Johnson v. Eaton

• Decision Date: 04 May 1995
• Docket Number: Civ. A. No. 93-1081-M1.
• Citation: 884 F. Supp. 1068
• Parties: Ruth E. JOHNSON v. Gregory M. EATON, et al.
• Court: U.S. District Court — Middle District of Louisiana

884 F. Supp. 1068

Ruth E. JOHNSON v. Gregory M. EATON, et al.

Civ. A. No. 93-1081-M1.

United States District Court, M.D. Louisiana.

May 4, 1995.

COPYRIGHT MATERIAL OMITTED

Garth J. Ridge, Bivins & Ridge, Baton Rouge, LA, for plaintiff.

Scott H. Crawford and David C. Sander, Crawford & Lewis, Baton Rouge, LA, for defendants.

RULING ON POST-TRIAL MOTIONS

RIEDLINGER, United States Magistrate Judge.

This matter is before the court on the defendants' motion to amend the judgment and motion for a finding that the action was brought in bad faith and for the purpose of harassment, and the plaintiff's motion for an award of attorney's fees. The motions are opposed.

Plaintiff, Ruth E. Johnson, brought this action pursuant to the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. Plaintiff alleged that two communications sent to her by the defendants violated various provisions of the FDCPA and that the defendants were liable for actual and additional damages, as well as attorney's fees and costs under section 1692k(a). Defendants filed a motion for summary judgment on the issue of their status as debt collectors under the FDCPA. The motion was denied and the court determined that the defendants were debt collectors as that term is defined by the FDCPA.¹ Plaintiff then filed a motion for partial summary judgment to determine the defendants' liability for the violations alleged and asked that the issue of damages be reserved for determination by the jury. The court granted the plaintiff's motion for partial summary judgment, finding that the defendants' communications violated sections 1692g, 1692e(2)(A), 1692e(9) and 1692e(11). Plaintiff prevailed on all claims except those under sections 1692e, 1692e(10) and 1692f.²

A jury trial was held on March 8, 1995. The jury returned a verdict finding that the conduct of defendant Eaton was not a legal cause of any actual damages to the plaintiff; that the plaintiff was not entitled to an award of additional damages against defendant White, but was entitled to additional damages against Eaton in the amount of $125.00 for each of his violations of the FDCPA. See, special verdict form attached to record document number 61.

Defendants' Motion for Finding that the Action Was Brought in Bad Faith and for the Purpose of Harassment

Defendants moved for attorney's fees and costs under section 1692k(a)(3), claiming that the plaintiff brought this action in bad faith and for the purpose of harassment. Plaintiff asserted that such a motion can only be brought by a prevailing defendant, and since the defendants in this case violated the FDCPA they cannot be prevailing defendants.

Section 1692k(a)(3) provides in pertinent part that: "On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs." This section allows the court in its discretion to award attorney's fees and costs to a prevailing defendant who shows affirmatively that the plaintiff brought an FDCPA claim both in bad faith and for the purpose of harassment. See, Perry v. Stewart Title Co., 756 F.2d 1197, 1211 (5th Cir.1985), modified on other grounds, 761 F.2d 237 (5th Cir.1985); Knowles v. Credit Bur. of Rochester, 1992 WL 131107, 1992 U.S.Dist. LEXIS 8349 (W.D.N.Y., May 27, 1992).

White argued that she is a prevailing defendant in this action because the plaintiff withdrew allegations of actual damages against her approximately two weeks before trial and did not prevail on her claim of statutory damages. Eaton argued that he is a prevailing defendant because the jury found that his actions were not the cause of any actual damages to the plaintiff.

Defendants' contention that they are "prevailing defendants" is without merit. Defendants virtually ignore the summary judgment findings that their conduct violated numerous provisions of the FDCPA. Yet, clearly, except for the general claims under sections 1692e and 1692f, the plaintiff prevailed on the merits. Defendants have not pointed to any resolution of the merits of the dispute in their favor which changed the legal relationship between them and the plaintiff.³ Furthermore, the defendants cite no authority to support their argument that their partial success in defending against the plaintiff's claims for damages is sufficient to support a finding that they are prevailing parties.

Even assuming that the defendants could somehow be designated as successful or prevailing, their arguments that the record supports a finding that the plaintiff brought this action both in bad faith and for purposes of harassment are unpersuasive. Defendants focused on the fact that the plaintiff made allegations against both defendants that she suffered stress, humiliation and extreme mental anguish and maintained these allegations throughout most of this litigation. Then, approximately two weeks before trial, the plaintiff withdrew the claim of actual damages as to the communication signed by White. As to defendant Eaton, the plaintiff maintained the allegations based only on her own testimony which the jury ultimately found to be not credible. The result, claimed the defendants, was that they were forced to bear the costs associated with defending themselves against baseless claims and put in a position of being potentially responsible for over $15,000.00 in attorney's fees. Defendants asserted that the only interpretation of these facts is that the plaintiff misled them for the purpose of building up her attorney's fees.

The fact that ultimately the plaintiff did not prevail on her claim for actual damages against Eaton or that there may have been unnecessary delay in notification that the plaintiff was not claiming actual damages against White, is insufficient evidence to conclude that the plaintiff initiated this action in bad faith or to harass. The record does not support the defendants' assertion that the claim for actual damages forced them to bear the cost of defending against baseless claims and increased their exposure to liability for attorney's fees. Defendants did not depose the plaintiff until less than a month before trial. Nothing prevented the defendants from deposing the plaintiff at an earlier date in order to explore the accuracy of her allegations or determine the factual basis for the actual damages claim.⁴

Plaintiff brought this action under the FDCPA and ultimately proved that the defendants violated four provisions of the Act, and that she was entitled to an award of statutory damages against Eaton. Defendants' motion for attorney's fees and costs is simply based on their own interpretation or characterization of the plaintiff's suit and her reasons for bringing it. However, there is no factual support for this interpretation nor any evidence to support a finding that the plaintiff was motivated by bad faith or a desire to harass the defendants.

Plaintiff's Motion for Attorney's Fees

Plaintiff moved for an award of attorney's fees and costs under section 1692k(a)(3). This section provides that in the case of any successful action to enforce the FDCPA, a debt collector who failed to comply with the Act's provisions with respect to any person is liable to that person for the costs of the action, and a reasonable attorney's fee as determined by the court. In support of the motion the plaintiff filed a memorandum accompanied by an affidavit of counsel setting forth the time expended in this case with a description of the services rendered. Plaintiff claimed compensation for 146.3 hours at a rate of $100.00 per hour, for a total fee of $14,630.00. Plaintiff submitted an affidavit from another attorney concerning the prevailing market rate and a statement of expenses claiming costs in the amount of $556.56. Plaintiff argued that the summary judgment finding that the defendants were liable for violating four provisions of the Act, and the jury's verdict awarding $500.00 in statutory damages against Eaton, establish that she is a prevailing party in this action. Based on these same facts the plaintiff argued that she achieved a high degree of success and should be awarded the entire fee requested.

Defendants opposed the plaintiff's motion on several grounds. First, defendant White argued that since the plaintiff was not successful in enforcing any liability against her, she should not be held responsible for any attorney's fees and costs under section 1692k(a)(3). She relied upon the Supreme Court's decision in Farrar v. Hobby, arguing that the finding of no damages against her is analogous to a civil rights plaintiff who is not entitled to fees because he only succeeds in obtaining an award of nominal damages. Defendant White asserted that the plaintiff cannot show any benefit or change in behavior as a result of filing suit against her. Defendant Eaton also argued that the plaintiff cannot show any modification in his conduct resulting from the outcome of this case. Therefore, no attorney's fees should be awarded because the plaintiff is not a prevailing party.

Alternatively, the defendants argued that the plaintiff's request for attorney's fees is unreasonable because the plaintiff only achieved limited success — the plaintiff withdrew the allegations of actual injury against White prior to trial and failed to prove them at trial against Eaton. Furthermore, if the plaintiff had not made baseless allegations of actual injury in the complaint the defendants would have made an offer of judgment shortly after the complaint was filed that would have limited their exposure for attorney's fees. Defendants also contended that the amount of time submitted — over 70 hours — for researching and drafting memoranda in opposition and support of dispositive motions is excessive.

In the context of this FDCPA case the defendants' contention that the plaintiff is not entitled to any fees...