Faulker v. Eastpoint Recovery Group, Inc.

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NEW YORK

IAN FAULKNER,

Plaintiff,

DECISION AND ORDER

v.

19-CV-1262S

EASTPOINT RECOVERY GROUP, INC.,

Defendant.

I. INTRODUCTION

In this case, Plaintiff Ian Faulkner seeks an award of attorneys’ fees and costs from

Defendant Eastpoint Recovery Group, Inc., after the entry of an order of judgment against

Eastpoint in his Fair Debt Collection Practices Act (“FDCPA”) action. For the following

reasons, Plaintiff’s motion will be granted, and he will be awarded $7,679.00 in attorneys’

fees and $695.68 in costs.

II. BACKGROUND

Plaintiff commenced this action on September 18, 2019. (Docket No. 1). In his

complaint, he alleged that Defendant contacted him regarding a loan incurred by his

mother, Dawn. (Complaint, Docket No. 1, ¶ 9.) On one call, Defendant threatened to have

Dawn arrested if Plaintiff did not pay her debt. (Id., ¶ 10.) Defendant did not have the legal

authority to arrest Dawn, nor to have another entity arrest Dawn, but Plaintiff, fearful that

his mother would be arrested, paid Defendant $5,000 to settle her debt. (Id., ¶¶ 12-13.)

After learning that Defendant had no legal authority to arrest Dawn, Plaintiff

unsuccessfully pursued a refund of the $5,000 he paid Defendant. (Id., ¶ 15-16.)

Plaintiff’s complaint alleged that Defendant had violated the FDCPA by making

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false, deceptive, or misleading statements in connection with the collection of a debt. (Id.,

¶ 21.) Pursuant to a case management order issued by Magistrate Judge Hugh Scott, the

parties pursued discovery. (See Docket No. 10.) Plaintiff asserts that Defendant did not

timely respond to requests for production and delayed the course of discovery. (Docket

No. 26 at pp. 6-7).

After discovery, Plaintiff filed an amended complaint, adding claims for common

law fraud, unjust enrichment, and rescission of contract. (Docket No. 11.) In his amended

complaint, Plaintiff alleged further details about Defendant’s communications to him,

including the details of a recorded conversation between Plaintiff and Defendant’s agent

in which the agent threatened legal action against Plaintiff’s mother. (Id.)

The parties agree that Defendant offered to settle the case with Plaintiff for $5,000.

(Defendant’s Response to Plaintiff’s Motion, Docket No. 25 at p. 14; Plaintiff’s Reply,

Docket No. 26 at pp. 2-3.) Plaintiff explains that this offer would have resolved Plaintiff’s

mother’s and grandmother’s claims along with his own, and did not provide for attorneys’

fees, resulting in a smaller recovery for Plaintiff. (Id.) Plaintiff rejected the offer. (Id.) After

the parties engaged in mediation, Plaintiff filed notice of acceptance of an offer of

judgment for $5,000 plus reasonable attorneys’ fees and taxable costs. (Docket No. 19,

corrected at Docket No. 20.)

III. DISCUSSION

Plaintiff initially sought $8,348.50 in attorneys’ fees and $695.68 in costs. In

response to Defendant’s objections, Plaintiff’s reply memorandum requests $7,679 in

fees and $695.68 in costs. This court finds that the hourly rates requested and the time

expended in the new request are reasonable, and grants Plaintiff’s request.

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A. Legal Rules

The FDCPA provides for the recovery of reasonable attorneys’ fees and costs by

successful litigants. See 15 U.S.C. § 1692k(a)(3). In determining a reasonable fee, “the

number of hours reasonably expended on the litigation [are] multiplied by a reasonable

hourly rate.” Eades v. Kennedy, PC. Law Offices, 343 F. Supp. 3d 104, 106–07 (W.D.N.Y.

2018) (citing Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933, 76 L. Ed. 2d 40

(1983)). A Court has broad discretion to determine whether the hours expended and the

rates charged are reasonable, and the fee applicant has the burden to establish the

reasonableness of both. Hensley, 461 U.S. 424 at 433; Arbor Hill Concerned Citizens

Neighborhood Association v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008).

In determining the reasonable number of hours that a case requires, a Court

“should exclude from [its] initial fee calculation hours that were not reasonably expended

due to reasons such as overstaffing, unnecessarily contentious conduct, and

unsuccessful claims.” Savino v. Computer Credit, 71 F. Supp. 2d 173, 175 (E.D.N.Y.

1999). Rather than weighing the reasonableness of each individual time entry, a Court

may exclude excessive and unreasonable hours from a fee request by making an across-

the-board reduction in the amount of hours for which compensation is sought. See Kirsch

v. Fleet St. Ltd., 148 F.3d 149, 173 (2d Cir. 1998).

In considering the reasonableness of the rate sought, a Court may consider the

“complexity and difficulty of the case, the expertise and capacity of counsel, the resources

required to effectively prosecute the matter, the timing demands of the case, the

attorney's interest in achieving the ends of the litigation, whether the attorney was acting

pro bono, and other benefits expected by the attorney as a result of the representation.”

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Eades, 343 F. Supp. 3d at 107 (citing Arbor Hill, 522 F.3d 182 at 190).

“Where the plaintiff has failed to prevail on a claim that is distinct in all respects

from his successful claims, the hours spent on the unsuccessful claim should be excluded

in considering the amount of a reasonable fee.” Hensley v. Eckerhart, 461 U.S. 424, 440,

103 S. Ct. 1933, 1943, 76 L. Ed. 2d 40 (1983). However, “[w]here a lawsuit consists of

related claims, a plaintiff who has won substantial relief should not have his attorneys’ fee

reduced simply because the district court did not adopt each contention raised.” Id. A

plaintiff may thus recover attorneys’ fees for “hours spent on unsuccessful claims ... if the

claims are inextricably intertwined and involve a common core of facts.” Reiter v. Metro.

Transp. Auth. of State of New York, No. 01CIV2762GWG, 2007 WL 2775144, at *13

(S.D.N.Y. Sept. 25, 2007) (quoting Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir.

1999) (internal quotation marks omitted)).

B. Reasonableness of Faulkner’s attorney and law clerk hourly rates

1. Lead attorney hourly rate

Attorney Jonathan Hilton requests a $300 hourly rate. This Court finds that this is

a reasonable rate for FDCPA work in this district. See, e.g., Welch v. PDL Recovery Grp.,

LLC, No. 15-CV-512, 2019 WL 4887595, at *3 (W.D.N.Y. Oct. 3, 2019) ($300 per hour a

reasonable rate for experienced FDCPA attorney); Eades v. Kennedy, PC. Law Offices,

343 F. Supp. 3d 104, 108 (W.D.N.Y. 2018) (finding a reasonable average rate for partners

who worked on an FDCPA case to be $300/hour); Godson v. Eltman, Eltman & Cooper,

P.C., No. 11-CV-764, 2018 WL 5263071 at *16, (W.D.N.Y. 2018) (granting attorneys’ fees

in an FDCPA matter of $350-$375/hour for partners and $300/hour for associates in a

class action presenting “unique” issues, but noting that “review of recent FDCPA cases

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decided in this District suggests that a reasonable hourly rate for attorneys' fees ranges

from about $200 to $300 per hour”).

Defendant argues that this Court should follow its holding in Lepski v. Bayside

Capital Services, LLC, where it awarded Mr. Hilton $270 per hour for FDCPA work.

(Docket No. 25 at p. 6, citing Lepski v. Bayside Capital Servs., LLC, No. 19-CV-1677S,

2020 WL 4192245, at *4 (W.D.N.Y. July 21, 2020)). But the present matter is

distinguishable from Lepski in two ways: first, Mr. Hilton only requested $270 in Lepski,

while he requests $300 here; and second, this case does not involve a simple matter of

default judgment like Lepski was, but involved discovery delays, the preparation of an

amended complaint and a motion for summary judgment, and settlement negotiations.

Given Mr. Hilton’s experience in litigating FDCPA matters, and given the issues

involved in this case, this Court finds that $300 per hour is a reasonable hourly rate.

2. Associate and student law clerk hourly rates

Two junior attorneys, Matthew Stewart and Taylor Hutta, worked on this matter.

Plaintiff initially requested $130 per hour for the time worked before they were admitted

to the practice of law, and $225 for the hours worked after their admission to the practice

of law. (Docket No. 23 at p. 3.) However, after Defendant objected, Plaintiff adopted

Defendant’s request that they receive $110 per hour for their time worked before

admission, and $180 per hour thereafter. This Court finds these rates to be reasonable.

See Randle v. AC Asset Servs. LLC, No. 19-CV-01074-LJV, 2020 WL 5757187, at *7

(W.D.N.Y. Sept. 28, 2020) (finding $180 to be a reasonable hourly rate for Stewart).

The parties do not dispute Plaintiff’s request for $110 per hour for the work of

student law clerk Regina Mendocino, and this Court finds this a reasonable rate for such

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work. See Lepski, 2020 WL 4192245, at *4 (finding $110 per hour to be a reasonable rate

in the Western District of New York for the work of law student interns); see also Buffalo

Transportation, Inc. v. Frezer Bezu, No. 16CV1032V, 2020 WL 1695556, at *5 (W.D.N.Y.

Feb. 19, 2020), report and recommendation adopted, No. 16-CV-1032, 2020 WL 1694714

(W.D.N.Y. Apr. 7, 2020) (approving rate of $110 per hour for student law clerk soon to be

admitted to practice).

Because the parties do not dispute these rates, and because this Court finds them

reasonable for this District, it will grant them.

C. Reasonableness of time expended

Mr. Hilton originally sought payment for 43 hours of attorney work, encompassing

his own, his associates’, and his student law clerk’s work. (Docket No. 23-2 at p. 3.) Mr.

Hilton reduced some of this time based on Defendant’s objections, and now asks this

court to award fees for 41.9 hours of work, as this Court calculates his amended time

entries. (Docket No. 26-12 at pp. 2-5.)

This Court finds the amended amount to be a reasonable amount of time to expend

on this matter. Defendant argues that this is too much time for a “routine” FDCPA matter,

but Plaintiff brings forth evidence suggesting that this case was more complex, and

required more time, than the average FDCPA case. According to documents submitted

by Plaintiff, the claim was turned down by an attorney specializing in consumer law due

to its complexity. This attorney then referred the matter to Mr. Hilton. (See Docket No. 26-

2 at p. 2.) As examples of its complexity, this Court notes the challenges in establishing

Plaintiff’s claim regarding his mother’s debt and the potential related common-law causes

of action.

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It also appears that some of the time Plaintiff’s attorney spent was caused by

Defendant’s own tactics. Defendant’s resistance to production necessitated frequent

email communication, and led to much of the additional time spent. (See Docket No. 26

at pp. 6-7.) And the time spent on Plaintiff’s motion for summary judgment may have been

a necessary impetus for the ultimate resolution of this matter. (See Docket No. 10, making

dispositive motions due by September 2, 2020; Docket No. 19, Plaintiff’s initial notice of

acceptance dated August 31, 2020.) This Court finds that at least some of the time Plaintiff

had to expend was related to Defendant’s conduct. Defendant cannot cause Plaintiff to

spend more time in pursuing his claims and then protest the amount of time Plaintiff

ultimately spent.

Defendant argues that time spent on common-law causes of action should not be

reimbursed because these claims are not subject to any fee-shifting statutes. While the

general rule is that hours spent solely on non-fee-shifting claims are not eligible for

reimbursement, In re Arbration Between Okyere & Houslanger & Assocs., PLLC, No.

1:12-CV-01463 JPO, 2015 WL 4366865, at *9–10 (S.D.N.Y. May 28, 2015), time spent

on such claims “may be compensable if doing so furthers the success of the claim under

the fee-shifting statute.” Id. (citing Millea v. Metro–N. R. Co., 658 F.3d 154, 168 n. 4 (2d

Cir. 2011) (“Hours spent on legal work that furthers both fee-shifting and non-fee-shifting

claims may be included in the lodestar calculation because they would have been

expended even if the plaintiff had not included non-fee-shifting claims in his complaint.”)).

Further, time spent on “unsuccessful” claims can be compensated if all of a plaintiff’s

claims are “inextricably intertwined and involve a common core of facts.” Reiter, 2007 WL

2775144, at *13.

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This Court finds that time spent on Plaintiff’s common-law causes of action can be

compensated. The claims for unjust enrichment and fraud clearly stem from the same

facts as Plaintiff’s FDCPA action: the telephone call in which Defendant threatened to

have Plaintiff’s mother arrested, and Plaintiff paid Defendant $5000 to prevent that

outcome. Further, the time spent on the common-law claims appears to have furthered

the success of Plaintiff’s FDCPA claim. This Court finds, therefore, that Plaintiff can

recover attorneys’ fees for the time spent on his common-law claims.

D. An across-the-board reduction is not warranted.

Defendant argues that a 25% reduction in total fees is warranted because Plaintiff

rejected a settlement offer of $5,000, only to eventually agree to the same amount later,

making the time spent after the first offer’s rejection “wasteful.”

If a court finds entries vague or inflated, it can reduce fee award across the board.

to avoid a line by line accounting. Kirsch, 148 F.3d at 173. Here, Plaintiff has performed

that accounting and has addressed Defendant’s claims about vague entries. After

examining Plaintiff’s amended time entries, this Court finds the remaining hour

calculations to represent a reasonable amount of time, and declines to reduce the award

by 25% as Defendant requests.

Defendant’s argument that the time spent after Plaintiff rejected its offer of $5,000

was wasteful is unpersuasive. As represented by Plaintiff, the initial offer purported to

resolve his mother’s and grandmother’s claims along with his own, and did not provide

for a separate recovery of attorneys’ fees. (See Docket No 26 at pp. 2-3.) The settlement

ultimately reached allowed Plaintiff to achieve his goal of recovering the entire $5,000 he

paid to Defendant, and provided for the separate recovery of attorneys’ fees. This Court

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does not consider time spent achieving a better outcome to be wasteful, and it therefore

will not reduce Plaintiff’s fee recovery on that basis.

IV. CONCLUSION

This Court has examined Plaintiff’s request for attorneys’ fees and found the rates

requested and the time expended to be reasonable for this case. Therefore, Plaintiff’s

motion will be granted.

V. ORDERS

IT HEREBY IS ORDERED, that Plaintiff’s Motion for Attorneys’ Fees and Costs

(Docket No. 23) is GRANTED.

The Clerk of Court is HEREBY DIRECTED to enter judgment against Defendant

in the amount of $8,374.68, comprising $7,679.00 in attorneys’ fees and $695.68 in costs.

SO ORDERED.

Dated: December 27, 2020

Buffalo, New York

_______/s/ William M. Skretny________

WILLIAM M. SKRETNY

United States District Judge

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