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Heroux v. Callidus Portfolio Management, Inc.

United States District Court, D. Minnesota

January 3, 2019

Jason Heroux, Plaintiff,
v.
Callidus Portfolio Management, Inc., and Messerli & Kramer, P.A., Defendants.

          Darren B. Schwiebert, DBS Law LLC, for Plaintiff

          Derrick N. Weber and Stephanie Shawn Lamphere, Messerli & Kramer, P.A., for Defendant

          ORDER AWARDING ATTORNEY'S FEES AND COSTS

          HILDY BOWBEER, UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on Plaintiff Jason Heroux's Motion for Determination of Amount of Reasonable Attorney Fees [Doc. No. 42], following a settlement of the underlying action as a part of which the parties stipulated that the Court would determine the amount of the award to Heroux for attorney's fees and costs pursuant to the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. [Doc. No. 37].[1] Heroux seeks an award of attorney's fees in the amount of $41, 720 and costs in the amount of $400. For the reasons set forth below, the Court awards attorney's fees in the amount of $22, 946 and costs in the amount of $400.

         I. Background

         A. The State Court Action

         The factual background underlying this case is largely set forth in an Order by the Honorable David S. Doty on Defendants' Motion for Judgment on the Pleadings.[2] [Doc. No. 29.] Briefly, Callidus Portfolio Management Inc. (“Callidus”), sought to collect on a debt owed by Plaintiff Jason Heroux. Callidus hired Defendant Messerli & Kramer, P.A. (“Messerli”) as counsel to assist in collecting the debt. (Id.) Messerli served Heroux in April 2016 with a state court complaint seeking $1665.11 plus interest. Heroux answered the complaint in March 2017 and denied all liability. Messerli filed the complaint in Hennepin County District Court and served on Heroux a document entitled “Plaintiff's First Set of Interlocking Discovery.” Heroux did not respond to the discovery, and, further, did not respond or appear when Messerli, on behalf of Callidus, moved for summary judgment against him. On June 23, 2017, the Hennepin County District Court entered judgment against Heroux in the amount of $2, 881.02.

         B. The Federal Court Action

         On November 16, 2017, Heroux filed the Complaint in this case [Doc. No. 1], alleging that Callidus' and Messerli's conduct in connection with the state court action violated multiple provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. [Doc. No. 1.] Heroux alleged several violations of the FDCPA, including that Defendants' use of the “Interlocking Discovery” in their efforts to collect a consumer debt from Heroux was intentionally misleading and that the document was drafted with the purpose of causing confusion and curbing Heroux's responses. (Compl. ¶ 13 [Doc. No. 1].)

         On January 3, 2018, Heroux made a settlement demand of $3, 000, inclusive of attorneys' fees and costs. (Schwiebert Decl. ¶ 31 [Doc. No. 44].) On January 19, 2018, Defendants filed a joint Answer [Doc. No. 10], and shortly thereafter moved for judgment on the pleadings [Doc. No. 12], arguing that Heroux's claims were barred by res judicata and collateral estoppel in view of the prior state court proceedings, that the claims were also barred by the Rooker-Feldman doctrine because they were an impermissible attempt to collaterally appeal the state court decision, that Callidus was not a “debt collector” for purposes of the FDCPA, and that Heroux's FDCPA claims against both Defendants also failed on the merits. With regard to the particular allegations concerning the “Interlocking Discovery, ” Defendants urged, inter alia, that Judge Doty should not rely on a previous decision in which United States District Judge Ann D. Montgomery had permitted an FDCPA case to go forward on a similar claim, arguing that the issue in that case had not been fully briefed. (Defs.' Mem. Supp. Mot. J. Pleadings at 29 [Doc. No. 14] (citing Dakowa v. MSW Capital, LLC, No. CV 16-2753 ADM/FLN, 2017 WL 662975, at *1 (D. Minn. Feb. 17, 2017)).)

         Judge Doty heard argument on Defendants' Motion for Judgment on the Pleadings and issued an order on May 1, 2018, granting it in part and denying it in part. [Doc. No. 29]. Judge Doty rejected Defendants' claim preclusion and Rooker-Feldman arguments (id. at 3-7), but agreed that Callidus was not a debt collector for purposes of the FDCPA and therefore dismissed with prejudice all claims against Callidus (id. at 8). As against Messerli, Judge Doty dismissed all of the claims of alleged FDCPA violations except the claim concerning Messerli's use of the “Interlocking Discovery.” As to that claim he found Judge Montgomery's decision in Dakowa instructive, and concluded that Heroux had stated a plausible claim for relief. (Id. at 11.)

         C. The Settlement

         The Court held a pretrial scheduling conference with counsel for the parties on February 22, 2018. [Doc. No. 17.] On May 2, 2018, counsel for Heroux and Messerli took part in a telephonic status conference with the Court to discuss the prospects for settlement. [Doc. No. 30]. Over the next six weeks, the parties engaged in settlement negotiations, and by June 15, 2018, they had agreed to the terms of a settlement. The negotiated settlement provided for a payment by Messerli to Heroux of $1, 500 and further provided that Messerli would pay Heroux's costs and attorneys' fees. (Schwiebert Decl. ¶ 36 [Doc. No. 44].) However, they were unable to reach an agreement regarding the amount of attorneys' fees. (Schwiebert Decl. ¶ 12 [Doc. No. 44].) Accordingly, on July 19, 2018, they entered into a Stipulation for Court Determination of Attorneys' Fees and Costs and Proposed Briefing Schedule in which they agreed the Court would decide the issue of attorneys' fees and costs. [Doc. No. 37.] The Court approved the Parties' Stipulation. (Order on Stipulation [Doc. No. 41].)

         II. Heroux's Motion for Attorney's Fees

         Heroux requests $41, 720 in attorney's fees, representing 104.3 hours worked at an hourly rate of $400, plus $400 in costs, amounting to a total of $42, 120.[3] (Pl.'s Reply Supp. Mot. at 11 [Doc. No. 49].) Messerli and Callidus argue the Court should award no more than $5, 000 total in fees and costs.[4] (Defs.' Mem. Opp'n Mot. at 1 [Doc. No. 47].)

         A. Legal Standard

         The FDCPA allows successful plaintiffs to recover “the costs of the action, together with a reasonable attorney's fee as determined by the court.” 15 U.S.C. § 1692k(a)(3). The party seeking an award must provide evidence to support the reasonableness of the fees, both as to the hourly rate and the hours worked, and should “exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary.” Hensley v. ...


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