Keating v. Frederick Debt Management, LLC
- Eric Tostrud
- 0:24-cv-03659
- U.S. District Court · District of Minnesota
- 8
In Keating v. Frederick Debt Management, Judge Tostrud granted default judgment of $6,403 against a debt collector that contacted a represented consumer with false threats of lawsuit and wage garnishment.
Consumers who have retained legal counsel to dispute a debt and are nonetheless contacted directly by third-party debt collectors; debt collection companies facing default judgment motions; attorneys in the Twin Cities market seeking guidance on approved hourly rates in FDCPA cases.
What happened
In Keating v. Frederick Debt Management, LLC (No. 24-cv-3659), plaintiff Maria Keating sued a debt collection company for repeatedly contacting her directly—despite knowing she had a lawyer—and for falsely threatening to sue her and garnish her wages if she did not pay a disputed payday loan debt. Frederick Debt Management never responded to the lawsuit or appeared in court, so the Clerk entered a default against it, meaning the factual allegations in the complaint were treated as true. Keating then moved for a default judgment awarding her statutory damages, attorney fees, and costs.
Because Frederick defaulted, the court accepted as true that Frederick knew Keating was represented by an attorney, yet still sent her direct collection communications, and that Frederick's threats of a lawsuit and wage garnishment were false and made only to pressure her into paying. Those facts established a violation of the Fair Debt Collection Practices Act (FDCPA), specifically the provision that bars a debt collector from contacting a consumer directly when it knows the consumer has an attorney. The court found Keating was entitled to statutory damages and reasonable attorney fees and costs.
Judge Tostrud granted the motion for default judgment and entered judgment of $6,403 against Frederick Debt Management, LLC, in favor of Keating. This amount is slightly less than the $6,578 Keating requested, because the court reduced the hourly rate for the law clerk from the requested $145 to $95—the same rate previously approved for that clerk in an earlier case—finding no supporting evidence for the higher rate. The $1,000 in statutory damages, the $425 attorney hourly rate, the $210 paralegal hourly rate, the hours claimed, and the $490 in filing costs were all found reasonable.
The detailed version
- Keating v. Frederick Debt Management, LLC · No. 0:24-cv-03659
- Eric Tostrud
- Sept. 2, 2025
Background
Plaintiff Maria Keating is a Minnesota consumer who allegedly owed a payday loan debt originating from Check N' Go. In 2022, Keating's attorney notified Serenity Recovery LLC—Frederick Debt Management's predecessor-in-interest—that Keating was represented and disputed the debt. Beginning in 2023, Frederick Debt Management, LLC sent repeated direct communications to Keating attempting to collect the debt, including a letter dated October 18, 2023 threatening to seek a court judgment and wage garnishment if payment was not made by October 28, 2023. The complaint alleges Frederick never sought, never could seek, and never intended to seek judgment or garnishment, and that these statements were made solely to coerce payment.
Keating filed suit on September 2, 2024 alleging violations of multiple provisions of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., as well as the Minnesota common-law tort of intrusion upon seclusion. Frederick was personally served on October 29, 2024, but never appeared or responded. The Clerk entered Frederick's default, and Keating moved for a default judgment.
Legal Standard for Default Judgment
Upon entry of default, a court accepts the complaint's factual allegations as true—except those relating to the amount of damages. The court must still determine whether those taken-as-true facts establish a legitimate cause of action, because a defaulting party does not admit pure legal conclusions. If liability is established, the court must then ascertain the appropriate amount of damages with reasonable certainty.
Liability Analysis
The court found that the complaint's allegations established a legitimate cause of action under 15 U.S.C. § 1692c(a)(2), which prohibits a debt collector from communicating directly with a consumer if the debt collector knows the consumer is represented by an attorney concerning that debt and can ascertain the attorney's contact information, unless the attorney fails to respond within a reasonable time or consents to direct contact. Keating qualified as a "consumer" under 15 U.S.C. § 1692a(3), and Frederick qualified as a "debt collector" under 15 U.S.C. § 1692a(6). The court cited a parallel case, Kaminski v. Frederick Debt Mgmt., LLC (S.D. Ohio 2025), as further support for Frederick's status as a debt collector. Because Frederick repeatedly contacted Keating directly after being informed she was represented, liability under § 1692c(a)(2) was established.
Damages
Statutory Damages Under 15 U.S.C. § 1692k(a)(2)(A), a consumer may recover statutory damages of up to $1,000 for an FDCPA violation. Keating requested the full $1,000, which the court awarded without further analysis, describing this as "straightforward."
Attorney Fees and Costs The FDCPA mandates an award of reasonable attorney fees and costs to a successful plaintiff. 15 U.S.C. § 1692k(a)(3). The court applied the lodestar method—multiplying the number of hours reasonably expended by a reasonable hourly rate.
Attorney Rate — $425/hour (Christopher Wilcox)
Approved. Wilcox has 14 years of experience, has represented hundreds of consumers in debt-related matters, served as an adjunct professor at the University of Minnesota Law School (2014–2022), is a member of the National Association of Consumer Advocates, and is a contributing author to a Minnesota CLE consumer law publication. Two independent local attorneys submitted declarations attesting to the reasonableness of the $425 rate in the Twin Cities market. The court found this rate consistent with prevailing market rates and its own prior ruling in Kelly v. United Payment Ctr. Inc. (D. Minn. 2023).
Paralegal Rate — $210/hour (Lisa Robertson)
Approved. Robertson has 24 years of legal experience and has worked at Christensen Sampsel since 2014. The court had previously approved a $190 rate for Robertson in Major v. Halliday Watkins & Mann, P.C. (D. Minn. 2024). The roughly 10% increase was found reasonable and comparable to paralegal rates approved in this district.
Law Clerk Rate — $95/hour (not $145 as requested)
Reduced. Keating requested $145/hour for the same law clerk the court had previously compensated at $95/hour in Major. Keating argued that the clerk's near-completion of law school and additional year of experience justified the increase, but provided no supporting evidence or authority to justify the higher rate against prevailing market rates or the prior approved rate. The court applied $95/hour.
Hours
The court approved the full 14.4 hours requested: 8.6 attorney hours, 1.8 paralegal hours, and 4.0 law clerk hours. The court found these reasonable for an FDCPA case brought to early default judgment, covering tasks such as drafting the complaint, client communication, and preparing the default motion. An additional $500 for Mr. Wilcox's travel to and attendance at the default-judgment hearing was also approved as a reasonable and conservative estimate.
Filing Costs
The court approved $490 in filing costs.
Fee and Cost Calculation
- Attorney fees (8.6 hrs × $425): $3,655 - Paralegal fees (1.8 hrs × $210): $378 - Law clerk fees (4.0 hrs × $95): $380 - Hearing attendance fee: $500 - Total fees: $4,913 - Filing costs: $490 - Total fees and costs: $5,403 - Statutory damages: $1,000 - Grand total judgment: $6,403
This is $175 less than Keating's requested $6,578, due entirely to the law clerk rate reduction.
Order
The court granted Keating's motion for default judgment. The Clerk of Court was directed to enter default judgment against Frederick Debt Management, LLC and in favor of Maria Keating in the amount of $6,403. Plaintiff's counsel was ordered to serve a copy of the opinion and order on Frederick at its registered address by both first-class mail and certified mail, return receipt requested.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.