Smith v. Nations Recovery Center, Inc.

• Court: District Court, N.D. New York
• Decided: April 6, 2021
• Docket: 1:19-cv-01229
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK ____________________________________________

SANDY SMITH,

Plaintiff,

vs. 1:19-CV-1229 (MAD/DJS)

NATIONS RECOVERY CENTER, INC.,

Defendant. ____________________________________________

APPEARANCES: OF COUNSEL:

AGRUSS LAW FIRM, LLC JAMES J. PARR, ESQ. 4809 N. Ravenswood Avenue Suite 419 Chicago, Illinois 60640 Attorneys for Plaintiff

HORMOZDI LAW FIRM, LLC SHIREEN HORMOZDI, ESQ. 1770 Indian Trail Lilburn Road Suite 175 Norcross, Georgia 30093 Attorneys for Plaintiff

BARRON, NEWBURGER LAW OFFICE ARTHUR SANDERS, ESQ. 30 South Main Street New City, New York 10956 Attorneys for Defendant

Mae A. D'Agostino, U.S. District Judge:

ORDER On October 4, 2019, Sandy Smith ("Plaintiff") commenced this action alleging that Nations Recovery Center, Inc. ("Defendant") violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. ("FDCPA"). See Dkt. No. 1. Currently before the Court is Plaintiff's unopposed motion for default judgment against Defendant brought pursuant to Rule 55(b) of the Federal Rules of Civil Procedure. See Dkt. No. 30. Defendant answered the complaint on November 18, 2019, which has since been stricken. See Dkt. No. 10. The Court has taken the facts set forth below from Plaintiff's complaint and attached exhibits. Plaintiff is a "consumer" as defined in the FDCPA. See Dkt. No. 1 at ¶ 6. Defendant is a Georgia limited liability company and debt collection agency with a principal place of business in Fulton County, Georgia, and is a "debt collector" as defined by 15 U.S.C. § 1692(a)(6). See id. at ¶¶ 7, 9. According to the complaint, Defendant claims that Plaintiff owes a debt "aris[ing] from

transactions for personal, family, and household purposes" (the "Debt"). Id. at ¶¶ 16-17. However, Plaintiff's complaint alleges that she did not owe this Debt, but rather only has a similar name to the proper debtor. Id. at ¶¶ 18-19. In an attempt to collect the Debt, Defendant began calling Plaintiff in November 2018. Id. at ¶ 21. Subsequently, Plaintiff left a voicemail for Defendant expressing that she did not want Defendant to call her. Id. at ¶¶ 24-25. However, Defendant continued to call. Id. at ¶ 26. Plaintiff commenced this action on October 4, 2019 by filing a complaint against Defendant alleging that Defendant's repeated communication violated the FDCPA. See Dkt. No. 1. Specifically, Plaintiff contends that Defendant violated Sections 1692b(3), 1692d, 1692d(5), 1692e, 1692e(2)(A), 1692e(10), and 1692f by contacting Plaintiff more than once, doing so with

intent to annoy, abuse, or harass, making a false representation of the legal status of an alleged debt and using deceptive means to collect it, and using unfair or unconscionable means to collect that debt. See Dkt. No. 1 at ¶ 31. Plaintiff served the Summons and Complaint on Defendant on October 8, 2019, making the response due on October 29, 2019. See Dkt. No. 5. Defendant filed an answer in response to the complaint on November 18, 2019. See Dkt. No. 10. Subsequently, Plaintiff filed a notice of settlement on January 2, 2020, and this Court entered an Order of Dismissal by Reason of Settlement. See Dkt. No. 21; Dkt. No. 22. When Defendant failed to consummate the settlement agreement, Plaintiff filed a motion to reopen the case on May 24, 2020, which this Court granted on June 25, 2020. See Dkt. No. 24; Dkt. No. 26. On August 5, 2020, pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, Plaintiff moved to strike Defendant's answer and requested an entry of default judgment against Defendant. See Dkt. No. 27. Defendant's answer was stricken pursuant to this Court's order on

October 19, 2020. See Dkt. No. 28. On October 29, 2020, the Clerk of the Court entered default against Defendant. See Dkt. No. 29. On November 2, 2020, Plaintiff filed the present motion seeking a default judgment against Defendant pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. See Dkt. No. 30. Defendant has not responded to that motion. "Federal Rule of Civil Procedure 55 provides a two-step process that the Court must follow before it may enter a default judgment against a defendant." United States v. Carpineta, No. 3:14-CV-0517, 2015 WL 500815, *1 (N.D.N.Y. Feb. 5, 2015) (quotation omitted). "'First, under Rule 55(a), when a party fails to plead or otherwise defend ... the clerk must enter the party's default.'" Id. (quotation omitted); see also Fed. R. Civ. P. 55(a). "Second, under Fed. R. Civ. P. 55(b)(1), '[u]pon request of the plaintiff, a default judgment may be entered by the clerk

when (1) the plaintiff's claim against the defendant is for a sum certain, (2) the plaintiff has submitted an affidavit of the amount due, and (3) the defendant has been defaulted for failure to appear.'" Id. (quotation and other citation omitted). "When a default is entered, the defendant is deemed to have admitted all of the well- pleaded factual allegations in the complaint pertaining to liability." Bravado Int'l Group Merch. Servs., Inc. v. Ninna, Inc., 655 F. Supp. 2d 177, 188 (E.D.N.Y. 2009) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). "While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation." Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974) (citations omitted); see also Bravado Int'l, 655 F. Supp. 2d at 189-90 (citation omitted). "[E]ven upon default, a court may not rubber-stamp the non- defaulting party's damages calculation, but rather must ensure that there is a basis for the damages that are sought." Overcash v. United Abstract Group, Inc., 549 F. Supp. 2d 193, 196 (N.D.N.Y.

2008) (citing Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999)). "The burden is on the plaintiff to establish its entitlement to recovery." Bravado Int'l, 655 F. Supp. 2d at 189 (citing Greyhound Exhibitgroup, Inc., 973 F.2d at 158). "While 'the court must ensure that there is a basis for the damages specified in a default judgment, it may, but need not, make the determination through a hearing.'" Id. at 190 (quotation and other citation omitted). Additionally, the Local Rules require the party moving for default judgment to submit an affidavit stating the following: 1. The party against whom it seeks judgment is not an infant or an incompetent person;

2. The party against whom it seeks judgment is not in the military service, or if unable to set forth this fact, the affidavit shall state that the party against whom the moving party seeks judgment by default is in the military service or that the party seeking a default judgment is not able to determine whether or not the party against whom it seeks judgment by default is in the military service;

3. The party has defaulted in appearance in the action; [and]

4. Service was properly effected under Fed. R. Civ. P. 4 ....

N.D.N.Y.L.R. 55.2(a). In the present matter, the Court finds that Plaintiff complied with the procedural requirements necessary for the Court to grant the motion for default judgment. Specifically, Plaintiff affirmed that Defendant is not an infant or an incompetent person. See Dkt. No. 30-1 at ¶ 48. Since Defendant is a limited liability company, it is inferred that Defendant is not in military service. See Dkt. No. 1 at ¶ 9. Further, Defendant was properly served in accordance with Rule 4(e)(2)(A) of the Federal Rules of Civil Procedure. See Dkt. No. 30-1 at ¶ 9. For a court to enter default judgment, "'there must be a sufficient basis in the pleadings for the judgment entered.'" West Coast 2014-7, LLC v. Lieberman, No. 1:15-CV-1142, 2017 WL

6210825, *2 (N.D.N.Y. Dec. 8, 2017) (quotation and other citation omitted). Accordingly, Plaintiff may be granted default judgment if the well-pleaded allegations of the complaint establish the alleged FDCPA violations. See Curves Int'l, Inc. v. Cleveland, No. 5:11-CV-426, 2013 WL 204658, *1 (N.D.N.Y. Jan. 17, 2013). Plaintiff brings this action pursuant to 15 U.S.C. § 1692, et seq., contending that Defendant violated Sections 1692b(3), 1692d, 1692d(5), 1692e, 1692e(2)(A), 1692e(10), and 1692(f). See Dkt. No. 1 at ¶ 31. "To state a claim for a violation of the FDCPA, 'a plaintiff must establish three elements: (1) the plaintiff must be a "consumer" who is alleged to owe a debt or the target of efforts to collect a consumer debt; (2) the defendant must be a "debt collector"; and (3) the defendant must have engaged in conduct violating FDCPA requirements.'" Palmer v.

Simon's Agency, Inc., No. 6:19-CV-114, 2020 WL 1332829, *3 (N.D.N.Y. Mar. 23, 2020) (quotation and other citation omitted), aff'd, 833 Fed. Appx. 838 (2d Cir. 2020). "[T]he question of whether a communication complies with the FDCPA is determined from the perspective of the 'least sophisticated consumer.'" Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 90 (2d Cir. 2008) (quoting Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)). "Under this standard, 'collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate.'" Easterling v. Collecto, Inc., 692 F.3d 229, 233 (2d Cir. 2012) (quoting Clomon, 988 F.2d at 1319). First, Plaintiff claims that Defendant violated 15 U.S.C. § 1692b(3) by "communicating with Plaintiff more than once." See Dkt. No. 1 at ¶ 31a. Under § 1692b(3), "Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall not communicate with any such person more than once ...." 15 U.S.C. § 1692b(3). While the complaint alleges that Defendant called Plaintiff multiple

times—even after she left a voicemail articulating that she did not want to be contacted—Plaintiff has overlooked the language of the statute. See Dkt. No. 1 at ¶¶ 24-26. Plaintiff does not allege that Defendant was communicating to acquire location information about the consumer. Rather, Plaintiff alleges that Defendant continually contacted Plaintiff because the proper debtor and Plaintiff "share similar names." See Dkt. No. 1 at ¶ 19. Accordingly, Plaintiff has not sufficiently alleged a violation of Section 1692b(3). Plaintiff next claims that Defendant violated 15 U.S.C. §§ 1692d and 1692d(5). See Dkt. No. 1 at ¶ 31b-d. The statute prohibits debt collectors from "engag[ing] in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt[,]" such as "[c]ausing a telephone to ring or engaging any person in telephone

conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number." 15 U.S.C. §§ 1692d, 1692d(5). "[T]he list of specified violations [of the anti- harassment provision] is explicitly not exhaustive ...." Bank v. Pentagroup Fin., LLC, No. 08- CV-5293, 2009 WL 1606420, *5 (E.D.N.Y. June 9, 2009). Since Plaintiff has endured "unabated" phone calls from Defendant for a debt she did not owe, see Dkt. No. 1 at ¶ 26, the Court finds that Plaintiff has sufficiently alleged a violation of 15 U.S.C. §§ 1692d and 1692d(5). See Doyle v. Midland Credit Mgmt., Inc., No. 11-CV-5571, 2012 WL 1666397, *1, 4 (E.D.N.Y. May 11, 2012) (denying a motion to dismiss where a defendant repeatedly called a plaintiff who did not owe a debt), dismissed on other grounds, 2012 WL 5210596, *2, 4 (E.D.N.Y. Oct. 23, 2012) (holding that the action was moot after the plaintiff rejected defendant's offer of settlement), aff'd, 722 F.3d 78 (2d Cir. 2013). Furthermore, Plaintiff claims that Defendant violated 15 U.S.C. §§ 1692e, 1692e(2)(A), and 1692e(10) by falsely representing the character, amount, or legal status of the Debt Defendant

tried to collect from Plaintiff and by being deceptive in its attempt to collect that Debt. See Dkt. No. 1 at ¶ 31e-g. Specifically, Defendant represented Plaintiff as the debtor when she did not owe the alleged Debt. See Dkt. No. 1 at ¶ 31f. Under the statute, "[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. A defendant may not falsely represent "the character, amount, or legal status of any debt" or "use ... any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." 15 U.S.C. §§ 1692e(2)(A), 1692e(10). This Court concludes that Plaintiff sufficiently alleged that, to collect a debt that Plaintiff allegedly did not owe, Defendant falsely represented the legal status of the Debt and falsely represented that Plaintiff owed this debt. See DeWolf v. Samaritan Hosp., No. 1:17-cv-

0277, 2018 WL 3862679, *4 (N.D.N.Y. Aug. 14, 2018) (holding that Section 1692e(2)(A) was violated when debt collectors sued to collect a debt that the plaintiff allegedly did not owe); Robinson v. Transworld Sys., Inc., 876 F. Supp. 385, 393 (N.D.N.Y. 1995) (holding that Section 1692e(10) was violated when a debt collector asserted that a debt was valid before it was legally allowed to assume so). Finally, Plaintiff alleges that Defendant violated 15 U.S.C. § 1692f by using "unfair or unconscionable means" to collect the debt. See Dkt. No. 1 at ¶ 31h. Section 1692f "was 'enacted specifically "to catch conduct not otherwise covered by the FDCPA," because Congress was "[c]ognizant that it could not anticipate every improper practice used by debt collectors."'" DeWolf, 2018 WL 3862679, at *5 (quoting Okyere v. Palisades Collection, LLC, 961 F. Supp. 2d 522, 530 (S.D.N.Y. 2013)) (other citation omitted). Plaintiff did not specify any of Defendant's conduct that violates Section 1692f. See Dkt. No. 1 at ¶ 31h. Therefore, Plaintiff has not sufficiently alleged a violation of Section 1692f.

While Plaintiff has not sufficiently alleged violations of Sections 1692b(3) and 1692f, Plaintiff has sufficiently alleged violations of Sections 1692d, 1692d(5), 1692e, 1692e(2)(A), and 1692e(10). Plaintiff is therefore entitled to default judgment on her FDCPA claim. Plaintiff seeks $1,000 in statutory damages pursuant to 15 U.S.C. § 1692k. See Dkt. No. 30-1 at ¶ 18. "The FDCPA provides that ... '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 ... such additional damages as the court may allow, but not exceeding $1,000." Overcash v. United Abstract Group, Inc., 549 F. Supp. 2d 193, 196 (N.D.N.Y. 2008). Because Plaintiff sufficiently alleged that Defendant violated the FDCPA, Plaintiff is entitled to $1,000 in statutory damages.

Plaintiff additionally seeks attorneys' fees and costs pursuant to 15 U.S.C. § 1692k(a)(3). Under the FDCPA, "a prevailing party may recover 'the costs of the action, together with a reasonable attorney's fee as determined by the court.'" Azzara v. Nat'l Credit Adjusters, LLC, No. 1:16-cv-01213, 2017 WL 2628875, *3 (N.D.N.Y. June 19, 2017) (quoting Stevens v. EOS CCA, No. 5:16-cv-01076, WL 1423242, *1 (N.D.N.Y. Apr. 21, 2017)). "In awarding attorney fees, the district court is to determine the 'presumptively reasonable fee, reached by multiplying a reasonable hourly rate by the number of reasonably expended hours.'" Genito v. Forster, No. 6:15-cv-00954, 2016 WL 3748184, *1 (N.D.N.Y. July 11, 2016) (quoting Bergerson v. N.Y. State Office of Mental Health, 652 F.3d 277, 289 (2d Cir. 2011)). The Court begins with the lodestar method and "multipl[ies] the number of hours reasonably expended on the litigation by a reasonable hourly rate for each attorney or paralegal involved." Id. (quotation and other citations omitted). This amount should be consistent with rates "prevailing in the community for similar services by lawyers of reasonably comparable skill,

experience, and reputation." Id. (quotation and other citations omitted). "[T]he district court 'should exclude ... hours that were not "reasonably expended,"' including 'hours that are excessive, redundant, or otherwise unnecessary.'" Id. at *2 (quoting Hensley v. Eckerhart, 461 U.S. 424, 435 (1983)) (citation omitted). Plaintiff seeks $7,032.90 in attorneys' fees. See Dkt. No. 30-1 at ¶ 19. Plaintiff specifies that this amount is for 17.80 hours of legal work performed by James Parr, Esq. at a rate of $348 per hour and 6.5 hours of legal work performed by Jacqueline Laino, a paralegal, at a rate of $129 per hour. See Dkt. No. 30-12. Plaintiff provided the Court with detailed records with the amount of time he and the paralegal spent on the case. See id. Moreover, Mr. Parr cites the 2017-2018 United States Consumer Law Survey Report, which indicates that the median fee for attorneys in

credit rights cases is $350 per hour. See id. Mr. Parr, an associate attorney, has experience with over 600 consumer rights cases, and worked as a paralegal with an emphasis in consumer law for seven years before entering his current position in 2016. See Dkt. No. 30-1 at ¶¶ 26-30. While Mr. Parr has been awarded up to $325 for his work in the Western District of Missouri, see Dkt. No. 30-1 at ¶ 23, this District has found "the prevailing hourly rate for experienced counsel in an FDCPA case in this District is $250." Davis-Fisk v. Overton, Russell, Doerr & Donovan, LLP, No. 1:17-CV-1047, 2018 WL 4509489, *7 (N.D.N.Y. Sept. 19, 2018). For a paralegal, the Court finds that $100 per hour, while on the high end of paralegal rates for FDCPA cases in this District, is reasonable. See Muldowney v. Merit Recovery Sys., Inc., No. 5:18-CV-1057, 2019 WL 2024760, *6 (N.D.N.Y. May 8, 2019); Van Echaute v. Law Office of Thomas Landis, Esq., No. 6:09-cv-1071, 2011 WL 1302195, *4 (N.D.N.-Y. Mar. 31, 2011). Thus, Mr. Parr's work will be awarded at $250 per hour and Ms. Laino's work will be awarded at $100 per hour. Additionally, the hours expended were not excessive. Therefore, the Court awards the requested attorneys’ fees in the amount of $5,100 for 17.8 hours of attorney work and 6.5 hours of paralegal work. Plaintiff seeks an award of $400 for the cost of filing this action and $60 for the service of the summons and the complaint. See Dkt. No. 30-12. Plaintiff is entitled to an award of $460 in costs under 15 U.S.C. § 1692k(a)(3). Accordingly, the Court hereby ORDERS that Plaintiff's motion for default judgment is GRANTED in the amount of $1,000 in statutory damages, $5,100 in attorneys’ fees, and $460 in costs; and the Court further ORDERS that the Clerk of the Court shall enter judgment in Plaintiffs favor and close this case. IT IS SO ORDERED. ; Dated: April 6, 2021 We if LD Loge nate. Albany, New York Mae A. D’Agosting” U.S. District Judge