Hoover v. Western New York Capital

Filing 7

ORDER granting 6 Motion for Default Judgment and awarding damages along with costs and fees. Clerk of Court to close case. Signed by Hon. Richard J. Arcara on 6/16/2010. (JMB)

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

S U S A N HOOVER, P la in tiff, D E C IS IO N AND ORDER 0 9 -C V -9 5 5 A v.

W E S T E R N NEW YORK CAPITAL, D e fe n d a n t.

IN T R O D U C T IO N P la in tiff Susan Hoover filed a complaint in this case on November 5, 2009, a c c u s in g defendant W e s te rn New York Capital of multiple violations of the Fair D e b t Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692­1692p. Plaintiff s e rve d defendant with a summons and complaint, but defendant failed to answer o r appear. On May 13, 2010, plaintiff filed a motion for default judgment seeking s ta tu to ry 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. Nonetheless, the complaint d o e s allege that defendant continually called plaintiff demanding payment for this d e b t. Defendant's calls included calls to plaintiff's place of employment, despite b e in g informed that her employer prohibited such communications. W h e n s e n d in g "verification of employment" faxes to plaintiff's place of employment, a c c o rd in g to the complaint, defendant made reference to garnishing plaintiff's w a g e s . Defendant's conduct also allegedly included various threats and a failure to provide a debt validation letter. In the course of these interactions with plaintiff, d e fe n d a n t allegedly committed numerous violations of the FDCPA, including the fo llo w in g : failure to provide debt validation information; communicating with third p a rtie s about the debt in question without plaintiff's authorization; placing calls to p la in tiff's place of employment while knowing that such calls are prohibited; h a ra s s in g and abusive conduct toward plaintiff; and threats to take legal action s u c h as garnishment without any intent actually to do so. D e fe n d a n t never answered the allegations in the complaint, let alone within th e time required by Rule 12 of the Federal Rules of Civil Procedure ("FRCP"). Accordingly, plaintiff requested an entry of default on February 10, 2010. The C le rk of the Court filed an entry of default on February 11, 2010. On May 13, 2 0 1 0 , plaintiff filed her motion for default judgment. In the motion, plaintiff did not re q u e s t an evidentiary hearing and did not seek actual damages. Plaintiff instead 2

sought statutory damages, actual costs, attorney fees, plus "anticipated collection c o s ts ." DISCUSSION 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 because of the straightforward nature of plaintiff's request fo r damages, costs, and fees.

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Statutory Damages S e c tio n 1692k(a)(2)(A) of the FDCPA provides for statutory damages of up to $1,000 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 frequent communications th a t harassed plaintiff, that involved third parties without authorization, and that ta rg e te d plaintiff's place of employment. Defendant's admissions include an a d m is s io n that it did not provide required debt validation information. Under th e s e circumstances, the Court finds that an award of statutory damages in the a m o u n t of $500 will suffice to address all of the allegations now deemed a d m itte d .

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Costs 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. § 1692k(a)(3). The prevailing plaintiff in an FDCPA action is entitled to an award o f 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 has noted that A reasonable hourly rate is the "prevailing market rate," i.e., the r a 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 t e r m in a tio 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 t o 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.). 5

The Second Circuit revisited case law governing attorney fee calculations la s t year 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 2 2 F.3d 182 (2d Cir. 2008)], we undertook to simplify the complexities s u r r o 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. Several corrections are necessary. First, the itemization includes e n trie s for Adam Krohn, Scott Cohen, and Mahadhi Corzano concerning the e d itin g of timesheets and of data in the firm's case management software. These e n trie s are only clerical in nature. The Court will disregard them. Second, the ite m iz a tio n includes entries for legal assistants concerning email messages to p ro c e s s servers, document downloads from the Court's electronic docket, and o th e r tasks that are only clerical in nature. Plaintiff has not set forth a basis for

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the recovery of clerical services performed by secretaries or legal assistants. The C o u rt will disregard these entries also. Finally, recent cases in this District set re a s o n a b le attorney rates in debt collection cases at $215 per hour for partners, $ 1 8 0 per hour for associates, and $50 per hour for paralegals.1 See, e.g., Dayton v . Ne. Fin. Solutions, No. 09-CV-549, 2009 W L 4571819, at *3 (W .D .N .Y . Dec. 7, 2 0 0 9 ) (Arcara, C.J.); Clark v. Brewer, Michaels & Kane, LLC, No. 09-CV-188, 2 0 0 9 W L 3303716, at *3 (W .D .N .Y . Oct. 14, 2009) (Arcara, C.J.); Berry v. Nat'l F in . 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 th e itemization of hours to arrive at the following calculations: ! ! 4 .7 hours for G. Thomas Martin, III at $180 per hour, for a total of $846; 3 .7 hours for Mahadhi Corzano at $180 per hour, for a total of $666;

Plaintiff has cited extensively to consumer law attorney fee surveys to ju s tify hourly rates as high as $445 per hour, the apparent average billing rate in C a lifo rn ia . The Court rejects these citations because "courts should generally u s e the hourly rates employed in the district in which the reviewing court sits in c a lc u la tin g the presumptively reasonable fee." Simmons, 575 F.3d at 174 (2d C ir. 2009) (internal quotation marks and citation omitted). There is one exception to this rule that allows a higher rate, but to qualify, "a litigant must persuasively e s ta b lis h that a reasonable client would have selected out-of-district counsel b e c a u s e doing so would likely (not just possibly) produce a substantially better n e t result." Id. at 175. Plaintiff has submitted no evidence qualifying her for that e x c e p tio n . 7

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1 .1 hours for Adam Hill at $180 per hour, for a total of $198; and 0 .4 hours for paralegals at $50 per hour, for a total of $20. Total attorney and paralegal fees, accordingly, add up to $1,730.00. As adjusted, plaintiff's proposed fees appear reasonable. In assessing

w h e th e r a reasonable, paying client looking to minimize expenses would be w illin g to pay for the hours claimed here, the Court bears in mind the provision of th e FDCPA awarding attorney fees to successful litigants. W ith o u t that provision, a reasonable, paying client likely would not spend over $1,700 in fees to receive a $500 statutory damages award. Factoring in that provision, however, a re a s o n a b le , paying client likely would endorse the investment of time that counsel c la im here. Counsel spent 9.9 hours litigating the entire case, an amount of time c o m p a ra b le to the 8.3 hours spent in Dayton. W h e re a debt collector fails to a p p e a r in an FDCPA case, meaning that judgment as to liability is assured and a n award of attorney fees is likely, a reasonable, paying client likely would want c o u n s e l to prosecute the case to a successful resolution. As for costs, plaintiff has requested $361.61 to compensate for filing and s e rvin g the complaint. The Court accepts this request as reasonable. The request for "anticipated collection costs" is another matter. Plaintiff's c o u n s e l has requested $500 in "anticipated collection costs," with no explanation o f what that means or what authority the Court has to grant such an award. As fa r as the Court can tell, there is no statutory authority for an award of

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"anticipated collection costs" under the plain language of 15 U.S.C. § 1692k. See, e.g., Molinar v. Coleman, No. 3:08-CV-1430-M, 2009 W L 435274, at *3 (N .D . Tex. 2009) ("The plain language of the statute states that `the costs of the a c tio n ' itself may be recovered, but does not provide for costs incurred in e n fo rc in g a resulting judgment.") (citation omitted); Gervais v. O'Connell, Harris & A s s o c s ., Inc., 297 F. Supp. 2d 435, 440 n.1 (D. Conn. 2003) ("Plaintiff also asked th is Court to award him the likely fees that he will incur in enforcing this judgment. However, at the hearing, plaintiff acknowledged that he did not have any legal a u th o rity that would permit the Court to make such an award, and the Court d e c lin e s to do so."). This Court cited those cases to plaintiff's counsel in Dayton, w h e re , like here, plaintiff's counsel submitted that request without explanation. See Dayton, 2009 W L 4571819, at *3. Nonetheless, plaintiff's counsel has s u b m itte d this unexplained request once again. Plaintiff's counsel has a history o f scattering unexplained requests for "anticipated collection costs" across m u ltip le districts. This history has grown so far to these cases in addition to D a y to n : ! M c K ib b e n v. Collection Prof'l Servs., No. 2:09-cv-02949, 2010 W L 2 0 2 5 3 1 9 , at *9 (E.D. Cal. May 18, 2010) (report and recommendation) ("A d d itio n a lly , the undersigned will not recommend that plaintiff recover the re q u e s te d $500.00 in anticipated collection costs. Plaintiff cites no a u th o rity in support of such an award, and `[t]he plain language of § 1692k

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states that `the costs of the action' itself may be recovered, but does not p ro vid e for costs incurred in enforcing a resulting judgment.'") (citations o m itte d ) ; ! S e lb y v. Christian Nicholas & Assocs., Inc., No. 309-cv-121-J-34JRK, 2010 W L 745748, at *3 (M.D. Fla. Feb. 26, 2010) ("Preliminarily, the Court notes th a t Plaintiff has failed to provide any authority for the proposition that an a w a rd of `anticipated collection fees and costs' is permitted under the F D C P A . The statute itself provides for an award of `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 . § 1692k(a)(3) (emphasis supplied). Future, anticipated sums, which m a y or may not be incurred in enforcing any resulting judgment, are not p a rt of the costs and attorney's fees incurred in enforcing liability under the F D C P A in this action.") (citations omitted); ! J a m a l v. Thompson & Assocs., P.C., No. C-09-04249, 2010 W L 678925, at * 4 (N.D. Cal. Feb. 25, 2010) ("As to plaintiff's request for anticipated c o lle c tio n costs of $750.00 pursuant to section 1692k(a)(3) of the FDCPA, s e c tio n 1692k(a)(3) simply does not apply here: this is not an action to e n fo rc e liabilities."); ! J o n e s v. Morgan Stone Assocs., No. C 09-03172, 2010 W L 55884, at *1 (N .D . Cal. Jan. 4, 2010) ("Plaintiff's request for anticipated for collection c o s ts is unsupported. Accordingly, the Court rejects the recommendation

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to award Plaintiff those costs and denies Plaintiff's motion, in part, on that b a s is . This ruling is without prejudice to Plaintiff renewing her request for a n tic ip a te d collection costs, if it is properly supported."); and ! M id d le s w o rth v. Oaktree Collections, Inc., No. 1:09-CV-601, 2009 W L 3 7 2 0 8 8 4 , at *2 (E.D. Cal. Nov. 3, 2009) ("Plaintiffs also seek $750.00 in a n tic ip a te d collection costs. Plaintiffs cite no authority for an award of a n tic ip a te d collection costs. The plain language of § 1692k states that `the c o s ts of the action' itself may be recovered, but does not provide for costs in c u rre d in enforcing a resulting judgment.") (citation omitted). In listing plaintiff's counsel's position in prior cases, the Court is not s u g g e s tin g that plaintiff's counsel is not allowed to advocate for a new in te rp re ta tio n of the FDCPA through an actual explanation and citation to a u th o rity. Rather, the Court is concerned about the complete absence of e xp la n a tio n and citation, over and over again, in this and other district courts. The repeated submission of this request without any attempt even to explain it w a s te s judicial time and energy. For this case, the Court simply will deny the re q u e s t. Plaintiff's counsel is advised, though, that repeating this position in any fu tu re cases may warrant sanction proceedings under FRCP 11(c)(3). After completing its review, the Court finds that all costs and fees for this c a s e amount to $2,091.61. Adding in the $500 award for statutory damages yie ld s a total damages award of $2,591.61. 11

CONCLUSION F o r all of the foregoing reasons, the Court awards plaintiff $500 in statutory d a m a g e s and $2,091.61 in costs and fees, for a total of $2,591.61. T h e Clerk of the Court is directed to close this case. SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT JUDGE DATED: June 16, 2010

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