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Ash v. Malacko

United States District Court, D. Minnesota

August 18, 2014

Deborah Ash, Plaintiff,
v.
Richard Malacko, Defendant.

REPORT AND RECOMMENDATION

JEANNE J. GRAHAM, Magistrate Judge.

The above-captioned case is before the Court on Plaintiff's Motion for Attorney Fees. (Pl.'s Mot. for Att'y Fees, July 7, 2014, ECF No. 13.) The Motion has been referred to this Court for a report and recommendation pursuant to 28 U.S.C. § 636 and Local Rule 72.1. For the reasons discussed below, the Court recommends that Plaintiff's request be granted and Plaintiff be awarded $2, 475 for attorney fees incurred in reaching a settlement.

I. Background

On March 4, 2014, the University of Minnesota's Legal Clinic ("the Clinic"), headed by Professor Prentiss Cox, filed a Complaint on behalf of Plaintiff Deborah Ash. (Compl., Mar. 4, 2014, ECF No. 1.) The Complaint alleged that Defendant Richard Malacko violated provisions of 15 U.S.C. § 1692, subsections (c) through (e), more commonly known as the Fair Debt Collections Practices Act ("FDCPA"). ( Id. ¶¶ 4, 29.) Defendant sent his Offer of Judgment, dated April 30, 2014, to Plaintiff. (Bolstad Aff. Ex. A, July 7, 2014, ECF No. 16.) The terms of the offer included "reasonable attorneys' fees incurred to date" and stated that "[the] offer of judgment is made for the purposes specified in Rule 68, and is not to be construed as an admission of liability or damages." ( Id. ) Plaintiff accepted the offer on May 13, 2014. (Bolstad Aff. ¶ 3.) The following day, Plaintiff requested the attorney fees in accordance with the offer, but Defendant refused to pay them. ( Id. ¶¶ 5-7.)

As a result of Defendant's failure to pay, Plaintiff filed the Motion for Attorney Fees now before this Court. (Pl.'s Mot. for Att'y Fees.) In support of her motion, Plaintiff submitted an itemized statement detailing the time spent on the matter by student attorney Samuel Bolstad, clinic supervisor Professor Cox, and an attorney from Legal Aid.[1] (Bolstad Aff. Ex. B.) The supporting memorandum also argued that awarding attorney fees for work done by student attorneys in a legal clinic is proper. (Pl.'s Mem. in Supp. of Mot. 3-4, July 8, 2014, ECF No. 15.) Plaintiff requested that Mr. Bolstad's work be billed at an hourly rate of $100 and Professor Cox's work be billed at an hourly rate of $350. (Bolstad Aff. Ex. B.) In support of these rates, Plaintiff filed supplemental briefing to the Court delineating the legal experience of both Mr. Bolstad and Professor Cox. (Bolstad Supplemental Aff. Ex. A & B, July 28, 2014, ECF No. 21.) Plaintiff also cited cases outlining reasonable rates for advocates with similar experience. (Pl.'s Supplemental Mem. in Supp. of Mot. at 4.)

Defendant claimed that he should not have to pay any attorney fees because (1) this case involves an accepted offer for settlement, not a party prevailing in court, so principles of contract interpretation, rather than fee-awarding statutes, should control; (2) the settlement agreement included the term "incurred, " and no fees have been incurred to date; (3) the attorney fees requested are unreasonable. (Def.'s Mem. 2-6, July 15, 2014, ECF. No. 19.) In supplemental briefing, Defendant argued that Mr. Bolstad's affidavit and resume and Professor Cox's curriculum vitae were insufficient to show that the fees charged were reasonable. (Def.'s Responsive Briefing 4-7, Aug. 1, 2014, ECF No. 22.)

Plaintiff countered that the term "incurred" used in the settlement agreement should not limit the attorney fees to those " actually incurred." (Pl.'s Supplemental Mem. in Supp. of Mot. at 2 (citing Raney v. Fed. Bureau of Prisons, 222 F.3d 927, 929 (Fed. Cir. 2000)).) Instead, the award should include fees for work completed but not yet billed, even if the Clinic did not plan to charge Plaintiff for that work. (Pl.'s Mem. in Supp. of Mot. at 4.) In the alternative, Plaintiff argued, the term "incurred" is ambiguous and should be construed against the drafter- Defendant-to include fees from the Clinic. (Pl.'s Supplemental Mem. in Supp. of Mot. at 3.)

II. Discussion

A. Attorney fees incurred

The FDCPA includes a fee-shifting statute that requires a defendant to pay "the costs of the action, together with a reasonable attorney's fee as determined by the court" in the "case of any successful action to enforce... liability [under the FDCPA]." 15 U.S.C. § 1692k(a)(3). Reasonable attorney fees under the FDCPA and other federal fee-shifting statutes include fees for non-profit legal services. See Raney, 222 F.3d at 933 ("The Supreme Court's instructions in Blum are crystal clear that a non-profit legal services organization is entitled to receive a prevailing market rate pursuant to a statute that authorizes the prevailing party to be awarded a reasonable attorney's fee as part of the cost.'" (quoting Blum v. Stenson, 465 U.S. 886, 894 (1984))).

Fees are still awarded under this rule, even when there is an offer of judgment under Rule 68. See Fletcher v. City of Fort Wayne, 162 F.3d 975, 976-77 (7th Cir. 1998) (Easterbrook, J.). In Fletcher, the court had before it a Rule 68 offer of judgment with the following language: "This offer is not to be construed as an admission that the Defendants are liable in this action or that Plaintiff suffered any damages." Id. at 977. Judge Easterbrook opined:

Defendants think that these are magic words that preclude awards of attorneys' fees, but that can't be right. Plaintiffs who accept Rule 68 offers accept the money, not the defendants' self-serving characterizations.... That the agreement contained the defendants' we-admit-nothing slug line would not prevent the plaintiffs from asking the court to treat them as prevailing parties.... [P]laintiffs may "prevail" by settlement as well as by victory at trial.

Id.

When it comes to the meaning of the word "incurred" as used in an offer of judgment, "courts have neither interpreted the incurred' term in these statutes to restrict or limit the payment of fees to those actually incurred, nor prevented ...


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