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Barkouras v. Hecker

June 20, 2007

PETER BARKOURAS, PLAINTIFF,
v.
LAURENCE A. HECKER, AND VCOLLECT GLOBAL, INC., DEFENDANTS.



The opinion of the court was delivered by: Hughes, U.S.M.J.

MEMORANDUM OPINION

This matter having previously come before the Court upon Motion by Plaintiff Peter Barkouras, individually and on behalf of all others similarly situated, ("Plaintiff") for sanctions pursuant to Federal Rules of Civil Procedure 16(f) & 37(d) against Defendants vCollect Global ("vCollect") and Laurence A. Hecker ("Hecker") (collectively "Defendants") for failure to provide a current audit by June 16, 2006 to determine vCollect's net worth. On May 16, 2006 the Court entered a Pretrial Scheduling Order requiring Defendants produce a current audit no later than June 16, 2006. When Defendants failed to provide that audit Plaintiff filed a motion for sanctions. The Court, on March 12, 2007, entered an opinion and order denying Plaintiff's request for equitable relief and granting Plaintiff's request for fees. The award was limited to fees spent by Plaintiff in discovering an accurate net worth of vCollect after Defendants failed to produce accurate information. Accordingly, Plaintiff has submitted a Supplemental Motion for fees in the amount of $12,859.00 pursuant to FED. R. CIV. P. 16(f) and 37(d). Defendants have submitted certain objections to the reasonableness of the fees. For the reasons stated below, the Court will awardPlaintiff$11,011for attorneys fees and costs associated with the failure to produce discovery concerning net worth.

I. BACKGROUND AND PROCEDURAL HISTORY

This case arises from Defendants allegedly violating the Fair Debt Collection Practices Act ("FDCPA") in mailing collection letters and acting "in a false, deceptive, or misleading and unfair manner" to Plaintiff. (See Dkt. no. 06-366, entry no. 1, 18). On May 16, 2006 a Pre Trial Scheduling Order required Defendants to produce a current audit no later than June 16, 2006. (Dkt. no. 06-366, entry no. 9). Defendants failed to comply. Plaintiff filed a motion for sanctions December 18, 2006. (See Dkt. no. 06-366, entry no. 15). On March 12, 2007 this Court denied Plaintiff's request to estop Defendants' claim that vCollect has a negative net worth because of the factors outlined in Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 868 (3d Cir. 1984),*fn1 and the holding in Meyers v. Pennypack Woods Home Ownership Ass'n, 559 F.2d 894, 904-5 (3d Cir. 1977),*fn2 weighed against the estoppel order. (Dkt. no. 06-366, entry no. 18).

In addition, Plaintiff submitted an "Affidavit of Attorneys fees," Exhibit 1. However, the affidavit included work not narrowly tailored to the fees incurred by Plaintiff in its discovery efforts to determine the net worth of vCollect. The Court ordered Plaintiff to submit a revised fee petition detailing fees incurred and how they directly related to the discovery work Plaintiff conducted after Defendants failed to produce an audited balance sheet by April 12, 2006. (Dkt. no. 06-366, entry no. 19). Defendants were permitted to respond within 30 days of the date of the revised fee petition. On April 2, 2007, Plaintiff filed a Supplemental Motion for Sanctions setting forth the affidavit of attorneys fees detailing the time, dates, and specific attorney who rendered the specified the services, along with the billing rate charged. (Dkt. no. 06-366, entry no. 20). Subsequently on April 16, 2007, Defendants filed a Brief in Opposition to Plaintiff's Supplemental Motion for Sanctions. (See Defs.' Opp. Br.).

A. Plaintiff's Memorandum of Services

Plaintiff has submitted a Supplemental Motion for Sanctions requesting $12,859.00. Plaintiff maintains that the relief requested reflects "the amount expended in seeking discovery regarding [vCollect's] net worth" (Pl.'s Supp. Mot. at 2). The Affidavit of Attorneys Fees certifies the hourly billing rate of attorneys Bonnie S. Stein ("BSS"), Robert A. Badman ("RAB"), Robert G. LaBar ("RGL"), and Matthew J. Bass ("MJB") at $350, $330, $300, and $280, respectively. Id. The total relief requested reflects 47.1 hours of labor, $7755 billed from RAB (at $330), $4984 billed from MJB (at $280), and $120 billed from RGL (at $300). Id. Some entries are "adjusted to account for the fact that the time incurred for those services included time for discovery of net worth and other matters that were handled simultaneously." Id. at ¶ 8. Plaintiff further adjusted fees requested for Defendants' sanctioned conduct to reflect the time spent on vCollect by reducing the billable rate by half for time Plaintiff spent directed to both Defendants.

In addition, Plaintiff submits an affidavit of Frank S. Guarrieri, managing partner at Curtin & Heefner, LLP, a firm with "experience representing plaintiffs under the Fair Debt Collection Practices Act." (Guarrieri Aff. at ¶ 2). Mr. Guarrieri certifies he is personally "knowledgeable about the prevailing market rates" for legal services associated with FDCPA litigation and affirms "the firm rates[,] as submitted[,] are within the prevailing market rates in [this] community." Id. at ¶¶ 3, 5.

B. Defendants' Objections to Plaintiff's Memorandum of Services

Defendants Laurence A. Hecker ("Hecker") and vCollect Global, Inc. ("vCollect") (collectively "Defendants") submitted objections to Plaintiff's Supplemental Motion for Sanctions. Defendants contend that "Plaintiff seeks recovery of . . . fees incurred as a result of the sanctioned conduct [and] also the fees incurred in the course of class discovery." (Defs.' Opp. Br. at 2). Specifically, Defendants object as follows:

1. $7,300.00 Defendants contend Plaintiff's counsel lists expenses relating to class discovery that are not causally connected to the sanctioned conduct. Specifically, affidavits, legal analysis of net worth information, analysis of discovery responses, preparing for and conducting the deposition of vCollect's 30(b)(6) representative, and conversations with opposing counsel on discovery and settlement issues "[account] for more than $7,300.00." Id. at 4-5.

2. $4,851.00 Defendants claim Plaintiff's 17.2 hours for preparing, drafting and revising the Motion for Sanctions and the supporting Memorandum of Law are "not reasonable in light of the work performed and the experience of counsel (based on . . . rates of $330 per hour for [RAB] and $280 per hour for [MJB]." Id. at 8-9 & 8 n.2. Additionally, Defendants raise the argument that since the Motion and the Memoranda of Law were only partially successful, full award of the time spent should not be granted. Id. at 2-3.

In summary, Defendants claim that the award of fees requested is not reasonable, particularly since the required causal link between the fees and the failure to comply is not shown. (See Defs.' Opp. Br. at 6-8). Defendants argue that Plaintiff's burden of showing that the fees were incurred as a result of the specific sanctioned conduct of vCollect was not ...


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