Hagy et al v. Demers & Adams, LLC et al
Filing
117
OPINION AND ORDER granting 101 Motion for Attorney Fees, Statutory Damages and Costs. The Court awards $500.00 per plaintiff for statutory damages under the FDCPA; $400.00 per plaintiff for the three OCSPA violations; attorney fees in th e amount of $74,195.62; and costs and expenses in the amount of $312.05. The parties shall provide the Court with an update regarding the status of the arbitration re: the Green Tree Defendants w/in seven (7) days. Signed by Magistrate Judge Terence P Kemp on 10/22/2013. (kk2)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
James R. Hagy, III, et al.,
:
Plaintiffs,
:
v.
:
Case No. 2:11-cv-530
:
Demers & Adams, LLC, et al.,
Magistrate Judge Kemp
:
Defendants.
OPINION AND ORDER
This matter is before the Court on the motion for an award
of statutory damages, attorney fees, and costs filed by
Plaintiff James R. Hagy, III, on behalf of himself and Patricia
R. Hagy1 (“the Hagys”) against Defendants Demers & Adams, LLC and
David J. Demers (“the Law Firm Defendants”).
(Doc. #101).
For
the reasons that follow, the Court will grant the motion for
statutory damages, attorney fees, and costs, but it will award
the relevant amounts as set forth below.
I. Background
This case arises from a foreclosure action initiated by the
Law Firm Defendants on behalf of Green Tree Servicing LLC (“Green
Tree”) against the Hagys.
On September 26, 2002, the Hagys
executed a fixed-rate note and mortgage for the purchase of a
mobile home and real property, securing payment of that note with
Conseco Finance Servicing Corp. (“Conseco”).
subsequently converted to Green Tree.
Conseco was
On April 28, 2010, the Law
Firm Defendants filed a foreclosure action against the Hagys on
behalf of Green Tree in the Carroll County Court of Common Pleas.
(Doc. #18-1).
1
On February 9, 2012, this Court granted James R. Hagy’s
motion requesting that he be substituted for his wife, Patricia
R. Hagy, following Mrs. Hagy’s death. (Doc. #47).
There is some disagreement between the parties as to whether
Ms. Hagy then called the Law Firm Defendants and asked whether
some type of settlement could be reached, or whether she talked
to someone at Green Tree about settlement.
Doc. #67 at 37-39).
(Doc. #69 at 43-45;
Either way, on June 8, 2010, David Demers
sent the Hagys a letter and warranty deed in lieu of foreclosure.
(Doc. #65, Ex. C).
The June 8 letter stated in relevant part,
“This letter is to advise you that my office has been retained to
represent Green Tree . . . in regards to your delinquent account.
. . . In return for executing the Deed in Lieu Green Tree has
advised me that it will waive any deficiency balance.”
Id.
On June 24, 2010, the Hagys signed the warranty deed in lieu
of foreclosure. (Doc. #18, Ex. 4).
On June 28, 2010, Green Tree
confirmed to Mr. Demers that Green Tree would not seek a
deficiency balance if the Hagys signed the deed in lieu of
foreclosure. (Doc. #65, Ex. F).
On June 30, 2010, Mr. Demers
confirmed in a letter to the Hagys’ counsel, James Sandy, Esq.,
that he had received the warranty deed in lieu of foreclosure and
that in return for the Hagys “executing the Warranty Deed in Lieu
of Foreclosure Green Tree will not attempt to collect any
deficiency balance which may be due and owing after the sale of
the collateral.”
Id., Ex. E.
On July 19, 2010, the Law Firm Defendants dismissed the
foreclosure complaint.
(Doc. #18, Ex. 2).
After the warranty
deed in lieu of foreclosure was executed, Green Tree began
contacting the Hagys by telephone for the collection of an
alleged deficiency.
(Doc. #67 at 25-32; Doc. #69, Ex. 12).
On June 15, 2011, the Hagys filed this case against Green
Tree and its employee Kevin Winehold (“the Green Tree
Defendants”) and the Law Firm Defendants alleging violations of
the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C.
§§1692, et seq., the Ohio Consumer Sales Practices Act (“OCSPA”),
2
O.R.C. §§1345.01 et seq., and common law invasion of privacy.
On
December 7, 2011, this Court granted the Law Firm Defendants’
motion to dismiss the Hagys’ claims under 15 U.S.C. §1692g on the
grounds that those claims were based on the June 8 letter and
thus were barred by the FDCPA’s one-year statute of limitations.
(Doc. #42).
On February 2, 2012, this Court granted the Green
Tree Defendants’ motion to compel arbitration and stay the case
against them. (Doc. #44).
On February 5, 2013, the Court issued an Opinion and Order
granting in part and denying in part the motion for summary
judgment filed by the Law Firm Defendants (Doc. #65) and granting
a cross-motion for summary judgment filed by the Hagys (Doc.
#83).
(Doc. #95).
In doing so, the Court found the Law Firm
Defendants to be in violation of the FDCPA and the OCSPA.
Id.
In the Opinion and Order, the Court first examined the Law
Firm Defendants’ alleged liability under 15 U.S.C. §§1692d, 1692e
(unrelated to the notice provision of subsection (11)), and 1692f
and found that there was “no evidence in the record to suggest
that the Law Firm Defendants engaged in any behavior that would
constitute a violation of these sections of the FDCPA.”
7.
Id. at
Consequently, the Court granted summary judgment to the Law
Firm Defendants with respect to the Hagys’ claims under 15 U.S.C.
§§1692d, 1692e (unrelated to the notice provision of subsection
(11)), and 1692f.
The Court next turned to the Law Firm Defendants alleged
failure to provide the mandatory notice in violation of 15 U.S.C.
§1692e(11) in the June 30 letter that they sent to Mr. Sandy, the
Hagys’ attorney.
The Court found that, because the Law Firm
Defendants were debt collectors for purposes of the statute and
the June 30 communication was an attempt to collect a debt, the
Law Firm Defendants violated the FDCPA by failing to include in
the letter that the communication was from a debt collector.
3
Thus, the Court granted the Hagys’ motion for summary judgment on
the claims related to §1692e(11).
The Court then examined the Hagys’ claims under the OCSPA,
finding that the Law Firm Defendants’ conduct in violation of 15
U.S.C. §1692e(11), namely their failure to specify in the June 30
letter that it was from a debt collector, also violated the
OCSPA.
The Court likewise found that the Law Firm Defendants’
use of the June 8 letter and subsequent failure to provide the
civil Miranda warning violated the OCSPA.
In making this
determination, the Court noted that “[t]he fact that the June 8
letter is time barred under the FDCPA does not alter this
outcome.”
Id. at 19.
Accordingly, the Court granted the Hagys’
motion for summary judgment as to this claim.
Based on the foregoing, the Opinion and Order resolved each
of the claims against the Law Firm Defendants.
There are no
remaining liability issues as to those Defendants.
The
proceedings against the Green Tree Defendants remain stayed
pending arbitration.
On April 3, 2013, the Hagys filed the instant motion seeking
an award of statutory damages, attorney fees, and costs.
#101).
(Doc.
On April 17, 2013, the Law Firm Defendants filed a
memorandum in opposition to the Hagys’ motion, opposing the award
of statutory damages and attorney fees in the amounts requested
by the Hagys.
(Doc. #102).
On April 24, 2013, the Hagys filed a
reply brief in support of their motion.
(Doc. #103).
Finally,
on May 5, 2013, the Law Firm Defendants filed a supplemental
memorandum is response to the Hagys’ opposition.
(Doc. #104).
On May 16, 2013, the Law Firm Defendants filed a motion for
reconsideration, asking this Court to reconsider the portion of
its February 5 Opinion and Order relating to the OCSPA claims in
light of a recent decision by the Ohio Supreme Court, namely
Anderson v. Barclay’s Capital Real Estate, Inc., Slip Opinion No.
4
2013-Ohio-1993, decided May 14, 2013.
(Doc. #105).
Upon review
of the relevant briefs and case law, the Court denied the motion
and granted the Hagys leave to file a supplemental request for
attorney fees to account for the time expended since the filing
of their motion for an award of statutory damages, attorney fees,
and costs.
Thus, the issue of damages, attorney fees, and costs
has been briefed fully and is now ripe for consideration.
II. Discussion
The Court first considers the Hagys’ request for statutory
damages under the FDCPA and the OCSPA.
Next, the Court examines
the Hagys’ request for attorney fees and costs.
A. Statutory Damages Under The FDCPA
In resolving the Hagys’ motion, the Court first examines the
maximum amount of statutory damages available under the FDCPA.
In their motion, the Hagys argue that each plaintiff may recover
up to $1,000.00 in statutory damages.
The Law Firm Defendants
disagree, asserting that statutory damages under the FDCPA are
limited to $1,000.00 per proceeding and not per plaintiff.
After
resolving this issue, the Court will determine the proper award
of statutory damages in light of the particular FDCPA violation
in this case.
The motion requests the statutory maximum of $1,000.00 for
each plaintiff in this case, namely Mr. Hagy on behalf of himself
and in his capacity as a substitute for his late wife.
Consequently, the motion seeks an award of $2,000.00 in statutory
damages under the FDCPA.
Although the Hagys acknowledge that the
Court of Appeals limited statutory damages to $1,000.00 per
proceeding, rather than per violation, in Wright v. Finance
Service of Norwalk, Inc., 22 F.3d 647, 650-51 (6th Cir. 1994),
they claim that Wright is factually distinguishable.
This Court agrees.
In Wright, the district judge found the
defendant liable for multiple FDCPA violations, but held that the
5
plaintiff could only recover $1,000.00 in statutory damages per
proceeding.
Id. at 649.
The Court of Appeals affirmed, holding
that the FDCPA limits statutory damages to $1,000.00 per
proceeding, rather than per violation.
Id. at 651.
The issue in Wright, however, was not how many plaintiffs
could collect statutory damages under the FDCPA in a given
matter.
To the contrary, the issue was whether a single
plaintiff could collect the $1,000.00 maximum per violation.
The
Court of Appeals held that a plaintiff is limited to $1,000.00,
irrespective of the number of violations.
Based upon this
finding, the Court of Appeals necessarily limited the amount of
statutory damages to $1,000.00 per proceeding, given that there
was just a single plaintiff in that case.
As noted above, there are two plaintiffs in this case.
Consequently, the narrow issue before the Court, which is
distinct from the issue in Wright, is whether each plaintiff may
recover up to $1,000.00.
At least one court within this district
has found that, in cases with multiple plaintiffs, each plaintiff
may recover $1,000.00 in statutory damages.
See Boyce v.
Attorney’s Dispatch Serv., No. C-3-94-347, 1999 U.S. Dist. LEXIS
12970, at *9 (S.D. Ohio Apr. 27, 1999)(finding that “each
Plaintiff is entitled to recover $1,000.00, as statutory or
additional damages”).
The Law Firm Defendants’ reliance upon
Mann v. Acclaim Financial Services, 348 F. Supp.2d 923, 926 (S.D.
Ohio 2004) in support of their position is misplaced because
Mann, like Wright, involved a single plaintiff and thus has no
bearing on whether each plaintiff may recover $1,000.00.
Cf.
Dowling v. Kucker Kraus & Bruh, LLP, No. 99CIV11958RCC, 2005 WL
1337442, at *3-4 (S.D.N.Y. June 6, 2005)(finding that the cases
which limit statutory damages under the FDCPA to $1,000.00 “per
proceeding” involve a “lone plaintiff”).
Based on the foregoing,
the Court finds that each plaintiff may recover an individual
6
award up to $1,000.00 in statutory damages under the FDCPA.
Merely because a plaintiff may recover $1,000.00 in
statutory damages under the FDCPA does not necessarily mean that
the Court will award the Hagys a total of $2,000.00 in this case.
In fashioning a proper award of statutory damages here, the Court
must examine the particular FDCPA violation found in the context
of the various factors set forth in the FDCPA.
These factors
include: “the frequency and persistence of noncompliance by the
debt collector, the nature of such noncompliance, and the extent
to which such noncompliance was intentional. . . .” 15 U.S.C.
§1692k(b)(1).
To reach the proper award, the Court will consider
and balance each of these factors against the FDCPA’s purpose,
which is “to eliminate abusive debt collection practices by debt
collectors, to insure that those debt collectors who refrain from
using abusive debt collection practices are not competitively
disadvantaged, and to promote consistent State action to protect
consumers against debt collection abuses.”
Fed. Home Loan Mortg.
Corp. v. Lamar, 503 F.3d 504, 508 (6th Cir. 2007) (quoting 15
U.S.C. §1692(e)).
The Hagys argue that the Law Firm Defendants’ noncompliance
was frequent and persistent because “each and every communication
between the Law Firm Defendants and Plaintiffs in this matter
violated the FDCPA in some way.”
(Doc. #101 at 6).
In the
Opinion and Order on the cross-motions for summary judgment,
however, the Court held the Law Firm Defendants liable for just
one violation under the FDCPA.
More specifically, the Court
found the Law Firm Defendants liable for their failure to provide
the mandatory notice in violation of 15 U.S.C. §1692e(11) in the
June 30 letter that they sent to Mr. Sandy.
The Court found
that, because the Law Firm Defendants were debt collectors for
purposes of the statute and the June 30 communication was an
attempt to collect a debt, the Law Firm Defendants violated the
7
FDCPA by failing to include in the letter that the communication
was from a debt collector.
This conduct alone cannot be
characterized as frequent and persistent.
Moreover, even if the
Court were to consider the Law Firm Defendants’ conduct relating
to the June 8 letter, which was time barred under the FDCPA, the
Court would still find that the Hagys fail to establish that the
noncompliance was frequent and persistent.
The Hagys’ broad
accusations that the Law Firm Defendants’ conduct was frequent
and persistent are simply not borne out by evidence in the
record, and the conduct relating to the June 8 letter and June 30
letter, even when considered together, does not rise to the level
of frequent and persistent.
As to the nature of the noncompliance, the Hagys argue that
“[i]nclusion of the disclosure and warning notices required by 15
U.S.C. §1692e(11) . . . is one of the FDCPA’s most basic and
fundamental consumer protections.”
This Court agrees that the
mandatory notice provision in 15 U.S.C. §1692e(11) serves the
important purpose of eliminating abusive debt collection
practices by debt collectors.
For that reason, noncompliance
with that provision should not to be taken lightly.
Here,
however, the severity of the noncompliance is somewhat mitigated
by the fact that the June 30 letter was sent to the Hagys’
attorney, rather than to the Hagys themselves.
Although this
fact does not excuse the Law Firm Defendants’ conduct, which was
indeed in violation of 15 U.S.C. §1692e(11), it does make the
violation less egregious than it would have been had the letter
been sent directly to the Hagys.
Finally, the Hagys contend that the Law Firm Defendants’
noncompliance was intentional.
The Hagys’s argue that:
Law Firm Defendants conducted their debt collection
practices with a flagrant and openly lackadaisical
disregard for consumers’ FDCPA protections.
To the
extent
that
they
were
at
all
concerned
about
noncompliance, that concern was focused primarily on
8
‘covering their backside’ from ‘frivolous litigation.’
Yet, even this concern failed to convince Law Firm
Defendants to adequately educate themselves about the
FDCPA or comply with even the most basic of FDCPA
protections found in 15 U.S.C. § 1692(e)(11).
Id. at 9 (citation omitted).
The Law Firm Defendants disagree,
arguing that their failure to include the mandatory notice was an
“oversight” for which they are not “morally culpable.”
(Doc.
#102 at 2).
In this case, there is no evidence to suggest that the Law
Firm Defendants’ failure to comply with 15 U.S.C. §1692e(11) was
intentional.
That is, the Hagys have not presented evidence to
suggest that the Law Firm Defendants deliberately decided not to
disclose in the letter that the communication was from a debt
collector.
Accordingly, this factor weighs in favor of awarding
less than the maximum amount of statutory damages.
In sum, the Court finds that the frequency and persistence
of the noncompliance, the nature of the noncompliance, and the
extent to which the violation may have been intentional weigh in
favor of awarding less than the maximum amount of statutory
damages under the FDCPA.
Balancing these factors against the
important purpose served by 15 U.S.C. §1692e(11), the Court finds
that an award of $500.00 per plaintiff is warranted in this case,
making the total amount of statutory damages under the FDCPA in
this matter $1,000.00.
B. Statutory Damages Under The OCSPA
The Court now turns to the Hagys’ request for statutory
damages under the OCSPA.
The Hagys argue that they are entitled
to $1,200.00 in statutory damages under the OCSPA, stating that a
“majority of courts” have found that “where there are separate
OCSPA violations caused by separate acts, the consumer is
entitled to $200.00 per violation.” (Doc. #101 at 10)(citing Crye
v. Smolak, 110 Ohio App.3d 505 (Franklin Cty. 1996); Merriwether
9
v. A-All Type Heating Airconditioning & Builders, Inc., 2002 WL
31950750 (C.P. Cuyahoga 2002); and Robie, Ohio Consumer Law
(West), §2:131 at 102-103 (2012-2013)).
The Hagys argue that, in
this case, “there were three CSPA violations,” resulting in a
total award of $600.00 per plaintiff.
Id.
On this basis, the
Hagys move this Court to award them $1,200.00 in statutory
damages based upon the OCSPA violations.
The Law Firm Defendants oppose the amount of statutory
damages that the Hagys seek under the OCSPA.
(Doc. #102 at 1-2).
In particular, the Law Firm Defendants assert that, although the
OCSPA authorizes statutory damages of $200.00 per violation, the
Court should award less than that amount.
Id. at 2.
The Law
Firm Defendants agree that the Court has held them liable for
three violations of the OCSPA.
Id. at 3.
The Law Firm
Defendants argue that an award less than the statutory maximum
for each violation should be ordered, however, because the
violation arising from the June 30 letter was an oversight, and
the violation arising from the June 8 letter “contained no false
or misleading information.”
Id.
Finally, the Law Firm
Defendants argue:
Compliance with FDCPA §1692g (which formed the basis for
an OCSPA claim) would have been difficult for Law Firm
Defendants in this case because FDCPA §1692g requires the
debt collector to send written notice to the consumer
asserting that a specified amount is being sought for
collection.
After Law Firm Defendants’ initial
communication with Plaintiffs on June 8th, the parties
agreed that no specified amount would be owed if
Plaintiffs executed the deed-in-lieu of foreclosure.
Id. at 3.
On this basis, the Law Firm Defendants request
statutory damages to be an amount less than the maximum.
Id.
For the reasons set forth above, the Court finds that the
Hagys are entitled to less than the maximum amount of statutory
damages for the OCSPA violation based on the June 30 letter.
Here, the Court finds that $100.00 per plaintiff based on this
10
OCSPA violation is appropriate.
As to the OCSPA violations
stemming from the Law Firm Defendants’ use of the June 8 letter,
the Court finds that a higher amount is warranted.
The Court
reaches this conclusion because, unlike the June 30 letter, the
June 8 letter was sent directly to the Hagys and the subsequent
failure to warn also should have been directed to them.
For
these OCSPA violations, the Court finds that the Hagys are
entitled to $150.00 per plaintiff per violation.
Based upon
these findings, the Hagys will be awarded $400.00 each for the
three OCSPA violations, for a total amount of $800.00 in
statutory damages under the OCSPA in this matter.
C. Attorney Fees And Costs
Finally, the Hagys argue that they are entitled to attorney
fees and costs because they were successful in this action under
the FDCPA and the OCSPA.
There appears to be no dispute that the
Hagys are entitled to attorney fees and costs in this case.
See
15 U.S.C. §1692k(a)(3) (stating that a plaintiff who brings a
successful FDCPA action is entitled to costs “together with a
reasonable attorney’s fee as determined by the court”).
Consequently, the sole issue remaining for consideration is the
appropriate amount of such fees and costs in these circumstances.
In determining what constitutes a reasonable award of
attorney fees, the Court first determines 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-
52 (6th Cir. 2008) (citing Hensley v. Eckerhart, 461 U.S. 424,
433, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983)).
“Where the party
seeking the attorneys 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.”
Imwalle, 515 F.3d at 552 (citing Pennsylvania v. Delaware Valley
11
Citizens’ Council for Clean Air, 478 U.S. 546, 564-65, 106 S. Ct.
3088, 92 L. Ed. 2d 439 (1986)).
“Where documentation of hours is
inadequate, the district court may reduce the award accordingly.”
Hensely, 461 U.S. at 433.
In any context where an attorney requests fees to be awarded
by the Court, there is an obligation to award only reasonable
fees.
While the Court has substantial discretion in determining
what is a reasonable fee, there are a number of factors which
should be considered, including the prevailing market rates for
comparable legal work in the community, whether the amount of
time for which compensation is requested is reasonably necessary
to perform the tasks described, and whether the representation
was of at least average quality.
See Kauffman v. Sedalia Med.
Ctr., Inc., No. 2:04-CV-543, 2007 WL 490896 at *3 (S.D. Ohio Feb.
9, 2007)(citing Bemis v. Hogue, Nos. 89-1697, 89-1767, 1991 WL
102385, at *7 (6th Cir. Jun 13, 1991)).
In their declarations in support of the Hagys’ fee
application, counsel aver that the lodestar amount is the
following:
For Attorney Finzel Lewis:
133.55 hours x $175.00 per hour billable rate = $23,371.25;
For Attorney Icove:
138.30 hours x $400.00 per hour billable rate = $55,320.00;
and
For Attorney Williams:
9.2 hours x $400.00 per hour billable rate = $3,680.00.
The charges amount to a total of $81,371.25 in attorney fees as
of April 3, 2013, the date on which the Hagys filed the motion.
(Doc. #101 at 20).
The Hagys acknowledge that the lodestar
amount is significant, but they contend that “it is nonetheless
reasonable and proper . . . in light of Attorney Icove’s and
Attorney Williams’ vast array of experience in consumer cases;
the fact that Attorney Finzel Lewis exercised ‘billing judgment’
12
and reduced the amount of hours billed by over 35%; and perhaps
most importantly, the militant defense waged by Law Firm
Defendants and the resulting time and effort required of
Plaintiffs’ counsel to respond.”
(Doc. #103 at 5) (citation
omitted).
The Law Firm Defendants argue that the amount of attorney
fees should be reduced for several reasons.
First, the Law Firm
Defendants claim that the attorney fees should be reduced because
the Hagys did not prevail on the majority of their causes of
action.
Next, the Law Firm Defendants argue that the lodestar
amount is significantly less than the Hagys’ request because
counsel engaged in duplicative billing, the hourly rates for
Attorney Icove and Attorney Williams are unreasonable, and the
attorney fees requested bear no relationship to the Hagys’
recovery.
Finally, the Law Firm Defendants contend that a large
attorney fee award “incentivizes gamesmanship in the litigation
process” and does not comport with the FDCPA’s purpose.
(Doc.
#102 at 8-9).
As set forth below, the Court will reduce the amount of
attorney fees requested for duplicative billing and tasks not
sufficiently tied to the claims against the Law Firm Defendants.
After doing so, the Court will address the Law Firm Defendants’
arguments relating to the Hagys’ unsuccessful claims, the
reasonableness of the hourly rates, the proportionality of the
recovery to attorney fees, and whether a large attorney fee award
“incentivizes gamesmanship in the litigation process” and
comports with the FDCPA’s purpose.
Last, the Court will address
the Hagys’ supplemental request for attorney fees.
1. Reductions In The Lodestar Amount
In order to reach a reasonable award of attorney fees, the
Court first addresses duplication in the billing records.
Next,
the Court examines time entries which describe tasks that are not
sufficiently tied to the claims against the Law Firm Defendants.
13
As set forth below, this analysis will result in a reduction of
the lodestar amount in the amount of $13,155.63.
a. Duplicative Billing
The Law Firm Defendants argue that the Court should reduce
the amount of attorney fees requested based upon alleged
duplicative billing.
Attorneys conferring with one another is
not necessarily indicative of duplicated efforts or “double
billing” to a client.
(6th Cir. 1998).
See Glover v. Johnson, 138 F.3d 229, 252
If, however, upon review of the disputed hours,
the Court determines that a duplication of services indeed has
occurred, it may in its discretion reduce the hours at issue to
eliminate the duplication.
See id.
The Law Firm Defendants attach Exhibit C to their memorandum
in opposition, which they claim sets forth the duplicative
billing by Attorney Icove, Attorney Finzel Lewis, and Attorney
Williams on a given task.
(Doc. #102).
The Law Firm Defendants
state, “[o]f particular note is that deposition attendance,
teleconferences and the vast majority of motion practice was
billed by both Ms. Lewis and Mr. Icove.”
Id. at 5.
In response, the Hagys argue that many of the entries
characterized as duplicative were “actually entries for each
counsel’s individual completion of their assigned tasks related
to a common pleading, memorandum, project, or research.”
#103 at 9).
(Doc.
The Hagys assert that:
Attorney Icove and Attorney Finzel Lewis regularly
assigned and completed separate tasks, taking care not to
duplicate efforts. Additionally, it is reasonable that
co-counsel would each attend significant matters such as
conference calls with the Court and depositions of the
parties and each would spend time reviewing Law Firm
Defendants’ pleadings and correspondence.
Because
matters significant to the outcome of the case can
transpire during any engagement with the Court, and
certainly during the depositions of the parties, it is
reasonable that both Attorney Icove and Attorney Finzel
Lewis participated in these matters.
Further, it is
imperative that each co-counsel review all of the
14
pleadings and correspondence in order to ensure competent
representation.
Id.
On this basis, the Hagys argue that the time expended was
necessary in furtherance of their case and should not be reduced
by the Court.
Id.
The Hagys have explained how Attorney Finzel Lewis and
Attorney Icove came to work together on this matter, noting that
Attorney Finzel Lewis, an attorney for Southeastern Ohio Legal
Services (“SEOLS”), had limited experience in federal consumer
litigation, an area in which Attorney Icove had considerable
experience.
According to the Hagys, when Attorney Finzel Lewis
attempted to place this fee-generating case with Attorney Icove
consistent with the applicable federal regulations, Attorney
Icove agreed to represent the Hagys on the condition that SEOLS
agreed to serve as co-counsel on the case.
(Doc. #103 at 6).
As
the Hagys argue, had Attorney Finzel Lewis not served as cocounsel on this case billing at an hourly rate significantly
lower than Attorney Icove and reducing the number of hours she
billed by over 35%, the request for attorney fees would have been
higher.
Id. at 5, 7.
The Court has carefully examined the bills for Attorney
Finzel Lewis and Attorney Icove, including but not limited to the
time entries set forth in the Law Firm Defendants’ Exhibit C, and
does not find the work performed to be overly duplicative.
Further, that both Attorney Finzel Lewis and Attorney Icove
attended depositions and teleconferences and collaborated with
respect to motions practice is not unusual.
See, e.g.,
Communities for Equity v. Michigan High School Athletic Assoc.,
No. 1:98-CV-479, 2008 WL 906031, at *16 (W.D. Mich. Mar. 31,
2008) (discussing the reasons for having multiple attorneys
present for a deposition).
Turning to the time billed by Attorney Williams, the
itemized time entries reflect that he worked on matters
15
associated with summary judgment, on the motion for attorney
fees, on matters related to mediation, in addition to briefly
becoming acquainted with the case.
The following summarizes
Attorney Williams’s bill:
Time relating to summary judgment
9/29/12
1.2 hours = 480.00
9/30/12
1.5 hours = 600.00
10/2/12
.80 hours = 320.00
11/16/12
.50 hours = 200.00
12/2/12
.40 hours = 160.00
(4.4 hours = $1,760.00)
Time on the motion for attorney fees
3/25/13 .80 hours = 320.00
3/25/13 .40 hours = 160.00
3/29/13 1.3 hours = 520.00
4/2/13
.60 hours = 240.00
(3.1 hours = $1,240.00)
Time on matters relating to mediation
2/23/13 .60 hours = 240.00
3/5/13 .50 hours = 200.00
(1.1 hours = $440.00)
Time getting acquainted with case
9/29/12 Reviewing Order re: Defendants’ Motion to
Dismiss .60 hours = 240.00
(.60 hours = $240.00)
(Doc. # 101, Ex.3).
Based on the foregoing, Attorney Williams
worked for a total of 9.2 hours and billed $3,680.00 for his work
on this matter.
The Law Firm Defendants allege that 3.5 hours of Attorney
Williams’s time were duplicative.
(Doc. #102, Ex. C at 2).
specifically, the Law Firm Defendants urge that the following
More
tasks were duplicative:
16
Date
Task
Time
9/29/2012
reviewing/editing draft motion
for summary judgment
1.2
hours
9/30/2012
editing/revising draft motion for
summary judgment
1.5
hours
10/2/2012
revising defendants summary
judgment motion
.8
hours
(Doc. #102, Ex. C at 2).
Consequently, the Law Firm Defendants
urge that these tasks should not be included the attorney fees
awarded in this case.
The Court agrees that Attorney Williams’s tasks, as set
forth by the Law Firm Defendants, appear to be duplicative of the
efforts expended by Attorney Finzel Lewis and Attorney Icove.
Even beyond the three time entries highlighted by the Law Firm
Defendants, there has been no explanation offered as to why
Attorney Williams was added to this case on September 29, 2012,
over a year after this case was filed by competent counsel on
June 15, 2011.
Although Attorney Williams has outlined his
considerable experience in consumer law, as noted above, Attorney
Icove also has considerable experience in that area.
The motion
for attorney fees does not argue that Attorney Williams’s work
was an individual completion of assigned tasks related to a
common project, nor does it offer any other argument as to why he
completed work also completed by Attorney Finzel Lewis and
Attorney Icove.
Absent such an explanation, the Court will find
that Attorney Williams’s work was duplicative and that the 9.2
hours and corresponding bill for $3,680.00 is unreasonable.
Accordingly, the $3,680.00 requested for Attorney Williams’s work
will not be included in the award of attorney fees in this case.
b. Charges Not Sufficiently Tied To Claims Against
The Law Firm Defendants
In addition to reducing the award for duplicative billing,
17
the Court also will reduce the award for work performed that is
not sufficiently tied to the claims against the Law Firm
Defendants.
Although not raised by the Law Firm Defendants, the
Court finds that a review of the bills reflects time entries for
work relating primarily to claims against the Green Tree
Defendants, including matters relating to the arbitration with
those Defendants.
Because the arbitration did not involve the
Law Firm Defendants and the Hagys raised claims against those
Defendants alone, the Court finds it unreasonable to charge the
Law Firm Defendants for attorney fees related to those tasks.
In
making this ruling, the Court recognizes that the allegations
against the Law Firm Defendants stem from the same facts as the
allegations against the Green Tree Defendants.
However, the
Hagys bear the burden of demonstrating that the requested fees
are reasonable.
See Disabled Patriots of Am., Inc. v. Reserve
Hotel, Ltd., 659 F. Supp.2d 877, 884 (N.D. Ohio 2009).
Here, the
Hagys have failed to meet that burden, providing descriptions
which suggest that the tasks at issue related exclusively or at
least primarily to the Green Tree Defendants.
Consequently, the
Court will reduce the lodestar amount for attorney fees relating
to those tasks, each of which is set forth below.
On August 4, 2011, the Green Tree Defendants filed a motion
to stay proceedings and compel arbitration.
The following
charges, amounting to a total of $3,452.50, appear to be arising
from that motion.
Because those charges are not sufficiently
tied to claims against the Law Firm Defendants, the Law Firm
Defendants will not bear the cost for the following tasks:
Date
Task
Time
8/11/2011
Emails with Kristen; research on
arb issue. (EAI)
2.10
hours
840.00
8/15/2011
Research on arb issue. (EAI)
1.50
hours
600.00
18
Fee
Date
Task
Time
Fee
8/15/2011
draft email to attys Bland & Baily
at Justice Netwk re arbitration
(KFL)
.50
hours
87.50
8/15/2011
research arbitration issues; email
NCLC to Ed (KFL)
.50
hours
87.50
8/17/2011
Review and revised memo. (EAI)
2.30
hours
920.00
8/18/2011
Reviewed and revised memo and
telephone call to Kristen. (EAI)
.50
hours
200.00
8/18/2011
draft email to Bland re
arbitration (KFL)
.20
hours
35.00
8/18/2011
conference call with Ed (KFL)
.50
hours
87.50
8/18/2011
review arbitration motion; emails
from Ed (KFL)
.50
hours
87.50
8/23/2011
review emails re arbitration (KFL)
.20
hours
35.00
8/26/2011
research Conseco Bus. entity,
bkruptcy, relationshp w/ Green
Tree (KFL)
2.50
hours
437.50
9/6/2011
email Pat Skilliter re arbitration
issues (KFL)
.20
hours
35.00
The following charges also relate to the motion to stay and
compel arbitration filed by the Green Tree Defendants, as well as
a motion to dismiss filed by the Law Firm Defendants.
The Court
notes that, on August 25, 2011, the Hagys filed both an
opposition to the motion to stay and compel arbitration and an
opposition to the motion to dismiss.
Because counsel did not
delineate the exact amount of time attributable to each task, the
Court finds it appropriate to reduce the amount of fees for the
following tasks by half, amounting to a total reduction of
$2,960.00 in attorney fees relating to the following charges:
19
Date
Task
Time
Fee
8/22/2011
Research; review and revised memo
in opposition to motion to stay
and motion to dismiss. (EAI)
5.20
hours
2,080.00
8/24/2011
Research and revised both memo’s;
telephone call with Kristen.
(EAI)
5.70
hours
2,280.00
8/25/2011
Proofed and cite checked memo’s
and filed. (EAI)
3.10
hours
1,240.00
8/25/2011
Reviewed ECF filing. (EAI)
.10
hours
40.00
9/6/2011
rev cases; emails to/from Ed; re
prelim statemt; supp auth both
mot(KFL)
1.0
hours
175.00
9/19/2011
email/call from Ed/Michelle re
conf call; rev addl auth on arb
issue (KFL)
.30
hours
52.50
10/6/2011
review email, case re
arbitration; email to Icove (KFL)
.30
hours
52.50
Further, on November 10, 2011, the Green Tree Defendants
filed a motion to amend/correct motion to stay proceedings and
compel arbitration.
On November 15, 2011, the Court granted the
motion for leave to amend and allowed plaintiffs 14 days from the
date of the order to respond to the amended motion to stay.
The
Hagys filed an opposition to the motion on November 29, 2011, and
the Green Tree Defendants filed a reply on December 6, 2011.
The
charges below, amounting to $2,910.00, appear to be related to
those filings, as well as the subsequent arbitration.
As such,
the following will not be charged against the Law Firm
Defendants:
Date
Task
Time
11/10/2011
Reviewed ECF filing and notice.
(EAI)
.10
hours
20
Fee
40.00
Date
Task
Time
11/10/2011
Reviewed & received ECF filing.
(EAI)
.10
hours
40.00
11/10/2011
Email to Kristen. (EAI)
.10
hours
40.00
11/10/2011
review motion to amend; call from
Icove to discuss response (KFL)
.50
hours
87.50
11/12/2011
Reviewed motion and redrafted
portion of the memorandum. (EAI)
.90
hours
360.00
11/14/2011
research for reply to motion to
amend (KFL)
1.75
hours
306.25
11/14/2011
Email to Kristen. (EAI)
.10
hours
40.00
11/15/2011
Reviewed ECF order; docketed
dates conference call with
Kristen; revised memo and email
to Kristen. (EAI)
1.20
hours
480.00
11/15/2011
rev order; meet w Ed re case
status; reply to amended mot to
arbitrate (KFL)
.50
hours
87.50
11/29/2011
Reviewed memo and revised; emails
to Kristen; research; and filed.
(EAI)
2.10
hours
840.00
12/6/2011
Reviewed reply and file. (EAI)
.30
hours
120.00
2/3/2012
review arbitration
decision/research (KFL)
1.25
hours
218.75
3/13/2012
email from opposing atty re
arbitration; forward to Icove
(KFL)
.10
hours
17.50
3/19/2012
email from Bennett re Green Tree
arbitration; call Ed to discuss
(KFL)
.30
hours
52.50
3/19/2012
Email to Kristen; telephone call
with Kristen. (EAI)
.20
hours
80.00
3/20/2013
[sic]
draft reply to Bennett re
arbitration (KFL)
.20
hours
25.00
21
Fee
Date
Task
Time
Fee
4/2/2012
email from opposing atty re
arbitrator (KFL)
.10
hours
17.50
4/12/2012
call from Icove re arbitrator
selection (KFL)
.10
hours
17.50
4/12/2012
Telephone with Kristen. (EAI)
.10
hours
40.00
Finally, the following tasks appear to be related in part to
claims against the Green Tree Defendants, with some time
allocated to claims against the Law Firm Defendants.
Consistent
with the findings set forth above, because the Hagys’ counsel did
not delineate the exact amount of time attributable to each task,
the Court finds it appropriate to reduce the amount of fees for
the following tasks by half.
Doing so results in a reduction of
$153.13 in attorney fees for the following charges:
Date
Task
Time
Fee
11/30/2011
rev Green Tree’s response on
arbitration; rev Demer’s discov
response (KFL)
.50
hours
87.50
2/6/2012
emails to/from Ed; rev mot;
research arb issues; appeal issue
(KFL)
1.25
hours
218.75
c. Summary Of Reductions
Taking all of the reductions above together, the Court will
reduce the lodestar amount by the $3,680.00 billed by Attorney
Williams and the $9,475.63 billed for tasks not sufficiently tied
to the claims against the Law Firm Defendants, resulting a total
reduction in the lodestar amount of $13,155.63.
2. The Law Firm Defendants’ Remaining Arguments
Next, the Court will address the Law Firm Defendants’
arguments concerning charges for the unsuccessful claims, the
reasonableness of the hourly rates, the proportionality of the
22
recovery to attorney fees, and whether a large attorney fee award
“incentivizes gamesmanship in the litigation process” and
comports with the FDCPA’s purpose.
a. Impact Of Dismissed Claims On Fee Award
The Law Firm Defendants argue that the fees sought should be
reduced because the Hagys were unsuccessful on the majority of
their claims.
(Doc. #102 at 3-4).
The Hagys disagree, stating
that they are entitled to “100% of attorney’s fees, so long as
the unsuccessful claims are premised upon a common core of
facts.”
(Doc. #103 at 10 (citing Pheland v. Bell, 8 F.3d 369,
374-75 (6th Cir. 1993)).
If claims arise “from a common nucleus of facts” such that
it would be impossible to distinguish “the time counsel spent on
each one,” a court need not divide the billable hours on a claimby-claim basis.
Dowling v. Litton Loan Servicing LP, 320 Fed.
Appx. 442, 448 (6th Cir. 2009).
Accordingly, the Court does not
need to reduce the attorney fees requested to account for
unsuccessful claims if the “successful and unsuccessful claims
were related both factually and legally. . . .”
Id.
Here, the Hagys are not seeking attorney fees on distinctly
separate and unrelated claims, some of which were unsuccessful.
Rather, the claims against the Law Firm Defendants involved a
core of common facts, making the Hagys a prevailing party
entitled to attorney fees under the relevant statute.
See Allen
v. Allied Plant Maintenance Co. of Tennessee, Inc., 881 F.2d 291,
299 (6th Cir. 1989).
More specifically, each of the claims
against the Law Firm Defendants was based upon their
communications with the Hagys concerning a warranty deed in lieu
of foreclosure after filing a foreclosure action against the
Hagys on behalf of Green Tree.
Accordingly, the Court finds the
Law Firm Defendants’ argument to be without merit, and it will
not reduce the award of attorney fees on this basis.
23
b. Reasonableness Of Hourly Rates
The Court now turns to the Law Firm Defendants’ argument
regarding the reasonableness of Attorney Icove’s hourly rate.
Plainly stated, the Law Firm Defendants argue that the $400.00
per hour charged by Attorney Icove is excessive, and that
Attorney Finzel Lewis could have handled this matter on her own.
As set forth above, the Court has examined how Attorney Finzel
Lewis and Attorney Icove came to work together and finds their
joint representation in this case to be reasonable.
Therefore,
the Court need only address the Law Firm Defendants’ argument
that Attorney Icove’s rate is excessive.
To determine whether a billing rate is reasonable, courts
should assess the prevailing market rate in the relevant
community, which is the rate that “lawyers of comparable skill
and experience can reasonably expect to command within the venue
of the court of record....”
Adcock-Ladd v. Secretary of
Treasury, 227 F.3d 343, 350 (6th Cir. 2000) (citations omitted).
“A district court may rely on a party’s submissions, awards in
analogous cases, state bar association guidelines, and its own
knowledge and experience in handling similar fee requests.”
Van
Horn v. Nationwide Prop. and Cas. Ins. Co., 436 Fed. Appx, 496,
498-99 (6th Cir. Aug. 26, 2011).
Neither side has submitted evidence regarding what
reasonable attorneys of similar skill and experience would charge
for legal services in a comparable market.
An attorney’s
customary client billing rate, however, can be a reliable
indicator of the market rate.
See West v. AK Steel Corp. Ret.
Accumulation Pension Plan, 657 F. Supp. 2d 914, 932 (S.D. Ohio
2009) (citing Hadix v. Johnson, 65 F.3d 532, 526 (6th Cir.
1995)).
Here, Attorney Icove avers that his hourly rate has
increased incrementally over the years in practice, which
included his being awarded a fee of $300.00 in 2008.
Ex. 2 at ¶9.
(Doc. #101,
The Court has no reason to doubt that the rate of
24
$400.00 represents Attorney Icove’s current billing rate or that
an attorney of his skill and experience in a comparable market
could reasonably charge that amount on a hourly basis.
In Wells v. Rhodes, No. 2:11-CV-217, 2012 WL 3835391, at *2
(S.D. Ohio 2012), Judge Sargus approved an hourly rate of $400.00
for an attorney who possessed considerable experience, when that
attorney worked in combination with an attorney with a much lower
hourly rate.
Applying the decision in Wells to this case, the
Court finds that $400.00 is reasonable based on Attorney Icove
skill and experience when combined with Attorney Finzel Lewis’s
lower hourly rate.
Further, because the work performed in this
case required an attorney with skill and experience in consumer
law, the Court finds Attorney Icove’s hourly rate to be
reasonable.
c. Proportionality Of Fees To Recovery And The Impact
Of A Large Attorney Fee Award
Finally, the Law Firm Defendants argue that the attorney
fees requested bear no relationship to the Hagys’ recovery, and
that a large attorney fee award “incentivizes gamesmanship in the
litigation process” and does not comport with the FDCPA’s
purpose.
(Doc. #102 at 8-9).
The Court addresses these
arguments in turn.
The Court first addresses the Law Firm Defendants’ argument
concerning the proportionality of the recovery to the requested
attorney fees.
This is not an instance where the relief sought
is far more than the relief obtained.
That is, the statutory
damages awarded in this case were limited at the outset and the
resulting relief is reflective of that limitation.
As to a
reasonable award of attorney fees in relation to that relief, at
least one court has observed that “FDCPA suits usually entail
significant awards of attorneys’ fees, above and beyond any
damages awarded.”
Cir. 2000).
Sanders v. Jackson, 209 F.3d 998, 1004 (7th
Thus, that the amount of attorney fees will be
25
considerably higher than the damages award in this case is not
unusual.
Here, the award of attorney fees does not need to be
proportional to recovery, and the Court will not reduce the
lodestar amount, which is presumed to be reasonable, on this
basis.
See id.; see also Building Serv. Local 47 Cleaning
Contractors Pension Plan v. Grandview Raceway, 46 F.3d 1392, 1401
(6th Cir. 1995)(finding that the award of attorney fees does not
need to be proportional to the recovery in the civil rights
context).
Next, the Court addresses the Law Firm Defendants’ arguments
that a large attorney fee award would encourage gamesmanship in
the litigation process, and that it does not comport with the
FDCPA’s purpose.
The Law Firm Defendants assert that “the facts
of this case present a particularly dangerous opportunity for
gamesmanship” because the communications at issue were “solicited
by Plaintiffs or their counsel.”
(Doc. #102 at 8).
The Sixth
Circuit has noted that the FDCPA’s attorney fees provisions serve
as a deterrent to prevent the prohibited conduct.
See Sanders,
209 F.3d at 1004 (“The Sixth Circuit is correct in noting that,
on top of the damages awarded, the costs and attorneys’ fees
provisions in the FDCPA provide substantial punishment which
undoubtedly deters similar conduct”) (citing Wright, 22 F.3d at
651).
As noted above, the proportionality of the attorney fees
to the recovery is not unusual in this type of lawsuit.
To the
extent that the attorney fees requested may be somewhat higher
than in a typical case, this difference is attributable the fact
that this case has been highly contested by the Law Firm
Defendants since its inception.
Although the Law Firm Defendants
are entitled to a zealous defense, the applicable mandatory
attorney fees provisions dictate that such a defense will come at
a considerable cost if the outcome is unfavorable. Because the
award of attorney fees does not promote gamesmanship in the
litigation process or run counter to the FDCPA’s purpose, the
26
Court finds the Law Firm Defendants’ arguments to be without
merit.
3. Supplemental Request For Attorney Fees
On September 26, 2013, with leave of Court, the Hagys filed
a supplemental motion for an award of attorney fees.
In the
supplemental motion, the Hagys seek an additional award of
attorney fees for the billing charges incurred since the filing
of the original motion for an award of statutory damages,
attorney fees, and costs.
Specifically, the Hagys seek the
following: $3,600.00 in attorney fees for work performed by
Attorney Icove, $1,720.00 in attorney fees for work performed by
Attorney Williams, and $2,450.00 in attorney fees for work
performed by Attorney Finzel Lewis, for a total of $7,700.00 in
additional attorney fees.
The Court has reviewed the attorney fees requested for
worked performed by Attorney Icove and Attorney Finzel Lewis and
finds them to be reasonable.
With respect to the attorney fees
requested for Attorney Williams, however, the Court finds the
charges to be duplicative.
As set forth above, there has been no
explanation offered as to why Attorney Icove required the
assistance of Attorney Williams on the additional tasks described
in the supplemental motion.
Further, the descriptions do not
reflect that Attorney Williams’s work was an individual
completion of assigned tasks related to a common project.
Consequently, the Cou rt will adjust the lodestar amount to add
$5,980.00 for the additional work performed by Attorney Icove and
Attorney Finzel Lewis.
4. Summary of Attorney Fees
Based on the foregoing, the Court will find that attorney
fees in the amount of $74,195.62 is reasonable, with $68,215.62
stemming from the original motion and $5,980.00 stemming from the
supplemental motion.
27
5. Costs and Expenses
Finally, the Hagys request costs and expenses in the amount
of $312.05 for deposition transcripts. Because the Court finds
this request to be reasonable, it will award the full $312.05
requested in the motion.
III. Conclusion
For the reasons set forth above, the motion for an award of
statutory damages, attorney fees, and costs filed by the Hagys is
granted (Doc. #101), and the Court awards the following:
$500.00
per plaintiff for statutory damages under the FDCPA, for a total
of $1,000.00 in damages under the FDCPA; $400.00 per plaintiff
for the three OCSPA violations, for a total of $800.00 in damages
under the OCSPA; attorney fees in the amount of $74,195.62; and
costs and expenses in the amount of $312.05.
The Clerk is
directed to enter judgment in favor of the Plaintiffs and against
the Law Firm Defendants in the total amount of $76,307.67.
The
proceedings in this case against the Green Tree Defendants have
been stayed pending arbitration.
The parties shall provide the
Court with an update regarding the status of that arbitration
within seven days of the issuance of this Opinion and Order.
/s/ Terence P. Kemp
UNITED STATES MAGISTRATE JUDGE
28
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