Dunnigan v. Federal Home Loan Mortgage Corporation

Filing 95

ORDER granting in part and denying in part 71 Motion for Attorney Fees, awarding Plaintiff $116,432.25 in fees; adopting in part 90 Report and Recommendation regarding attorney's fees. (Written Opinion) Signed by Judge Susan Richard Nelson on 3/2/2017. (ADC)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Julie M. Dunnigan,

Case No. 15-cv-2626 (SRN/JSM)

Plaintiff,
v.
Federal Home Loan Mortgage Corporation
d/b/a Freddie Mac,

ORDER

Defendant.

John H. Goolsby, Goolsby Law Office, LLC, 475 Cleveland Ave. N., Ste. 212, St. Paul,
MN 55104, for Plaintiff.
Ashley M. DeMinck and Ellen B. Silverman, Hinshaw & Culbertson, LLP, 333 South 7th
St., Ste. 2000, Minneapolis, MN 55402, for Defendant.

SUSAN RICHARD NELSON, United States District Judge
This matter is before the Court on Plaintiff Dunnigan’s Objections (“Objs.”) [Doc.
No. 91] to Magistrate Judge Mayeron’s Report and Recommendation (“R&R”) [Doc. No.
90] and Plaintiff’s Motion for Attorney’s Fees [Doc. No. 71]. For the reasons set forth
below, Dunnigan’s Objections are sustained in part and overruled in part. Consistent
with this ruling, the Court adopts the Report and Recommendation in part and
respectfully declines to adopt it in part.
I.

BACKGROUND
Defendant Federal Home Loan Mortgage Corporation (“Freddie Mac”) did not

object to the Report and Recommendation. Neither party objected to the procedural

history and facts as set forth in the Report and Recommendation. Thus, the Court cites to
the Report and Recommendation in recounting the background of this case.
A. Facts and Procedural Posture
Dunnigan alleges that in July of 2013, software used and operated by Freddie Mac
erroneously listed the mortgage on her home as 90-days or more delinquent within the
past year. (R&R at 1.) As a result of this classification, when Dunnigan later sought to
refinance her home, Freddie Mac allegedly sent numerous “caution certificates” as part of
the feedback it provided to loan originators who inquired into Dunnigan’s credit scores.
(Id. at 1–2.) Due at least in part to these caution certificates, Dunnigan was unable to
obtain refinancing for several months and when she finally did, the mortgage terms were
less favorable. (See id. at 2.)
When Dunnigan investigated the reason for the caution certificates, Freddie Mac
allegedly represented to her that Equifax was erroneously reporting the delinquency on
her mortgage. (Id.) Based on this representation, Dunnigan sued Equifax in 2014 for the
erroneous reporting (hereinafter, the “Equifax Case”).

(Id.) As part of discovery in the

Equifax Case, Dunnigan subpoenaed records from Freddie Mac and deposed company
representatives.

(See id. at 6, 11–12.)

Dunnigan alleges that it was through this

discovery that she finally learned that Freddie Mac—not Equifax—was the source of the
problem. (See id.) The Equifax Case was settled and dismissed in 2015. (Id. at 2.)
In June of 2015, Dunnigan brought the present suit against Freddie Mac. (Id.)
Originally, Dunnigan alleged two violations of the Fair Credit Reporting Act (“FCRA”),
but subsequently added various state law tort claims over the course of three amendments
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to her Complaint. (Id.) At a hearing on Freddie Mac’s motion to dismiss, this Court
made clear that although Dunnigan’s FCRA claims would survive for the time being, she
had “an uphill battle” to show that Freddie Mac was a credit reporting agency, which was
a legal issue and not a question of fact. (See Hr’g Tr. dated 2/12/2016 at 18 [Doc. No.
45].) Ultimately, the parties resolved their dispute when Freddie Mac made a Rule 68
Offer of Judgment, which Dunnigan accepted.

(See Rule 68 Offer of Judg. and

Acceptance (“Offer of Judg.”) [Doc. No. 69].)
Two elements of the Offer of Judgment are important here. First, the Offer makes
clear that it “does not constitute an admission of any liability or wrongdoing by Freddie
Mac regarding Plaintiff’s claims against Freddie Mac or otherwise.” (Id. at 5 1 (emphasis
added).) Second, the Offer included “an additional amount for Plaintiff’s reasonable
attorneys’ fees and costs, in an amount to be determined by the Court.” (Id. at 4.)
Pursuant to the Offer and the FCRA, Dunnigan moved for attorney’s fees. (R&R
at 3–4.) Ultimately, she sought $205,143.33 related to her FCRA claims, as well as a five
percent “enhancement” of those fees. 2 (Id. at 5.) Magistrate Judge Mayeron (“Judge
Mayeron”) found that Dunnigan was entitled to fees generally, but not the full amount

1

The Offer contains multiple, individually paginated documents. Thus, the Court cites to
the ECF page number as it appears in the upper right hand corner of the Offer.
2

Dunnigan also sought $21,350 for fees associated with pursuing her state law claims.
(R&R at 5.) Magistrate Judge Mayeron found that the “source” of Dunnigan’s
entitlement to fees was the FCRA and denied the request for fees associated with other
claims. (R&R at 17.) Dunnigan did not object to this conclusion and this Court adopts
Judge Mayeron’s well-reasoned recommendation not to award those fees.
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that she sought. 3

(See id. at 35–36.)

Specifically, Judge Mayeron concluded that

Dunnigan was entitled to $99,140.57 in fees and declined to enhance that amount by the
requested five percent. (Id. at 21–22, 35–36.)
In relevant part, Judge Mayeron recommended the following reductions to
Dunnigan’s fees.

First, although she agreed Dunnigan was entitled to some fees

associated with the work performed in the Equifax Case, Judge Mayeron recommended
that only fees associated with work that ultimately assisted Dunnigan in her case against
Freddie Mac should be awarded.

(See id. at 23–25.)

Judge Mayeron found that

Dunnigan failed to provide the factual basis showing that many of her fees from the
Equifax Case related to Freddie Mac and thus recommended reducing the request by
$31,204.15. (Id. at 24–25.)
Second, Judge Mayeron recommended further reducing Dunnigan’s fees by
$20,335.86 for “unnecessary work” performed on matters such as summary judgment
motions that were never filed, preparing jury instructions and verdict forms for a trial that
was never close to occurring, and drafting motions to compel that were never filed. (Id.
at 29–30.) Third, Judge Mayeron further reduced Dunnigan’s fees by $43,255.24 for
“excessive hours.” (See id. at 31–35.) For example, Judge Mayeron concluded that
eleven hours preparing a Rule 26(f) report and 105 hours related to the first and second
motions to dismiss were unreasonable.

(Id. at 31–34.)

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Fourth, Judge Mayeron

Judge Mayeron concluded that the billing rate for Dunnigan’s attorney—$350 per hour
for legal work and $100 per hour for administrative tasks—was reasonable and in
keeping with the prevailing market rate. (R&R at 22–23.) No party objected to this
conclusion and this Court adopts Judge Mayeron’s well-reasoned conclusion.
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recommended further reducing Dunnigan’s fees by $11,207.51 for administrative tasks
performed by an attorney (and billed at the attorney’s rate) and vague billing entries that
prevented Judge Mayeron from determining whether they were reasonably necessary or
not. 4 (See id. at 25–29.) In total, Judge Mayeron recommended reducing Dunnigan’s
requested fees by $106,002.76. (Id. at 35.)
Dunnigan filed objections to the Report and Recommendation.

(See Objs.)

Specifically, she objects to the recommended reductions for work performed in the
Equifax Case, unnecessary or excessive work, and the denial of her “modest upward
adjustment to the lodestar.” (Id. at 1.) Freddie Mac filed a response in which it agreed
with Judge Mayeron’s recommendations and urged this Court to adopt the Report and
Recommendation. (See Def.’s Reply Mem. of Law in Opp. (“Mem. in Opp.”) [Doc. No.
93].)
II.

DISCUSSION
A. Legal Standard
District courts conduct de novo reviews of specific objections to dispositive

rulings by magistrate judges, including those on post-judgment motions for attorneys’
fees. See 28 U.S.C. § 636(b)(1)(B); D. Minn. L.R. 72.2(b)(3); Pub. Record Media, LLC
v. U.S. Dep’t of Justice, No. 12-cv-1225 (MJD/AJB), 2013 WL 2480678, at *1 (D. Minn.
June 7, 2013). However, “[o]bjections which are not specific but merely summarize or
repeat arguments presented to and considered by a magistrate judge are not entitled to de
4

Dunnigan did not object to the Judge Mayeron’s recommended reduction for
administrative tasks and vague billing. Thus, the Court adopts this portion of the Report
and Recommendation.
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novo review.” Mashak v. Minnesota, No. 11-cv-473 (JRT/JSM), 2012 WL 928251, at *2
(D. Minn. Mar. 19, 2012); Wedington v. United States, No. 12-cv-710 JRT/FLN, 2012
WL 3031240, at *1 (D. Minn. July 25, 2012), aff’d (Sept. 7, 2012) (“Objections which
are not specific are not entitled to de novo review.”).

Moreover, when presenting

arguments to the magistrate judge, parties must put forth “not only their ‘best shot’ but all
of their shots.” Ridenour v. Boehringer Ingelheim Pharm., Inc., 679 F.3d 1062, 1067 (8th
Cir. 2012) (quotations and citations omitted). “A party cannot, in his objections to an
R&R, raise arguments that were not clearly presented to the magistrate judge.”
Hammann v. 1-800 Ideas.com, Inc., 455 F. Supp. 2d 942, 947–48 (D. Minn. 2006). New
claims or arguments, presented for the first time in the objections to a report and
recommendation, will not be reviewed. See Britton v. Astrue, 622 F. Supp. 2d 771, 776
(D. Minn. 2008); Nhut Le v. Wells Fargo Bank, N.A., No. 13-cv-1920 (SRN/JJK), 2014
WL 1672353, at *3 (D. Minn. Apr. 28, 2014) aff’d, 595 F. App’x 661 (8th Cir. 2015).
B. Fees From the Equifax Case
Dunnigan argues that she is entitled to all of her fees associated with the Equifax
Case. (See Objs. at 2–3.) She contends that it was only through discovery in the Equifax
Case that she was able to learn that Freddie Mac—not Equifax—was the source of the
erroneous mortgage delinquency reports.

(See id. at 2.)

To “prove” this claim,

Dunnigan submitted an affidavit from her attorney (“Goolsby”) offering details about—
and documentation related to—discovery in the Equifax Case. (See Third Declaration of
John H. Goolsby (“Third Goolsby Decl.”) [Doc. No. 92].) Important here, the Third
Goolsby Declaration was not provided to Judge Mayeron.
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Dunnigan also argues that she is entitled to her attorneys’ fees associated with
responding to Freddie Mac’s assertion that personal matter jurisdiction was lacking in the
Equifax Case.

(Objs. at 3.)

Dunnigan contends that addressing Freddie Mac’s

jurisdictional resistance was necessary to obtaining the discovery that allowed her to
bring this suit and ultimately prevail.

(See id.)

Dunnigan also requests her fees

associated with preparing to address Freddie Mac’s anticipated personal jurisdiction
arguments (because of its resistance on these grounds in the Equifax Case) in this case.
(See id. at 6.) In support of these arguments, Dunnigan points to evidence related to
these specific fees that she provided Judge Mayeron. (See id. at 3, 6.)
This Court will not award Dunnigan any additional fees based on evidence and
arguments she presented for the first time with her Objections. Dunnigan bore the burden
of presenting Judge Mayeron with sufficient facts, documentation, and argument in
support of all the fees she sought. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983) (“The
party seeking an award of fees should submit evidence supporting the hours worked and
rates claimed. Where the documentation of hours is inadequate, the district court may
reduce the award accordingly.”); Philipp v. ANR Freight Sys., Inc., 61 F.3d 669, 675 (8th
Cir. 1995) (“[T]he plaintiff bears the burden of establishing an accurate and reliable
factual basis for an award of attorneys’ fees . . . .”). Her failure to satisfy this burden
resulted in Judge Mayeron excluding the fees associated with written discovery in the
Equifax Case. (R&R at 24–25.) Dunnigan does not get a second chance to meet this
burden in her Objections to this Court. See Ridenour, 679 F.3d at 1067; Britton, 622 F.
Supp. 2d at 776 (D. Minn. 2008).
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However, the fees incurred addressing Freddie Mac’s personal jurisdiction
challenges are another matter. Dunnigan provided some evidence and argument—even if
not clearly presented—as to why addressing these challenges was necessary in order for
her to obtain the information that allowed her to bring the present suit. (Objs. at 3 (citing
to evidence presented to Judge Mayeron).) This Court agrees that addressing Freddie
Mac’s jurisdictional challenges was in fact necessary in order to obtain that information.
Thus, the Court increases Dunnigan’s fee award by $974.17. (First Decl. of John H.
Goolsby, Ex. C (“Goolsby Time Sheet”) at 8/5/14, 8/18/14, and 6/15/15 5 [Doc. No. 763].) The total award for fees associated with the Equifax Case is $15,294.19 ($974.17
plus the $14,320.02 recommended by Judge Mayeron).
C. Fees Related to Motions to Compel
Dunnigan argues that she should be awarded fees associated with drafting
numerous motions to compel that were ultimately never filed.

(See Objs. at 6–8.)

Specifically, Dunnigan contends that these motions were all “caused” by Freddie Mac’s
obstructionist tactics or lack of diligence during discovery. (See id.) However, Dunnigan
is entitled to some of her requested attorney’s fees because she prevailed on her FCRA
claims, not because Freddie Mac allegedly acted improperly during discovery. (R&R at
2–3, 15–16.) Dunnigan never brought a motion for sanctions based on Freddie Mac’s
conduct during discovery and her mere allegations cannot serve as the basis for an award
of fees now. (See id. at 16.) Dunnigan’s objection is overruled.

5

The Court refers to particular time entries by the date associated with them on the
Goolsby Time Sheet.
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D. Fees For Drafting Jury Instructions and A Verdict Form
Dunnigan argues that she should be awarded the fees incurred drafting jury
instructions and a verdict form for a trial that never happened. (Objs. at 8–9.) The Court
declines to award these fees.
E. Fees Associated With Preparing For Summary Judgment
Dunnigan argues that she should receive her attorney’s fees related to work done
in preparation for summary judgment. (See Objs. at 9–10.) She contends that from early
on, it was clear that the case would likely be resolved, or substantially advanced, through
summary judgment. (Id. at 9.) Thus, Dunnigan claims that her efforts to prepare for
summary judgment—including legal research, drafting briefing, investigating experts,
and preparing for depositions—were entirely reasonable, despite the fact that the parties’
dispute was resolved before any summary judgment motion was actually filed. (Id. at
10.)
Dunnigan is correct that this Court indicated early on that her FCRA claims would
likely rise or fall on summary judgment. (See Hr’g Tr. dated 11/25/2015 at 18 [Doc. No.
45]; Order dated 4/27/2016 at 14–15.) Thus, it was reasonable for her to begin preparing
for summary judgment early by drafting briefing, preparing for depositions, and
researching experts. The time Dunnigan expended on these activities was similarly
reasonable in light of the fact that Freddie Mac evidenced its intent to pursue summary
judgment and full discovery until just before it made the Offer.

(See Objs. at 10

(describing a May of 2016 letter from Freddie Mac declaring its confidence regarding
prevailing on summary judgment); Doc. No. 65 (Answer filed by Freddie Mac in July of
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2016); Doc No. 68 (amended scheduling order issued in August of 2016 pursuant to the
parties’ stipulation to extend certain discovery and motion deadlines).)

The Court

increases Dunnigan’s award by $16,317.51, representing the time entries that refer to
drafting briefing in preparation for summary judgment, preparing for depositions, and
researching experts.

(See Goolsby Time Sheet at 1/22/2016, 1/25/2016, 1/28/2016,

2/1/2016, 2/4/2016, 3/14/2016, 3/15/2016, 5/5/2016, 5/11/2016, 5/12/2016, 5/25/2016,
6/14/2016, 6/27/2016, 7/22/2016, 7/25/2016, 7/28/2016, 7/29/2016, 8/1/2016, 8/2/2016,
8/4/2016, 8/8/2016, 8/9/2016, 8/22/2016, 8/23/2016, 8/29/2016.) Dunnigan’s objection is
otherwise overruled.
F. Fees Related to Certain Block Billing, Preparing for Depositions, and
Researching and Telephoning Potential Experts
Dunnigan objects to the reduction of her attorney’s fees associated with block
billing related to preparing for summary judgment and drafting a settlement letter,
preparing for depositions, and researching and calling potential experts. (Objs. at 10–12.)
The Court has already sustained these objections by awarding Dunnigan the fees
associated with summary judgment. See supra Part II.E. To the extent that Dunnigan
contends that she is entitled to fees other than those already awarded, she does not
identify which fees in particular she believes fall into these categories. Thus, the Court
will not award more than it already has for these areas of work because Dunnigan failed
to meet her burden of specifically identifying the fees to which she believes she is
entitled. See Hensley, 461 U.S. at 433; Philipp, 61 F.3d at 675.

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G. Reductions Related to Excessive Hours
Dunnigan objects to the reduction for unnecessary or excessive time spent on
particular tasks. (See Objs. at 12–13.) Specifically, Dunnigan argues that the time she
spent responding to motions to dismiss was reasonable because the issues in this case
were complex. (Id. at 12.) Dunnigan also contends that the fees incurred addressing
discovery issues were reasonable considering the significant amount of written discovery
and because of Freddie Mac’s resistance throughout the discovery process. (Id. at 13.)
Dunnigan’s objection lacks merit.

Although her FCRA claims raised the

somewhat novel issue of whether Freddie Mac was a credit reporting agency, this was not
an especially complex question. (See Order dated 4/27/2016 at 13–15.) This limited
legal complexity and the narrow factual scope of the case readily distinguishes it from
those cited by Dunnigan in support of her assertion that the 105 hours she spent
defending against the motions to dismiss was reasonable. See, e.g., North Dakota v.
Heydinger, No. 11-cv-3232 (SRN/SER), 2016 WL 5661926 (D. Minn. Sept. 29, 2016)
(awarding attorneys’ fees for 250 hours spent defending against a Rule 12 motion in a
case dealing with complex issues of federal preemption and constitutional law); Hagen v.
Messerli & Kramer, P.A., No. 14-cv-863 (DSD/JSM), 2015 WL 1963057, at *2 (D.
Minn. Apr. 30, 2015) (awarding attorneys’ fees for 100 hours spent briefing cross
motions for summary judgment where the prevailing party was forced to address novel
legal theories and unusual accusations against a legal aid attorney).
Similarly, the fact that there were discovery disputes does not explain why
Dunnigan incurred the number of hours that she did—such as eleven hours drafting a
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Rule 26(f) report. Rule 26(f) reports are commonplace in the vast majority of cases and
discovery disputes are far from unusual. Moreover, if Dunnigan believed Freddie Mac
was engaging in improper conduct during discovery, she could have moved for sanctions,
but she did not.
discovery conduct.

The Court will not award fees now based on allegedly improper
Finally, Dunnigan failed to meet her burden to provide Judge

Mayeron with evidence of the allegedly complex written discovery that she claims
supports her related attorney’s fees. (See R&R at 34–35.) See Hensley, 461 U.S. at 433;
Philipp, 61 F.3d at 675. She cannot attempt to remedy that deficiency now by providing
some of those details in her Objections. (See Objs. at 13.) See Ridenour, 679 F.3d at
1067; Britton, 622 F. Supp. 2d at 776 (D. Minn. 2008). Thus, Dunnigan’s objection is
overruled.
H. The Five Percent Enchancement
Dunnigan argues that she is entitled to a five percent enhancement to her fees.
(See Objs. at 14–15.)

She contends that it was Freddie Mac’s unjustifiable false

representation about the source of the mortgage delinquency report that caused a delay
while Dunnigan “chased the wrong defendant.” (Id. at 14.) Thus, Dunnigan asserts that
she is entitled to a “modest” five percent enhancement on her fees.
In rare, extraordinary, or exceptional circumstances, an enhancement to an award
of attorneys’ fees may be warranted when an “unanticipated delay” in resolution of the
case is “unjustifiably caused by the defense.” See Perdue v. Kenny A. ex rel. Winn, 559
U.S. 542, 546, 552–56 (2010). Dunnigan’s objection suffers from at least two related
problems. First, the Offer explicitly states that it “does not constitute an admission of any
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liability or wrongdoing by Freddie Mac regarding Plaintiff’s claims against Freddie Mac
or otherwise.” (Offer of Judg. at 5.) This denial of wrongdoing extends to Dunnigan’s
claim that Freddie Mac misled her as to the source of the reported mortgage delinquency.
Dunnigan could have pursued her claims until there was an adjudication regarding
Freddie Mac’s representations, or insisted that an admission of guilt be contained in the
Offer, but she did not. Her failure to do so precludes a fee enhancement based merely on
alleged misrepresentations that were never established.

See Great Lakes Gas

Transmission Ltd. P’ship v. Essar Steel Minnesota, LLC, No. 09-cv-3037 (SRN/LIB),
2016 WL 64285, at *4 n.5 (D. Minn. Jan. 5, 2016) (“To the extent Defendants disagree
with this conclusion, they should have more carefully crafted their Offer of Judgment.”);
Sampson v. Embassy Suites, Inc., No. CIV. A. 95-7794, 1998 WL 726649, at *1 (E.D.
Pa. Oct. 16, 1998) (“If there is any occasion in civil litigation which calls for caution and
care by counsel, it is the drafting of a Rule 68 offer.”). Second, there is no evidence of an
“extraordinary outlay of expenses[,]” “exceptionally protracted” litigation, or an
“exceptional delay in the payment of fees,” that would warrant a fee enhancement. See
Perdue, 559 U.S. at 555–56. Thus, Dunnigan’s objection is overruled.
III.

CONCLUSION
For the reasons stated above, the Court sustains Dunnigan’s objections in part and

overrules them in part. As a result, the Court will increase the recommended award of
attorney’s fees by $17,291.68 ($974.17 for fees associated with addressing Freddie Mac’s
personal jurisdiction challenges plus $16,317.51 for fees associated with preparing for
summary judgment) for a total award of $116,432.25 (the recommended award of
13

$99,140.57 plus the increase of $17,291.68). The Court will not apply any enhancement
to this award.
IV.

ORDER
Based on the foregoing, and all the files, records and proceedings herein, IT IS

HEREBY ORDERED that:
1. Plaintiff’s Objections [Doc. No. 91] are SUSTAINED IN PART AND
OVERRULED IN PART.
2. The Report and Recommendation dated January 5, 2017 [Doc. No. 90] is
ADOPTED IN PART.
3. Plaintiff’s Motion for Reasonable Attorney’s Fees [Doc. No. 71] is GRANTED
IN PART AND DENIED IN PART as follows:
a. Plaintiff is awarded $116,432.25 in reasonable attorney’s fees;
b. Plaintiff’s Motion is in all other respects DENIED.

Dated: March 2, 2017

s/ Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge

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