Cabala v. Crowley
736 F.3d 226
2d Cir.2013Background
- Cabala filed FDCPA action April 21, 2009 against Morris for alleged FDCPA violation.
- Morris offered June 25, 2009 to settle for the maximum statutory damages and to pay Cabala’s fees, but did not offer judgment.
- Faulkner refused to provide a fee hours accounting and preferred court determination of fees.
- Parties later stipulated for judgment in Cabala’s favor with damages at the statutory maximum and requested fee determination.
- District court held Morris’s offer did not moot the action and awarded Cabala full requested attorney’s fees.
- Court of appeals upheld, distinguishing settlement without judgment from Rule 68 offers and rejecting ethical-violation arguments as basis to deny fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Morris’s settlement offer moot the FDCPA action without an offer of judgment? | Cabala argued offer did not moot because it lacked judgment. | Morris argued offer mooted the case or functioned like a Rule 68 offer. | No; offer did not moot the dispute. |
| Are fees incurred after the June 25, 2009 offer recoverable? | Cabala entitled to fees as prevailing party. | Fees after offer should be excluded if moot or under Rule 68. | Yes; fees were reasonable and recoverable. |
| Should Morris’s offer be treated as a Rule 68 offer of judgment? | Rule 68 treatment should apply to bar post-offer fees. | Offer is not equivalent to Rule 68; not a judgment. | Not equivalent to Rule 68; still entitled to fees for continued litigation. |
| Do alleged ethical violations by Faulkner bar fee recovery? | No; district court’s fee award stands; ethics not controlling. |
Key Cases Cited
- McCauley v. Trans Union, L.L.C., 402 F.3d 340 (2d Cir. 2005) (unaccepted full settlement does not moot; judgment may be entered for proffered amount)
- Doyle v. Midland Credit Management, Inc., 722 F.3d 78 (2d Cir. 2013) (offer of judgment fully satisfying FDCPA claim need not conform to Rule 68; distinction from informal settlement)
- Arbor Hill Concerned Citizens Neighborhood Ass’n v. County of Albany, 522 F.3d 182 (2d Cir. 2007) (deference to district court in calculating reasonable fees; case-specific factors)
- Savino v. Computer Credit, Inc., 164 F.3d 81 (2d Cir. 1998) (presumptive entitlement to reasonable attorney’s fees for prevailing FDCPA plaintiff)
- Townsend v. Benjamin Enters., Inc., 679 F.3d 41 (2d Cir. 2012) (abuse of discretion standard for fee awards; substantial deference to district courts)
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (settlement agreement followed by dismissal creates a contract enforceable in state court absent federal jurisdiction)
- Marek v. Chesny, 473 U.S. 1 (U.S. 1985) (discusses Rule 68 and costs/fees interplay)