Case Information
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
CAROLYN SLUSHER,
Plaintiff,
DECISION AND ORDER v.
1:19-CV-01265 EAW ASSET CONSULTING EXPERTS, LLC
and MICHAEL EVANS,
Defendants. BACKGROUND
Plаintiff Carolyn Slusher (“Plaintiff”) commenced this action on September 18, 2019, against defendant Asset Consulting Experts, LLC (“ACE”) and Michael Evans (collectively “Defendants”), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). (Dkt. 1). Specifically, Plaintiff alleges that Defendants violated § 1692e generally by making false, deceptive, and misleading representations or means in connection with the cоllection of a debt, and § 1692e(5) by threatening to take legal action that cannot legally be taken, or in the alternative that Defendants do not intend to take. ( Id . at ¶ 25). Plaintiff alleges that this conduct occurred in connection with attempts to collect on a payday loan that Plaintiff took out for personal (not business) purposes. ( . at ¶ 9).
The filed affidavit of service indicates that service was made on ACE by delivering the process to the New York Secretary of State pursuant to section 303 of New York’s Limited Liability Company Law. (Dkt. 3). No affidavit of service was filed for defendant Michael Evans.
Currently pending before the Court is a motion for default judgment filed by Plaintiff against ACE. (Dkt. 6). Plaintiff also seeks to dismiss defendant Michael Evans without prejudice because he was never sucсessfully served. ( Id .). Plaintiff requests judgment in the amount of $7,943.83, comprised of $1,000 in statutory damages, $5,000 in actual noneconomic damages, $1,483.83 in attorneys’ fees, $60 in litigation expenses and $400 in court costs. ( .).
The Clerk of Court entered a default against ACE on November 22, 2019. (Dkt. 5). Thereafter, Plaintiff filed the pending motion for default judgment on June 15, 2020. (Dkt. 6). Plaintiff served the motion on ACE at its last known addresses (Dkt. 8), and no response was filed by ACE.
DISCUSSION
I. Legal Standard
Fedеral Rule of Civil Procedure 55 sets forth the procedural steps for obtaining a default judgment. First, a plaintiff must seek entry of default where a party against whom it seeks affirmative relief has failed to plead or defend in the action. Fed. R. Civ. P. 55(a). As noted above, Plaintiff has obtained entry of default as to ACE in this case. (Dkt. 5).
“Having obtained a default, a plaintiff must next seek a judgment by default under
Rule 55(b).”
New York v. Green
,
“As the Second Circuit has noted, when determining whether to grant a default
judgment, the Court is guided by the same factors which apply to a motion to set aside
entry of default.”
Krevat v. Burgers to Go, Inc.
, No. 13-CV-6258,
“Upon establishing a defendant’s liability, the only remaining question is whether
the plаintiff has provided adequate evidentiary support for the damages sought.”
Granite
Music Corp. v. Ctr. St. Smoke House, Inc.
,
Ultimately, “[t]he decision whether to enter default judgment is committed to the
district court’s discretion.”
Greathouse v. JHS Sec. Inc.
,
Here, the Court easily concludes that Plaintiff has established ACE’s willfulness
and that Plaintiff, as the non-defaulting party, would be prejudiced in the absence of a
default judgment. As to the latter, “[w]ithout the entry of a default judgment, Plaintiff
would be unable to recover for the claims adequately set forth in the Complaint.”
Flanagan
v. N. Star Concrete Constr., Inc.
, No. 13-CV-2300 (JS)(AKT),
II. Merits of the Claim and Any Defense
“A defense is meritorious if it is good at law so as to give the factfinder some
determination to make.”
Am. Alliance Ins. Co. v. Eagle Ins. Co.
,
“[W]here a defendant fails to answer the complaint, a court is unable to make a determination whether the defendant has a meritorious defense to the plaintiff’s claims, which circumstance weighs in favor of granting a default judgment.” Id.
The fact that a complaint stands unanswered does not, however, suffice to establish liability on [the] claims: a default does not establish conclusory allegations, nor does it excuse any defects in the plaintiff’s pleading. With respect to liability, a defendant’s default does no more than concede the complaint’s factual allegations; it remains the plaintiff’s burden to demonstrate that those uncontroverted allegations, without more, establish the defendant’s liability on each asserted cause of action.
Said v. SBS Electronics, Inc.
, No. CV 08-3067(RJD)(JO), 2010 WL 1265186, at *2
(E.D.N.Y. Feb. 24, 2010);
see also Krevat
,
“The statutory purposes of the FDCPA are 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.”
Wagner v.
Chiari & Ilecki, LLP
,
Section 1692e of the FDCPA provides that “[a] debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt,” and that includes conduct involving “[t]he threat to take any action that cannot lеgally be taken or that is not intended to be taken.” 15 U.S.C. § 1692e(5). “A debt collection practice may violate the FDCPA even if it does not fall within any of the subsections [of section 1692e] and a single violation of section 1692e is sufficient to establish civil liability under the FDCPA.” Bentley v. Great Lakes Collection Bureau , 6 F.3d 60, 62 (2d Cir. 1993) (citations omitted). The Second Circuit applies “an objective test based on the understanding of the ‘least sophisticated consumеr’” to determine whether conduct violates section 1692e. Id .
Thus, section 1692e(5) proscribes a debt collector using language where “the ‘least
sophisticated consumer’ would interpret this language to mean that legal action was
authorized, likely and imminent.”
Id
. A violation of § 1692e(5) will occur if “[t]he clear
import of the language, taken as a whole, is that
some
type of legal action hаs already been
or is about to be initiated and can be averted from running its course only by payment.”
Pipiles v. Credit Bureau of Lockport, Inc.
,
Here, the complaint alleges that during one of the calls made to Plaintiff, “ACE’s employee threatened to file a lawsuit against Plaintiff if she did not pay the purported debt.” (Dkt. 1 at ¶ 11). It is further alleged that ACE did not have the legal authority to file any such lawsuit, or alternatively it did not actually intend to filе a lawsuit. ( . at ¶ 13). These allegations are expounded upon to some degree in the affidavit from Plaintiff submitted in support of the motion for default judgment, wherein she states that ACE threatened to garnish her wages, pursue collections, file a judgment against her, and report her to credit reporting agencies. (Dkt. 6-1 at ¶ 6). The Court concludes that these allegations are sufficient to establish ACE’s liability for Plaintiff’s claims that the FDCPA was violated. Thus, the Court now turns to the issue of damages.
III. Damages
“A default constitutes an admission of all well-pleaded factual allegations in the
complaint, except for those relating to damages.”
1st Bridge LLC v. 682 Jamaica Ave.,
LLC
, No. 08-CV-3401 (NGG)(MDG),
Of course, “a court must ensure that there is an adequate basis for the damages
sought by a plaintiff before entering judgment in the amount demanded.”
Ditech Fin. LLC
v. Singh
, No. 15-CV-7078 (FB) (SMG),
Here, Plaintiff requests statutory damages, noneconomic actual damages, costs, and attorneys’ fees. (Dkt. 6 at 4-8). In support of those requests, Plaintiff has submitted her own affidavit and the affidavit of her attorney with supporting time records. (Dkt. 6-1; Dkt. 6-2; Dkt. 6-3). Plаintiff specifically argues that a hearing is unnecessary. (Dkt. 6 at 2-3). Each of the categories of damages requested by Plaintiff is discussed below.
A. Statutory Damages
The FDCPA allows for an award of statutory damages up to $1,000. 15 U.S.C.
§ 1629k(a)(2)(A). In determining the amount of a statutory damage award, relevant factors
that a court shall consider include “the frequency and persistence of noncompliance by the
debt collector, the nature of such noncompliance, . . . and the extent to which such
noncompliance was intentional. . . .” . at § 1629k(b)(1). “The decision whether to award
statutory damages under the FDCPA and the size of the award are matters committed to
the sound discretion of the district court.”
Savino v. Computer Credit, Inc.
,
Here, Plaintiff states that ACE contacted her approximately 15 times over the span of a couple months. (Dkt. 6-1 at ¶ 4). ACE used various phone numbers to contact Plaintiff, and communicated with Plaintiff in a harassing manner, calling her a “loser” and threatening legal action. ( . at ¶¶ 5-6). Plaintiff does not allege that ACE ever contacted her family or friends, or that it contacted her in the workplace.
Under the circumstances, the Court finds that an award of statutory damages is
appropriate, but the conduct is not sufficiently egregious to warrant an award at the
statutory ceiling. The Court’s survey of cases in this District addressing comparable
situations reveals that statutory damages in the range of $500 are more typical.
See Randle
,
B. Actual Noneconomic Damages
Plaintiff does not seek economic damages, but does claim that shе is entitled to an
award of $5,000 in actual noneconomic damages. (Dkt. 6 at 5-6). The FDCPA provides
an award of “actual damage sustained by such person as a result of” the statutory violations.
15 U.S.C. § 1692k(a)(1). “Actual damages are intended to compensate a plaintiff for ‘out
of pocket expenses, personal humiliation, embarrassment, mental anguish, and/or
emotional distress that results from defendant’s failure to comply with the FDCPA.’”
Randle
,
Plaintiff has submitted an affidavit stating that ACE’s conduct caused her “great
stress and anxiety,” that the threats were particularly concerning because she had “worked
hard to improve” her credit score, and that she “spoke with a psychiatrist about the stress
and anxiety that” ACE had caused her to suffer. (Dkt. 6-1 at ¶¶ 8-10). Plaintiff has not
submitted any proоf aside from her own affidavit to support these claims, such as mental
health records. Under the circumstances, the Court concludes that Plaintiff has sufficiently
established her entitlement to some noneconomic damages, but not to the extent she has
requested. ACE’s conduct would have inevitably caused some degree of stress and anxiety,
was not isolated but rather continued over а period of months, and was sufficiently
harassing so that an award of $1,000 in actual noneconomic damages is justified.
See
Randle
, 2020 WL 5757187, at *5-6 (awarding plaintiff who actually paid money to
defendant and experienced stress attempting to recover money entitled to noneconomic
damages of $1,000, and other plaintiff who claimed increased anxiety entitled to $500);
Lepski
, 2020 WL 4192245 at *3 (awarding plaintiff $2,000 in noneconomic damages
where court found plaintiff suffered some economic distress especially in view of calls to
family members);
see also Mira v. Maximum Recovery Solutions, Inc.
, No. CV 11-
1009(ADS)(GRB), 2012 WL 4511623, at *3 (Aug. 31, 2012) (awarding $1,000 for
emotional distress where the defendant’s contacts with the plaintiff spanned no more than
two months and there was no proof that the plaintiff sought or received medical treatment
as a result of these contacts),
report and recommendation adopted
, No. 11-CV-1009 ADS
GRB,
C. Attorneys’ Fees and Costs
The FDCPA provides that a successful plaintiff is entitled to an award for “the costs
of the action, together with a reasonable attorney’s fee as determined by the court.” 15
U.S.C. § 1592k(a)(3). The lodestar method provides one means of calculating a reasonable
fee, which “multiplies hours reasonably expended against a reasonable hourly rate.”
Hallmark v. Cohen & Slamowitz, LLP
,
Here, Plaintiff’s counsel seeks a fee award based on hourly rates ranging from $270 for her lead counsel, Jonathan Hilton, to $130 for a law student clerk. (Dkt. 6-2; Dkt. 6-3). Courts in this District generally have found that in FDCPA cases, “a reasonable hourly rate for attorneys’ fees ranges from about $200 to $300 per hour.” Hallmark , 378 F. Supp. 3d at 229 (collecting cases).
The Court concludes that Mr. Hilton’s requested hourly rate of $270 is reasonable.
With respect to the requested hourly rate of Matthew Stewart, an employee of Mr. Hilton’s
firm, it is represented that he was admitted to the Ohio bar on November 12, 2019. (Dkt.
6-2 at ¶ 12). The time records submitted by Plaintiff charge an hourly rate for Mr. Stewart
prior to his admission to practice of both $270 (
see
9/16/2019 time entry) and $200. (Dkt.
6-3). The Court finds that these rates are not reasonable, and reduces the rate for Mr.
Stewart prior to his admission to practice to $110.
See Lepski
,
Moreover, after admission to practice, the Court finds that a reasonable hourly rate
for Mr. Stewart is not the $200 requested, but rather $180.
Faulkner
,
With respect to the total hours worked on this matter (excluding the time of “EB” for which there is no explanation), the Court finds that the total of 6.1 hours is reasonable under the circumstances. Thus, based оn the hourly rates discussed above, the total attorneys’ fee awarded to Plaintiff is $1,159.
Additionally, Plaintiff has established her entitlement to the $60 in costs, representing the process server fee and statutory service of process fee for the New York Secretary of State (Dkt. 6-2 at ¶ 3), along with court costs of $400 representing the filing fees. Accordingly, Plaintiff is awarded a total of $1,619 in attorneys’ fees and costs.
CONCLUSION
For the foregoing reasons, Plaintiff’s motion for a default judgment is granted (Dkt.
6) and she is awarded $500 in statutory damages, $1,000 in actual noneconomic damages, and $1,619 in attorneys’ fees and costs, for a total award of $3,119. The Clerk of Court is directed to enter a total judgment in favor of Plaintiff against defendant Asset Consulting Experts, LLC, in the amount of $3,119 consistent with this Decision and Order, and close this casе. Defendant Michael Evans is dismissed from this action without prejudice.
SO ORDERED.
_________________________________ ELIZABETH A. WOLFORD United States District Judge Dated: March 9, 2021
Rochester, New York
Notes
[1] This state-court service provision, which is available in federal court pursuant to Federal Rule of Civil Procedure 4, provides that service on a limited liability company “shall be made by personally delivering to and leaving with the secretary of state or his or her deputy, or with any persоn authorized by the secretary of state to receive such service, at the office of the department of state in the city of Albany, duplicate copies of such process together with the statutory fee” and that such service “shall be complete when the secretary of state is so served.” Compliance with this provision with respect to ACE is apparent from a review of the affidavit of service. ( See Dkt. 3).
