Welther v. Schlottman & Wagner, P.C.

Filing 77

OPINION and ORDER Awarding Damages. Signed by District Judge Stephen J. Murphy, III. (DPar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JEFFREY WELTHER,
Plaintiff,

Case No. 2:14-cv-11001

v.

HONORABLE STEPHEN J. MURPHY, III

SCHLOTTMAN & WAGNER, P.C. and
RICHARD WAGNER, JR.,
Defendants.
/
OPINION AND ORDER AWARDING DAMAGES
Plaintiff Jeffrey Welther sued Defendants Schlottman & Wagner, P.C. and Richard
Wagner, Jr. under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.
("FDCPA"), and the Michigan Regulation of Collection Practices Act, Mich. Comp. Laws §
445.251 et seq.. The Court granted Plaintiff's motion for summary judgment on the federal
claim, ordered briefing on damages, and referred the parties to mediation to resolve the
damages issue. The parties were unable to reach a settlement through mediation, so the
Court will now determine damages.
DISCUSSION
Plaintiff seeks $2,000 in statutory damages, $36,628.00 in attorney fees, and $406.69
in costs, for a total of $39,034.69. Notice 7, ECF No. 70.
I.

Statutory Damages
Plaintiff "has chosen to forego his claim for actual damages in lieu of his claim for

statutory damages." Notice 2, ECF No. 70. He seeks $2,000 in statutory damages —
$1,000 from each Defendant. Pursuant to 15 U.S.C. § 1692k(a)(2)(A), plaintiffs can receive
from each Defendant statutory damages of up to $1,000, as determined by the Court. See

Ganske v. Checkrite, Ltd., No. 96-C-0541-S, 1997 WL 33810208, at *5 (W.D. Wis. Jan. 6,
1997) ("Because § 1692k(a) imposes liability for statutory damages upon 'any debt collector
who fails to comply with [the act],' statutory damages can be imposed against more than
one defendant debt collector in a single proceeding if it is established by the plaintiff that
each debt collector independently violated the FDCPA.").
Defendants contend that "it is doubtful that a jury will award Plaintiff any damages at
all," and thus conclude that Plaintiff is not entitled to recover any statutory or actual
damages, and must instead prove his damages at trial. Resp. 2, ECF No. 71. But Plaintiff
has made clear that he will forego his claim for actual damages in lieu of his claim for
statutory damages. And the Court has discretion to assess statutory damages. Jerman v.
Carlisle, McNellie, Rini, Kramer & Ulrich, No. 1:06-CV-1397, 2011 WL 1434679, at *2 n.5
(N.D. Ohio Apr. 14, 2011) (citing 15 U.S.C. §§ 1692k(a)(2)(A) and (b) ("[P]roviding statutory
damages shall be awarded as the court may allow . . . [and] providing that in determining
the amount of liability, the court shall consider the factors.") (emphasis in citation)); see also
Savino v. Computer Credit, Inc., 164 F.3d 81, 86 (2d Cir. 1998) ("All that is required for an
award of statutory damages is proof that the statute was violated, although a court must
then exercise its discretion to determine how much to award, up to the $1,000.00 ceiling.").
The Court has determined that the statute was violated, see Order, ECF No. 65, and
will exercise its discretion to determine the amount of statutory damages. The Court must
balance the purpose of the FDCPA — which is "to eliminate abusive debt collection
practices by debt collectors, to insure that those debt collectors who refrain from using
abusive debt collection practices are not competitively disadvantaged, and to promote
consistent State action to protect consumers against debt collection abuses," Fed. Home
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Loan Mortg. Corp. v. Lamar, 503 F.3d 504, 508 (6th Cir. 2007) — against several factors,
including "the frequency and persistence of noncompliance by the debt collector, the nature
of such noncompliance, and the extent to which such noncompliance was intentional." 15
U.S.C. § 1692k(b)(1).
Here, both Defendants are debt collectors, and are thus subject to statutory damage
penalties. But it is not clear — either from Plaintiff's notice of damages or his summary
judgment motion — that Defendants' violations constituted frequent and persistent willful
or negligent noncompliance with the statute such that Plaintiff is entitled to the full $1,000
from each Defendant. Plaintiff did allege that at one point Defendants issued a second
letter demanding additional money for attorney fees. And when Plaintiff called to ask why
he owed the debt, he could not get a straight answer. Am. Compl. ¶¶ 18–19, ECF No. 49.
But there is little evidence to support Plaintiff's claim that the violation was "frequent and
consistent, and was of a threatening nature." See Reply 2, ECF No. 76. The letter violated
the statute, but its tone was neither threatening nor abusive. And without more evidence
that Defendants' noncompliance with the statute was intentional, there is an insufficient
basis for an award of statutory damages greater than $250 — $125 from each Defendant.
II.

Attorney Fees and Costs
Plaintiff also seeks reasonable costs and attorney fees associated with the case. The

FDCPA authorizes an award of "the costs of the action, together with a reasonable
attorney's fee as determined by the court." 15 U.S.C. § 1692k(a)(3). Defendants argue that
Plaintiff has not established that he is the "prevailing party" such that he is entitled to an
award of attorney fees. Resp. 1, ECF No. 71. That is incorrect. The Court determined that
Defendants violated the statute. See Order, ECF No. 65. The Court's instant award of $250
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in statutory damages provides Plaintiff with relief on the merits of his claim, and is sufficient
to make him a prevailing party. Accordingly, an award of costs and attorney fees is
available.
According to an attached invoice, Plaintiff's counsel's work totaled $36,628.00:
$20,650.00 for 59 hours of work by attorney Gary Nitzkin at $350 an hour; $14,970.00 for
49.9 hours of work by attorney Travis Shackelford at $300.00 an hour; and $1,008 for 7.2
hours of work by paralegals at $140.00 an hour. Invoice, ECF No. 70-1; see also Notice 7,
ECF No. 70. Plaintiff's attorneys contend that their fee is reasonable by providing the
invoice and a rate chart from the Michigan Bar Journal showing a $335 per hour median
billing rate for consumer law cases.
The Sixth Circuit has identified several factors for courts to consider in determining
the lodestar amount, which is calculated by multiplying the reasonable number of hours
billed by a reasonable rate. Isabel v. City of Memphis, 404 F.3d 404, 415 (6th Cir. 2005).
The Court also considers the market rate charged by lawyers of comparable experience.
Adcock-Ladd v. Secretary of Treasury, 227 F.3d 343, 350 (6th Cir. 2000).
In his notice, Plaintiff lists the factors the Court should consider, but provides no
analysis as to how those factors apply the instant matter. See Notice 4–5, ECF No. 70.
Nevertheless, the Court finds that time and labor required of the Plaintiff's attorneys to
skillfully litigate the case was justified. The case has spanned several years, and Plaintiff's
attorneys have had to overcome several hurdles to reach the conclusion. See Order 1–3,
ECF No. 66. Above all things, "the most critical factor in determining the reasonableness
of a fee award is the degree of success obtained." Isabel, 404 F.3d at 416 (quotations
omitted). Although Plaintiff did not receive the fullest possible amount of statutory damages
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available to him, his attorneys ensured his success in all other respects, including a
successful motion for summary judgment. In their brief, Defendants contend that "attorney's
fees were the real impetus behind the filing and continuation of this action," and point to
Plaintiff's rejection of Defendants' Offer of Judgment at a very early stage in litigation as
something the Court should consider when determining an award of attorney fees and
costs. Resp. 3, ECF No. 71. But as Plaintiff points out in his Reply, the offer was made
while Plaintiff's motion to add Defendant Richard Wagner, Jr. to the case was still pending.
Reply 2–3, ECF No. 76. Acceptance of the offer would have ended the matter and
foreclosed any possibility of collecting statutory damages against Wagner. Id. The move
to add Wagner to the case, Plaintiff argues, was also influenced by Plaintiff's laterconfirmed suspicion that Defendant Schlottman & Wagner, P.C. would dissolve and
become uncollectable following an adverse judgment. Id. at 3. The Court is satisfied with
Plaintiff's explanation.
Having considered the factors and the documentation offered by the Plaintiff's
attorneys, which is "of sufficient detail and probative value to enable the court to determine
with a high degree of certainty that such hours were actually and reasonably expended in
the prosecution of the litigation," United Slate, Tile & Composition Roofers, Damp &
Waterproof Workers Ass'n, Local 307 v. G & M Roofing & Sheet Metal Co., 732 F.2d 495,
502 n.2 (6th Cir. 1984), the Court finds that Plaintiff's attorneys have successfully
prosecuted their client's case, and deserve their associated fees. Accordingly, the Court
will award Plaintiff $36,628.00 in attorney fees and $406.69 in costs.

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ORDER
WHEREFORE, it is hereby ORDERED that Plaintiff shall recover of the Defendants
$250.00 in statutory damages and $37,034.69 in costs and attorney fees, resulting in a total
amount of $37,284.69.
IT IS FURTHER ORDERED that the Court will decline to exercise jurisdiction over
Plaintiff's remaining state-law claim, see 28 U.S.C. § 1367(c), and that claim is DISMISSED
WITHOUT PREJUDICE. As a result, the case is CLOSED.
SO ORDERED.

s/Stephen J. Murphy, III
STEPHEN J. MURPHY, III
United States District Judge
Dated: January 10, 2017
I hereby certify that a copy of the foregoing document was served upon the parties and/or
counsel of record on January 10, 2017, by electronic and/or ordinary mail.
s/David P. Parker
Case Manager

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