Barnett v. Creditors Specialty Service, Inc.
Filing
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ORDER granting in part and denying in part 9 Motion for Default Judgment. Signed by District Judge Martin Reidinger on 4/15/13. (nll)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
ASHEVILLE DIVISION
CIVIL CASE NO. 1:12cv303
KEITH BARNETT,
)
)
Plaintiff,
)
)
vs.
)
)
CREDITORS SPECIALTY SERVICE, INC., )
)
Defendant.
)
__________________________
_)
ORDER
THIS MATTER is before the Court on the Defendant’s Notice of
Motion for Default Judgment [Doc. 9].
PROCEDURAL HISTORY
On September 27, 2012, the Plaintiff initiated this action alleging
violations of the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C.
§§1692, et. seq., the North Carolina Fair Debt Collection Practices Act,
N.C. Gen. Stat. §58-70, et seq., the North Carolina Fair Debt Collection
Act, N.C. Gen. Stat. §75-50, et seq., and a claim for invasion of privacy.
[Doc. 1]. On October 24, 2012, the Plaintiff filed proof of service on the
Defendant. [Doc. 4]. Based on the information therein, an answer was due
to be filed on or before November 5, 2012. [Doc. 4]. The Defendant did
not answer or otherwise respond but the Plaintiff did not move for entry of
default.
On November 13, 2012, this Court by text Order required the
Plaintiff to show cause why the action should not be dismissed for failure to
prosecute. As a result of that Order, the Plaintiff moved for entry of default
on November 28, 2012. [Doc. 5]. The Clerk of Court entered default on
December 14, 2012. [Doc. 6].
Thereafter, the Plaintiff did not move for default judgment.
As a
result, on January 23, 2013, this Court for a second time required the
Plaintiff to show cause why the action should not be dismissed for failure to
prosecute. [Doc. 7]. In response to that Order, the Plaintiff moved for
default judgment. [Doc. 9]. It bears noting that the Plaintiff’s attorney has
been less than diligent in prosecuting this action.
DISCUSSION
Although the Complaint contains four claims, default judgment is
sought only as to the FDCPA and the North Carolina Fair Debt Collection
Practices Act, N.C. Gen. Stat. §58-70, et. seq.
Federal Rule of Civil
Procedure 55(b)(2) authorizes district courts to enter default judgment
against a properly served defendant who has failed to appear. In
determining whether to enter a judgment by default, the Court must
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consider whether the Plaintiff has alleged one or more legitimate causes of
action. Ryan v. Homecomings Financial Network, 253 F.3d 778, 780 (4th
Cir. 2001) (in determining whether to enter default judgment, the court must
find the well-pleaded allegations of the complaint support the relief sought).
“A default is not treated as an absolute confession by the defendant of his
liability and of the plaintiff’s right to recover.” Id. If liability is established,
then the Court must determine the appropriate amount of damages, if any.
Id. In so doing, the Court makes an independent determination concerning
damages.
Id.
The Court may, but is not required to, conduct an
evidentiary hearing in this regard. CGI Finance, Inc. v. Johnson, 2013 WL
1192353 (D.Md. 2013) (citing Adkins v. Teseo, 180 F.Supp.2d 15, 17
(D.D.C. 2001)).
The Court finds that the allegations of the Complaint establish a
violation of the federal FDCPA. The Plaintiff, who is a natural person and a
consumer, claimed that the Defendant’s agents, acting as debt collectors,
repeatedly called him at work and on at least one occasion threatened to
have him arrested in connection with a debt arising out of services
performed on his vehicle. Richardson v. William Sneider and Associates,
LLC, 2012 WL 3525625 **5-6 (E.D.Va. 2012) (calling place of employment
with threats of criminal charges violated FDCPA). For an individual plaintiff,
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the FDCPA provides three types of damages: (1) actual damages; (2)
statutory damages not to exceed $1,000.00 and (3) costs plus a
reasonable attorney’s fee. 15 U.S.C. §1692(k)(1).
In support of his request for actual damages, the Plaintiff states that
the “calls to my workplace caused me to suffer aggravation, anxiety and
anger. I suffered damages, emotional aggravation and stress as the result
of these collection calls.”
[Doc. 9-3].
Nothing more in support of the
request for actual damages is provided and the Court will not award
unsubstantiated damages.
Richardson, 2012 WL 3525635 (awarding
statutory damages but not actual damages); Woodring v. Collection
Recovery Bureau, 2012 WL 439690 **3 (D.Md. 2012) (refusing to award
actual damages where not itemized); Ford v. Consigned Debts &
Collections, Inc., 2010 WL 5392643 (D.N.J. 2010) (no actual damages in
absence of proof of emotional, mental or physical consequences and
treatment); Coles v. Land’s Towing and Recovery, Inc., 2010 WL 5300892
**3-4 (E.D.Va. 2010) (in the absence of competent proof of actual
damages, no award given).
Considering the frequency of the Defendant’s telephone calls, the
virulent nature of those calls, including a threat to arrest the Plaintiff, and
the clearly intentional noncompliance with the statute, the Court finds that
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statutory damages are warranted. 15 U.S.C. §1692k(b)(1); Richardson,
2012 WL 3525635 **10. The statute provides for damages of $1,000.00
per lawsuit, not per incident. Id.; Wright v. Finance Serv. of Norwalk, Inc.,
22 F.3d 647, 651 (6th Cir. 1994). The Court will therefore award statutory
damages of $1,000.00. The Plaintiff’s request for attorney’s fees and costs
pursuant to the federal statute are addressed below.
The Plaintiff also seeks an award of statutory damages pursuant to
the North Carolina Fair Debt Collections Practices Act, N.C. Gen. Stat. §5870-110. In support of that request, counsel cites to the same conduct as
that which supported the federal cause of action. The only authority cited
by counsel in support of his claim that the same injury may be
compensated twice is 15 U.S.C. §1692n. That statute provides in pertinent
part:
[The federal statute] does not annul, alter, or affect, or exempt
any person subject to the provisions of this [Act] from complying
with the laws of any State with respect to debt collection
practices, except to the extent that those laws are inconsistent
with any provision of this [Act], and then only to the extent of
the inconsistency. For purposes of this section, a State law is
not inconsistent with this [Act] if the protection such law affords
any consumer is greater than the protection provided by this
[Act].
15 U.S.C. §1692n.
Thus, “the FDCPA preempts only laws that afford consumers less
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protection than that provided by the FDCPA.” Desmond v. Philips & Cohen
Associates, Ltd., 724 F.Supp.2d 562, 567 (W.D.Pa. 2010). The Plaintiff
does not argue that the North Carolina statute affords greater protection
than the FDCPA; instead, he claims that the state statute provides for relief
when a debt collector engages in deceptive acts. N.C. Gen. Stat. §58-70130(c) (unfair or deceptive acts are proscribed); N.C. Gen. Stat. §58-70110(4) (falsely representing the creditor’s rights or intentions). Those acts,
he claims, were threatening to have him arrested, to garnish his wages and
to seize his property. [Doc. 1 at 3; Doc. 9-1 at 5]. These are, however, the
same acts which are claimed to have violated the federal statute which also
prohibits deceptive representations in connection with debt collection. 15
U.S.C. §1692e. The Court will nonetheless find that the federal statute
does not preempt the state statute. In re Baie, 2011 WL 1257148 **4 (Bkr.
E.D.N.C. 2011) (damages under FDCPA do not preclude damages under
N.C. Gen. Stat. §58-70-110).
As noted above, however, the Plaintiff has failed to show actual
damages as opposed to an entitlement to the statutory penalty provided by
§58-70-130. Llera v. Security Credit Systems, Inc., 93 F.Supp.2d 674, 67778 (W.D.N.C. 2000) (“a plaintiff must be awarded actual damages in order
to prove an actual injury”); Bailey v. LeBeau, 79 N.C.App. 345, 353, 339
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S.E.2d 460, modified and affirmed 318 N.C. 411, 348 S.E.2d 524 (1986)
(evidence of misrepresentation alone does not establish injury).
The
Plaintiff is therefore not entitled to an award of actual damages.
The
Plaintiff’s failure to prove actual damages also precludes any recovery of
attorney’s fees under the state statute. Llera, 93 F.Supp.2d at 677-679.
The Plaintiff also requests an award of statutory damages in the
nature of a penalty. The statute provides for a “penalty in such amount as
the court may allow, which shall not be less than five hundred dollars
($500.00) for each violation nor greater than four thousand dollars ($4,000)
for each violation.” N.C. Gen. Stat. §58-70-130(b). The Plaintiff has limited
his request for relief to one violation. [Doc. 9-1 at 6] (“Although Plaintiff is
entitled to recovery under this statute ranging from $500 to $4,000 for each
violation, Plaintiff seeks and requests the amount of $4,000[.]”). The Court
will therefore, considering the conduct at issue, impose a statutory penalty
of $500.00. In re Baie, 2011 WL 1257148.
Finally, the Court considers the Plaintiff’s request for an award of
attorney’s fees and costs pursuant to the FDCPA which provides “in the
case of a successful action” for a “reasonable attorney’s fee as determined
by the court.” 15 U.S.C. §1692k(a)(3). This determination is within the
sound discretion of the court. Beasley v. Sessoms & Rogers, P.A., 2011
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WL 5402883 **2 (E.D.N.C. 2011) (citing Carroll v. Wolpoff & Abramson, 53
F.3d 626, 628-29 (4th Cir. 1995)).
In order to calculate a reasonable fee, the Court begins with the
lodestar amount which is determined by multiplying the number of hours
reasonably expended by a reasonable hourly rate. Hensley v. Eckerhart,
461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), abrogated on
other grounds by Texas State Teachers Ass’n v. Garland Independent
School District, 489 U.S. 782, 109 S.Ct. 1486, 103 L.Ed.2d 866 (1989). The
twelve factors to be considered in determining what is a reasonable
number of hours and a reasonable rate are: (1) the time and labor
expended; (2) the novelty and difficulty of the questions presented; (3) the
skill required to properly perform the legal services; (4) the attorneys’
opportunity costs; (5) the customary fee for like work; (6) the attorneys’
expectations at the outset of the litigation; (7) the time limitations imposed
by the client or case; (8) the amount in controversy and results obtained;
(9) the experience, reputation and ability of the attorneys; (10) the
undesirability of the case within the legal community; (11) the nature and
length of the relationship and (12) awards in similar cases. Id.; Grissom v.
Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008); Beasley, 2011 WL
5402883. Although all the factors must be considered, this Court “is not
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required to engage in a lengthy discussion concerning what portion of the
award is attributable to each factor.” Arnold v. Burger King Corporation,
719 F.2d 63, 67 n.4 (4th Cir.), cert. denied 469 U.S. 826, 105 S.Ct. 108, 83
L.Ed.2d 51 (1984).
Indeed, the initial calculation of reasonable hours
expended at a reasonable rate will normally include most of the twelve
factors which need not be further considered. Henley, 461 U.S. at 434 n.9.
After the lodestar figure is determined, the court should subtract fees spent
on unsuccessful and/or unrelated claims. Robinson v. Equifax Information
Services, LLC, 560 F.3d 235, 244 (4th Cir. 2009). In this case, the Plaintiff
did not seek default judgment in connection with the North Carolina Fair
Debt Collection Act, N.C. Gen. Stat. §75-50, et seq., and the claim for
invasion of privacy.
As to those claims, then, the Plaintiff was not a
prevailing party and those fees must be deleted from a final figure.
Hensley, 461 U.S. at 435; Grissom, 549 F.3d at 321.
The
Court
first
considers
the
reasonable
hours
expended,
“necessarily exclud[ing] any hours that are excessive, redundant or
otherwise unnecessary and therefore not reasonably expended on the
litigation. Hensley, 461 U.S. at 434. The Court has reviewed the time
records submitted in support of the motion and notes that there is no
amount of time specifically designated for the two claims as to which
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default judgment was not sought. [Doc. 9-2]. Counsel will therefore be
required to submit a corrected affidavit. Hensley, 461 U.S. at 434 (“Hours
that are not properly billed to one’s client also are not properly billed to
one’s adversary[.]”) (emphasis in original).
The Court also notes that Plaintiff’s counsel did not independently
prosecute this action. The Court was required on more than one occasion
to prompt counsel to continue the litigation. The preparation of a motion for
default judgment is not a difficult legal task yet counsel asserts that she
spent more than six hours in the research and preparation of the same.
Meanwhile, the paralegal spent almost four hours on the same task. The
Court finds both figures to be excessive.
Concerning the calculation of a reasonable hourly rate, the Plaintiff
has failed to carry his burden of proof that the hourly rates sought for
counsel and the paralegal are reasonable. Robinson, 560 F.3d at 244.
[The] determination of the hourly rate will generally be the
critical inquiry in setting the reasonable fee, and the burden
rests with the fee applicant to establish the reasonableness of a
requested rate. In addition to the attorney’s own affidavits, the
fee applicant must produce satisfactory specific evidence of the
prevailing market rates in the relevant community for the type of
work for which [she] seeks an award.
Id. (emphasis in original).
Counsel has not included with this motion any affidavits from other
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attorneys within this community. The only evidence provided is her own
affidavit which is insufficient to allow this Court to determine a reasonable
hourly rate. Id. The Court also notes that counsel failed to address the
following factors for consideration: the novelty and difficulty of the questions
presented; the skill required to properly perform the legal services; the
attorneys’ opportunity costs, if any; the customary fee for like work; the
attorneys’ expectations at the outset of the litigation; the time limitations
imposed by the client or case; the undesirability of the case within the legal
community; and the nature and length of the relationship. Grissom, 549
F.3d at 320-21. The Court will therefore deny this portion of the Plaintiff’s
motion without prejudice to renewal. An award of costs, however, will be
granted for the cost of the filing fee and service of process.
ORDER
IT IS, THEREFORE, ORDERED that the Plaintiff’s Notice of Motion
for Default Judgment [Doc. 9] is hereby GRANTED to the extent that
Default Judgment is entered against the Defendant in the amount of One
Thousand Five Hundred Dollars and No Cents ($1,500.00).
IT IS FURTHER ORDERED that the Plaintiff’s motion for an award of
costs and attorney’s fees is hereby GRANTED in part and DENIED without
prejudice in part. The Plaintiff is hereby GRANTED an award of costs in
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the amount of Four Hundred Thirty-Five dollars and No Cents ($435.00).
The Plaintiff’s motion for an award of attorney’s fees is hereby DENIED
without prejudice to renewal in accordance with the terms and provisions of
this Order.
IT IS FURTHER ORDERED that the Court will enter final Judgment in
this matter upon a final determination of attorney’s fees.
Signed: April 15, 2013
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