Price v. Midland Funding LLC
| Decision Date | 19 October 2018 |
| Docket Number | Case No. 18-cv-509 (SRN/SER) |
| Parties | Joan Price, Plaintiff, v. Midland Funding LLC, and Messerli & Kramer, P.A., Defendants. |
| Court | U.S. District Court — District of Minnesota |
AMENDED ORDER
Darren B. Schwiebert, DBS Law LLC, 301 Fourth Ave. S., Ste. 280N, Minneapolis, MN 55415, for Plaintiff.
Derrick N. Weber and Stephanie Shawn Lamphere, Messerli & Kramer, 3033 Campus Dr., Ste. 250, Plymouth, MN 55411, for Defendants.
This matter is before the Court on Plaintiff's Motion for Attorneys' Fees [Doc. No. 12] and Plaintiff's Motion for Leave to File a Reply, or in the Alternative, to Amend Deadlines Pursuant to Rule 6 ("Plaintiff's Motion to Amend Deadlines") [Doc. No. 19]. For the reasons set forth below, the Court grants Plaintiff's Motion to Amend Deadlines and finds that Plaintiff is entitled to a total of $6,080 in attorneys' fees.
On February 21, 2018, Plaintiff Joan Price filed this suit against Midland Funding, LLC, ("Midland") and Messerli & Kramer, P.A., ("Messerli & Kramer"), under the Fair Debt Collections Practices Act, ("FDCPA"), 15 kuntzU.S.C. § 1692, et seq. Price, who is disabled and relies on disability income as her sole means of support, alleges that Midland retained Messerli & Kramer as its counsel to collect on a consumer credit card debt allegedly owed by Price. (Compl. ¶7 [Doc. No. 1].) Price asserts that both Midland and Messerli & Kramer are "debt collectors," as that term is defined under the FDCPA. (Id. ¶¶ 6-7.) Price alleges that in underlying litigation in 2017, Midland and Messerli & Kramer served her with a summons and complaint concerning the alleged debt owed to Midland. (Id. ¶ 9.) She contends that she served a pro se answer, denying the primary allegations against her. (Id. ¶ 12.)
Price further alleges that in early February 2018, Midland moved for judgment on the pleadings, attaching to its motion a "true and correct copy" of the "Answer to the Complaint," ("Answer"). (Id. ¶¶ 13-18.) In the instant action, however, Price alleges that this purported Answer, which contained admissions about "a debt" of some kind, had nothing to do with her. (Id. ¶ 18.)
In addition, Price alleges that Defendants served her with a declaration seeking costs and disbursements for fees incurred in the underlying action, including approximately $77 for a "Hearing Fee" and $304 for "Fees of Clerk of Court." (Id. ¶ 21.) But in her FDCPA action here, Price contends that these statements were false, as the underlying action had not been filed as of February 8, 2018, therefore Defendants had not paid or incurred any filing fees or costs. (Id. ¶ 22.) On February 13, 2018, Defendants filed the underlying action in Hennepin County District Court, along with theirsupporting documents and requests, including the purported Answer and declaration seeking costs and disbursements. (Id. ¶¶ 24-25.)
On February 21, 2018, Price filed the instant action in this Court. Price asserts that Defendants violated the FDCPA by falsely representing the amount or legal status of the alleged debt, using false representations and unfair and unconscionable means to attempt to collect a debt, and attempting to collect an amount not authorized by contract or law. (Id. ¶ 38.) Because of these alleged FDCPA violations, Price sought actual damages, statutory damages up to $1,000, and reasonable attorneys' fees and costs. (Id. ¶ 41) (citing 15 U.S.C. § 1692k(a)(1)-(3).)
On April 10, 2018, Defendants offered Price a total judgment of $1,001, inclusive of all damages, "plus Plaintiff's reasonable attorneys' fees and costs, in an amount to be agreed upon by all counsel or, alternatively, as determined by the Court," with respect to Price's claims here. (Offer of Judgment ¶ 3 [Doc. No. 10-1].) On April 24, 2018, Plaintiff filed a Notice of Acceptance of Offer of Judgment [Doc. No. 10], stating that she accepted Defendants' offer. With respect to an award of attorneys' fees and costs, Price's Notice stated, "The parties are attempting to reach an agreement on fees and costs, but if an agreement is not reached, Plaintiff will petition the Court for such an award." (Notice of Acceptance at 1.) The Clerk of Court entered judgment in Price's favor on April 24, 2018 [Doc. No. 11].
Shortly thereafter, Price's attorney, Darren Schwiebert, requested $4,480 in attorneys' fees and costs from Defendants. (See Defs.' April 27, 2018 Letter at 1, 3 [Doc. No. 15-2].) On April 27, 2018, Derrick Weber, counsel for Defendants, objected.(Id.) Weber countered with an offer to pay attorneys' fees of $1,750, reflecting a lower hourly billing rate than Plaintiff had requested and reduction in billed time. (Id. at 3.)
On May 22, 2018, Schwiebert filed the instant motion for attorneys' fees. Plaintiff's requested total amount of $6,080 includes additional fees for his work in preparing and submitting the fee petition itself. (See Billing Statement at 1-2 [Doc. No. 15-3].)
The FDCPA allows a successful plaintiff to collect "the costs of the action, together with a reasonable attorneys' fee as determined by the court." 15 U.S.C. § 1692k(a)(3). "Fees are still awarded under this rule, even when there is an offer of judgment under Rule 68." Ash v. Malacko, No. 14-cv-590 (PJS/JJG), 2014 U.S. Dist. LEXIS 123493, at *3 (D. Minn. Aug. 18, 2014) (citing Fletcher v. City of Ft. Wayne, 162 F.3d 975, 976-77 (7th Cir. 1998)).
Defendants argue that Plaintiff is not entitled to attorneys' fees for the following reasons: (1) the petition is untimely; (2) counsel's fee agreement is void as a matter of public policy; and (3) the requested amount of fees is unreasonable. (Defs.' Opp'n at 3-5 [Doc. No. 17].) However, if the Court decides that a fee award is nevertheless warranted, Defendants maintain that the award should be no more than $1,500. (Id. at 17.)
A party seeking attorneys' fees and costs is to required make such a claim under Rule 54(d) no later than 14 days after the entry of judgment. Fed. R. Civ. P. 54(d)(2)(B)(i). As noted, judgment in this case was entered on April 24, 2018, andPlaintiff filed the instant motion on May 22, 2018. Defendants argue that Plaintiff is not entitled to an award of attorneys' fees because the motion was not filed within the 14-day period under Rule 54(d)(2)(B). (Defs.' Opp'n at 3-4.) In response to this argument, Plaintiff moves for permission to file a reply memorandum or, alternatively, to amend the deadline for filing the fee petition pursuant to Rule 6(b).1 (Pl.'s Mem. Supp. Mot. to Amend Deadlines at 1 [Doc. No. 20].)
Here, in the Offer of Judgment, Defendants expressly offered Plaintiff reasonable attorneys' fees and costs, to be agreed upon by the parties, or in the event of disagreement, to be determined by the Court. (Offer of Judgment at 1.) Plaintiff's acceptance of Defendants' offer reflects that understanding. (Notice of Acceptance at 1.)
While Plaintiff argues in the Motion to Amend Deadlines that the Notice of Acceptance essentially served as a substitute for a motion for attorneys' fees, the Court disagrees. Nevertheless, under the circumstances here, granting an after-the-fact extension is warranted. As the commentators to Rule 54 have noted, the rule does not require that the motion for attorneys' fees be accompanied by evidence related to attorneys' fees at the time of filing the motion, but that the petitioner file materials "sufficient to alert the adversary and the court that there is a claim for fees, and the amount of such fees (or a fair estimate)." Fed. R. Civ. P. 54 1993 Advisory Cmte. Notes,1993 Amendment, Subd. (d), ¶ 2(B). Given that Defendants were not only on notice that Plaintiff would seek attorneys' fees, but had expressly agreed to pay reasonable attorneys' fees, (see Offer of Judgment at 1), consideration of the merits of Plaintiff's request does not prejudice Defendants. Pursuant to Rule 6(b), the Court therefore extends the deadline for Plaintiff's filing to the date of filing, finding that Plaintiff has demonstrated good cause, in light of the Offer of Judgment and Plaintiff's Acceptance of the Offer of Judgment, for consideration of the merits of the fee petition.
Defendants also argue that Plaintiff's fee request should be denied because the fee agreement between Price and her counsel is "void as a matter of public policy." (Defs.' Opp'n at 4.) Defense counsel attests that the fee agreement states, in pertinent part, "You hereby unequivocally and irrevocably assign to us all right, title, and interest in any attorneys' fees recovered or awarded in this case, whether negotiated between the parties or ordered by the Court." (Weber Decl. ¶ 8 [Doc. No. 18].) Defendants argue that this provision violates Minnesota Rule of Professional Conduct 1.8(i), which generally prohibits a lawyer from obtaining a proprietary interest in a client's cause of action, subject to certain exceptions.2
Minnesota Rule of Professional Conduct 1.8(i) provides:
Minn. R. of Prof'l Conduct 1.8(i) (2018).
The Court finds no violation of this Rule. Here, the language in the fee agreement reserves counsel's right to any attorneys' fees awarded in an action under the FDCPA—a statute that expressly contemplates an award of reasonable attorneys' fees to a successful plaintiff, as discussed above. The reservation in the fee agreement is essentially a right to a lien or contingent fee that is exempted from Rule 1.8, quoted above. As Plaintiff's counsel explains, Price hired him on a contingency-fee basis. (Schwiebert Decl. ¶ 9 [Doc. No. 15].) Therefore, Schwiebert "took the case...
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