Bond et al v. USAA Federal Savings Bank

Filing 18

ORDER granting 8 Motion to Dismiss the counterclaim for attorneys' fees (Written Opinion). Signed by Senior Judge David S. Doty on 4/10/2014. (PJM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 13-02931(DSD/JJG)
Erin Bond and John Bond,
Plaintiffs,
ORDER

v.
USAA Federal Savings Bank,
Defendant.

Thomas J. Lyons, Jr. Esq., Consumer Justice Center P.A.,
367 Commerce Court, Vadnais Heights, MN 55127, counsel
for plaintiffs.
Garth G. Gavenda, Esq. and Anastasi Jellum, PA, 14985
North 60th Street, Stillwater, MN 55082, counsel for
defendant.

This matter is before the court upon the motion by plaintiffs
Erin Bond and John Bond to dismiss the counterclaim for attorneys’
fees by defendant USAA Federal Savings Bank (USAA).

Based on a

review of the file, record and proceedings herein, and for the
following reasons, the court grants the motion.

BACKGROUND
This consumer-protection dispute arises out of an October 2013
electronic funds transfer by USAA.

At the time of the transfer,

the Bonds maintained an account with USAA to make payments toward
a vehicle loan.

Compl. ¶ 14.

The Bonds authorized USAA to

periodically transfer $100 from their personal bank account to the
loan account.

Id. ¶ 16.

On October 11, 2013, USAA mistakenly

transferred $1,000 to the account.

Id. ¶ 22.

The funds were

returned to the personal bank account on October 17, 2013.

Id.

¶ 50.
On October 24, 2013, the Bonds filed a complaint alleging
(1) violations of the Electronic Fund Transfer Act (EFTA) and
(2) conversion.
2013,

seeking

USAA answered and counterclaimed on November 15,
attorneys’

fees

under

15

U.S.C.

§

1693m(f).

Specifically, USAA alleges that the original action was brought in
bad faith or for purposes of harassment.

The Bonds move to dismiss

the counterclaim.

DISCUSSION
I.

Standard of Review
To survive a motion to dismiss for failure to state a claim,

“a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.”
Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 594 (8th Cir. 2009)
(citations and internal quotation marks omitted).
facial

plausibility

when

the

plaintiff

[has

“A claim has

pleaded]

factual

content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”

Ashcroft v.

Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 556 (2007)).

Although a complaint need not

contain detailed factual allegations, it must raise a right to

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relief above the speculative level.

See Twombly, 550 U.S. at 555.

“[L]abels and conclusions or a formulaic recitation of the elements
of a cause of action” are not sufficient to state a claim.

Iqbal,

129 S. Ct. at 1949 (citation and internal quotation marks omitted).
II.

Attorneys’ Fees Under EFTA
Under the EFTA, the court shall award reasonable attorneys’

fees and costs to a defendant “[o]n a finding by the court that an
unsuccessful [EFTA] action ... was brought in bad faith or for
purposes of harassment.”

15 U.S.C. § 1693m(f).

The Bonds argue

that dismissal is warranted because § 1693m(f) allows fees only by
motion after the underlying EFTA claim is resolved on the merits.
USAA responds that § 1693m(f) allows fees to be sought either by
motion or counterclaim.

The court disagrees.

The Eighth Circuit is silent as to the proper vehicle for
seeking attorneys’ fees under § 1693m(f).

In general, however, a

claim for attorneys’ fees “must be made by motion unless the
substantive law requires those fees to be proved at trial as an
element of damages.”

Fed. R. Civ. P. 54(d)(2)(A).

Here, USAA

argues that the presence of bad faith or harassment is a fact issue
to be determined by a jury.

The relevant section, however,

specifically awards fees upon “a finding by the court.”
§ 1693m(f).

15 U.S.C.

Moreover, the statute provides for fees only in the

event of an “unsuccessful action.”

Id.

Such language - focusing

on the merits and ultimate disposition of the case - demonstrates

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that the requested relief is not properly before the court via a
counterclaim.
Although no court has addressed whether fees under § 1693m(f)
may be sought by counterclaim, such a conclusion comports with the
few courts that have discussed the proper vehicle for § 1693m(f)
relief.

Cf., e.g., Drager v. Bridgeview Bank, No. 1:10-cv-7585,

2011

2415244,

WL

affirmative
“[s]hould

at

defense

*6
of

[d]efendants

(N.D.
bad

win

Ill.

faith
this

in

construing

a

comparable

13,

EFTA

lawsuit,

attorneys[’] fees under” § 1693m(f)).
courts

June

2011)

action
they

(striking

and

may

noting

move

for

Moreover, the majority of

provision

of

the

Fair

Debt

Collection Practices Act (FDCPA)1 find that a motion is the proper
vehicle for seeking attorneys’ fees.

See Kirscher v. Messerli &

Kramer, P.A., No. 05-1901, 2006 WL 145162, at *6–7 (D. Minn. Jan.
18, 2006); see also, e.g., Kropf v. TCA, Inc., 752 F. Supp. 2d 797,
800 (E.D. Mich. 2010) (collecting cases).

The court finds the

reasoning of those courts persuasive, and holds that the proper
method for seeking attorneys’ fees under § 1693m(f) is by motion
after a resolution on the merits of the underlying EFTA claim.

1

As

The FDCPA’s fee provision, 15 U.S.C. § 1692k(a)(3), provides
that “[o]n a finding by the court that an action under this section
was brought in bad faith and for the purpose of harassment, the
court may award to the defendant attorney’s fees reasonable in
relation to the work expended and costs.”
4

a

result,

dismissal

of

the

counterclaim

is

warranted.

Such

dismissal does not affect USAA’s ability to move for attorneys’
fees at an appropriate time.

CONCLUSION
Accordingly, IT IS HEREBY ORDERED that plaintiffs’ motion to
dismiss the counterclaim [ECF No. 8] is granted.
Dated:

April 10, 2014
s/David S. Doty
David S. Doty, Judge
United States District Court

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