Schommer v. Accelerated Receivable Solutions

Filing 18

MEMORANDUM AND ORDER - The Plaintiff Richard Schommer's Motion for Attorney's Fees (Filing No. 12 ) is granted in part as follows: a. Plaintiff Richard Schommer is entitled to an award of attorneys' fees in the total amount of $1,400, b. Plaintiff Richard Schommer is entitled to reimbursement of his costs in the total amount of $385.00. Ordered by Judge Laurie Smith Camp. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
RICHARD SCHOMMER,
Plaintiff,
v.
ACCELERATED RECEIVABLE
SOLUTIONS,
Defendant.

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CASE NO. 8:11CV95

MEMORANDUM
AND ORDER

This matter is before the Court on Plaintiff Richard Schommer’s Motion for
Attorney’s Fees (Filing No. 12). For the reasons discussed below, the Motion will be
granted in part.
BACKGROUND
Plaintiff Richard Schommer (“Schommer”) filed his Complaint on March 15, 2011.
Schommer alleged that Defendants Accelerated Receivable Solutions (“ARS”) violated the
Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (the ”FDCPA”). Schommer
served the Complaint on or about April 11, 2011. Defendant never filed an Answer.
On April 14, 2011, Defendant served an Offer of Judgment (Filing No. 6-1) pursuant
to Fed. R. Civ. P. 68. The Offer of Judgment offered Schommer a total of $1,001.00 plus
reasonable costs and reasonable attorneys fees accrued up to the date of the offer. The
Offer of Judgment stated that it was being made solely for the purposes set forth in Fed.
R. Civ. P. 68, and denied liability and damages with respect to Schommer‘s lawsuit. On
April 21, 2011, Schommer filed his Notice of Acceptance of Offer of Judgment. On May
18, 2011, the Deputy Clerk for this Court entered judgment against ARS in the amount of
$1,001.00.

Schommer now claims he is entitled to $3,220.30 in attorneys fees and $410.00 in
costs incurred in pursuing this action. The claim for attorneys fees represents work done
by three attorneys and paralegals from the law firm of Krohn and Moss in Los Angeles,
California. Mike Agruss billed 4.9 hours at a rate of $312.00 per hour. Shireen Horzmodi,
also an associate, billed 1.7 hours at a rate of $250.00 per hour. Mahadhi Corzano billed
4.9 hours at $210.00 per hour. The fee schedule (Filing No. 12-3) also includes paralegal
work billed at $125.00 per hour for 1.9 hours. The costs represent $350.00 for the filing
fee, and $60 in expenses to serve the Complaint.
DISCUSSION
In Hensley v. Eckerhart, 461 U.S. 424 (1983), the United States Supreme Court
outlined the major factors to be considered by a court in awarding attorneys fees: 1)
whether an award is appropriate; and 2) the value of the services rendered as determined
by the "lodestar" method. Id. at 433. The lodestar “is calculated by multiplying the number
of hours reasonably expended by the reasonable hourly rates.” Fish v. St. Cloud State
University, 295 F.3d 849, 851 (8th Cir. 2002).
1.

Whether an Award is Appropriate
The parties do not dispute that an award of attorneys fees and costs is appropriate

in this case. Paragraph 2 of ARS’s accepted Offer of Judgment states “[Schommer’s]
costs and reasonable attorneys' fees now accrued are to be added to the judgment as
against Defendant; said fees and costs shall be as are agreed to between counsel for the
parties, or if they are unable to agree, as determined by the Court upon motion.”

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Schommer has properly filed a motion for attorneys fees, and the parties agree that an
award determined by the Court is appropriate.
2.

Hours Reasonably Expended
The first part of the lodestar calculation is based on the hours reasonably expended

on the case. “The hours reasonably expended are determined by reviewing the records
submitted by counsel, verifying the accuracy of the records, and then deducting excessive,
redundant, or otherwise unnecessary work.” U & I Sanitation v. City of Columbus, 112
F.Supp.2d 902, 904 (D.Neb. 2000). “In the private sector, ‘billing judgment’ is an important
component in fee setting . . . Hours that are not properly billed to one's client also are not
properly billed to one's adversary pursuant to statutory authority.” Hensley v. Eckerhart,
461 U.S. 424, 437 (1983) (quoting Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir.
1980) (en banc) (emphasis in original)).1
ARS claims that the 13.4 hours claimed by Schommer’s counsel are excessive
because the case was straightforward, involving very little activity. ARS claims that 0.9
hours for Mike Agruss, and 1.4 hours for Mahadhi Corzano should be excluded because
fees for these hours were incurred regarding settlement discussions before the action was
filed.

The Court will not reduce these hours.

The Offer of Judgment allowed for

“[Schommer’s] reasonable attorneys’ fees now accrued.” The Offer was ambiguous as to
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Before Hensley, the so-called "Johnson factors" were the courts' primary guide in
formulating awards. This Court has recognized that the Johnson factors should be considered
as they bear on the calculating the lodestar. Those factors are: (1) time and labor required; (2)
novelty and difficulty of issues; (3) skill required; (4) loss of other employment; (5) customary
fee; (6) whether fee is fixed or contingent; (7) time limitations imposed by client or
circumstances; (8) amount involved and results obtained; (9) counsel's experience, reputation,
and ability; (10) undesirability of case; (11) nature and length of relationship with clients; and
(12) awards in similar cases. Johnson v. Georgia Highway Express, 488 F.2d 714, 717 (5th
Cir. 1974). The Court has considered these factors in its analysis.

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whether it limited fees to those reasonably incurred between the time the Complaint was
filed and the time the Offer of Judgment was accepted. This ambiguity will be resolved in
favor of Schommer and the Court will not exclude hours reasonably incurred in settlement
discussions prior to filing the Complaint.
The Court, however, will not include fees incurred for hours after Schommer
accepted the Offer of Judgment in its lodestar calculation. While parties may not exclude
costs entirely from an offer of judgment under Rule 68, they may define which costs are
included. See Thompson v. Southern Farm Bureau Cas. Ins. Co., 520 F.3d 902, 904 (8th
Cir. 2008) (Per curiam) (citing Util. Automation 2000, Inc. v. Choctawhatchee Elec. Coop.,
Inc., 298 F.3d 1238, 1241 (11th Cir.2002)). “Rule 68 is designed to encourage complete
settlement, not simply to resolve the issues of liability and remedies.” Radecki v. Amoco
Oil Co., 858 F.2d 397, 403 (8th Cir.1988); see also Marek v. Chesny, 473 U.S. 1, 6-7
(1985) (“If defendants [were] not allowed to make lump-sum offers that would, if accepted,
represent their total liability, they would understandably be reluctant to make settlement
offers.”) Here, ARS did not include attorneys fees and costs as part of a lump-sum offer
of judgment, but the parties defined the scope of the fee award. The Offer limits fees to
“reasonable attorneys’ fees now accrued.” The latest possible date included within “now
accrued” is April 21, 2011, the date Schommer filed his Notice of Acceptance of
Defendant’s Offer of Judgment (Filing No. 6). Fees incurred after acceptance of the Offer
of Judgment therefore will not be included, and the hours billed by Mike Agruss will be
reduced by 0.7 hours and the hours billed by Mahadhi Corzano will be reduced by 1.1
hours.

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ARS also argues that several hours billed were duplicative and/or administrative or
secretarial in nature. Where more than one attorney represents a prevailing party, courts
must consider the contribution of all attorneys. A.J. v. Kierst, 56 F.3d 849, 863-64 (8th Cir.
1995).

However, “[a] court may reduce attorney hours, and consequently fees, for

inefficiency or duplication of services in cases where more than one attorney is used.” Id.
at 864. ARS has identified several billed entries that it argues should be considered
duplicative or administrative. Several of these entries include discussions between two
attorneys, for which both attorneys billed the time. Other entries include two or more
attorneys billing for what appears to be the same service, or entries repeated for general
tasks such as “reviewed case.” While case review and consultation between multiple
attorneys are not per se unreasonable, the Court’s review of the fee schedule reveals
some duplicative and administrative entries. Accordingly, the Court reduces the hours
billed by Mike Agruss and Mahadhi Corzano by 1.4 hours, and the hours billed by Shireen
Hormozdi by 0.7 hours.
3.

Reasonableness of the Hourly Rates
In considering the second part of the equation, the reasonableness of the hourly

rates, “[t]he burden is on the moving party to provide evidence supporting the rate
claimed.” Wheeler v. Missouri Highway & Transportation Comm'n, 348 F.3d 744, 754 (8th
Cir.2003). Further, “district courts may rely on their own experience and knowledge of
prevailing market rates.” Hanig v. Lee, 415 F.3d 822, 825 (8th Cir. 2005) (citing Warnock
v. Archer, 397 F.3d 1024, 1027 (8th Cir. 2004)). Schommer provides reports and surveys
as evidence for the prevailing market rate. However, none of these reports suggests a
reasonable rate for attorneys in the Nebraska market.
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Schommer does include a

“Consumer Law Attorney Fee Survey” (Filing No. 12-6), concluding that the rates charged
by counsel for Schommer are within the range reported in an eleven-state region in the
midwest. This broad evidence is not sufficient to establish the reasonable rate in this
market.
ARS offers the Affidavit of Joshua Dickinson, an Omaha attorney with significant
experience litigating FDCPA cases in this Court. Dickinson states that the reasonable rate
in Nebraska is $215.00 per hour for Agruss, $200.00 per hour for Horzmodi, $170.00 per
hour for Corzano, and $100.00 per hour for paralegal work. Schommer has not met his
burden of proof, establishing the reasonable market rate, and Dickinson and his firm have
significant FDCPA practice before this Court. Accordingly, the Court will adjust the hourly
rates to those given by Dickinson as the prevailing rate in this market.
4.

Calculation
For the reasons discussed above, the Court will reduce the attorney fee award in

the manner described. According to the lodestar method, the reasonable fees for Plaintiff’s
attorneys are:
Agruss

2.8 hours x $215 per hour = $ 602.00

Horzmodi

1.0 hours x $200 per hour = $200.00

Corzano

2.4 hours x $170 per hour = $408.00

Paralegal

1.9 hours x $100 per hour = $190.00

Thus, the total lodestar calculation for attorneys fees is $1,400.00. The Court finds
no reason to otherwise enhance or reduce this award.

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5.

Costs
Schommer also claims that he is entitled to costs incurred in bringing this action.

ARS does not dispute that Schommer is entitled to the filing fee of $350.00. Schommer
also claims that it is entitled to $60.00 for serving the Complaint; however, any costs
incurred by Schommer other than the fee paid to the process server were presented in the
fee schedule as “paralegal services.”

Schommer has provided no other evidence

supporting the costs of serving the Complaint. Accordingly, the Court will award $35.00
in additional costs, representing a reasonable fee to hire a process server.
IT IS ORDERED:
1.

The Plaintiff Richard Schommer’s Motion for Attorney’s Fees (Filing No. 12) is
granted in part as follows:
a.

Plaintiff Richard Schommer is entitled to an award of attorneys’ fees in the
total amount of $1,400,

b.

Plaintiff Richard Schommer is entitled to reimbursement of his costs in the
total amount of $385.00.

Dated this 4th day of August, 2011.
BY THE COURT:

s/Laurie Smith Camp
United States District Judge

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