UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA
October 19, 2010
EDWARD WALKER AND SUSAN WALKER, PLAINTIFFS,
RASH CURTIS & ASSOCIATES, DEFENDANT.
The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
MEMORANDUM AND ORDER
Plaintiffs Edward and Susan Walker ("Plaintiffs") and Defendant Rash Curtis & Associates ("Defendant") have litigated their dispute regarding alleged violations of the Fair Debt Collection Practices Act (the "FDCPA"), and have resolved their substantive differences. Presently before the Court are two separate motions. First, Plaintiffs filed a Motion for Attorneys' Fees and Costs to have the Court determine the appropriate remuneration under the terms of the settlement agreement. Second, the terms of the settlement agreement are themselves in dispute, as the Defendant filed a Motion to Vacate or Set Aside Judgment Dated September 2, 2010 ("Motion to Vacate").
For the reasons set forth below, Defendant's Motion to Vacate the Judgment is denied, and Plaintiffs' Motion for Reasonable Attorneys' Fees is granted in part.*fn1
Plaintiff Susan Walker incurred a debt that Defendant either owned or was hired to collect. Several times on or around July 23, 2009, Defendant made repeated calls to Mrs. Walker's place of business, even after both Plaintiffs explained that Mrs. Walker could not receive personal calls at her place of employment. During these calls, Defendant threatened to sue Plaintiffs if the debt was not paid. These exchanges caused Mrs. Walker emotional and mental anxiety and stress. Plaintiffs' filed suit against Defendant for violating the FDCPA, and the California version of the FDCPA, the Rosenthal FDCPA.
On August 3, 2010, Defendant sent Plaintiffs, via postal mail, a "Rule 68 Offer of Settlement." (ECF No. 15-1.) The settlement offer stated that, if agreed, Defendant would pay Plaintiffs two thousand and one dollars ($2,001.00) plus reasonable attorneys' fees and costs in exchange for dismissing the case with prejudice. (Id. at 2.) The offer was "made for the purposes specified in [Federal Rule of Civil Procedure]
Rule 68 and is not to be considered an admission of liability."
(Id. at 3.) Defendant never filed the Offer of Settlement with the Court, but instead sent the offer directly to Plaintiffs. On August 17, 2010, Plaintiffs filed a Notice of Acceptance of Defendant's Rule 68 Offer of Judgment, stating that both Plaintiffs accepted the terms of settlement. (ECF No. 15.) In accordance with the Notice of Acceptance with Offer of Judgment, the Clerk of Court entered the Judgment and closed the case on September 2, 2010. (ECF No. 17.)
On the same day the Clerk entered the Judgment, Defendant filed the Motion to Vacate. (ECF No. 18.) In their motion, Defendant states that the Rule 68 Offer of Settlement was not in fact a judgment, and was never intended to serve as a judgment. Specifically, Defendant argues that Federal Rule of Civil Procedure Rule 68*fn3 distinguishes between judgment and settlement, and the rule should be "construed to include termination of litigation by settlement." (Id. at 4.) Instead of issuing a judgment, Defendant asks the Court to enter an order of dismissal with prejudice. (Id.)
In conjunction with the settlement offer to pay attorneys' fees, Plaintiffs filed a Motion for Reasonable Attorneys' Fees and Costs on August 31, 2010. (ECF No. 16.) Plaintiffs calculated the fees owed through August 3, 2010. For 21.8 hours of work, Plaintiffs' counsel states they are owed $4822.50 USD. In their motion, Plaintiffs also argued they should be awarded expenses under FDCPA § 1692k(a)(3). Plaintiffs' expenses were calculated at $609.50 USD.
A. Motion to Vacate
Rule 68 clearly explains the standard for a party to make an offer of judgment. At any time more than ten days preceding trial, a party to the action "may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued." Rule 68(a). The opposing party may then accept the offer if "within 14 days after being served," they serve "written notice accepting the offer." Id. To confirm the offer, either party may file the "offer and notice of acceptance, plus proof of service. The clerk must then enter judgment." Id.
The word "judgment" is interpreted "broadly to encompass termination of litigation resolved by subsequent settlement." Lang v. Gates, 36 F.3d 73, 76 (9th Cir. 1994). To "preserve and promote the purposes of Rule 68, the phrase 'judgment finally obtained' certainly would encompass" terminating litigation as a result of settlement. Id. By all accounts, at the federal level, there is no material distinction between an offer of "judgment" and an offer of "settlement" under Rule 68.*fn4 See Jay Horowitz, Rule 68: The Settlement Promotion Tool That Has Not Promoted Settlements, 87 Denv. U. L. Rev. 485, 504-505 (2010).
In the instant case, Defendant's settlement was titled "Rule 68 Offer of Settlement." Obviously, Defendant intended the case to be settled via rule 68. Consequently, because the settlement was offered pursuant to Rule 68, it is irrelevant whether Plaintiffs' acceptance is characterized as a "settlement" or a "judgment." Plaintiffs accepted the offer and executed the requirements of Rule 68, and the Clerk of Court entered the judgment appropriately. Defendant's own motion acknowledges that the primary purpose of Rule 68 is to achieve settlements of this nature. (See Def. Motion to Vacate at 2-3.) The Court sees no reason to overturn the judgment entered. Therefore, Defendant's Motion to Vacate the Judgment is denied.
B. Plaintiffs' Motion for Reasonable Attorneys' Fees & Costs
1. Reasonable Attorneys' Fees
In accordance with the terms of settlement, Plaintiffs filed a Motion for Reasonable Attorneys' Fees and Costs. Rule 54(d)(2) requires that a claim for attorneys' fees be filed by a motion specifying both the manner in which the case was disposed and the amount of fees sought. Essentially adopting the "lodestar" standard set in Hensley v. Eckerhart, 461 U.S. 424 (1983), Eastern District Local Rule 293 further expounds on the requirements necessary for a party to be paid reasonable attorneys' fees. Under Local Rule 293, a party has 28 days to file the motion after an entry of judgment.
Further, Rule 293(c) gives the court ample criteria by which to evaluate the reasonableness of attorneys fees, including: (1) the time and labor of the attorney(s), (2) the reputation and ability of the attorney(s), and (3) any other matters the Court "may deem appropriate under the circumstances."
In this case, the terms of the settlement dictated that Defendant pay Plaintiffs' attorneys' fees. Plaintiffs' motion was timely filed under the statute and contained all pertinent information regarding the calculation of reasonable fees. The Court is unpersuaded by Defendant's argument that Plaintiffs' attorneys' pro hac vice admission in the Eastern District precludes them in any way from receiving compensation. Defendant also argues that secretarial work not be included in any fee calculation. While this is true, Plaintiffs' description of the work the legal assistants performed is consistent with actual legal work and is not secretarial in nature. (See ECF No. 16-1, itemizing the legal services performed by Plaintiffs' counsel.)
The Court has evaluated each of the lodestar criteria as well as the summary of legal fees requested and determines that the fees are reasonable given the length of the case and the results obtained. Therefore, pursuant to the settlement offer and the factors listed in Local Rule 293(c), Plaintiffs' are entitled to $4,822.50 in reasonable attorneys' fees.
2. Reasonable costs under the FDCPA
Plaintiffs also request reasonable litigation costs and expenses to be paid as part of the settlement pursuant to the FDCPA's Civil Liability provision. Under the statute, if a plaintiff is successful in enforcing liability on a debt collector who fails to comply with the FDCPA, then "the costs of the action" are recoverable by the prevailing party. 15 U.S.C. § 1692k(a)(3).
As noted above, nothing in the Rule 68 Settlement Offer indicates that Plaintiffs in any way conducted a "successful action to enforce" liability against Defendant under the FDCPA. Id. In fact, the settlement offer explicitly states that it is "not to be considered an admission of liability." (ECF No. 15-1 at 3.) See Pigeaud v. McLaren, 699 F.2d 401, 402 (11th Cir. 1983) (Plaintiff could not be considered a prevailing party because: (1) the offer of judgment specifically stated that nothing in it should be construed as an admission of liability, and (2) Plaintiff did not establish "success on the merits."). Therefore, Plaintiffs are not entitled to litigation costs and expenses under the FDCPA.
For the reasons stated above, Defendant's Motion to Vacate the Judgment is DENIED. Plaintiffs' Motion for Reasonable Attorneys' Fees and Costs is GRANTED in part and DENIED in part. Plaintiffs are entitled to reasonable attorneys' fees in the amount of $4,822.50, but are NOT entitled to reasonable costs under the FDCPA.
IT IS SO ORDERED.