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Shaw v. Credit Collection Services

December 11, 2009

ADAM SHAW, PLAINTIFF,
v.
CREDIT COLLECTION SERVICES, DEFENDANT.



The opinion of the court was delivered by: Honorable Larry A Lanburns United States District Judge

ORDER ON PLAINTIFF'S MOTION FOR ATTORNEYS' FEES

Shaw accepted a Rule 68 offer of judgment for $2,001.00 plus reasonable attorneys' fees on or about July 15, 2009. This judgment was entered on July 24, 2009. Now pending before the Court is Shaw's motion for attorneys' fees, which the parties have not been able to compromise on. Shaw wants $12,572.44*fn1 ; Credit Collection Services ("CCS") believes $2,000 is fair.

Shaw and CCS agree that Shaw is entitled to a "lodestar" amount that is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). They disagree on three things: (1) whether Shaw can recover attorneys' fees beyond the date of the offer of judgment (that is, attorneys' fees for bringing and arguing the present motion); (2) whether the number of hours Shaw's lawyers claim to have spent on this case is reasonable; and (3) whether Shaw's lawyers' rates are reasonable.

1. Fees on Fees

As a general rule, the time attorneys spend seeking fees is compensable, and can be incorporated into a final attorneys' fees award. Comacho v. Bridgeport Financial, Inc., 523 F.3d 973 (9th Cir. 2008). But there was an offer of judgment in this case, dated July 7, 2009, that allowed Shaw "his reasonable attorneys' fees and costs incurred to date, to be mutually agreed upon by the parties, or if no agreement can be reached, to be determined by the Court in accordance with 15 U.S.C. § 1692k." (Dkt. No. 8 (emphasis added).) The judgment subsequently entered confirmed this, awarding Shaw "his reasonable attorneys' fees and costs incurred through July 7, 2009 . . . ." (Dkt. No. 11.)

Guerrero v. Cummings, 70 F.3d 1111 (9th Cir. 1995), would appear to control here. In that case, an offer of judgment allowed the plaintiff $1,500 "plus reasonable attorney fees and costs incurred . . . prior to the date of this offer in an amount to be set by the court." Id. at 1113. The plaintiff's attorney then sought to recover fees for preparing his bill, and the district court denied the request. The Ninth Circuit affirmed. The language of the offer of judgment, the Ninth Circuit held, was unambiguous, and it limited recoverable attorneys' fees to those accrued prior to the date of the offer. Id. at 1113.

Ostensibly, the same conclusion is warranted in this case. The offer of judgment Shaw accepted plainly allowed him "reasonable attorneys' fees and costs incurred to date," that date being July 7, 2009.*fn2 Shaw claims there is an ambiguity, however: The "to date" language can be read to limit only a fees award that the parties mutually agree upon; if no agreement is reached, and the Court has to determine an award in accordance with 15 U.S.C. 1692k, Shaw is entitled to his fees and costs for the entire action, which includes filing and arguing a motion for fees. The question, in other words, is whether "to date" modifies "to be mutually agreed upon by the parties" and its alternative,"to be determined by the Court," or whether it modifies only the former.

The Court rejects Shaw's argument, for four reasons. First, the construction of the offer of judgment that Shaw proposes would incentivize him (or his lawyers) to negotiate a fees award in bad faith, knowing more work will come (and with it, a greater award) if the parties can't agree on one and have to involve the Court. Second, it is highly unlikely that CCS would willingly subject itself to a larger fee award in the event that it could not mutually agree upon one with Shaw. Third, mutually agreeing on a fees amount takes the work of lawyers, too, and it's counterintuitive that CCS would be unwilling to compensate Shaw's lawyers for their time negotiating an award but absolutely willing to compensate his lawyers for moving for one.

Fourth, and most important, the Court simply finds Shaw's reading of the offer of judgment to be extremely strained and ends-driven. The point of an offer of judgment is to save the offeror costs going forward, and the "to date" language is prominent in the offer CCS made. Shaw argues that "15 U.S.C. § 1692k provides that all Plaintiff's reasonable attorneys' fees and costs are to be paid by Defendant for the entire action," but that is misleading. (Reply Br. 3.) The word "entire" appears nowhere in the text of the statute; in fact, the relevant subdivision, § 1692k(a)(3), merely authorizes courts to determine "a reasonable attorney's fee" in Fair Debt Collection Practices Act cases. That language doesn't eviscerate the relevance of an offer of judgment that cuts the attorneys' fees off at the offer of judgment.*fn3 Thus, Shaw's fees are cut off at the offer of judgment.

2. Cut-Off Date

Taking the parties at their word, the offer of judgment was sent on July 7, 2009 and received on July 15, 2009.*fn4 Shaw's lawyers billed a decent number of hours between these dates, having nothing to do with their motion for fees, and the Court must also determine whether they are compensable. The question, in other words, is whether, under the offer of judgment, attorneys' fees and costs stopped accruing on the day the offer was dated and sent, or on the day it was received and accepted.

Offers of judgment under Rule 68 are analogous to contract offers, and rules of contract construction are used to interpret them. Holland v. Roeser, 37 F.3d 501, 504 (9th Cir. 1994). In Holland, the defendant's Rule 68 offer used the words "costs now accrued and reasonable attorney fees as determined by the court," and the Ninth Circuit held that "costs now accrued" clearly waived post-offer costs while "reasonable attorney fees" was ambiguous and didn't limit post-offer fees. This is consistent with the principle that ambiguities must be construed "against the offeror as the drafting party." Herrington v. County of Sonoma, 12 F.3d 901, 907 (9th Cir. 1993). But there are no such ambiguities in CCS's offer, which awards Shaw "his reasonable attorneys' fees and costs incurred to date."

The only conceivable date that the words "to date" could reference is the date written on the offer: July 7, 2009. See generally Robins v. Scholastic Book Fairs, 928 F.Supp. 1027, 1030-31 (D. Oregon 1996) (phrase "accrued costs and attorney's fees" did not waive post-offer fees).

Morever, as CCS observes, the judgment entered in this case by the Clerk, to which Shaw made no objection, clearly states that "plaintiff is awarded his reasonable attorneys' fees and costs incurred through July 7, 2009, to be mutually agreed upon by the parties, or, if no agreement can be reached, to be determined by the Court in accordance with 15 U.S.C. ยง 1692k." (Dkt. No. 12.) This judgment unambiguously sets the cut-off date for fees and costs ...


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