorneys’ fees.
Defendant points to this court’s holding that plaintiff lacked evidentiary support and
had contradicting testimony in order to establish plaintiff’s bad faith. At summary judgment,
this court noted plaintiff had no record of phone calls nor any colorable claims stemming
from his conversations with defendant. Plaintiff also relied merely on the allegations in his
own pleadings, which is insufficient to survive summary judgment. Saltzman v. I.C.
Systems, Inc., 2009 WL 3190359, at *7 (E.D. Mich. 2009) (defendant granted summary
judgment on plaintiff’s FDCPA claims because plaintiff relied on mere allegations in her
complaint without providing any evidence that defendant placed calls with the intent to
annoy, harass, or abuse.). Moreover, plaintiff’s allegations that defendant called him at
work conflicted with his affidavit stating that he was self-employed and did not have a
business phone.
Plaintiff argues his claims were not brought in bad faith nor to harass because they
were at least minimally colorable. Plaintiff relies on a district court ruling stating, “the
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standard for bad faith is higher than the standard for mere frivolousness.” Sanchez v.
United Collection Bureau, Inc., 649 F.Supp.2d 1374, 1382 (N.D. Ga. 2009). Also, plaintiff
notes that even if the claim lacked merit, defendant failed to define bad faith and failed to
show plaintiff’s motive for harassment. Campbell v. Credit Bureau Systems, Inc., 655
F.Supp.2d 732, 743 (E.D. Ky. 2009). Before summary judgment, plaintiff believed his claim
was colorable for three reasons. First, defendant placed numerous calls to him alleging he
owed a debt that he in fact did not owe. Second, the calls were abusive because defendant
yelled at him. Third, defendant continued to call after plaintiff showed documentation that
he did not owe the alleged debt. Therefore, plaintiff argues his claims were not brought in
bad faith because he had reason to believe he would prevail. In addition, plaintiff cites
Wilson v. Merchs. & Med. Credit Corp., 2010 U.S. Dist. LEXIS 91237, at *21-22 (E.D. Mich.
Sept. 2, 2010), which held that unsupported claims that may unreasonably multiply
proceedings are not per se bad faith to warrant sanctions under § 1692k(a)(3).
The issue is whether defendant has established enough to show plaintiff’s complaint
was brought in bad faith and with intent to harass. Defendant contends that after discovery
plaintiff should have known his claims lacked evidentiary and legal support. At summary
judgment, this court addressed defendant’s calls to plaintiff and readily dismissed them.
Specifically: plaintiff was not harassed at work and had contradicting testimony on this
issue, defendant’s yelling at plaintiff over the phone does not support his claim,2 and the
debt collector is entitled to rely on a creditor’s representations and is not required to

2

Majeski v. I.C. System, Inc., 201 WL 145861, at *4 (N.D. Ill. Jan. 8, 2010) (“Yelling
and rude language, while disrespectful, does not by itself violate 1692d.”).
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conduct an independent investigation to determine if plaintiff was truly indebted.3
Furthermore, as the Saltzman court held, plaintiff should have known he could not merely
rely on the allegations in his complaint to survive summary judgment. Therefore, simple
legal research should have warned plaintiff of his non-viable claims, and that continuing to
bring these claims would cause needless expenditures for defendant. Thus, this court
accepts defendant’s argument that plaintiff’s failure to dismiss untenable claims establishes
plaintiff’s bad faith and intent to harass.
Defendant’s Requested Attorneys’ Fees are Unreasonable
Determining a reasonable fee begins with calculating the product of a “reasonable
hourly rate” and the “number of hours reasonably expended on the litigation.” Kuhne v.
Law Offices of Timothy E. Baxter an Associates, P.C., 2009 WL 1798926, at *1 (E.D. Mich.
2009), quoting Hensley v. Eckerhart, 461 US. 424, 433 (1983). “A district court has broad
discretion to determine what constitutes a reasonable hourly rate for an attorney.” Id.,
quoting Wayne v. Village of Sebring, 36 F.3d 517, 533 (6th Cir. 1994). A useful guideline
in determining a reasonable hourly rate is the “prevailing market rate . . . in the relevant
community.” Blum v. Stenson, 465 U.S. 886, 895 (1984). The prevailing market rate is
defined as, “that rate which lawyers of comparable skill and experience can reasonably
expect to command within the venue of the court of record.” Adcock-Ladd v. Sec’y of
Treasury, 227 F.3d 343, 350 (6th Cir. 2000). However, “[h]ours attributable to excessive,
redundant or otherwise unnecessary work must be excluded.” Hensley, 461 U.S. at 434.
“Thus, courts have reduced fee awards where the requested fee reflected duplication of

3

Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1031-32 (6th 1992)(FDCPA
does not require independent investigation of debts referred for collection).
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services, excessive time for simple or routine tasks, [and] the use of too many attorneys
. . . .” Jackson v. Butler, 2009 WL 5217675, at *6 (E.D. Mich. Dec. 29, 2009), citing Hirsch
and Sheehey, Awarding Attorneys Fees and Managing Fee Litigation (2nd ed. 2005).
Defendant urges the court to award attorneys’ fees and costs of $20,714.33. Their
argument relies on cases like Jackson, which held hourly rates between $200 and $250 for
attorneys with 20 to 29 years of experience are reasonable. Id. (According to the 2007
Economics of Law Practice Summary Report by the State Bar of Michigan), see also
O’Connor v. Trans Union, LLC, 2008 WL 4910670, at *6 (E.D. Mich. Nov. 13, 2008)
(“District courts have relied on the State Bar of Michigan Economics of Law Practice Survey
to determine average billing rates in Michigan, and the Sixth Circuit has approved this
practice.”). The court accepts defendant’s requested rates of $195, $165 and $175 an hour
as reasonable.
Plaintiff contends that the hours billed by defendant’s attorneys were unreasonable.
First, plaintiff points out defendant’s argument for bad faith depends on plaintiff’s failure to
dismiss a non-viable claim. Subsequently, defendant had four attorneys working on this
case even though they argue it lacked merit. Plaintiff further argues that defendant’s
refusal to file a motion to dismiss the frivolous claims unreasonably extended unwarranted
attorney hours. Additionally, Mr. Smolek was acquired as local counsel, but defendant
continued sending attorneys from Ohio. For example, Mr. Smolek conducted depositions
and Mr. Gentry drove from Ohio to also conduct depositions. Defendant could have simply
allowed Mr. Smolek to conduct all depositions in order to save substantial expense. Finally,
plaintiff had reason to believe his claim was at least minimally colorable before discovery

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was finalized. It was after discovery was complete and defendant’s motion for summary
judgment was fully briefed that plaintiff could review all of the information about the case
and decide whether or not to continue to bring his claim. Therefore, the court concludes
that plaintiff’s failure to dismiss his claims only warrants fees that defendant incurred in
participating in the hearing on its motion for summary judgment before the court on March
24, 2011. Attorney Gentry expended 8.5 hours in travel time and appearing before this
court, for a fee of $1,487.50 (Ex. 2, Defendant’s motion for attorneys’ fees).4
Conclusion
For the reasons stated above, defendant’s request for attorneys’ fees and costs
is GRANTED in part. Plaintiff shall pay $1,487.50 in fees and costs pursuant to 15
U.S.C. § 1692k(a)(3) of the Fair Debt Collection Practices Act.
SO ORDERED.
Dated: July 28, 2011
S/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
July 28, 2011, by electronic and/or ordinary mail.
S/Josephine Chaffee
Deputy Clerk

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The plaintiff and not plaintiff’s attorney is required to pay defendant’s attorneys’
fees. This is because the statute does not specify that plaintiff’s attorney must pay fees
and defendant did not bring request for sanctions under Federal Rule of Civil Procedure
11.
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