CAPLAN v. PREMIUM RECEIVABLES LLC
Filing
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MEMORANDUM OPINION AND ORDER granting 8 Motion for Default Judgment. Judgment is hereby entered in favor of Plaintiff, Garret Caplan, and against Defendant, Premium Receivables LLC, pursuant to Fed. R. Civ. P. 55(b)(2). As explained more fully in the Court's Memorandum Opinion, the Court awards Plaintiff $250 in statutory damages, $480 in attorneys fees, and $473 in costs, for a total of $1,203. Signed by Judge Terrence F. McVerry on 7/29/2015. (rjw)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
)
)
Plaintiff,
)
) 2:15-cv-474
v.
)
)
PREMIUM RECEIVABLES LLC,
)
Defendant.
)
MEMORANDUM OPINION
GARRETT CAPLAN,
Now pending before the Court is the MOTION FOR DEFAULT JUDGMENT filed by
Plaintiff, Garrett Caplan, along with a brief in support. ECF Nos. 8-9. Plaintiff has also filed the
following documents in support of his motion: the declaration of one of his attorneys, Christian
M. Rieger, Esq. (ECF No. 8-2), his own declaration (ECF No. 8-3), and his attorneys’ time
entries and fee statement (ECF No. 8-4 R).
I.
Background
This action arises out of Defendant Premium Receivables LLC’s alleged violations of the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. Plaintiff filed his
Complaint on April 7, 2015, alleging that Defendant’s alleged conduct violated various
provisions of the FDCPA: § 1692b(1), § 1692b(2), § 1692c(b), § 1692d, § 1692d(5), § 1692d(6),
§ 1692e, § 1692e(3), § 1692e(5), § 1692e(10), § 1692e(11), § 1692e(14), § 1692f, and § 1692g.
The docket indicates that Defendant was served with a summons and copy of the Complaint on
April 17, 2015. ECF No. 5. Defendant was allowed until May 8, 2015, to file a responsive
pleading. None has been filed. Accordingly, on May 28, 2015, Plaintiff requested that the Clerk
enter default based on Defendant’s failure to answer, plead, or otherwise defend itself in this
action. ECF No. 6. Default was entered the next day. ECF No. 7. On July 23, 2015, Plaintiff filed
this motion, in which he seeks the entry of default judgment against Defendant.
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II.
Legal Standard
“[T]he entry of a default judgment is left primarily to the discretion of the district court.”
Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984). Upon the Clerk’s entry of default,
“the factual allegations of the complaint, except those relating to the amount of damages, will be
taken as true.” Comdyne I, Inc. v. Corbin, 980 F.2d 1142, 1149 (3d Cir.1990) (quoting 10 C.
Wright, A. Miller & M. Kane, Federal Practice and Procedure, § 2688 at 444 (2d ed.1983)).
However, “the Court need not accept the moving party’s legal conclusions[.]” Chanel, Inc. v.
Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008) (citations omitted). Thus, “before
entering a default judgment the Court must decide whether ‘the unchallenged facts constitute a
legitimate cause of action, since a party in default does not admit mere conclusions of law.’”
Ford v. Consigned Debts & Collections, Inc., No. 09–3102, 2010 WL 5392643, at *2 (D.N.J.
Dec. 21, 2010) (quoting Chanel v. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008)).
III.
Discussion
To begin, the Court must determine whether the well-pleaded facts (as opposed to legal
conclusions) in the Complaint state a cause of action against Defendant. Having thoroughly
reviewed the Complaint, the relevant statutory provisions, and the applicable case law
interpreting same, the Court is skeptical of whether several of the statutory sections upon which
Plaintiff relies have actually been violated.
Specifically, the Court does not believe that the restrictions on third-party
communications, 15 U.S.C. §§ 1692b(1)-(2) and 1692c(b), were violated. See Counts I – III.
Nor does the Court find that 15 U.S.C. § 1692d (or the cited provisions thereunder) was violated
by Defendant’s conduct. See Counts IV – VI. Specifically, the number of calls – three calls to
Plaintiff (two of which went unanswered, though Defendant did leave voicemails); one call to
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Plaintiff’s brother-in-law; seven unprompted calls to Plaintiff’s mother; one call to Plaintiff’s
mother returning her own call; and one call to Plaintiff’s mother – is too low to state a claim
under § 1692d(5). See generally Zortman v. J.C. Christensen & Associates, Inc., 870 F. Supp. 2d
694, 707 (D. Minn. 2012) (“A remarkable volume of telephone calls is permissible under
FDCPA jurisprudence.”). Moreover, although Plaintiff claims that § 1692d(6) was violated
because Defendant identified itself as “Platinum Holdings” to his mother, “[t]here is substantial
authority that the [§ 1692d(6)’s] ‘meaningful disclosure’ requirement is limited to calls to the
debtor.” Lynn v. Monarch Recovery Mgmt., Inc., No. CIV. WDQ-11-2824, 2013 WL 1247815, at
*11 (D. Md. Mar. 25, 2013) (citations omitted). Likewise, there are no facts in the Complaint to
support a claim under § 1692e(3), which prohibits a debt collector from falsely representing or
implying “that any individual is an attorney or that any communication is from an attorney.”
Finally, on the facts alleged, the Court cannot find a violation of § 1692e(14). “[T]he cases in
which a violation of § 1692e(14) have been found typically involve a debt collector
misrepresenting its identity, such as by purporting to be the creditor when it is not, purporting to
be a government agency when it is not, or purporting to be distinct from the creditor when it is
not.” Mahan v. Retrieval-Masters Credit Bureau, Inc., 777 F. Supp. 2d 1293, 1300 (S.D. Ala.
2011) (citations omitted). But this section permits a debt collector to use any “name under which
it usually transacts business” – i.e., a “trade name, licensed or otherwise.” Id. Here, there is
nothing to suggest that “Platinum Holdings” isn’t a valid trade name. Furthermore, it strains
logic to believe that Plaintiff’s mother could have been deceived or mislead about who was
calling her, inasmuch as she had initiated the contact with Defendant; Defendant was just
returning her call when the reference to “Platinum Holdings” was made.
Nevertheless, the facts alleged do appear to state a valid cause of action under §
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1692e(5), which prohibits a debt collector from making empty threats to take legal action,
inasmuch as Defendant threatened to file a lawsuit against Plaintiff and, to date, has not actually
done so. That same conduct supports a violation of § 1692e(10), which bars the “use of any false
representation or deceptive means to collect or attempt to collect any debt.” Additionally, since,
according to the Complaint, Defendant failed to disclose in its initial communication with
Plaintiff that it was “attempting to collect a debt and that any information obtained w[ould] be
used for that purpose,” Plaintiff has stated a cognizable claim under § 1692e(11).1 So, too, has
Plaintiff established a violation of § 1692g, since Defendant failed to validate the debt in writing
within five days of the initial communication with Plaintiff.
Because there has been at least one violation of the FDCPA, the Court must address
Plaintiff’s claim for damages. Under the FDCPA,
any debt collector who fails to comply with any provision of this subchapter with
respect to any person is liable to such person in an amount equal to the sum of—
(1) any actual damage sustained by such person as a result of such failure;
(2)(A) in the case of any action by an individual, such additional damages
as the court may allow, but not exceeding $1,000 . . . ;
(3) in the case of any successful action to enforce the foregoing liability,
the costs of the action, together with a reasonable attorney’s fee as
determined by the court.
15 U.S.C. § 1692k. Plaintiff seeks $1,000 in actual damages for “humiliation, embarrassment,
stress, aggravation, emotional distress, and mental anguish,” $1,000 in statutory damages,
$2,632.50 in attorneys’ fees, and $473 in court and other related costs.
1.
The Court notes that “Plaintiff does not allege unfair or unconscionable conduct that is
not already addressed by his § 1692e claims, and thus his § 1692f claims [in Count XIII] are
redundant.” Feuerstack v. Weiner, No. CIV. 12-04253 SRC, 2014 WL 3619675, at *7 (D.N.J.
July 22, 2014).
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A.
Actual Damages
“Damages for emotional distress are recoverable under the FDCPA.” Walton v. Pereira,
995 F. Supp. 2d 437, 441 (W.D. Pa. 2014). Be that as it may, where, as here, a claim for
emotional distress is only supported by an affidavit, that affidavit “should be more than
conclusory or boilerplate statements.” Manopla, 2014 WL 793555, at *7. Otherwise, at most, de
minimis actual damages are recoverable. Id. Plaintiff’s affidavit contains nothing more than
boilerplate allegations of emotional distress. Indeed, in one of the paragraphs, the declaration
misidentifies the debt collector as “ACM,” instead of Premium Receivables. This is not
sufficient to establish Plaintiff’s entitlement to recover damages. Nor are the facts and
circumstances alleged in the Complaint the type that would support a large award of actual
damages for emotional distress. See id. (explaining that “even in cases where a plaintiff has
suffered permanent personal and professional damages, the damages awards are relatively
small”) (internal citation and quotation marks omitted). No doubt, the interaction with Defendant
was annoying, but Plaintiff himself only fielded one of the calls and, in total, there were a
relatively few communications from Defendant occurring over a relatively short period of time,
several of which were actually instigated by Plaintiff’s mother. Thus, the Court will decline to
award any actual damages to Plaintiff.
B.
Statutory Damages
Whether statutory damages should be awarded is left to the court’s discretion. Id.
(citations omitted). In exercising its discretion, the court should consider “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. The full amount of
statutory damages ($1,000) is usually only awarded in the most egregious of cases. Manopla,
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2014 WL 793555, at *6. “When, however, the violation is shown to be technical in nature and
infrequent, courts have exercised their discretion to deny or reduce statutory damages.” Id.
This case falls into the latter category. The maximum statutory penalty sought by Plaintiff
is definitely not warranted. As already noted, the calls were not especially frequent and, in fact,
Plaintiff’s contacts with Defendant were limited to just three calls (two of which he didn’t
answer). Nor was the conduct especially egregious. The gist of the non-compliance was that
Defendant threatened to sue Plaintiff, and this threat wasn’t even made to Plaintiff, himself. This
conduct is “not nearly as reprehensible as much of the prohibited conduct set forth in the statute,
which ranges from threatening to arrest the debtor to accusing her of committing a crime.”
Sweetland v. Stevens & James, Inc., 563 F. Supp. 2d 300, 305 (D. Me. 2008). Accordingly, the
Court will award Plaintiff $250 in statutory damages.
C.
Attorneys’ Fees and Costs
As the Third Circuit Court of Appeals has recognized, unless there are unusual
circumstances, “attorney’s fees should not be construed as a special or discretionary remedy”
under the FDCPA; “rather, the Act mandates an award of attorney’s fees” to the prevailing party
in every case. Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991). “Indeed, several courts
have required an award of attorney’s fees even where violations were so minimal that statutory
damages were not warranted.” Id. (citations omitted).
“[T]he determination of a reasonable attorney fee” is governed “by the traditional
lodestar method[.]” Jackson v. Allied Interstate, LLC, No. 2:12CV1144, 2013 WL 3990875, at
*4 (W.D. Pa. Aug. 5, 2013). This familiar method “entails multiplying the total number of hours
reasonably expended by a reasonable hourly rate.” Bilazzo v. Portfolio Recovery Associates,
LLC, 876 F. Supp. 2d 452, 458 (D.N.J. 2012) (citations omitted). “The burden of establishing the
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reasonableness of a fee request falls on the plaintiff’s counsel.” Jackson, 2013 WL 3990875, at
*3. To satisfy this burden, the plaintiff’s counsel “is initially required to submit evidence
supporting the hours worked and the rates claimed.” Bilazzo, F. Supp. 2d at 458. “Additionally,
although the lodestar is presumed to yield a reasonable fee, district courts retain discretion to
adjust the lodestar.” Id. (citation omitted).
Plaintiff seeks to recover $2,632.50 in attorneys’ fees, broken down as follows:
(1) David Levin, Esq., who is described as a “Non-PA Partner” – 1.3 hours at $425 per
hour, totaling $552.50;
(2) Christian Rieger, Esq., who is described as a “PA Partner” – 1.1 hours at $425 per
hour, totaling $467.50;
(3) Paul Daniels, Esq., who is described as a “PA Partner” – 0.5 hours at $425 per hour,
totaling $212.50;
(4) Jocelyn Hsiao, Esq., who is described as a “Non-PA Associate” – 3.9 hours at $250
per hour, totaling $975.00;
(5) Megan Feddor, paralegal – 0.7 hours at $125 per hour, totaling $87.50;
(6) Amy Catena, paralegal – 1.0 hours at $125 per hour, totaling $125;
(7) Aquanda Thomas, paralegal – 0.2 hours at $125 per hour, totaling $25;
(8) Sarah Heinz, law clerk – 0.3 hours at $125 per hour, totaling $37.50; and
(9) Katie Jezierny, legal assistant – 1.2 hours at $125 per hour, totaling $150.
ECF No. 8-4, at 2. Plaintiff also seeks to recover $400.00 in court costs, which, according to
Plaintiff, constitutes the $400 filing fee paid by counsel on Plaintiff’s behalf. In addition,
Plaintiff seeks $73 to cover process server fees.
Before addressing whether the fees sought by Plaintiff’s counsel are reasonable, the
Court must address another issue that has come to mind. In particular, while reviewing the time
entries submitted by Plaintiff’s counsel, it came to light that the bulk of the work performed on
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Plaintiff’s behalf was done by out-of-state attorneys – Ms. Hsiao and Mr. Levin of the Chicagobased firm, Upright Law, LLC – who are not admitted to practice in the Western District of
Pennsylvania generally and did not seek to appear in this action pro hac vice.2 This raises the
question: Can Plaintiff recover fees for work performed by Ms. Hsiao and Mr. Levin, even
though they have not been admitted to practice in this Court?
In assessing this issue, courts have drawn a distinction between when an out-of-state
attorney acts in a “consulting” role and when he or she “appears,” “actively participates,” or
“practices” in the matter. When doing the former, the attorney need not seek pro hac vice
admission and can, without question, recover fees for services performed. See, e.g., Winterrowd
v. Am. Gen. Annuity Ins. Co., 556 F.3d 815, 823 (9th Cir. 2009) (permitting plaintiff to recover
fees for work performed by out-of-state attorney “because his conduct did not rise to the level of
‘appearing’ before the district court”). When doing the latter, pro hac vice admission is required,
and the failure to seek such admission can result in a denial of fees. As Senior District Judge
Eduardo C. Robreno of the Eastern District of Pennsylvania recently explained,
From the various decisions considering whether an out-of-state attorney occupied
the sort of “consulting” role that would allow for an award of attorney’s fees
despite the attorney’s failure to seek pro hace vice admission in the local court, a
consistent list of relevant factors emerges . . . . Where an out-of-state attorney’s
participation was limited to that of a consultant whose services are compensable
despite lack of pro hac vice admission, that attorney likely:
(1) refrained from direct client contact,
(2) refrained from contact with opposing counsel,
(3) did not sign or draft substantial portions of pleadings, especially the
complaint,
(4) restricted his participation in the case to reviewing motions, drafting
internal memos, and advising lead counsel, such that his work was
supervised by, and ultimately “filtered” through the lead attorney,
(5) recorded only a modest number of hours on a case, relative to lead
counsel and other admitted attorneys working on a case.
2.
Ms. Hsiao and Mr. Levin are both licensed to practice in Illinois.
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Gsell v. Rubin & Yates, LLC, 41 F. Supp. 3d 443, 450 (E.D. Pa. 2014) (citations omitted). See
also Bilazzo, 876 F. Supp. 2d at 464 (identifying similar factors).
Applied here, Ms. Hsiao appears to have been the only attorney who contacted Plaintiff,
so the first factor weighs in favor of finding that she was not merely a “consulting” attorney. The
second factor is not applicable here because Defendant failed to appear. With respect to the third
factor, Ms. Hsiao and Mr. Levin appear to have been primarily responble for drafting the
Complaint, even though it was signed by Mr. Daniels and Mr. Rieger. Thus, this factor also
weighs against finding that Ms. Hsiao and Mr. Levin were just “consulting” with Mr. Daniels
and Mr. Rieger. As to the fourth factor, the work of Ms. Hsiao and Mr. Levin went far beyond
simply reviewing motions, drafting memos, and advising “lead” counsel. If anything, it was the
other way around. That is especially true for Ms. Hsiao, who did the bulk of the leg work on this
case, speaking with Plaintiff and his mother and drafting the complaint. Meanwhile, up until the
time the motion for default judgment was filed, Mr. Levin was “the apparent pilot guiding the
course of the litigation.” Gsell, 41 F. Supp. 3d at 451. Lastly, Ms. Hsiao and Mr. Levin worked a
total 5.2 hours on this case, while Mr. Levin and Mr. Rieger worked just 1.6 hours combined.
One would expect those numbers to be reversed if the Chicago attorneys were really just
performing “consulting” roles. In sum, under the present circumstances, the Court finds that Ms.
Hsiao and Mr. Levin appeared in this case and engaged in the practice of law before this Court.
Accordingly, they were required to seek and obtain pro hac vice admission under LCvR 83.2(B).
Since they failed to do so, the Court will decline to award Plaintiff fees for any work they
performed on his behalf. The 5.2 hours of work they performed will therefore be excluded from
the lodestar calculation. See also Martz v. PNC Bank, N.A., Civ. No. 06–1075, 2008 WL
1994858 at *4 n.19 (W.D. Pa. May 5, 2008) (denying part of fee award for work performed by
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out-of-state attorneys who failed to seek pro hac vice admission). Additionally, the work
performed by the legal support staff in this case appears to have been done under the supervision
of Ms. Hsiao and Mr. Levin. Thus, fees for services they performed will also be disallowed. See
Gsell, 41 F. Supp. 3d at 452 n.10.
Now the Court must assess whether the rate sought for Mr. Daniels and Mr. Rieger ($425
per hour) is reasonable. The benchmark of reasonableness “is the prevailing rate for comparable
legal services in the forum of litigation.” Bilazzo, 876 F. Supp. 2d at 469-70 (citing Interfaith
Cmty. Org. v. Honeywell Int’l, Inc., 426 F.3d 694, 705 (3d Cir. 2005)). “Plaintiff bears the
burden ‘of producing sufficient evidence of what constitutes a reasonable market rate for the
essential character and complexity of the legal services rendered in order to make out a prima
facie case.’” Id. (quoting Smith v. Philadelphia Hous. Auth., 107 F.3d 223, 225 (3d Cir. 1997)).
Here, the only documentation offered by Plaintiff in support of his claim for attorneys’ fees is the
declaration of Mr. Rieger. According to Mr. Rieger’s declaration, he was admitted to practice
law in Pennsylvania in 2009, is admitted to practice before this Court and the United States
Bankruptcy Court for the Western District of Pennsylvania, and is a member of the Allegheny
County Bar Association (“ACBA”). Meanwhile, the declaration states that Mr. Daniels has over
35 years of experience, is admitted to practice before this Court, and is also a member of the
ACBA. This information – or lack of information, really – is woefully inadequate to substantiate
the reasonableness of the rate sought. An hourly rate of $300 is much more reasonable “and in
line with the prevailing market rates in the Pittsburgh market.” Jackson, Jackson v. Allied
Interstate, LLC, No. 2:12CV1144, 2013 WL 3990875, at *9 (W.D. Pa. Aug. 5, 2013) (finding
that $300 hourly rate for FDCPA case was reasonable). Thus, that is the rate the Court will apply
in the lodestar calculation.
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In sum, the following amounts will be awarded:
(1) Mr. Daniels – 0.5 hours at $300.00 per hour, totaling $150; and
(2) Mr. Rieger – 1.1 hours at $300.00 per hour, totaling $330.
This results in a total of $480 for attorneys’ fees. Costs in the amount of $473 will also be
awarded.
IV.
Conclusion
In accordance with the foregoing, default judgment will be entered in favor of Plaintiff
based on Defendant’s violations of the FDCPA. The Court will award Plaintiff $250 in statutory
damages, $480 in attorneys’ fees, and $473 in costs, for a total of $1,203. An appropriate order
follows.
McVerry, S.J.
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
GARRETT CAPLAN,
Plaintiff,
v.
PREMIUM RECEIVABLES LLC,
Defendant.
)
)
)
) 2:15-cv-474
)
)
)
)
ORDER OF COURT AND JUDGMENT
AND NOW, this 29th day of July, 2015, in accordance with the foregoing Memorandum
Opinion, it is hereby ORDERED, ADJUDGED, and DECREED that PLAINTIFF’S MOTION
FOR DEFAULT JUDGMENT (ECF No. 8) is GRANTED. Judgment is hereby entered in favor
of Plaintiff, Garret Caplan, and against Defendant, Premium Receivables LLC, pursuant to Fed.
R. Civ. P. 55(b)(2). The Court awards Plaintiff $250 in statutory damages, $480 in attorneys’
fees, and $473 in costs, for a total of $1,203. Furthermore, the Clerk shall docket this case
CLOSED.
BY THE COURT:
s/Terrence F. McVerry
Senior United States District Judge
cc:
Christian M. Rieger, Esq.
Email: chris@pauldanielslaw.com
Paul M. Daniels, Esq.
Email: paul@pauldanielslaw.com
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