Opinion
Civil Action 2:20-1789
10-17-2023
PATRICIA MILKO, Plaintiff, v. EVOLUTION ASSET GROUP LLC, et al.,
LAMAR SNOW TONISA HODGE
LAMAR SNOW
TONISA HODGE
REPORT AND RECOMMENDATION
PATRICIA L. DODGE UNITED STATES MAGISTRATE JUDGE
I. Recommendation
It is respectfully recommended that Plaintiffs' Motion for Default Judgment (ECF No. 36) be granted in part.
II. Report
A. Relevant Procedural Background
Plaintiff Patricia Milko, who is represented by counsel, initiated this action by filing a Motion for Leave to Proceed In Forma Pauperis (“IFP Motion”) on November 17, 2020 (ECF No. 1). Her motion was granted on December 2, 2020 (ECF No. 3) and her Complaint was docketed the same day. (ECF No. 6.) Plaintiff later filed a First Amended Complaint (ECF No. 18), which named additional defendants. Three months later, she was granted leave to file a Second Amended Complaint (ECF No. 23), which corrected the spelling of the name of one of the individual defendants who were named in the First Amended Complaint. (ECF No. 25.) The Second Amended Complaint, which is the operative pleading, alleges violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). Plaintiff filed proofs of service as to Defendants Lamar Snow (“Snow) and Tonisa Hodge (“Hodge”), the two remaining defendants, on February 15, 2022. (ECF Nos. 27 and 28.) After Snow and Hodge failed to respond or otherwise plead to the Second Amended Complaint, Plaintiff requested entry of default against each of them, and the Clerk of Court entered a default against both on March 1, 2022 (ECF Nos. 32 and 33.)
Plaintiff voluntarily dismissed her claims against Defendant Evolution Asset Group, LLC on February 25, 2022. (ECF No. 29.)
Plaintiff took no further action to advance this case until the Court issued a rule to show cause on September 19, 2023 as to why this action should not be dismissed for failure to prosecute. (ECF No. 34.) Plaintiff then voluntarily dismissed the three Doe Defendants (ECF No. 35), responded to the rule to show cause (ECF No. 37) and filed a Motion and Memorandum in Support of Default Judgment and Attorneys' Fees. (ECF No. 36.) In her Motion, Plaintiff seeks a judgment of $13,463, which consists of statutory damages of $1,000.00, $12,313.25 in attorneys' fees and $150 in costs.
This Court has subject matter jurisdiction pursuant to 28 U.S.C. §1331.
B. Facts Alleged in Second Amended Complaint
Plaintiff's Second Amended Complaint alleges that on or about November 21, 2019, Snow and Hodge began calling her in an attempt to collect a consumer debt she allegedly owed. They claimed that there was a lawsuit pending against her. (ECF No. 25 ¶¶ 7, 8.) Snow and Hodge did not inform Plaintiff that they were debt collectors, that they were calling in an attempt to collect a debt, or that any information obtained could be used for that purpose. (Id. ¶ 8.) The next day, Snow and Hodge called Plaintiff again and claimed that there was a lawsuit pending against her. (Id. ¶ 9.) Snow and Hodge did not inform Plaintiff that they were debt collectors or that any information obtained could be used for that purpose and when Plaintiff told Snow and Hodge that they were not allowed to call her in this manner, they hung up on her. (Id.) Four days later, Snow and Hodge called her a third time but she promptly ended the call. (Id. ¶ 10.)
Plaintiff, who was concerned that there was a lawsuit filed against her, subsequently retained Centennial Law Offices as her counsel. (Id.¶ 13.) Staff from Centennial Law Offices contacted Snow and Hodge by telephone, who confirmed that they had a file containing Plaintiff's information but claimed that they could not find any other information, including any details about the alleged debt. (Id. ¶ 14.) A search of local, state and federal courts did not reveal any litigation pending against Plaintiff. (Id. ¶ 15.)
Finally, Snow and Hodge failed to provide Plaintiff with the debt validation information required by law.
C. Causes of Action Asserted
Based upon these facts, Plaintiff asserts five causes of action against Snow and Hodge. In Count I, she alleges that they violated 15 U.S.C. § 1692d(6) by failing to provide meaningful disclosure of their identity as debt collectors in their communications with Plaintiff, which were made in an attempt to collect a debt. Count II of the Second Amended Complaint alleges that Snow and Hodge violated 15 U.S.C. § 1692(e)11 by failing to disclose that their communications with Plaintiff were from a debt collector in an attempt to collect a debt, and that any information obtained as a result could be used for that purpose.
Plaintiff claims in Count III that Snow and Hodge violated 15 U.S.C. § 1692g(a) by continuing in their collection efforts after failing to send Plaintiff debt validation information within five days of their initial communication with her. Count IV alleges that Snow and Hodge violated 15 U.S.C. §§ 1692e(2), l692e(5), and l692e(l0) by misrepresenting that litigation was pending against Plaintiff. Finally, in Count V, Plaintiff asserts that Snow and Hodge violated 15 U.S.C. § l692f by misrepresenting that litigation was pending against her.
D. Standard of Review
A district court may enter default judgment against a party when a default has been entered by the Clerk of Court. Fed.R.Civ.P. 55(b)(2). Entry of default judgment is a matter within the sound discretion of the court. Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984).
Three factors are examined in determining whether to grant a default judgment: prejudice to the plaintiff if default is denied; whether the defendant appears to have a litigable defense; and whether the defendant's delay is due to culpable conduct. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). Once a default judgment is entered, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990) (citations omitted). See also Stout St. Funding LLC v. Johnson, 2014 WL 5591043 *2 (E.D. Pa. Nov. 4, 2014).
E. Discussion
1. Liability
The purpose of the FDCPA is to eliminate abusive debt collection practices by debt collectors. 15 U.S.C. §1692. In order to prove a claim under the FDCPA, a plaintiff must show that she is a consumer, the defendant is a debt collector, the complained-of practice is an attempt to collect a debt and the defendant has violated a provision of the FDCPA in doing so. Jensen v. Pressler & Pressler, 791 F.3d 413, 417 (3d Cir. 2015). A “consumer” is defined by the FDCPA to include any person obligated or allegedly obligated to pay a debt, while a “debt collector” includes “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. §§1692a(3),(6). A “debt” is the obligation of a consumer to pay money arising out of a transaction principally for personal, family or household purposes. 15 U.S.C. § 1692a(5).
All of Plaintiff's claims arise out of violations of the FDCPA and stem from the same basic set of uncontroverted facts. Plaintiff alleges that at the time of the events at issue, Snow and Hodge were debt collectors as defined by the FDCPA. She received three calls from them between November 21, 2019, and November 26, 2019, in an attempt to collect a debt. Snow and Hodge falsely told her that a lawsuit was pending against her. They did not identify themselves as debt collectors or advise Plaintiff that they were calling to collect a debt and that any information they obtained could be used for that purpose. Plaintiff subsequently retained counsel because she was concerned that a lawsuit had been filed against her. No lawsuit was actually filed against Plaintiff, and she never received any validation of the alleged debt.
These facts support the claims asserted by Plaintiff. First, she claims in Count I that Snow and Hodge violated Section 1692d(6) of the FDCPA, which prohibits harassment or abuse in debt collection practices, including the failure to make a meaningful disclosure of the caller's identity when placing a call to a consumer. Specifically, during the three calls made to her in November 2019, Snow and Hodge failed to disclose that they were debt collectors and their communications were for the purpose of collecting a debt. These uncontested facts are sufficient to prove a violation of Section 1692d(6) of the FDCPA.
In Count II, Plaintiff pleads a violation of Section 1692e(11), which sanctions the failure to disclose in the initial communication with the consumer that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose. Again, it is uncontroverted that Snow and Hodge failed to disclose in any of their calls that they were debt collectors and that any information conveyed during the calls could be used to collect the debt. Thus, the factual allegations of the Second Amended Complaint support a finding that Section 1692e(11) has been violated.
In Count III, Plaintiff alleges that by failing to provide validation of the alleged debt within five days of the initial communication on November 21, 2019, Snow and Hodge violated 15 U.S.C. § 1692g(a). This section requires, among other things, that a debt collector provide written notice within five days of the initial communication to collect a debt that includes the amount of the debt and the identity of the creditor. A debt collector is also required to provide other notifications to the consumer within a thirty-day window. The Second Amended Complaint alleges that Snow and Hodge did not provide Plaintiff with any debt validation information. Thus, these facts demonstrate that Snow and Hodge did not comply with the requirements of 15 U.S.C. § 1692g(a).
The FDCPA also prohibits false statements by a debt collector, including those related to the character, amount, or legal status of a debt; any services rendered by the debt collector; a threat to take action that cannot be taken or is not intended to be taken; or the use of a misrepresentation as a means to attempt to collect a debt. 15 U.S.C. § 1692e. Plaintiff alleges in Count IV that Snow and Hodge misrepresented that litigation was pending when it was not. These facts, which are accepted as true given Snow and Hodge' default, are sufficient to prove a claim under section 1692e of the FDCPA.
Finally, in Count V, Plaintiff claims that by misrepresenting that litigation was pending Snow and Hodge violated Section 1692f of the FDCPA, which prohibits a debt collector from using unfair or unlawful means to collect a debt. As these facts as pleaded demonstrate unfair practices under the FDCPA, Plaintiff has demonstrated a violation of Section 1692f.
Therefore, Plaintiff's unrefuted and well-pleaded facts are sufficient to establish the liability of Snow and Hodge for violations of the FDCPA.
2. Default Judgment
The Court will next turn to the three factors that must be examined in order to determine whether to grant a default judgment. Chamberlain, 210 F.3d at 164. A review of these factors supports the entry of a default judgment in favor of Plaintiff.
First, Plaintiff will be prejudiced if default is denied. Snow and Hodge have failed to respond despite being served with the Second Amended Complaint and the request for entry of default. Second, the admissions made by Snow and Hodge when contacted pre-suit by Plaintiff's counsel, as well as the facts pleaded in the Second Amended Complaint, strongly suggests that Snow and Hodge do not have a litigable defense. They failed to advise Plaintiff that they were debt collectors and were attempting to collect a debt, falsely stated that a lawsuit had been filed against Plaintiff, failed to provide written validation of the debt and contacted her again despite her instruction not to do so. Finally, based on the fact that Snow and Hodge were served and have failed to respond in any manner, it must be concluded that their default is due to culpable conduct.
Therefore, a default judgment is warranted in favor of Plaintiff. The Second Amended Complaint was served upon Snow and Hodge, they have failed to appear and a default was entered against the Snow and Hodge by the Clerk of Court. Snow and Hodge are not infants, incompetent, or in the military service of the United States of America. In addition, the facts pleaded in the Second Amended Complaint are sufficient to demonstrate violations of the FDCPA and the requisite factors have been met. Accordingly, the Court will now turn to the amount of damages to be awarded to Plaintiff.
3. Damages
Under the FDCPA, a debt collector who violates its provisions is liable to the consumer. An award of damages can include actual damages, statutory damages up to $1,000.00, attorneys' fees and costs. 15 U.S.C. § 1692k.
The damages sought by Plaintiff fall into three buckets. First, she requests statutory damages of $1,000.00. Under the uncontested facts, the conduct of Snow and Hodge violated the FDCPA. Thus, an award of $1,000.00 to Plaintiff is warranted.
Plaintiff also claims attorneys' fees in the amount of $12,313.25 and costs of $150. Attorneys' fees are mandatory under the FDCPA. Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991). In support of her claim for attorneys' fees, Plaintiff has submitted the Declaration of Robert Amador, who is with the Centennial Law Offices in Santa Barbara, California. Mr. Amador represents that he is a member of good standing of the California bar, practices almost exclusively representing plaintiffs in cases under the FDCPA and has been admitted to practice in multiple jurisdictions. His normal billing rate is $400.00 per hour. Mr. Amador has submitted his “billing file” for this case as an exhibit to his Declaration, which reflects billing for his time at $400.00 per hour and $75.00 per hour for paralegal work. The “billing file” itemizes the work performed in connection with this matter and the time spent for each task listed and reflects a total of $12,313.25 in attorneys' fees and $150 in costs for service upon Snow and Hodge.
As an initial matter, it should be noted that a billing rate of $300 per hour submitted by Mr. Amador has been previously approved in at least two other FDCPA actions in the Western District of Pennsylvania: Bower v. NRA Grp., LLC et al., Civil Action No. 1:18-cv-00389; and Milko v. Direct Recovery Grp., LLC, et al., Civil Action No. 2:19-cv-00510. In this case, in addition to Mr. Amador's Declaration and “billing file”, Plaintiff also submitted an Attorney Fee Survey Report for 2017-2018, which indicates that Mr. Amador's current billing rate of $400 per hour rate is consistent with the rates charged in this jurisdiction for experienced counsel performing similar work. Given this evidence and the two-year passage of time since counsel last sought attorneys' fees in this court, the hourly rate increase is within a reasonable range. Thus, the Court concludes that Mr. Amador's current hourly rate is reasonable and appropriate given all of these factors.
The lodestar approach is appropriately used to examine the reasonableness of total billings in this matter. See Student Pub. Interest Research Group of N.J., Inc. v. Windall, 51 F.3d 1179 (3d Cir. 1995). This is the product of the hours reasonably expended and the hourly billing rate for the legal services rendered. Id.; see also Hensley v. Eckerhart, 461 U.S. 424, 433-34 (1983). As required, the Court has reviewed each billing entry, including the nature of the service performed, the time spent in doing so, the professional who performed the work and the hourly rates for each such service.Based upon this review, it concludes that the majority of the services and time spent on this case was reasonable and appropriate.
The billing entries are not dated.
However, the fees associated with certain work performed will be deducted from the amount of attorneys' fees that the Court recommends be awarded. They can be summarized as follows:
1. Time spent on administrative tasks as opposed to legal work:
• “Process initial intake report/initiate representation/create file” (paralegal): .75 hours at $75.00 per hour: $56.25.
• “Mailingof demand letter to Defendant/update file” (paralegal): .33 hours at $75.00 per hour: $24.75.
2. Time billed for drafting Motion in support of Default Judgment/Proposed Order:
The billing entry for this work reflects attorney time of 6.66 hours at an hourly rate of $400.00, totaling $2,664.00. The Court takes judicial notice of the fact that in another action filed in this Court, Milko v. Direct Recovery Grp., LLC et
al., Civil Action 2:19-cv-00510, Mr. Amador, who was also Plaintiff's counsel in that case, filed a Motion and Memorandum in Support of Default Judgment and Attorney's Fees (ECF No. 36). A review of this pleading reflects that some portions of it are identical or substantially similar to the content of the motion and memorandum filed in this case at ECF No. 16. Compare ECF No. 16, pp. 4, 5 with ECF No. 36, pp. 5, 6; ECF No. 16, pp. 8-9 with ECF No. 36, p. 9; ECF No. 16, pp. 9-12 with ECF No. 36, pp. 10-13.
Based upon the duplication and overlap in these memoranda, the Court concludes that billing 6.66 hours for the preparation of the present motion is excessive. Therefore, it recommends reducing the time spent to 3 hours. Approximately six pages of the 12-page motion and memoranda filed in this case are taken directly from the prior motion. Thus, the reasonable attorneys' fee for this work is $1,200.00, which is three hours at the rate of $400.00 per hour.
As reflected in the billing entries, the letter was drafted by counsel.
Deducting these amounts results in a total of $10,768.25 in attorneys' fees.
Amount claimed by Plaintiff of $12,313.25 minus deduction of paralegal time in the amount of $85.00 ($56.25 plus $24.75) and attorney time in the amount of $1,464.00 (deduction of 3.66 hours at $400.00 per hour).
Finally, Plaintiff is also entitled to recover the cost of service of this lawsuit, which, as reflected in the billing file, totals $150.00.
F. Conclusion
For the reasons set forth herein, Plaintiff has demonstrated that she is entitled to a default judgment against Defendants Snow and Hodge and an award of statutory damages, attorneys' fees, and costs. Therefore, it is respectfully recommended that Plaintiffs' Motion for Default Judgment (ECF No. 36) be granted in part and that Plaintiff be awarded statutory damages of $1,000.00, attorneys' fees of $10,768.25 and costs of $150.
Litigants who wish to challenge this Report and Recommendation must seek review by the district judge by filing objections by October 31, 2023. Failure to file timely objections will waive the right of appeal.