Hanrahan v. Statewide Collection, INC.

Background

Hanrahan incurred medical debt with Mad River Hospital. The bill was sent to Statewide Collection, Inc., which sent Hanrahan a collection letter dated January 23, 2018. Hanrahan alleged that the letter was false, deceptive, and misleading because it threatened that a judgment would be reported to Equifax, TransUnion, and Experian for seven years and suggested that Statewide could renew the judgment after that period, causing another seven years of reporting.

Hanrahan sued under the Fair Debt Collection Practices Act and California’s Rosenthal Fair Debt Collection Practices Act. In a December 23, 2020 order, the court granted in part and denied in part Hanrahan’s motion for partial summary judgment, ruling that Hanrahan was entitled to summary judgment on liability under both laws but not on statutory damages. Hanrahan later accepted Statewide’s Rule 68 offer to have judgment entered for $7,500, exclusive of attorney’s fees and costs. The court entered that judgment and reserved fees and costs for determination on a later motion.

Attorney’s Fees

Hanrahan sought $62,846.25 in attorney’s fees and $3,135.05 in costs. Statewide did not argue that all fees and costs should be denied; it challenged the reasonableness of the amounts.

The court calculated fees using the lodestar method, which multiplies the reasonable hours spent on the case by reasonable hourly rates. Hanrahan sought compensation for 127.95 hours by Daniel Zemel and 27.45 hours by Elizabeth Apostola. The court rejected Statewide’s categorical arguments that fees should be denied for work performed before the attorneys were admitted to appear in the case, work on Hanrahan’s motion to compel, work after August 3, 2020, and work after Statewide’s February 1, 2021 Rule 68 offer. The court found that the attorneys would have been admitted to appear as a matter of course, that the motion to compel was denied without prejudice because of a magistrate judge’s standing order, and that the offer did not clearly and unambiguously limit fees to those incurred before the offer.

The court nevertheless excluded or reduced specific time entries. It excluded 0.8 hours for Zemel and 5.7 hours for Apostola as not reasonably spent, leaving 127.15 hours for Zemel and 21.75 hours for Apostola. The court excluded duplicate work, excessive time for certain tasks, 0.6 hours of clerical work, and inadequately documented entries. It approved a $400 hourly rate for Zemel and reduced Apostola’s requested rate from $425 to $400 because her relevant debt-collection experience was more limited.

These hours and rates produced a lodestar of $59,560.13. The court then applied a 10% reduction because of the size of the lodestar compared with the settlement amount, awarding $53,604 in attorney’s fees.

Costs and Disposition

Hanrahan requested $3,135.05 in costs. Statewide argued that recoverable costs should be limited to $3,024.60 incurred by August 3, 2020. For the same reasons it declined to limit attorney’s fees to that date, the court declined to impose that limitation on costs and found the requested costs reasonably incurred.

The court therefore granted in part and denied in part Hanrahan’s motion for attorney’s fees and costs. It awarded $53,604 in attorney’s fees and $3,135.05 in costs, totaling $56,739.05.