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Reygadas v. DNF Associates LLC

United States District Court, W.D. Arkansas, Fort Smith Division

December 23, 2019

STEPHANIE REYGADAS PLAINTIFF
v.
DNF ASSOCIATES, LLC DEFENDANT

          ORDER

          HON. MARK E. FORD UNITED STATES MAGISTRATE JUDGE.

         Currently before the Court are Plaintiff's Bill of Costs (ECF No. 53) filed September 30, 2019 and her Motion for Attorney's Fees[1] (ECF No. 54) and supporting brief and exhibits (ECF No. 55) filed on October 1, 2019. Defendant filed its Opposition to Plaintiff's Counsel's Motion for Attorney's Fees (ECF No. 59) on October 15, 2019. The matter was referred to the undersigned on November 4, 2019. For the reasons set forth below, Plaintiff's Bill of Costs (ECF No. 53) is GRANTED and Plaintiff's Motion for Attorney's Fees (ECF No. 54) is GRANTED IN PART.

         I. BACKGROUND

         Plaintiff, Stephanie Reygadas (“Reygadas”) filed this civil action against DNF Associates, LLC (“DNF”) on October 29, 2018, alleging violations of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq., and the Arkansas Fair Debt Collection Practices Act (“AFDCPA”), Ark. Code Ann. § 17-24-501, et seq. (ECF No. 1). DNF sued Reygadas in state court, only to have DNF hire Radius Global Solutions (“RGS”) to contact Reygadas, instead of her retained counsel, to “settle” the debt. (Id., pp. 5-6).

         On November 20, 2018, DNF moved to dismiss under Rule 12(b)(6), arguing it was not a “debt collector” under the primary purpose prong of the FDCPA and the AFDCPA because it was a “passive debt buyer, ” and that it could not be liable under the FDCPA or AFDCPA for RGS's contact with Reygadas. (ECF Nos. 8, 9). After further research of DNF's debt collection activities in Arkansas, Reygadas filed a First Amended Complaint, which included more facts establishing that DNF's primary purpose was debt collection. (ECF No. 11). Reygadas also filed an opposition to DNF's motion to dismiss with a memorandum brief in support, explaining how DNF was a “debt collector” under the primary purpose prong of the statutory definition of a “debt collector, ” and how it knew Reygadas was represented by counsel and violated the FDCPA and the AFDCPA by hiring RGS to collect the debt directly from Reygadas. (ECF No. 12). DNF moved to dismiss the First Amended Complaint on December 18, 2018. (ECF Nos. 14, 15).

         The parties held their Rule 26(f) Conference on December 10, 2018. (ECF No. 16). During the conference, DNF requested a settlement demand from Reygadas. As requested, Reygadas made an Offer of Compromise on December 12, 2018: Reygadas would release her claims in exchange for payment of $12, 000.00 and cessation of debt collection efforts against her. (ECF No. 55-3). The Offer of Compromise also explained the time that Reygadas' counsel had devoted to the case prior to filing the original complaint and then preparing the First Amended Complaint and opposition to the motion to dismiss, and that if DNF intended to litigate the “passive debt buyer” arguments through trial, then the attorney time and resources it would take to resolve the case through a trial would likely far exceed the money a jury might allow Reygadas for her statutory and actual damages. (Id.). DNF did not accept Reygadas' offer of compromise, make a counter-offer, or engage in any settlement discussions.

         Reygadas then prepared and served her Initial Disclosures (which included several debt collection complaints and other filings, i.e., default judgments, by DNF in Arkansas state courts that Reygadas' counsel spent time searching for and organizing so Reygadas could prove DNF's primary purpose was debt collection), Interrogatories, and Request for Admissions. She had already served her Request for Production. DNF then moved to stay discovery and to shorten Reygadas' time to respond to the motion to stay discovery. (ECF Nos. 18-20). On December 28, 2018, the Court denied DNF's motion to dismiss, the motion to stay discovery, and the motion to shorten time. (ECF No. 22).

         DNF moved for summary judgment on March 15, 2019. (ECF Nos. 25-27). In order to oppose DNF's motion for summary judgment, Reygadas' counsel spent time identifying 129 debt collection lawsuits and the associated filings (i.e., motions for default judgments and default judgments) DNF had filed in Arkansas state courts after Reygadas filed her complaint against DNF. These debt collection lawsuits were presented in support of her opposition to DNF's motion for summary judgment, to specifically rebut DNF's “passive debt buyer” argument by showing it was still engaging in debt collection activities by suing Arkansas consumers to collect defaulted debts it had purchased. Reygadas' counsel also spent time researching the “passive debt buyer” issue to prepare her opposition to DNF's motion for summary judgment. (ECF Nos. 28, 29).

         On May 16, 2019, the Court found as a matter of law that DNF was a “debt collector” as defined by the FDCPA and the AFDCPA; that it violated the FDCPA and AFDCPA because it knew Reygadas was represented by counsel when it hired RGS to collect the debt from her; and, that the only remaining issue for jury trial was to determine the damages that Reygadas could recover. (ECF No. 35). DNF moved for certification for an interlocutory appeal on May 23, 2019 (ECF Nos. 36, 37), which the Court denied on May 29, 2019 (ECF No. 38).

         DNF then pursued discovery, including the service of interrogatories, requests for production of documents, and the deposition of Reygadas. (ECF No. 55, p. 5). After Reygadas' deposition, counsel for the parties resolved the case by the accepted Offer of Judgment filed on September 17, 2019. (ECF No. 51). Judgment in the amount of $4, 000.00, plus post-judgment interest, was entered on the same date. (ECF No. 52). The Offer of Judgment further provided for payment of “reasonable attorneys' fees and taxable costs incurred in this action prior to expiration of this offer, such fees to be determined by agreement of the parties and, if the parties cannot agree, by the Court upon motion of the Plaintiff.” (ECF No. 51, ¶ 1). Reygadas filed her Bill of Costs on September 30, 2019. (ECF No. 53). Her pending Motion for Attorney's Fees and supporting brief were filed on October 1, 2019. (ECF Nos. 54, 55). DNF's response in opposition to Reygadas' motion for attorney's fees was filed on October 15, 2019. (ECF No. 59). The matter was referred to the undersigned on November 4, 2019.

         II. DISCUSSION

         Reygadas seeks a total of $803.28 in costs and $26, 550.00 in attorney's fees. In support of her motion for attorney's fees, Reygadas submitted the sworn declaration of her attorney, Corey D. McGaha (“McGaha”) (ECF No. 55-1); an itemized list of hours billed to this case by McGaha (ECF No. 55-2); the Offer of Judgment (ECF No. 55-3); the sworn Affidavit of Todd M. Turner, an Arkansas attorney (ECF No. 55-4); and, a separate Bill of Costs (ECF No. 53). As noted above, the Offer of Judgment explicitly provides that Reygadas is entitled to recover reasonable attorney's fees and costs. The issue here is whether the amounts claimed by Reygadas are reasonable. DNF does not object to the amount of costs. Regarding attorney's fees, DNF objects to the reasonableness of the hourly rate claimed by McGaha and the number of hours expended in the case. (ECF No. 59).

         A. Costs

         Under 28 U.S.C. § 1920, a court may tax certain litigation fees as costs. Pursuant to that statute, the Court awards the following:

Description

Amount

Authority

Filing Fee

$400.00

§ 1920(1)

Service of Summons

$7.33

§ 1920(1)

Transcript of Reygadas' Deposition

$385.25

§ 1920(2)

Exemplification Fees

$10.70

§ 1920(4)

Total

$803.28

         Accordingly, Reygadas' total cost award, excluding attorney's fees, is $803.28.

         B. ...


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