Gould v. Monarch Recovery Management Inc

CourtDistrict Court, E.D. Wisconsin
DecidedNovember 10, 2020
Docket1:18-cv-01282
StatusUnknown

This text of Gould v. Monarch Recovery Management Inc (Gould v. Monarch Recovery Management Inc) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gould v. Monarch Recovery Management Inc, (E.D. Wis. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

DONNA GOULD,

Plaintiff,

v. Case No. 18-C-1282

MONARCH RECOVERY MANAGEMENT, INC. and JOHN DOES,

Defendants.

DECISION AND ORDER ON ATTORNEYS’ FEES

Plaintiff Donna Gould commenced this Fair Debt Collection Practices Act (FDCPA) action against Defendant Monarch Recovery Management, Inc., on August 20, 2018. Gould accepted Monarch’s offer of settlement for $1,001.00 in June 2019. The case is now before the court on Gould’s motion for attorneys’ fees and costs. Gould seeks $57,073.37 in attorneys’ fees and $1,503.21 in costs. For the following reasons, Gould’s motion for an award of attorneys’ fees and costs will be granted but for a substantially reduced amount. BACKGROUND

Gould brought this action against Monarch on a claim that Monarch had violated the FDCPA by sending her a letter regarding her debt of $932.30 owed to First Premier Bank. Congress enacted the FDCPA “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.” 15 U.S.C. § 1692(e). Toward that end, the FDCPA bars a debt collector’s use of: (a) harassing, oppressive, and abusive conduct; (b) false, deceptive, or misleading means or representations; and (c) unfair or unconscionable means. 15 U.S.C. §§ 1692d, 1692e, 1692f. In this case, Gould alleged that Monarch had violated the FDCPA by sending her a letter that included the statements “Total Balance as of 11 SEP 2017: $932.30” and “As of the date of

this letter, you owe $932.30.” Compl., Ex. A, Dkt. No. 1-1. The letter was sent in an effort to comply with the FDCPA, which requires the debt collector at the inception of the collection process to provide certain information to the consumer/debtor, including the amount of the debt; the name of the creditor to whom it is owed; a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; and an offer to provide verification of the debt, if any portion is disputed, and the name of the original creditor, if different from the current creditor, upon request. 15 U.S.C. § 1692g(a). Gould claimed that the letter violated the FDCPA because the statement was false, deceptive, or misleading in violation of § 1692e and failed to state the amount of the debt in violation of § 1692g(a)(1).

In making this claim, however, Gould was not saying that she did not owe the full $932.30 (which Monarch offered to discount by 35% to $606 in order to settle the matter). If she had disputed either the validity of the debt or the amount, the letter informed Gould that Monarch would provide her written verification. But Gould disputed neither. Instead, Gould’s claim was that by stating her balance “as of” the date of the letter, Monarch had falsely suggested that the amount of the debt was subject to change, that it could increase due to interest or late charges. Gould alleged that, contrary to the impression left by the letter, the debt was “static” and would never increase with the passage of time. Compl., Dkt. No. 1, ¶ 32. Gould claimed that the letter was therefore “materially misleading to the unsophisticated consumer as it creates a false sense of urgency that if the Debt is not promptly paid it will increase substantially and without notice.” Id. at ¶ 33. In addition to actual damages, the FDCPA authorizes statutory damages up to $1,000. 15 U.S.C. § 1692k(a). Gould did not allege that she sustained any actual loss or injury as a result

of the letter she received. As a result, the most she could get for her claim was $1,000. To obtain this amount, Gould retained attorneys whose billing rates range from $475 to $675 per hour. Of course, Gould did not agree to pay those rates herself. No sane person would agree to pay attorneys at such a rate to start a federal lawsuit to obtain at most $1,000. Successful FDCPA plaintiffs are entitled to recover “the costs of the action, together with a reasonable attorney’s fee as determined by the court.” 15 U.S.C. § 1692k(a)(3). Attorneys who handle FDCPA cases naturally look to this provision to recover their fees and costs. And when, as here, the claim is based upon the standard notice that the debt collector sends to the consumer in each of the accounts assigned for collection, attorneys who specialize in FDCPA cases generally file suit not just on behalf of the individual client who brought the letter to the attorney’s attention, but to the entire class of

consumers who received the letter, each of whom, whether confused or not, may be entitled to an award of up to $1,000. In class action cases, the FDCPA imposes liability on the debt collector for the total actual or statutory damages for each class member up to the lesser of $500,000 or one percent of the debt collector’s net worth. 15 U.S.C. § 1692k(a)(2)(B). In class action litigation involving awards of up to a half million dollars, the rates such as those charged by Gould’s attorneys might appear more reasonable. Gould’s attorneys initially filed her action as a putative class action. However, Gould filed a motion to withdraw her motion for class certification, which the court granted on March 6, 2019. Dkt. No. 19. Gould also filed a motion to compel discovery (Dkt. No. 17) and a motion in limine (Dkt. No. 26) during the course of litigation. After Gould filed a motion for summary judgment as to liability (Dkt. No. 31), Monarch made an offer of judgment, which Gould accepted, for $1,001, one dollar more than the maximum statutory award Gould could receive on her claim. The offer also provided that the judgment would “include an amount for Plaintiff’s reasonable

attorneys’ fees and costs in this matter. Dkt. No. 35. The offer further provided that “reasonable attorneys’ fees and costs are to be agreed upon by the parties, or if the parties are unable to agree, to be determined by the Court on application by Plaintiff’s counsel.” Id. In her motion for an award of attorneys’ fees and costs, Gould stated that, based on the reasonable rates of the attorneys and the time spent litigating the case, attorneys’ fees amounted to $58,070.67. In an exercise of billing judgment, Gould’s counsel eliminated some time entries altogether, including all paralegal time, and took an “across-the-board” reduction of the remaining total of 25%. Dkt. No. 43 at 4. As a result, Gould initially sought an award of $46,618.11 in fees and $1,452.56 in costs based on 131.49 hours expended in the matter. Dkt. Nos. 42; 46-1 at 47. Gould then requested to supplement her motion for attorneys’ fees and costs to include the fees

and costs incurred in preparing a reply brief in support of her motion for attorneys’ fees. Following a 40% reduction to the total amount of fees incurred in preparing the reply brief, Gould requests $9,782.80 in attorneys’ fees and $50.65 in costs. In all, Gould seeks $57.073.37 in attorneys’ fees and $1,503.21 in costs. ANALYSIS

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