Estay v. Moren and Woods LLC

Filing 7

DECISION AND ORDER AWARDING DAMAGES AND COSTS AND FEES. Clerk of court to close case. Signed by Hon. Richard J. Arcara on 12/22/2009. (JMB)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF NEW YORK

T E R R I ESTAY, P la in tiff, D E C IS IO N AND ORDER 0 9 -C V -6 2 0 A v.

MOREN AND W O O D S LLC, D e fe n d a n t.

IN T R O D U C T IO N P la in tiff Terri Estay filed a complaint in this case on July 7, 2009, accusing d e fe n d a n t Moren and W o o d s LLC of multiple violations of the Fair Debt C o lle c tio n Practices Act ("FDCPA"), 15 U.S.C. §§ 1692­1692p. Plaintiff served d e fe n d a n t with a summons and complaint, but defendant failed to answer or a p p e a r. On December 4, 2009, plaintiff filed a motion for default judgment s e e k in g statutory damages along with costs and fees. Given the allegations that d e fe n d a n t is deemed to have admitted by default, and given the itemization of c o s ts and fees that plaintiff has submitted, the Court awards damages along with c o s ts and fees as described below. B AC K G R O U N D T h is case concerns defendant's conduct in attempting to collect on an a lle g e d consumer debt. Because defendant did not appear in the case, and

because the complaint does not contain a lot of background information, details c o n c e rn in g this debt are not available to the Court. For example, the Court c a n n o t determine from the information available what kind of debt defendant a tte m p te d to collect and whether it communicated that information to plaintiff; w h e th e r plaintiff acknowledges owing any kind of debt, and if so, whether she a g re e s with defendant's characterization of it; and whether the parties dispute the a m o u n t of the debt in question. Nonetheless, the complaint does allege that d e fe n d a n t continually called plaintiff demanding payment for this debt. During th e s e telephone calls, according to the complaint, defendant repeatedly th re a te n e d plaintiff with legal action if immediate payment was not made, even th o u g h such legal action never ensued. Defendant also has called a third party, n a m e ly plaintiff's sister, and disclosed information to her about plaintiff's alleged d e b t. In the course of communicating with plaintiff, defendant allegedly c o m m itte d several violations of the FDCPA, including the following: harassing a n d abusive conduct toward plaintiff; improper disclosure of debt information to a th ird party; and misrepresentations about plaintiff's legal situation, including th re a ts to commence civil litigation without any intent actually to do so. D e fe n d a n t never answered the allegations in the complaint within the time re q u ire d by Rule 12 of the Federal Rules of Civil Procedure. Accordingly, plaintiff re q u e s te d an entry of default on October 13, 2009. The Clerk of the Court filed a n entry of default on October 15, 2009. On December 4, 2009, plaintiff filed her 2

motion for default judgment. In the motion, plaintiff did not request an evidentiary h e a rin g and did not seek actual damages. Plaintiff instead sought statutory d a m a g e s , attorney fees, and the cost of filing the complaint. D IS C U S S IO N L ia b ility "F e d e ra l Rule of Civil Procedure 55 is the basic procedure to be followed w h e n there is a default in the course of litigation. And it tracks the ancient c o m m o n law axiom that a default is an admission of all well-pleaded allegations a g a in s t the defaulting party." Vermont Teddy Bear Co., Inc. v. 1-800 Beargram C o ., 373 F.3d 241, 246 (2d Cir. 2004) (citation omitted). Because defendant n e ve r answered or otherwise challenged the complaint, all allegations in the c o m p la in t are now deemed admitted. Nonetheless, "[w]hile a party's default is d e e m e d to constitute a concession of all well pleaded allegations of liability, it is n o t considered an admission of damages." Greyhound Exhibitgroup, Inc. v. E .L .U .L . Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (citations omitted). The C o u rt thus must assess what an appropriate award might be, keeping in mind th a t plaintiff has not requested an evidentiary hearing or actual damages. Pursuant to FRCP 55(b)(2), the Court will exercise its discretion not to schedule a n evidentiary hearing on its own initiative because of the straightforward nature o f plaintiff's request for damages, costs, and fees.

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Statutory Damages S e c tio n 1692k(a)(1) of the FDCPA provides for statutory damages of up to $ 1 ,0 0 0 per plaintiff. See also Savino v. Computer Credit, Inc., 164 F.3d 81, 86 (2 d Cir. 1998) ("All that is required for an award of statutory damages is proof that th e statute was violated, although a court must then exercise its discretion to d e te rm in e how much to award, up to the $1,000.00 ceiling.") (citations omitted). Here, plaintiff seeks the maximum amount of statutory damages given the fre q u e n c y and nature of defendant's harassing conduct. "In determining the a m o u n t of liability in any action under subsection (a) of this section, the court s h a ll consider, among other relevant factors . . . the frequency and persistence of n o n c o m p lia n c e by the debt collector, the nature of such noncompliance, and the e xte n t to which such noncompliance was intentional." 15 U.S.C. § 1692k(b)(1). In this case, defendant is deemed to have admitted to making harassing te le p h o n e calls on more than occasion; to making empty threats of litigation; and to disclosing alleged debt information improperly to a third party. Under these c irc u m s ta n c e s , the Court finds that an award of statutory damages in the amount o f $250 will suffice to address all of the allegations now deemed admitted. C o s ts and Attorney Fees T h e FDCPA authorizes successful litigants to receive "in the case of any s u c c e s s fu l action to enforce the foregoing liability, the costs of the action, to g e th e r with a reasonable attorney's fee as determined by the court." 15 U.S.C. 4

§ 1692k(a)(3). The prevailing plaintiff in an FDCPA action is entitled to an award of reasonable attorneys' fees and expenses regardless of whether any statutory o r actual damages are awarded. See Savino, 164 F.3d at 87; Pipiles v. Credit B u re a u of Lockport, Inc., 886 F.2d 22, 28 (2d Cir. 1989) (citation omitted). As to h o w district courts should calculate attorney fees when such an award is a p p ro p ria te , this Court noted in a prior FDCPA case that A reasonable hourly rate is the "prevailing market rate," i.e., the ra te "prevailing in the [relevant] community for similar services by la w y e rs of reasonably comparable skill, experience, and reputation." Blum v. Stenson, 465 U.S. 886, 896 n.11, 104 S. Ct. 1541, 79 L. Ed. 2d 8 9 1 (1984); see also Cohen v. W. Haven Bd. of Police Comm'rs, 638 F .2 d 496, 506 (2d Cir. 1980) ("[F]ees that would be charged for similar w o rk by attorneys of like skill in the area" are the "starting point for d e te r m in a t io n of a reasonable award."). The relevant community, in tu rn , is the district in which the court sits. Polk v. New York State Dep't o f Corr. Servs., 722 F.2d 23, 25 (2d Cir. 1983). D e te rm in a tio n of the "reasonable hourly fee" requires a c a s e -s p e c ific inquiry into the prevailing market rates for counsel of s im ila r experience and skill to the fee applicant's counsel. Farbotko v. C lin to n County of New York, 433 F.3d 204, 209 (2d Cir. 2005). This in q u iry may include judicial notice of the rates awarded in prior cases, th e court's own familiarity with the rates prevailing in the district, and a n y evidence proffered by the parties. Id. The fee applicant has the b u rd e n of showing by "satisfactory evidence" that the requested hourly ra te is the prevailing market rate. Blum, 465 U.S. at 896 n.11. F o n ta n a v. C. Barry & Assocs., LLC, No. 06-CV-359, 2007 W L 2580490, at *2 (W .D .N .Y . Sept. 4, 2007) (Arcara, C.J.). T h e Second Circuit revisited case law governing attorney fee calculations re c e n tly and explained that In [Arbor Hill Concerned Citizens Neighborhood Ass'n v. County o f Albany, 493 F.3d 110 (2d Cir. 2007), amended on other grounds by 5

522 F.3d 182 (2d Cir. 2008)], we undertook to simplify the complexities s u rro u n d in g attorney's fees awards that had accumulated over time u n d e r the traditional "lodestar" approach to attorney's fees (the product o f the attorney's usual hourly rate and the number of hours worked, w h ic h could then be adjusted by the court to set "the reasonable fee"), a n d the separate "Johnson" approach (a one-step inquiry that c o n s id e re d twelve specified factors to establish a reasonable fee). 493 F .3 d at 114. Relying on the substance of both approaches, we set forth a standard that we termed the "presumptively reasonable fee." Id. at 1 1 8 . W e directed district courts, in calculating the presumptively re a s o n a b le fee, "to bear in mind all of the case-specific variables that w e and other courts have identified as relevant to the reasonableness o f attorney's fees in setting a reasonable hourly rate." Id. at 117 (e m p h a s is in original). The presumptively reasonable fee boils down to "what a reasonable, paying client would be willing to pay," given that s u c h a party wishes "to spend the minimum necessary to litigate the c a s e effectively." Id. at 112, 118. S im m o n s v. N.Y. Trans. Auth., 575 F.3d 170, 174 (2d Cir. 2009). H e re , counsel for plaintiff have submitted an itemization of hours spent on th is case. Two corrections to the itemization are necessary. First, plaintiff's ite m iz a tio n of time spent by non-attorneys requires a minor adjustment. The ite m iz a tio n as listed amounts to 2.6 hours, not 2.5 hours as stated in the s u m m a ry, but the 0.2 hours accredited to a legal assistant will be disregarded. Plaintiff has not set forth a basis for the recovery of services performed by s e c re ta rie s or legal assistants as opposed to attorneys or paralegals. Second, re c e n t cases in this District set reasonable attorney rates in debt collection cases a t $215 per hour for partners, $180 per hour for associates, and $50 per hour for p a ra le g a ls . See Clark v. Brewer, Michaels & Kane, LLC, No. 09-CV-188, 2009 W L 3303716, at *3 (W .D .N .Y . Oct. 14, 2009) (Arcara, C.J.); Berry v. Nat'l Fin. 6

Sys., Inc., No. 08-CV-18, 2009 W L 2843260, at *6 (W .D .N .Y . Aug. 27, 2009) (A rc a ra , C.J.); Miller v. Midpoint Resolution Group, LLC, 608 F. Supp. 2d 389, 3 9 5 (W .D .N .Y . 2009) (McCarthy, M.J.). The Court will apply these hourly rates to p la in tiff's itemization of hours to arrive at the following calculations: ! ! ! 2 .1 hours for Adam Krohn at $215 per hour, for a total of $451.50; 4 .7 hours for Nicholas Bontrager at $180 per hour, for a total of $846; and 2 .4 hours for paralegals at $50 per hour, for a total of $120. Total attorney and paralegal fees, accordingly, add up to $1,417.50. Additionally, the Court endorses plaintiff's proposal to include in the amount of d a m a g e s the cost of filing the complaint. All costs and fees thus amount to $ 1 ,7 6 7 .5 0 . Adding in the $250 award for statutory damages yields a total d a m a g e s award of $2,017.50. O th e r than the corrections noted above, the costs and fees that counsel c la im to have incurred in this case appear reasonable. In assessing whether a re a s o n a b le , paying client looking to minimize expenses would be willing to pay for th e hours claimed here, the Court bears in mind the provision of the FDCPA a w a rd in g attorney fees to successful litigants. W ith o u t that provision, a re a s o n a b le , paying client likely would not spend approximately $1,800 in costs a n d fees to obtain a damages award of $250. Factoring in that provision, h o w e ve r, a reasonable, paying client likely would endorse the investment of time th a t counsel claim here. Counsel's itemization, as corrected by the Court, shows 7

that a little more than nine hours were needed to litigate this case to its c o n c lu s io n . That time is only a little over half of the amount of time needed in C la rk without a hearing and in Berry outside of the evidentiary hearing that o c c u rre d in that case. W h e re a debt collector fails to appear in an FDCPA case, m e a n in g that judgment as to liability is assured and an award of attorney fees is lik e ly, a reasonable, paying client likely would want counsel to prosecute the case to a successful resolution. C O N C L U S IO N F o r all of the foregoing reasons, the Court awards plaintiff $250 in statutory d a m a g e s and $1,767.50 in costs and fees, for a total award of $2,017.50. S in c e all proceedings here now have concluded, the Clerk of the Court is d ire c te d to close this case upon entry of judgment.

SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA CHIEF JUDGE UNITED STATES DISTRICT COURT DATED: December 22, 2009

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