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Robert Van Echaute v. Law Office of Thomas Landis

March 31, 2011

ROBERT VAN ECHAUTE, PLAINTIFF,
v.
LAW OFFICE OF THOMAS LANDIS, ESQ., DEFENDANT.



The opinion of the court was delivered by: Norman A. Mordue, Chief U.S. District Court Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Presently before the Court is plaintiff's motion for an award of attorney's fees in the amount of $4,271.50 following entry of an offer of judgment on plaintiff's complaint under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. and New York Gen. Business Law §§ 601 and 349.

II. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

In his complaint, plaintiff alleged that the defendant law firm which is not licensed to conduct business in the State of New York, engaged in a campaign of harassment in its attempt to collect a ten (10) year old American Express credit card debt. The Complaint was filed in September 2009. The Court scheduled an initial conference for January 20, 2010. The conference was rescheduled a number of times and was eventually held on March 26, 2010. Following the Court's Rule 16 scheduling conference, defendant filed an Offer of Judgment in the amount of $2,500.00, which Offer plaintiff accepted. The Offer of Judgment included "costs accrued to ... date by plaintiff." The case was deemed dismissed by way of settlement on April 22, 2010. Plaintiff's counsel filed a motion for attorney's fees on May 3, 2010.

Defendant served motion papers in opposition to plaintiff's request for attorney's fees asserting three grounds for denying the motion in part or in total. First, defendant asserts that the Offer of Judgment includes costs, which under the FDCPA, takes attorney's fees into account. Second, defendant contends that since plaintiff did not include in his motion papers the retainer agreement upon which the fee application was based, it is not appropriate to award hourly fees to plaintiff. Finally, defendant argues that plaintiff's fee request is unreasonable based on the number of hours expended and the rate of some of the attorneys who performed work in plaintiff's case.

Plaintiff's counsel then asked the Court for permission to file a reply in further support of his motion for attorney's fees to address whether the Offer of Judgment included plaintiff's reasonable legal fees and whether plaintiff was required to submit his retainer agreement with his moving papers. Defense counsel objected to the request on the basis that these issues were readily foreseeable before defendant served its opposing papers and permitting further submissions "in a case settled well before the exchange of substantial discovery, [including taking depositions], would unduly increase the amount that plaintiff's attorneys may obtain in what amounts to a very modest recovery for their client." Thereafter, this Court denied plaintiff's request to file a reply via text order.

III. DISCUSSION

A. Whether Offer of Judgment Includes Attorney's Fees in "Costs Accrued to Date" Fed. R. Civ. P. 68 governs Offers of Judgment. Rule 68 provides that "[a]t any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued." Fed R. Civ. P. 68. If such an offer is not accepted and "the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer." Id. The purpose of Rule 68 is to encourage settlement and avoid litigation. See Marek v. Chesny, 473 U.S. 1, 5 (1985). The rule prompts both parties to a suit to evaluate the risks and costs of litigation, and to balance them against the likelihood of success upon trial on the merits. Id.

In Marek, the Supreme Court considered the question whether "costs" included attorney's fees under Rule 68. The Court arrived at two significant holdings: First, under Rule 68, a valid offer of judgment always includes all costs (whether or not it so specifies) because Rule 68 authorizes such an offer only with costs then accrued. See Marek, 473 U.S. at 6. Second, the Court held that "costs" includes attorney's fees only if such fees are defined as costs under the relevant substantive statute or authority upon which the suit is premised. See id. Under Marek, to determine whether these costs include an award for attorney's fees, a court must look to the statutes under which plaintiff brought suit.*fn1 See id.

Among the damages that can be awarded under the FDCPA are "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 text of the FDCPA which describes, "costs of the action, together with a reasonable attorney's fee" is not significantly different than the language of the antitrust statute ("cost of suit, including a reasonable attorney's fee") under which an award of attorney's fees to the prevailing party is mandatory. See Samsung Elec. Co., Inc. v. Rambus, Inc., 398 F. Supp.2d 470, 488 (E.D. Va. 2005) (citing15 U.S.C. § 15). "For that reason, and considering that the FDCPA treats costs and attorney's fees in the same statutory provision, it is reasonable to conclude that, in the FDCPA, attorney's fees are part of costs." Id. However, Samsung notes that there are decisions that construe attorney's fees not to be a facet of costs under the FDCPA. See Samsung, 398 F.

Supp.2d at 488 (citing Marek, 473 U.S. at 42-51) (Brennan, J., dissenting); Chambers v. Manning, 169 F.R.D. 5 (D. Conn. 1996) (citing Marek, 473 U.S. at 6); Shapiro v. Credit

Protection Ass'n I, Inc., 53 F. Supp.2d 626 (S.D.N.Y. 1999) (citing Chambers, 169 F.R.D. at 8). The court in Samsung noted that the determination in Marek that held attorney's fees were not part of costs is found in a dissenting opinion and "neither Chambers nor Shapiro explain the reasoning in support of their terse comments on the matter." 398 F. Supp.2d at 487.

This Court disagrees with Samsung's assessment that neither Chambers nor Shapiro explained its reasoning for deciding that attorney's fees were not part of costs under the FDCPA. In Chambers, the court determined that attorney's fees are included as part of costs "only when the underlying statute so defines them" and construed the plain language of the FDCPA as a statute that does not define attorney's fees "as part of" costs. See Chambers, 169 F.R.D. at 8 (citing 15 U.S.C. § 1692k(a) (1994) ("costs ... together with [or in addition to] a reasonable attorney's fee")) (emphasis added). To wit, in Chambers, the court rejected plaintiff's contention that Rule Fed. R. Civ. P. 68 mandates a fee award simply because the offer of judgment failed to exclude one. The court also dismissed defendant's claim that the accepted offer could not be interpreted as excluding attorney's fees because it was "clearly a lump-sum settlement of all liability." Indeed, the court construed the offer of judgment as ambiguous since it was silent on attorney's fees. 169 F.R.D. at, *8 (citing Radecki v. Amoco Oil Co., 858 F.2d 397, 400 (8th Cir. 1988). Using "ordinary contract principles," the court concluded that rather than looking to extrinsic evidence to resolve the ambiguity, it should be construed against the offeror. "[This] approach . . . forces a defendant to be precise about the terms of his offer." 169 F.R.D. at, * 8. Indeed, the court found that "the practice ...


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