Tomlinson v. Eastern Recovery & Remediation Group, LLC et al
Filing
99
ORDER Granting in Part and Denying in Part Plaintiff's Motion for Default Judgment 78 , Granting Defendants' Motions to Set Aside Default 87 ; 88 ; 89 and Denying Plaintiff's Motion for Evidentiary Hearing 98 . Signed by District Judge Denise Page Hood. (LSau)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
VICTORIA TOMLINSON,
Plaintiff,
CASE NO. 15-13606
HON. DENISE PAGE HOOD
v.
EASTERN RECOVERY & REMEDIATION GROUP, LLC, et al.,
Defendants.
/
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S
MOTION FOR DEFAULT JUDGMENT [#78], GRANTING DEFENDANTS’
MOTIONS TO SET ASIDE DEFAULT [#87; #88; #89], AND DENYING
PLAINTIFF’S MOTION FOR EVIDENTIARY HEARING [#98]
I.
BACKGROUND
On October 14, 2015, Plaintiff Victoria Tomlinson filed a Complaint against
Defendants Eastern Recovery & Remediation Group, LLC (“Eastern Recovery &
Remediation Group”) and Diane Peach (“Peach”) alleging that these defendants
violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.
and the Michigan Occupational Code (“MOC”), M.C.L. §§ 339.915 and 339.918 (or
in the alternative, the Michigan Collection Practices Act (“MCPA”), M.C.L. §
445.252 ). (Doc # 1) On June 28, 2017, Plaintiff amended her original Complaint
to add the Law Office of Daria L. Pratcher, P.C. (“Law Office of Daria L. Pratcher”),
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Daria Pratcher (“Pratcher”), and Genique Meredith (“Meredith”) as Defendants, and
additionally alleged that all Defendants violated the Telephone Consumer Protection
Act (“TCPA”), 47 U.S.C. § 227. (Doc # 26) There were several other parties named
as defendants in the original Complaint and in the Amended Complaint, but these
parties have been dismissed from this case.
On July 5, 2018, Plaintiff filed a Motion for Default Judgment against the five
remaining defendants: Eastern Recovery & Remediation Group, the Law Office of
Daria L. Pratcher, Pratcher, Peach, and Meredith (collectively, “Defendants”). (Doc
# 78) On August 23, 2018, the Law Office of Daria L. Pratcher, Pratcher, and
Meredith filed Responses to Plaintiff’s Motion. (Docs # 84, 85, 86) To date, neither
Eastern Recovery & Remediation Group nor Peach has filed an answer to Plaintiff’s
Complaint or a response to Plaintiff’s Motion for Default Judgment.
On June 20, 2016, Plaintiff filed a Motion to Extend the Time for Service, to
Open Discovery, and for Alternate Service of Eastern Recovery & Remediation
Group (Doc # 8), which the Court granted on July 12, 2016 (Doc # 10). Plaintiff
provided proof of service for Eastern Recovery & Remediation Group in accordance
with the Court’s Order on February 27, 2017. (Doc # 21) On August 2, 2017, having
received no responsive pleading, Plaintiff requested a Clerk’s Entry of Default
against Eastern Recovery & Remediation Group. (Doc # 33) On August 2, 2017,
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the Clerk entered Default against Eastern Recovery & Remediation Group pursuant
to Fed. R. Civ. P. 55(a). (Doc # 34)
On August 2, 2017, Plaintiff provided the Court with proof of service for
Peach. (Doc # 32) On August 10, 2017, Plaintiff provided the Court with proof of
service for Meredith. (Doc # 37) On September 1, 2017, having received no
responsive pleading from either Peach or Meredith, Plaintiff requested a Clerk’s
Entry of Default against both parties. (Doc # 45) On September 5, 2017, the Clerk
entered Default against Peach and Meredith pursuant to Fed. R. Civ. P. 55(a). (Docs
# 46, 47) On September 6, 2018, Meredith filed a Motion to Set Aside Default.
(Doc # 89) Plaintiff filed her Response on September 13, 2018. (Doc # 91)
Meredith filed her Reply on September 18, 2018. (Doc # 94)
On September 1, 2017, Plaintiff provided the Court with proof of service for
the Law Office of Daria L. Pratcher and Pratcher. (Docs # 43, 44) On September
8, 2017, having not received a responsive pleading from either the Law Office of
Daria L. Pratcher or Pratcher, Plaintiff requested a Clerk’s Entry of Default against
both parties. (Doc # 50) On September 8, 2017, the Clerk entered Default against
the Law Office of Daria L. Pratcher and Pratcher pursuant to Fed. R. Civ. P. 55(a).
(Docs # 51, 52) On September 6, 2018, the Law Office of Daria L. Pratcher and
Pratcher each filed a Motion to Set Aside Default. (Docs # 87, 88) Plaintiff filed
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her Response on September 13, 2018. (Docs # 92, 93) The Law Office of Daria L.
Pratcher and Pratcher each filed a Reply on September 18, 2018. (Docs # 95, 96)
Plaintiff alleges that beginning on or about July 15, 2015, Defendants first
called her cellular phone to collect an alleged debt that was obtained over the
internet. (Doc # 26, Pg ID 182, ¶¶ 17-18) Plaintiff asserts that she told Defendants
that she never sought or obtained a loan over the internet and expressed that the
alleged account and debt did not belong to her. (Doc # 26, Pg ID 182, ¶ 21) Plaintiff
claims that Defendants contacted her by using an automatic telephone dialing system
even though she never consented to any calls made by Defendants for purposes of
collecting the alleged debt. (Doc # 26, Pg ID 203, ¶¶ 127-130) Plaintiff alleges that
Defendants also called her cellular phone on July 17, 2015 and July 20, 2015, and
left her voice mail messages. (Doc # 26, Pg ID 184, ¶ 29) On July 16, 2015,
Defendants emailed Plaintiff the names of the alleged original lender and creditor,
account number, original balance, and settlement balance of the alleged consumer
debt. (Doc # 26, Pg ID 183-184, ¶¶ 25-28)
Based on the aforementioned facts, Plaintiff alleges Defendants violated the
FDCPA, TCPA, and MOC. In total, Plaintiff requests $104,000 in damages from
this Court. (Doc # 78, Pg ID 855) Specifically, Plaintiff requests that this Court
enter judgment in her favor and against Defendants, jointly and severally, in the
amount of $3,000 for willful violations of the TCPA, $1,000 for statutory damages
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under the FDCPA, $25,000 for actual damages under the FDCPA, and $75,000 in
treble actual damages under the MOC. Id. Plaintiff has also indicated to the Court
that pursuant to Fed. R. Civ. P. 54, she will file a motion for attorney’s fees and costs
within fourteen days of entry of this Court’s Default Judgment Order. Id.
II.
ANALYSIS
A. Motions to Set Aside Default
Before the Court can consider Plaintiff’s Motion for Default Judgment, the
Court must consider the Motions to Set Aside Default that were filed by the Law
Office of Daria L. Pratcher, Pratcher, and Meredith. The Court considers these
motions together because they essentially contain the same arguments. Plaintiff’s
Responses to the Motions are similar as well.
Pursuant to Federal Rule of Civil Procedure 55(c), “[t]he court may set aside
an entry of default for good cause, and it may set aside a default judgment under
Rule 60(b).” Fed. R. Civ. P. 55(c). The Court considers the present Motions under
the “good cause” standard of Rule 55(c) instead of the more demanding “good
cause” standard under Rule 60(b) because damages have not been determined nor
has a judgment been entered. See Kuhnmuench v. LivaNova PLC, 323 F.R.D. 563,
566 (E.D. Mich. 2017) (“The more stringent Rule 60(b) standard does not apply
unless the court has determined damages and a judgment has been entered.”)
(citation and quotation omitted). Three factors must be determined to set aside a
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default under Rule 55(c): 1) whether the plaintiff will be prejudiced; 2) whether the
defendant has a meritorious defense; and 3) whether culpable conduct of the
defendant led to the default. United Coin Meter Co. v. Seaboard Coastline R.R.,
705 F.2d 839, 845 (6th Cir. 1983). Generally, Sixth Circuit decisions on Rule 55(c)
motions to set aside default are “extremely forgiving to the defaulted party and favor
a policy of resolving cases on the merits instead of on the basis of procedural
missteps.” United States v. $22,050.00 U.S. Currency, 595 F.3d 318, 322 (6th Cir.
2010). “It has been found that a district court abuses its discretion in denying a
motion to set aside an entry of default when . . . the defendant had a meritorious
defense and no prejudice would result to the plaintiff if the matter were to go
forward.” O.J. Distrib., Inc. v. Hornell Brewing Co., 340 F.3d 345, 353 (6th Cir.
2003).
Regarding the first factor, Plaintiff argues that she will be prejudiced if the
matter is reopened because it would result in a loss of evidence. (Doc # 91, Pg ID
1320-21, Doc # 92, Pg ID 1558-60, Doc # 93, Pg ID 1588-90) Plaintiff claims that
her cellular phone records were lost, and if the Law Office of Daria L. Pratcher,
Pratcher, and Meredith had answered Plaintiff’s Complaint in a timely fashion,
those records would still be available. Id. The Law Office of Daria L. Pratcher,
Pratcher, and Meredith respond to that argument by claiming that the alleged loss
did not occur as a result of their actions. (Doc # 94, Pg ID 1599, Doc # 95, Pg ID
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1606, Doc # 96, Pg ID 1613) Plaintiff also contends that she would be prejudiced
if this Court reopened this matter because it would give the Law Office of Daria L.
Pratcher, Pratcher, and Meredith additional time and opportunities to commit fraud
and collusion. (Doc # 91, Pg ID 1322-25, Doc # 92, Pg ID 1560-63, Doc # 93, Pg
ID 1590-93)
The Court finds that there are no facts that demonstrate that Plaintiff will be
prejudiced from setting aside the defaults. Plaintiff’s claim that a favorable ruling
on the Law Office of Daria L. Pratcher, Pratcher, and Meredith’s Motions would
result in the loss of evidence is inaccurate. As indicated by Plaintiff, courts have
held that a party opposing a motion to set aside default due to prejudice must
establish that vacating the default will result in the loss of evidence, create increased
difficulties of discovery, or provide greater opportunity for fraud and collusion.
INVST Fin. Grp., Inc. v. Chem-Nuclear Sys., Inc., 815 F.2d 391, 398 (6th Cir. 1987).
However, here, the evidence has allegedly already been lost. Further, Plaintiff has
not explained how setting aside the defaults would provide the Law Office of Daria
L. Pratcher, Pratcher, or Meredith with greater opportunities for fraud and collusion.
While setting aside the defaults may possibly delay a favorable judgment for
Plaintiff, delay alone is insufficient to show prejudice. United Coin Meter, 705 F.2d
at 845.
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Regarding the second factor, the Law Office of Daria L. Pratcher, Pratcher,
and Meredith have raised many meritorious defenses in response to Plaintiff’s
claims. For instance, the three defendants argue that Plaintiff’s FDCPA claim is
barred due to the relevant statute of limitations. (Doc # 84, Pg ID 1155-56, Doc #
85, Pg ID 1182-83, Doc # 86, Pg ID 1209) These defendants have additionally
alleged that they are not personally responsible for communicating with Plaintiff in
any way that would violate the TCPA, MOC, or MCPA. (Doc # 84, Pg ID 115658, Doc # 85, Pg ID 1183-85, Doc # 86, Pg ID 1210-12) Plaintiff only responds to
the Law Office of Daria L. Pratcher, Pratcher, and Meredith’s statute of limitations
defense, and concedes that if proven, it would operate as a sufficient defense to
Plaintiff’s FDCPA claim.
Regarding the third factor, the Law Office of Daria L. Pratcher, Pratcher, and
Meredith argue that they were not culpable for any conduct that would have led to
the default.
All three defendants claim that when they received Plaintiff’s
Complaint, they were under the impression that service of process was insufficient,
and therefore, they were not required to respond. (Doc # 84, Pg ID 1149, Doc # 85,
Pg ID 1176, Doc # 86, Pg ID 1203) The Law Office of Daria L. Pratcher, Pratcher,
and Meredith further claim that they were not made aware of any action regarding
this case until Plaintiff’s Motion for Default Judgment was filed. Id. The Court
notes that these defendants had notice of the action, but failed to file a limited
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appearance challenging the alleged insufficient service. Although Plaintiff argues
that the Law Office of Daria L. Pratcher, Pratcher, and Meredith willfully failed to
appear, these defendants claim that this was not the case. Considering that this
Court is required to be “extremely forgiving to the defaulted party,” this factor
slightly weighs in favor of these three defendants since there is no showing of a
blatant disregard of the relevant procedures.
After considering the Sixth Circuit’s three-factor analysis, the Law Office of
Daria L. Pratcher, Pratcher, and Meredith’s Motions to Set Aside Default must be
granted since each prong weighs in their favor. Therefore, an additional analysis of
Plaintiff’s Motion for Default Judgment against the Law Office of Daria L.
Pratcher, Pratcher, and Meredith is unnecessary, and the subsequent default
judgment analysis will only pertain to Defendants Eastern Recovery & Remediation
Group and Peach.
B. Motion for Partial Evidentiary Hearing
Plaintiff has asked the Court to conduct an evidentiary hearing regarding the
Law Office of Daria L. Pratcher, Pratcher, and Meredith’s Motions to Set Aside
Default in order to resolve disputed questions of fact. The Court does not believe
that it is necessary to hold such a hearing and finds that there is sufficient evidence
to grant the Law Office of Daria L. Pratcher, Pratcher, and Meredith’s Motions to
Set Aside Default. Plaintiff’s Motion (Doc # 98) is denied.
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C. Default Judgment
An Entry of Default under Rule 55 of the Rules of Civil Procedure is the first
procedural step necessary to obtain a default judgment. Shepard Claims Serv. Inc.
v. Williams Darrah & Assoc., 796 F.2d 190, 193 (6th Cir. 1986). “When a party
against whom a judgment for affirmative relief is sought has failed to plead or
otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must
enter the party’s default.” Fed. R. Civ. P. 55(a). The party must then apply to the
Court for entry of the default judgment. Fed. R. Civ. P. 55(b)(2). A default judgment
may be entered by the Clerk when the plaintiff’s claim is for a sum certain or a sum
which can be made certain, and the defendant is not an infant or an incompetent
person. Fed. R. Civ. P. 55(b)(1). The Court may conduct an accounting, determine
the amount of damages, establish the truth of any allegations by evidence, or
investigate any other matter. Fed. R. Civ. P. 55(b)(2).
Default judgment is generally disfavored because there is a “strong preference
for trials on the merits.” Shepard Claims Serv., 796 F.2d at 193. According to the
Sixth Circuit, “[j]udgment by default is a drastic step which should be resorted to
only in the most extreme cases.” United Coin Meter, 705 F.2d at 845. “When
considering whether to enter a default judgment, a court should take into account: 1)
possible prejudice to the plaintiff; 2) the merits of the claims; 3) the sufficiency of
the complaint; 4) the amount of money at stake; 5) possible disputed material facts;
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6) whether the default was due to excusable neglect; and 7) the preference for
decisions on the merits.” Russell v. City of Farmington Hills, 34 Fed. App’x. 196,
198 (6th Cir. 2002) (citing Eitel v. McCool, 782 F.2d. 1470, 1472 (9th Cir. 1986)).
In regard to the first factor, Plaintiff would suffer prejudice if the Court were
to deny her motion. The longer that this case is forced to continue without granting
Plaintiff any sort of relief only causes her to endure further prejudice by not being
able to obtain the relief she seeks. The first factor weighs in favor of entering a
default judgment.
The second and third factors also weigh in favor of entering a default
judgment.
Plaintiff has alleged in her Complaint that Eastern Recovery &
Remediation Group and Peach have violated her rights under the FDCPA, TCPA,
and MOC. The analysis of the second and third factors is rather straight-forward
since Plaintiff’s factual allegations are considered true due to Eastern Recovery &
Remediation Group and Peach’s defaults. See Ford Motor Co. v. Cross, 441 F.
Supp. 2d 837, 848 (E.D. Mich. 2006).
The fourth factor similarly weighs in favor of entering judgment by default.
The amount that Plaintiff seeks is relatively low. See, e.g., State Farm Bank, F.S.B.
v. Sloan, No. 11-CV-10385, 2011 WL 2144227, at *3 (E.D. Mich. May 31, 2011).
Further, this Court has awarded a comparable amount of damages and awards for
similar claims. See, e.g., Green v. Nationwide Arbitration Servs., LLC, No. 1411
14280, 2015 WL 7717165, at *2 (E.D. Mich. Nov. 30, 2015) (awarding plaintiff
$105,000 in damages, $12,355 for attorney’s fees, and $400 in costs).
The three remaining factors also weigh in favor of entering a default judgment
against Eastern Recovery & Remediation Group and Peach. Regarding the fifth
factor, Eastern Recovery & Remediation Group and Peach forfeited their right to
dispute any of Plaintiff’s allegations by not answering the Complaint. As for the
sixth factor, Eastern Recovery & Remediation Group and Peach’s failure to answer
the Complaint was not a result of excusable neglect because they were each served
with the Complaint at locations that were reasonably believed to give Eastern
Recovery & Remediation Group and Peach actual notice of the present lawsuit and
an opportunity to be heard. Finally, regarding the seventh factor, while true that
public policy favors the resolution of cases on the merits, Eastern Recovery &
Remediation Group and Peach have prevented a merits-based resolution by not
appearing. See State Farm Bank, F.S.B., 2011 WL 2144227, at *3 (following a
similar analysis).
Each factor weighs in favor of entering a default judgment.
The final issue to be assessed is the measure of damages. Rule 55(b)(2) of the
Rules of Civil Procedure empowers a federal court to hold a hearing to determine
damages, but such a hearing is not needed in all instances. See SEC v. Smyth, 420
F.3d 1225, 1231–32 n. 13 (11th Cir. 2005) (noting that an evidentiary hearing on
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damages is not a “per se requirement; indeed, Rule 55(b)(2) speaks of evidentiary
hearings in a permissive tone”). Here, the computation of actual damages is not the
product of a simple mathematical equation, and the Court will need to hold a hearing
to determine the amount of actual damages that should be awarded to Plaintiff.
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III.
CONCLUSION
For the reasons set forth above,
IT IS HEREBY ORDERED that Plaintiff Victoria Tomlinson’s Motion for
Default Judgment (Doc # 78) is GRANTED IN PART AND DENIED IN PART.
IT IS FURTHER ORDERED that Plaintiff Victoria Tomlinson’s Motion for
Default Judgment (Doc # 78) against Defendants Law Office of Daria L. Pratcher,
P.C., Daria Pratcher, and Genique Meredith is DENIED.
IT IS FURTHER ORDERED that Plaintiff Victoria Tomlinson’s Motion for
Default Judgment (Doc # 78) against Defendants Eastern Recovery & Remediation
Group, LLC and Diane Peach is GRANTED. A damages hearing will be held on
May 28, 2019, 1:30 p.m.
IT IS FURTHER ORDERED that Defendants Law Office of Daria L.
Pratcher, P.C., Daria Pratcher, and Genique Meredith’s Motions to Set Aside Default
(Doc # 87; Doc # 88; Doc # 89) are GRANTED.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Partial Evidentiary
Hearing (Doc # 98) is DENIED.
s/Denise Page Hood
Chief Judge, U. S. District Court
DATED: March 27, 2019
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