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Dunnigan v. Federal Home Loan Mortgage Corp.

United States District Court, D. Minnesota

March 2, 2017

Julie M. Dunnigan, Plaintiff,
v.
Federal Home Loan Mortgage Corporation d/b/a Freddie Mac, Defendant.

          John H. Goolsby, Goolsby Law Office, LLC, for Plaintiff.

          Ashley M. DeMinck and Ellen B. Silverman, Hinshaw & Culbertson, LLP, for Defendant.

          ORDER

          SUSAN RICHARD NELSON, United States District Judge.

         This matter is before the Court on Plaintiff Dunnigan's Objections (“Objs.”) [Doc. No. 91] to Magistrate Judge Mayeron's Report and Recommendation (“R&R”) [Doc. No. 90] and Plaintiff's Motion for Attorney's Fees [Doc. No. 71]. For the reasons set forth below, Dunnigan's Objections are sustained in part and overruled in part. Consistent with this ruling, the Court adopts the Report and Recommendation in part and respectfully declines to adopt it in part.

         I. BACKGROUND

         Defendant Federal Home Loan Mortgage Corporation (“Freddie Mac”) did not object to the Report and Recommendation. Neither party objected to the procedural history and facts as set forth in the Report and Recommendation. Thus, the Court cites to the Report and Recommendation in recounting the background of this case.

         A. Facts and Procedural Posture

         Dunnigan alleges that in July of 2013, software used and operated by Freddie Mac erroneously listed the mortgage on her home as 90-days or more delinquent within the past year. (R&R at 1.) As a result of this classification, when Dunnigan later sought to refinance her home, Freddie Mac allegedly sent numerous “caution certificates” as part of the feedback it provided to loan originators who inquired into Dunnigan's credit scores. (Id. at 1-2.) Due at least in part to these caution certificates, Dunnigan was unable to obtain refinancing for several months and when she finally did, the mortgage terms were less favorable. (See id. at 2.)

         When Dunnigan investigated the reason for the caution certificates, Freddie Mac allegedly represented to her that Equifax was erroneously reporting the delinquency on her mortgage. (Id.) Based on this representation, Dunnigan sued Equifax in 2014 for the erroneous reporting (hereinafter, the “Equifax Case”). (Id.) As part of discovery in the Equifax Case, Dunnigan subpoenaed records from Freddie Mac and deposed company representatives. (See id. at 6, 11-12.) Dunnigan alleges that it was through this discovery that she finally learned that Freddie Mac-not Equifax-was the source of the problem. (See id.) The Equifax Case was settled and dismissed in 2015. (Id. at 2.)

         In June of 2015, Dunnigan brought the present suit against Freddie Mac. (Id.) Originally, Dunnigan alleged two violations of the Fair Credit Reporting Act (“FCRA”), but subsequently added various state law tort claims over the course of three amendments to her Complaint. (Id.) At a hearing on Freddie Mac's motion to dismiss, this Court made clear that although Dunnigan's FCRA claims would survive for the time being, she had “an uphill battle” to show that Freddie Mac was a credit reporting agency, which was a legal issue and not a question of fact. (See Hr'g Tr. dated 2/12/2016 at 18 [Doc. No. 45].) Ultimately, the parties resolved their dispute when Freddie Mac made a Rule 68 Offer of Judgment, which Dunnigan accepted. (See Rule 68 Offer of Judg. and Acceptance (“Offer of Judg.”) [Doc. No. 69].)

         Two elements of the Offer of Judgment are important here. First, the Offer makes clear that it “does not constitute an admission of any liability or wrongdoing by Freddie Mac regarding Plaintiff's claims against Freddie Mac or otherwise.” (Id. at 5[1] (emphasis added).) Second, the Offer included “an additional amount for Plaintiff's reasonable attorneys' fees and costs, in an amount to be determined by the Court.” (Id. at 4.)

         Pursuant to the Offer and the FCRA, Dunnigan moved for attorney's fees. (R&R at 3-4.) Ultimately, she sought $205, 143.33 related to her FCRA claims, as well as a five percent “enhancement” of those fees.[2] (Id. at 5.) Magistrate Judge Mayeron (“Judge Mayeron”) found that Dunnigan was entitled to fees generally, but not the full amount that she sought.[3] (See id. at 35-36.) Specifically, Judge Mayeron concluded that Dunnigan was entitled to $99, 140.57 in fees and declined to enhance that amount by the requested five percent. (Id. at 21-22, 35-36.)

         In relevant part, Judge Mayeron recommended the following reductions to Dunnigan's fees. First, although she agreed Dunnigan was entitled to some fees associated with the work performed in the Equifax Case, Judge Mayeron recommended that only fees associated with work that ultimately assisted Dunnigan in her case against Freddie Mac should be awarded. (See id. at 23-25.) Judge Mayeron found that Dunnigan failed to provide the factual basis showing that many of her fees from the Equifax Case related to Freddie Mac and thus recommended reducing the request by $31, 204.15. (Id. at 24-25.)

         Second, Judge Mayeron recommended further reducing Dunnigan's fees by $20, 335.86 for “unnecessary work” performed on matters such as summary judgment motions that were never filed, preparing jury instructions and verdict forms for a trial that was never close to occurring, and drafting motions to compel that were never filed. (Id. at 29-30.) Third, Judge Mayeron further reduced Dunnigan's fees by $43, 255.24 for “excessive hours.” (See id. at 31-35.) For example, Judge Mayeron concluded that eleven hours preparing a Rule 26(f) report and 105 hours related to the first and second motions to dismiss were unreasonable. (Id. at 31-34.) Fourth, Judge Mayeron recommended further reducing Dunnigan's fees by $11, 207.51 for administrative tasks performed by an attorney (and billed at the attorney's rate) and vague billing entries that prevented Judge Mayeron from determining whether they were reasonably necessary or not.[4] (See id. at 25-29.) In total, Judge Mayeron recommended reducing Dunnigan's requested fees by $106, 002.76. (Id. at 35.)

         Dunnigan filed objections to the Report and Recommendation. (See Objs.) Specifically, she objects to the recommended reductions for work performed in the Equifax Case, unnecessary or excessive work, and the denial of her “modest upward adjustment to the lodestar.” (Id. at 1.) Freddie Mac filed a response in which it agreed with Judge Mayeron's recommendations and urged this Court to adopt the Report and Recommendation. (See Def.'s Reply Mem. of Law in Opp. (“Mem. in Opp.”) [Doc. No. 93].)

         II. ...


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