Miller v. Ability Recovery Services, LLC
Filing
9
ORDER granting 7 Motion for Default Judgment. Signed by Judge Timothy S. Black on 3/15/19. (rrs)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
MEGAN MILLER,
Plaintiff,
vs.
ABILITY RECOVERY SERVICES,
LLC.,
Defendant.
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Case No. 1:18-cv-266
Judge Timothy S. Black
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
This civil case is before the Court on Plaintiff’s motion for default judgment (Doc.
7) and supplemental memorandum (Doc. 8).
I. BACKGROUND
On April 14, 2018, Plaintiff Megan Miller commenced the instant civil action
against Defendant Ability Recovery Services, LLC (“ARS”), pursuant to the Fair Debt
Collection Practices Act (“FDCPA”) (15 U.S.C. § 1692, et seq.), the Telephone
Consumer Protection Act (“TCPA”), (47 U.S.C. § 227, et seq.), and the Ohio Consumer
Sales Practices Act (“OCSPA”) (Ohio Rev. Code § 1345.01 et seq.). (Doc. 1).
Plaintiff alleges that in December 2017, ARS, a third-party debt collector, first
contacted her regarding recovery in the amount of $226.50. Defendant subsequently
provided purported verification of the debt, which verification showed only $217.50
owed. Plaintiff informed Defendant that she had already paid the debt, but Defendant
continued to call her cellular telephone every few days, from different telephone
numbers, for several weeks. Plaintiff further asserts that Defendant left pre-recorded
voicemail messages and utilized an Automated Telephone Dialing System, absent
Plaintiff’s consent. Plaintiff states that Defendant threatened to harm her credit if she did
not pay Defendant the amount sought, regardless of whether or not the debt had already
been satisfied. Subsequently, Defendant also claimed to have already reported the debt to
credit bureaus and told Plaintiff to contact Defendant if she wished to fix her credit
report. Plaintiff further asserts that Defendant erroneously informed her that she bore the
burden to prove the debt had been satisfied.
Thus, Plaintiff claims to have suffered harm as a result of Defendant’s actions,
including but not limited to invasion of privacy, aggravation resulting from collection
calls, emotional distress, confusion as to her legal rights, and increased usage of her
telephone services.
II. STANDARD OF REVIEW
Following the Clerk’s entry of default pursuant to Fed. R. Civ. P. 55(a), a party
may seek entry of a default judgment by the Court. Applications for default judgment are
governed by Fed. R. Civ. P. 55(b). In determining whether to enter a default judgment,
the Court should consider: “1) possible prejudice to the plaintiff; 2) the merits of the
claims; 3) the sufficiency of the complaint; 4) the amount of money at stake; 5) possible
disputed material facts; 6) whether the default was due to excusable neglect; and 7) the
preference for decisions on the merits.” Russell v. City of Farmington Hills, 34 F. App’x
196, 198 (6th Cir. 2002) (citing Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986)).
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However, “[a] default judgment on well-pleaded allegations establishes only
defendant’s liability; plaintiff must still establish the extent of damages.” Antoine v.
Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995) (quoting Kelley v. Carr, 567 F.Supp.
831, 841 (W.D. Mich. 1983)).
As to damages, “[i]f the plaintiff’s claim is for a sum certain or a sum that can be
made certain by computation, the clerk--on the plaintiff’s request, with an affidavit
showing the amount due--must enter judgment for that amount and costs against a
defendant who has been defaulted for not appearing.” Fed. R. Civ. P. 55(b)(1).
“In all other cases, the party must apply to the court for a default judgment,” and
“[t]he court may conduct hearings or make referrals … [to] determine the amount of
damages ….” Fed. R. Civ. P. 55(b)(2). Thus, Rule 55(b)(2), “by its terms, allows but
does not require the district court to conduct an evidentiary hearing.” Vesligaj v.
Peterson, 331 F. App’x 351, 354–55 (6th Cir. 2009) (citing Fustok v. ContiCommodity
Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989)) (emphasis added). The Court may rely on
affidavits and documentary evidence to determine the issue of damages. P&G Health &
Longterm Disability Plan v. Molinary, No. 1:18-CV-283, 2019 WL 358936, at *2 (S.D.
Ohio Jan. 29, 2019).
III. ANALYSIS
A. Liability
Defendant ARS is in default, as evidenced by the Clerk’s Entry of Default. (Doc.
6). Accordingly, the factual allegations of the Complaint (Doc. 1), except those related to
the amount of damages, are deemed as true. Antoine, 66 F.3d at 105.
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Upon review of the record, the Court finds that default judgment is warranted.
Defendant’s failure to respond to the Complaint, the application for entry of default, or
the motion for default judgment has made it clear Defendant does not intend to defend
this action. Indeed, as detailed in Plaintiff’s motions, this is not the first or only case in
which ARS has failed to respond to similar claims. (Doc. 7, Ex. B). Moreover, the
communications between Plaintiff’s counsel and Defendant clearly indicate that
Defendant was well-aware of the pending action. (Doc. 8, Exs. 2, 4, 5, 6). Plaintiff’s
counsel appears to have attempted to negotiate a resolution with Defendant in good faith,
but to no avail. (See id.) Thus, Plaintiff is left with no other recourse but the present
action and faces significant potential harm if the Court were to deny default judgment.
The unchallenged factual allegations set forth in the Complaint sufficiently state
claims against Defendant for violating the FDCPA (15 U.S.C. §§ 1692d(5), 1692e(2), (5),
(8), (10), and 1692f), the TCPA (47 U.S.C. § 227(b)(1)(A)(iii)), and the OCSPA (Ohio
Rev. Code § 1345.02(A)). Accordingly, default judgment as to liability is appropriate.
B. Damages
Plaintiff seeks $1,000 in statutory damages under the FDCPA, plus attorney fees;
$500 in statutory damages per call under the TCPA, trebled for willful or knowing
violations; and $200 per call plus attorney fees under the OCSPA. (Doc. 7).
1. FDCPA
The Court may award statutory damages of up to $1,000 for a violation of the
FDCPA. 15 U.S.C. § 1692k(a)(2)(A).
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Here, the Court finds an award for the full amount of $1,000 appropriate, based on
“the frequency and persistence of noncompliance by the debt collector, the nature of such
noncompliance, and the extent to which such noncompliance was intentional.” See id.
§ 1692k(b)(1).
2. TCPA
Plaintiff also moves for an award of $10,500.00 under the TCPA. (Doc. 7 at 1617).
The TCPA proscribes the use of an automatic telephone dialing system or an
artificial or prerecorded voice to call a cellular telephone for non-emergency purposes
and without prior consent, “unless such call is made solely to collect a debt owed to or
guaranteed by the United States.” 47 U.S.C. § 227(b)(1)(A)(iii). 1 The TCPA permits an
award of $500.00 in damages per violation. 47 U.S.C. § 227(b)(3)(B). Further, it is
within the Court’s discretion to award treble damages if the Court finds the violations
were committed willfully or knowingly. 47 U.S.C. § 227(b)(3).
Here, Plaintiff’s uncontested allegations and documentary evidence show that
Defendant, without obtaining prior consent, used an automatic dialing system or prerecorded voice, or both, to make seven calls to Plaintiff’s cellular telephone. (Doc. 7, Ex.
E). Thus, at a minimum, Plaintiff is entitled to $3,500.00 in damages under the TCPA.
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The exemption constitutes an affirmative defense and thus Defendant bears the burden of proof.
See Ayers v. Receivables Performance Mgmt., L.L.C., No. 2:15-CV-12082, 2016 WL 5402962,
at *6 (E.D. Mich. Sept. 28, 2016) (collecting cases). Plaintiff “only need[s] to plead facts
showing that (1) a call was placed to a cell or wireless phone, (2) by the use of any automatic
dialing system and/or leaving an artificial or pre-recorded message, and (3) without prior consent
of the recipient plaintiff.” Id. (citations omitted).
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Additionally, given the pendency of similar cases against Defendant ARS, filed in
various jurisdictions, Defendant had ample notice of the TCPA’s proscriptions. (Doc. 7,
Ex. B). Moreover, Defendant ARS was undoubtedly aware of its own practice of using
automatic dialing systems and pre-recorded voice calls. (See Id., Exs. B, F). In short,
Defendant ARS’s persistent use of violative practices against debtors was both knowing
and willful, and thus treble damages are warranted.
3. OCSPA
Plaintiff also seeks an award of $2,200.00 in statutory damages under the OCSPA.
(Doc. 7 at 17-19).
Pursuant to Ohio Rev. Code § 1345.02(A), “[n]o supplier shall commit an unfair
or deceptive act or practice in connection with a consumer transaction.” For any such
violation, “the consumer may … recover the consumer’s actual economic damages plus
an amount not exceeding five thousand dollars in noneconomic damages.” Ohio Rev.
Code § 1345.09(A). If, however, the violation was an act or practice committed after an
Ohio state court had already deemed the conduct to violate § 1345.02, “the consumer
may … recover … three times the amount of the consumer’s actual economic damages or
two hundred dollars, whichever is greater, plus an amount not exceeding five thousand
dollars in noneconomic damages.” Ohio Rev. Code § 1345.09(B); see also Ferron v.
Dish Network, L.L.C., 961 N.E.2d 705, 707-08 (Ohio Ct. App. 2011). However, “Ohio
courts have limited the recovery of statutory damages when multiple violations occur in
the same transaction or cause the same injury.” Charvat v. NMP, LLC, 656 F.3d 440, 451
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(6th Cir. 2011) (collecting cases). Thus, Plaintiff is entitled to damages under the
OCSPA for violation resulting in “separate and distinct” harms. Id.
Here, Plaintiff asserts that Defendant ARS’s violation of the FDCPA results in
four distinct harms constituting remediable violations of the OCSPA: “(1) Plaintiff was
harassed by phone calls; (2) Plaintiff was misled as to the amount and character of the
debt, and ARS attempted to collect an amount not owed; (3) Plaintiff was threatened with
illegal actions with respect to her credit report; and (4) ARS misrepresented Plaintiff’s
legal rights to her.” (Doc. 7 at 18). Accordingly, Plaintiff seeks statutory damages in the
amount of $200.00 for each of the four violations, amounting to a total of $800.00 for the
FDCPA-related violations. (Id.) Plaintiff also seeks an additional $200.00 for each of
the seven calls made in violation of the TCPA, for a total of $1,400.00. (Id. at 18-19).
Accordingly, Plaintiff asserts that her combined damages under the FDCPA and the
TCPA amount to $2,200.00. (Id.) The Court agrees that Plaintiff is entitled to damages
under the OCSPA, but finds Plaintiff’s computation to be in error.
Specifically, Plaintiff asserts that a violation of the FDCPA or TCPA is, in and of
itself, a violation of OCSPA. (Doc. 1 at 10-12; Doc. 7 at 17-19). The Court disagrees
with Plaintiff’s oversimplification. See Charvat at 450-51 (noting that Ohio courts have
found some, but not all, TCPA violations to also constitute unfair or deceptive practices
under the OCSPA); see also Edwards v. McCormick, 136 F. Supp. 2d 795, 806 n.13 (S.D.
Ohio 2001) (“Plaintiffs would have this Court find that any violation of the FDCPA
is per se a violation of the OCSPA … [but] Ohio courts have not spoken in unison on the
issue”). Notably, “delivering a prerecorded message without prior express consent, in
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violation of [the TCPA], is not, by itself, a violation of the OCSPA.” Charvat at 450
(citing Culbreath v. Golding Enters., L.L.C., 872 N.E.2d 284 (Ohio 2007)). However, the
content or circumstances of that same prerecorded message may indeed constitute one or
more violations of the OCSPA. Id. at 451. Thus, assessing “recovery on a per-call basis
is too narrow of a view of the OCSPA.” Id.
Here, relying upon Plaintiff’s uncontested facts, and based on the evidentiary
record, the Court finds that one of more of the calls resulted in three separate and distinct
harms under the OCSPA, including: (1) deceiving the consumer by threatening to take,
and stating that it had taken, impermissible actions; (2) deceiving the consumer as to the
amount of the debt to be collected; and (3) deceiving the consumer by providing false
information regarding the consumer’s rights and obligations under the law. 2 See
Edwards v. McCormick, 136 F. Supp. 2d 795, 806 (S.D. Ohio 2001) (“[Ohio court] found
knowingly misstating the law with respect to the consumer’s obligations to the creditor,
as well as the exaggeration of remedies available to the creditor and the consequences to
the consumer of nonpayment, to be deceptive”); Taylor v. First Resolution Invest. Corp.,
72 N.E.3d 573, 598 (Ohio 2016) (holding that claim may be brought under OCSPA for
creditor’s attempt to collect an amount in excess of what creditor is entitled).
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The Court cannot conclude that merely placing several telephone calls in an effort to collect a
debt violates OCSPA. McIntosh v. Controlled Credit Corp., No. 1:17-CV-009, 2018 WL
4761456, at *6-7 (S.D. Ohio Sept. 30, 2018) (holding that conduct aimed at collecting a debt,
even if in error, is not, in and of itself, “conduct that the [O]CSPA was designed to guard against,
such as making false statements of fact, false statements about what will happen if the consumer
fails to satisfy the claim, or misrepresentations about the law”). To the extent that the issue is
actually placing the calls to collect a debt that had already been paid, the conduct falls under the
Court’s third identified category of harm, i.e., “deceiving the consumer … regarding [her] …
obligations under the law.”
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Thus, Plaintiff is entitled to $200.00 statutory damages each time any of these
harms occurred.
Based on Defendant ARS’s own call logs, Plaintiff has substantiated seven distinct
calls made to her telephone. (Doc. 7, Ex. E). However, the Court cannot conclude that
all three harms occurred during each of the seven telephone calls. As an initial matter,
Defendant ARS’s call logs show that only five of the calls are marked as “Answered.”
(Id.) And only three calls out of seven lasted for more than three seconds. 3 (Id.) More
significantly, however, the dates of the allegations on which the OCSPA violations are
predicated do not match any of the dates on the call logs. (Compare Doc. 1, ¶¶ 7-24, with
Doc. 7, Ex. E).
Relying upon Plaintiff’s uncontested facts, and based on the evidentiary record,
the Court concludes that six violations of the OCSPA are supported.
Specifically, the Complaint alleges that, “[o]n one occasion,” Defendant made
misrepresentations regarding Plaintiff’s obligation to pay a satisfied debt and threatened
to harm her credit if she did not comply. (Doc. 1, ¶¶ 19-20) (emphasis added). 4 Thus,
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Defendant ARS’s call log provides durations of the calls (listed chronologically) as follows:
00:00, 00:03, 03:09, 02:15, 00:01, 00:41, and 00:03. (Doc. 7, Ex. E). The first call is marked as
a “Hangup.” (Id.) The second call is listed as “Timeout.” (Id.) The remaining five are all
marked as “Answered.” (Id.)
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Although Plaintiff fails to specify, it appears that the misrepresentation regarding Plaintiff
bearing the burden to prove payment of the debt occurred in the course of the same single
conversation. (Id. at ¶ 21). As deceit regarding Plaintiff’s burden of proof is the same harm as
deceit regarding her obligation to pay the satisfied debt (i.e., deceiving Plaintiff regarding her
legal rights and obligations), it would not constitute a separate harm in this context.
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these allegations constitute two violations (i.e., one for each separate and distinct harm
that occurred on that one occasion).
On a separate occasion, Defendant again misled Plaintiff as to her legal rights and
obligations by informing her that she was required to prove satisfaction of the debt. (Id.
at ¶ 21). This constitutes one additional violation.
The Complaint further specifies that on February 22, 2018 and March 2, 2018,
Defendant misrepresented the amount of the debt and attempted to collect more than the
amount Plaintiff originally owed. (Id. at ¶¶ 11, 23). Although the same harm is at issue,
each repeated occurrence constitutes a new violation, for a total of two.
Finally, the Complaint states that on March 2, 2018, Defendant made a
misrepresentation regarding reporting Plaintiff’s allegedly unpaid debt. (Id. at ¶ 23).
Thus, this constitutes one additional violation.
The Court finds six total violations of the OCSPA. Accordingly, Plaintiff is
entitled to statutory damages in the amount of $1,200.00
4. Attorney’s Fees
Finally, Plaintiff seeks a total of $9,587.00 in attorney’s fees, as authorized under
the FDCPA and the OCSPA. (Docs. 7, 8).
“The FDCPA mandates the award of ‘a reasonable attorney’s fee’ and costs to a
prevailing party.” Dowling v. Litton Loan Servicing LP, 320 F. App’x 442, 446 (6th Cir.
2009); 15 U.S.C. § 1692k(a)(3). Also, pursuant to the OCSPA, “[t]he court may award to
the prevailing party a reasonable attorney’s fee … [if Defendant] has knowingly
committed an act or practice that violates this chapter.” Ohio Rev. Code § 1345.09(F)
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“The starting point for determining the amount of a reasonable attorney fee is the
‘lodestar’ amount, which is calculated by multiplying the number of hours reasonably
expended on the litigation by a reasonable hourly rate.” Imwalle v. Reliance Med. Prod.,
Inc., 515 F.3d 531, 551 (6th Cir. 2008) (citing Hensley v. Eckerhart, 461 U.S. 424, 433
(1983)). “Where the party seeking the attorney fees has established that the number of
hours and the rate claimed are reasonable, the lodestar is presumed to be the reasonable
fee to which counsel is entitled.” Id. at 552 (citing Pennsylvania v. Del. Valley Citizens
Council for Clean Air, 478 U.S. 546, 564 (1986)). “A district court has broad discretion
to determine what constitutes a reasonable hourly rate for an attorney.” Wayne v. Vill. of
Sebring, 36 F.3d 517, 533 (6th Cir. 1994). The “prevailing market rate [ ] in the relevant
community,” is a useful indication of what constitutes a reasonable rate. Dowling at 447
(quoting Blum v. Stenson, 465 U.S. 886, 895 (1984)). The “prevailing market rate” is
defined as “that rate which lawyers of comparable skill and experience can reasonably
expect to command.” Id. (quoting Adcock–Ladd v. Sec’y of Treasury, 227 F.3d 343, 350
(6th Cir. 2000)).
Here, Plaintiff’s total fees of $9,587.00 represent $7,352.00 incurred as of the date
of the motion for default judgment (Doc. 7), as well as $2,235.00 incurred subsequently
as Plaintiff’s counsel attempted to resolve the matter with ARS (Doc. 8). Plaintiff’s
counsel requests an hourly rate of $250 for attorney time and $100 per hour for all other
employees, having expending a total of 36.26 hours and 5.22 hours of each respectively
on this case. (Doc. 7, Ex. I; Doc. 8, Ex. 3).
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Given the nature of the case and in light of the prevailing market rates for similar
work completed by comparable attorneys in this community, the Court finds the rate and
hours expended reasonable. The Court further finds that an award of attorneys fees is
appropriate pursuant to the FDCPA. Moreover, the Court finds that Plaintiff is also
entitled to reasonable attorney’s fees under the OCSPA, in light of Defendant ARS’s
knowing acts in violation of the statute. Ohio Rev. Code § 1345.09(F). 5 Accordingly,
the Court awards attorney fees in the full amount of $9,587.00.
IV. CONCLUSION
Based upon the foregoing, Plaintiff’s motion for default judgment (Doc. 7) and
supplemental memorandum (Doc. 8) are GRANTED. Specifically:
1.
Plaintiff is granted default judgment;
2.
Plaintiff is awarded $22,287.00, representing $1,000.00 in statutory
damages for violation of the FDCPA; $10,500.00 in damages for violation
of the TCPA; $1,200.00 in statutory damages under the OCSPA; and
$9,587.00 in attorneys’ fees.
3.
The Clerk shall enter judgment accordingly, whereupon this case is
TERMINATED on the docket of this Court.
IT IS SO ORDERED.
Date:
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3/15/19
s/ Timothy S. Black
Timothy S. Black
United States District Judge
Plaintiff’s counsel is not seeking a fee multiplier in this case. (Doc. 7 at 18).
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