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Cabala v. Crowley

United States Court of Appeals, Second Circuit

November 19, 2013

Joel J. CABALA, Plaintiff-Appellee,
v.
Timothy W. CROWLEY, Kim A. Morris, Defendants-Appellants.[*]

Submitted: Aug. 30, 2013.

Page 227

Deepak Gupta, Gupta Beck PLLC, WA, DC, for the Plaintiff-Appellee.

Andrew J. Soltes, Jr., Law Offices of David W. Rubin, Stamford, CT, for the Defendants-Appellants.

Before: RAGGI, LYNCH, and LOHIER, Circuit Judges.

PER CURIAM:

Defendants-appellants appeal from a judgment of the United States District Court of the District of Connecticut (Vanessa L. Bryant, Judge ) awarding $32,489.29 in attorney's fees and costs to plaintiff-appellee. The issue presented by this case is whether a defendant remains liable for plaintiff's attorney's fees accrued after defendant offered a settlement that included the maximum available damages and, as mandated by statute, plaintiff's fees and costs, but that did not include an offer of judgment. Because a settlement offer without an offer of judgment does not fully resolve the case, such a settlement offer does not moot the dispute, and defendants remain liable for any reasonable attorney's fees accrued by plaintiff during further litigation.

BACKGROUND

Plaintiff-appellee Joel J. Cabala began this action on April 21, 2009, seeking damages for an alleged violation of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692, by defendant Benjamin Morris, an attorney. [1] Morris did not and does not contest his substantive liability for violating the FDCPA; Morris contends that, precisely because he promptly offered to pay Cabala the maximum damages he could have been entitled to under the FDCPA, he should not be held liable for attorney's fees incurred by Cabala during a protracted dispute between the parties concerning the form of the settlement.

Less than two months after the complaint was filed, on June 25, 2009, David W. Rubin, counsel for Morris, contacted counsel for Cabala, Joanne S. Faulkner, and offered to settle for $1000, the maximum statutory damages mandated by the FDCPA, and also offered, as mandated by the statute, to pay Cabala's attorney's fees and costs, with the amount of such fees to be determined by the court. Rubin indicated that in his view, as Morris's offer included maximum recoverable damages for the underlying violation, Morris would not be liable for any further fees accrued by Cabala in the dispute. Faulkner's reply requested a lump sum settlement including attorney's fees, to which Rubin responded by again requesting that any dispute over the amount of the fees be resolved by the court. Faulkner in turn replied that a fee application to the court would not be cognizable without a judgment,

Page 228

an outcome which Rubin had stated he wished to avoid. The parties also disagreed over Faulkner's refusal to provide an accounting of the hours she had thus far spent on the case.

After several months of fruitless settlement discussions, the parties finally jointly stipulated for judgment in favor of Cabala, with damages set at the statutory maximum as provided in Morris's initial settlement offer. The stipulation requested judicial determination of attorney's fees and costs.

In the subsequent discovery and litigation over the amount of the fee award to which Cabala was entitled, Morris alleged that Faulkner had behaved improperly by failing to communicate Morris's original settlement offer to Cabala. The district court, observing that there was a sincere dispute over the " nature and form" of the settlement— specifically about whether the settlement would include a judgment that would make the attorney's fee award judicially enforceable— concluded that Morris's original offer did not moot the action. Thus, the district court concluded, any reasonable attorney's fees incurred by Cabala during the continuing litigation should be borne by Morris. Following a lodestar analysis of Faulkner's ...


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