Judge Awards Plaintiff’s Attorneys $100k in FDCPA Case

A District Court judge in Indiana has rejected a defendant’s request to lower the amount of attorney’s fees awarded in a Fair Debt Collection Practices Act case, because it was the defendants who prolonged the litigation until it became clear that a jury was going to determine whether a “highly sympathetic” plaintiff was entitled to damages from suffering emotional distress after being notified that her wages were being garnished for a debt owed by her ex-husband.

A copy of the ruling in the case of Rosen v. MLO Acquisitions can be accessed by clicking here.

A lawsuit was filed by an attorney on behalf of a healthcare provider in 2011, seeking to recover an unpaid debt that was owed. A default judgment was awarded in 2012. Six years later, the the attorney added the plaintiff to the default judgment, even though she had divorced her husband back in 2010. A summons was sent to the corporate address for the plaintiff’s employer, but never made it to the plaintiff. A default judgment was awarded and the employer was notified of the garnishment order. The employer then notified the plaintiff that her wages were going to be garnished.

The plaintiff contacted three different attorneys, who told her she was going to have to pay the garnishment, before she found someone who would represent her. When asked for money by her daughter, she had to deny the request because she was afraid she was going to have to move. She lost eight pounds in a week and wasn’t sure how she was going to be able to make ends meet.

After a lot of back and forth, the plaintiff was granted relief from the garnishment after the defendant acknowledged it “lacked conclusive proof” that the plaintiff had been served with notice.

At this point, the plaintiff went on the offensive, suing the defendant for violating the FDCPA. Although it admitted liability, the issue of damages was “hotly contested.” The defendant sought summary judgment on whether the plaintiff was entitled to damages from emotional distress, and after losing that ruling, entered into a settlement with the plaintiff.

The plaintiff’s attorney requested more than $100,000 in fees, while the defendant countered with $40,000. Judge Philip P. Simon of the District Court for the Northern District of Indiana, had no problem siding with the plaintiffs’ attorneys’ assessment of how much work went into representing the plaintiff.

“The bottom line is that Ms. Rosen was a highly sympathetic figure and the defendants well knew that, having admitted liability, if the issue of emotional distress got to a jury, they could have been hit with a large verdict,” Judge Simon wrote. “So they fought tooth and nail to prevent that, and indeed that is what extended the litigation. It wasn’t until I issued my summary judgment ruling that the parties were able to negotiate a settlement, in an amount far and away higher than any offer she was made prior to litigating the damages issue. So the defendants chose to gamble that the emotional distress damages would be off the table in this case, and the bet didn’t pay off. For her part, Ms. Rosen simply was willing to stay strong and hold out for what she believed was a fair settlement amount. And she was successful. To somehow turn that all on its head and suggest that she (or her attorneys) should be penalized for not taking a substantially lesser offer earlier in the litigation strikes me as unjust.”

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