FRISCHBERG et al v. GLOBAL SERVICE GROUP, LLC. et al
Filing
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OPINION. Signed by Judge Noel L. Hillman on 7/18/2018. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DANIEL FRISCHBERG and
MICHELLE PEREZ,
Plaintiffs,
No. 1:17-cv-4449 (NLH/KMW)
OPINION
v.
GLOBAL SERVICE GROUP, LLC,
Defendant.
APPEARANCES:
ANDREW M. MILZ
CARY L. FLITTER
FLITTER MILZ, P.C.
525 ROUTE 73 SOUTH
SUITE 200
MARLTON, NJ 08053-9644
On behalf of Plaintiffs
JODY THOMAS LOPEZ-JACOBS
FLITTER MILZ, P.C.
450 N. NARBERTH AVE.
SUITE 101
NARBERTH, PA 19072
On behalf of Plaintiffs
No appearances were entered on behalf of Defendant
HILLMAN, District Judge
Pending before the Court is Plaintiffs Daniel Frischberg
and Michelle Perez’s Motion for Default Judgment against
Defendant Global Service Group, LLC.
For the reasons that
follow, the Motion for Default Judgment will be granted.
However, the Court will defer its determination on attorneys’
fees and entering Judgment in this matter for the reasons
detailed below.
I. Essential Facts
Plaintiffs’ June 19, 2017 Complaint pleads as follows.
Defendant is a company which assists other companies in managing
and collecting overdue accounts.
sister, each own a cellphone.
Plaintiffs, brother and
Within the last four years,
Defendant began placing calls to Plaintiffs’ cellphones.
Plaintiffs never had any account with Defendants.
These calls
were made using an automated telephone dialing system or
artificial or prerecorded voice.
During these calls, Defendants
indicated they were calling to collect an alleged pay day loan.
However, Plaintiffs have no liability for any such debt.
Plaintiffs plead Defendant knew Plaintiffs had no such
liability.
Plaintiffs separately instructed Defendant that they had no
liability for the debt and that Defendant was not to call their
cellphones.
Nonetheless, Defendant continued to make calls.
Plaintiffs never consented to these calls.
One of the
voicemails Frischberg received stated, in its entirety: “Hello,
this is Beth from Global Services, please call me back at 888240-0182 regarding a personal matter.
Thank you.”
Defendant
did not otherwise identify itself during this call or others.
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Defendant made at least fifteen calls to Frischberg and at least
fifteen calls to Perez.
II. Procedural Posture
Plaintiffs filed a Complaint with this Court on June 19,
2017.
The Complaint asserts three counts: (1) violation of the
Telephone Consumer Protection Act (TCPA), 47 U.S.C.
§ 227(b)(1)(A)(iii), (2) violation of the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. § 1692e(11), and (3) invasion
of privacy.
On June 29, 2017, the Court received an Affidavit of
Service providing that Defendant was served on June 23, 2017.
On August 18, 2017, Plaintiffs requested an entry of default
against Defendant.
Default was entered on November 3, 2017.
On
November 30, 2017, Plaintiffs filed a Motion for Entry of
Default Judgment.
III. Subject Matter Jurisdiction
The Court has federal question subject matter jurisdiction
pursuant to 28 U.S.C. § 1331 over this matter, as Plaintiffs
bring claims under two federal statutes: the TCPA and the FDCPA.
IV. Standard for Default Judgment
“Federal Rule of Civil Procedure 55(b)(2) authorizes courts
to enter a default judgment against a properly served defendant
who fails to file a timely responsive pleading.”
Chanel, Inc.
v. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008) (citing
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Anchorage Assocs. v. V.I. Bd. of Tax Rev., 922 F.2d 168, 177 n.9
(3d Cir. 1990)).
“The entry of a default judgment is largely a
matter of judicial discretion, although the Third Circuit has
emphasized that such ‘discretion is not without limits, however,
and we repeatedly state our preference that cases be disposed of
on the merits whenever practicable.’”
Id. (quoting Hritz v.
Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984)).
“Although the Court should accept as true the well-pleaded
allegations of the Complaint, the Court need not accept the
moving party’s legal conclusions or allegations relating to the
amount of damages.”
Id. at 535-36 (citing Comdyne I, Inc. v.
Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990); Directv, Inc. v.
Asher, No. 03-1969, 2006 WL 680533, at *1 (D.N.J. Mar. 14,
2006)).
“Consequently, before granting a default judgment, the
Court must first ascertain whether ‘the unchallenged facts
constitute a legitimate cause of action, since a party in
default does not admit mere conclusions of law.’”
Id. at 536
(quoting Asher, 2006 WL 680533, at *1).
Once a valid claim has been asserted, “[t]hree factors
control whether a default judgment should be granted: (1)
prejudice to the plaintiff if default is denied, (2) whether the
defendant appears to have a litigable defense, and (3) whether
defendant’s delay is due to culpable conduct.”
Chamberlain v.
Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) (citing United States
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v. $55,518.85 in U.S. Currency, 728 F.2d 192, 195 (3d Cir.
1984)).
V. Analysis
Before assessing the factors that control whether default
judgment should be granted, the Court must determine whether
Plaintiffs have asserted a legitimate cause of action.
A. TCPA Violations
“[T]o state a cause of action under the TCPA, a plaintiff
must allege: ‘(1) that the defendant called the plaintiff’s
cellular telephone; (2) using an [automatic telephone dialing
system]; (3) without the plaintiff’s prior express consent.’”
Todd v. Citibank, No. 16-5204, 2017 U.S. Dist. LEXIS 63402, at
*15-16 (D.N.J. Apr. 26, 2017) (quoting Leon v. Target Corp., No.
15-01, 2015 U.S. Dist. LEXIS 34490 (M.D. Pa. Mar. 19, 2015)).
Plaintiffs clearly plead Defendant called their cellphones.
They further plead that “[a]t no time did [Defendant] have
consent to call Plaintiffs’ cellular phones.”
As to the use of
an automatic telephone dialing system, Plaintiffs plead
“Defendants called Plaintiffs’ cellular telephones using an
automated telephone dialing system or artificial or prerecorded
voice.”
An allegation “merely stating a defendant used an ATDS
or ‘an artificial or prerecorded voice’ is insufficient to state
a TCPA claim.”
Id. at *16.
However, “courts permit the
allegation of an automatic system to be pled on information or
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belief, but require additional factual information, such as the
absence of a relationship between the parties and the random
nature of the automation device.”
Norman v. Sito Mobile Sols.,
No. 17-2215, 2017 U.S. Dist. LEXIS 52889, at *6 (D.N.J. Apr. 6,
2017).
Plaintiffs plead they have never had an account with
Defendant and have never heard of Defendant.
Plaintiffs further
plead they have no liability for the pay day loan.
Plaintiffs
allege at least fifteen calls each over a four-year period.
This indicates to the Court both a lack of a business
relationship and that Plaintiffs were randomly selected.
The
Court finds a legitimate cause of action under the TCPA.
B. FDCPA Violations
“To prevail on an FDCPA claim, a plaintiff must prove that
(1) she is a consumer, (2) the defendant is a debt collector,
(3) the defendant’s challenged practice involves an attempt to
collect a ‘debt’ as the Act defines it, and (4) the defendant
has violated a provision of the FDCPA in attempting to collect
the debt.”
Douglass v. Convergent Outsourcing, 765 F.3d 299,
303 (3d Cir. 2014).
Plaintiffs identify themselves as “consumers” in their
Complaint and Defendant as a “debt collector pursuant to the
FDCPA.”
The FDCPA defines a “consumer” as “any natural person
obligated or allegedly obligated to pay any debt.”
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15 U.S.C.
§ 1692a(3).
The FDCPA defines a “debt collector” as “any person
who uses any instrumentality of interstate commerce or the mails
in any business the principal purpose of which is the collection
of any debts, or who regularly collects or attempts to collect,
directly or indirectly, debts owed or due or asserted to be owed
or due another.”
Id. § 1692a(6).
The Court finds the Complaint
sufficiently pleads Plaintiffs are consumers and Defendant is a
debt collector.
The FDCPA defines a “debt” as “any obligation or alleged
obligation of a consumer to pay money arising out of a
transaction in which the money . . . [is] primarily for
personal, family, or household purposes.”
Id. § 1692a(5).
Plaintiffs’ Complaint identifies the purported loan as a “pay
day loan.”
The Complaint does not allege that the loan was
purportedly used for “personal, family, or household purposes.”
Nonetheless, “one can reasonably infer from the nature of a
payday loan that it was used for ‘personal, family, or household
purposes.’”
Aurandt v. Brown, No. 15-275, 2017 U.S. Dist. LEXIS
48725, at *23 (W.D. Pa. Mar. 31, 2017).
Plaintiffs claim a violation of the FDCPA under 15 U.S.C.
§ 1692e(11), which states a violation for “[t]he failure to
disclose in the . . . initial oral communication, that the debt
collector is attempting to collect a debt and that any
information obtained will be used for that purpose, and the
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failure to disclose in subsequent communications that the
communication is from a debt collector.”
Plaintiffs have
identified that, in at least one call to Frischberg, it was not
disclosed that the call was from a debt collector.
Plaintiffs
otherwise allege that “Defendants indicated they were calling to
collect an alleged pay day loan” during the calls and that
Defendant “did not properly or completely identify themselves
during each of its calls.”
The Court assumes in deciding this
motion that Plaintiffs’ allegations are true:
While at some
point Defendants identified they were attempting to collect a
debt, they failed to identify themselves as a debt collector.
The Court finds Plaintiffs have sufficiently pleaded a violation
of the FDCPA.
C. Whether Default Judgment Is Appropriate
Finding Plaintiffs have pleaded legitimate causes of action
under the TCPA and the FDCPA, the Court moves to the factor test
governing motions for default judgment.
Considering the second
two factors – whether there is a litigable defense and whether
the defendant’s delay is due to culpable conduct – the Court
finds that because Defendant was properly served but failed to
appear in this action, it is unknown whether Defendant has a
meritorious defense to Plaintiffs’ claims, and the inference is
that Defendant’s default was the result of culpable conduct.
As to the first factor – prejudice to Plaintiffs if default
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judgment is denied – “[a] plaintiff will be prejudiced absent a
default judgment where, due to the defendant’s continued failure
to respond to plaintiff’s claims, the plaintiff is left with no
other recourse.”
Cyprus Mines Corp. v. M & R Indus., Inc., No.
14-4590, 2015 WL 1469529, at *8 (D.N.J. Mar. 30, 2015).
The
Court finds Plaintiffs will be prejudiced if default judgment is
not entered against Defendant.
VI. Damages
Plaintiffs’ Complaint seeks $500 in damages (or actual
damages if greater) for each violation of the TCPA.
Plaintiffs’
Complaint also seeks statutory and actual damages under the
FDCPA.
In its moving brief, while Plaintiffs’ request for
$1,000 in statutory damages under the FDCPA is the same,
Plaintiffs also seek treble damages for all of the calls after
the initial call under the TCPA, alleging they were willful and
knowing.
Plaintiffs’ brief states Plaintiffs seek only statutory
damages for the TCPA and FDCPA violations. 1
A. Damages under the TCPA
Under the TCPA, a plaintiff is entitled “to receive $500 in
damages for each . . . violation.”
1
47 U.S.C. § 227(b)(3)(B).
They further state that their invasion of privacy claim is
subsumed within their statutory claims.
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Further, “[i]f the court finds that the defendant willfully or
knowingly violated this subsection or the regulations prescribed
under this subsection, the court may, in its discretion,
increase the amount of the award to an amount equal to not more
than 3 times the amount available under subparagraph (B) of this
paragraph.”
Id. § 227(b)(3).
Plaintiffs plead Defendant made the calls “intentionally,
willfully, and knowingly.”
Plaintiffs plead they each
separately instructed Defendant “that they had no liability for
the debt and that [Defendant] may not call their cell phones.”
They allege that, despite this, Defendant continued to call
them.
period.
They allege fifteen calls were made over a four-year
Regardless of whether this is sufficient to show
willful conduct, “[a] default judgment must not differ in kind
from, or exceed in amount, what is demanded in the pleadings.”
Fed. R. Civ. P. 54(c).
Plaintiffs did not request treble
damages in their Complaint.
award treble damages.
The Court, therefore, will not
See, e.g., Drew v. Lexington Consumer
Advocacy, No. 16-200, 2016 U.S. Dist. LEXIS 188997, at *27 (N.D.
Cal. Aug. 11, 2016) (stating, in a report and recommendation,
that “the court recommends against treble damages . . . [because
the plaintiff] did not seek treble damages in the [complaint]”);
Marina B Creation S.A. v. De Maurier, 685 F. Supp. 910, 912
(S.D.N.Y. 1988) (“No demand for treble damages is made.
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Thus,
this Court will not increase damages beyond what was originally
sought.”).
The Court will award $500 per violation of the TCPA.
The
Court takes the allegation that each Plaintiff received fifteen
calls as true and will award $7,500 to each Plaintiff for the
TCPA violations.
B. Damages under the FDCPA
The FDCPA provides, in addition to any actual damages, for
“such additional damages as the court may allow, but not
exceeding $1,000.”
15 U.S.C. § 1692k(a)(2)(A).
In determining the amount of liability in any action
under subsection (a), the court shall consider, among
other relevant factors –
(1)
in any individual action under subsection
a(2)(A), the frequency and persistence of
noncompliance by the debt collector, the
nature of such noncompliance, and the extent
to which such noncompliance was intentional
. . . .
Id. § 1692k(b)(1).
“Whether statutory damages should be granted, and if so,
whether the full amount of $1,000 should be allowed, is
committed to the discretion of the court.”
Manopla v. Bryant,
Hodge & Assocs., LLC, No. 13-338, 2014 U.S. Dist. LEXIS 24554,
at *16 (D.N.J. 2014).
“In exercising that discretion, courts
look to the nature of the violation.
If the violation is
especially egregious, or if plaintiffs show that it was repeated
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and persistent, courts are more likely to award the full
amount.”
Id. at *16-17.
“When, however, the violation is shown
to be technical in nature and infrequent, courts have exercised
their discretion to deny or reduce statutory damages.”
*17.
Id. at
“Actual damages are not required in order for a plaintiff
to recover statutory damages under the FDCPA.”
Id. at *18.
Plaintiffs plead fifteen calls over a four-year period.
The Court finds this to be persistent, but not particularly
frequent when spread out across that time frame.
Plaintiffs
sufficiently plead intentional conduct, as both Plaintiffs
informed Defendant they had no liability for the debt and told
Defendant to stop calling.
The Court concludes that a statutory
damage award of $750 per Plaintiff is appropriate. 2
C. Attorneys’ Fees and Costs
Plaintiffs also ask for attorneys’ fees and costs under the
FDCPA.
“Section 1692k(a)(3) allows a prevailing party to
recover ‘the costs of the action, together with a reasonable
attorney’s fee as determined by the court.’”
Harrison, 950 F.2d 107, 113 (3d Cir. 1991).
Graziano v.
The Third Circuit
has explained that “attorney’s fees should not be construed as a
2
The Court notes that, unlike the TCPA, the FDCPA does not
allow a statutory damage award of up to $1000 per violation.
“15 U.S.C. § 1692k(a)(2)(A) is best read as limiting statutory
damages to $1,000 per successful court action.” Goodmann v.
People’s Bank, 209 F. App’x 111, 114 (3d Cir. 2006).
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special or discretionary remedy; rather, the Act mandates an
award of attorney’s fees as a means of fulfilling Congress’s
intent that the Act should be enforced by debtors acting as
private attorneys general.”
Id.
Thus, “in a typical case under
the Act, the court should determine what constitutes a
reasonable fee.”
Id. at 114.
“Among the factors the court may
consider in determining the appropriate amount of the fee is the
degree of success obtained by the prevailing plaintiff; if the
plaintiff has only partial or limited success, a reduction in
the award of attorney’s fees may be appropriate.”
Id.
“The
Court should also assess the reasonableness of the hours
expended by counsel for the prevailing party.”
Id.
“Only in
unusual circumstances, however, may the court decline to award a
fee; in such circumstances, it should formulate particularized
findings of fact and conclusions of law explaining its
decision.”
Id.
The starting point for calculating a prevailing
party’s attorney’s fees is “the number of hours
reasonably expended on the litigation multiplied by a
reasonable hourly rate.”
This is the lodestar.
The
court must determine whether the attorney’s hourly rate
is appropriate given the attorney’s “skill, experience,
and reputation.”
The prevailing party must establish
“with satisfactory evidence, in addition to the
attorney’s own affidavits, that the requested rates are
in line with those prevailing in the community” for
similar work by lawyers of comparable qualifications.
Ford v. Consigned Debts & Collections, Inc., No. 09-3102, 2010
U.S. Dist. LEXIS 135385, at *22-23 (D.N.J. Dec. 21, 2010) (first
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quoting Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); then
quoting Loughner v. Univ. of Pittsburgh, 260 F.3d 173, 180 (3d
Cir. 2001); and then quoting Blum v. Stenson, 465 U.S. 886, 895
n.11 (1984)).
Plaintiffs seek $8,091 in attorneys’ fees and $453.91 in
costs.
Plaintiffs calculate attorney Andrew Milz’s lodestar at
$375 per hour for 13.4 hours; attorney Jody Thomas Lopez-Jacob’s
lodestar at $240 per hour for 12.1 hours; and $180 per hour for
0.9 hours of work performed by legal assistant Joan Raughley.
Milz submitted a Certification explaining the basis for the
hourly rates.
The Court finds no reason to doubt counsels’
qualifications and billing rates, and the Court’s independent
review of the requested rates finds them appropriate for the
attorneys’ level of experience, this type of action, and the
geographical area where the Court sits.
With regard to hours expended, “it is necessary that the
Court ‘go line, by line, by line’ through the billing records
supporting the fee request.”
Evans v. Port Auth. of N.Y. &
N.J., 273 F.3d 346, 362 (3d Cir. 2001).
However, in the
documentation supporting Plaintiffs’ fee request, several
descriptions of the work performed are redacted.
These
redactions prevent the Court from determining whether the hours
expended on this matter are reasonable.
The Court will require
Plaintiffs to file an unredacted version of Exhibit 1 to Milz’s
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Certification, under temporary seal, along with a Motion to
Seal.
The Court will thereafter determine the appropriate
amount of attorneys’ fees to be awarded in this case.
VII. Conclusion
The Court finds Plaintiffs have pleaded a legitimate cause
of action under the TCPA and the FDCPA and that all three
factors support granting Plaintiffs’ Motion for Default
Judgment.
The Court finds each Plaintiff entitled to $8,250 in
damages: $7,500 under the TCPA and $750 under the FDCPA.
The
Court will award attorneys’ fees but defers its decision as to
the amount to be awarded.
Accordingly, the Court will not enter
final judgment at this time.
An Order consistent with this
Opinion will be entered.
Date: July 18, 2018
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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