Ricketson v. Advantage Collection Professionals, LLC

Background

Kelly L. Ricketson alleged that Advantage Collection Professionals, LLC (ACP), violated the Fair Debt Collection Practices Act while attempting to collect an approximately $100 debt. Ricketson sought $1,000 in statutory damages, plus costs and reasonable attorneys’ fees.

ACP served a settlement offer under Federal Rule of Civil Procedure 68 for $1,001 plus Ricketson’s costs and reasonable attorneys’ fees. Ricketson accepted the offer in writing on December 30, 2021. At that point, her lawyer, Michael Sheridan, had billed $2,220 in fees.

The parties then disputed the amount of fees and costs. Sheridan did not provide his billing records when ACP requested information to evaluate the fee request. He later sought $10,000 in fees and responded to ACP’s offer of $1,447.50 in fees and $485 in costs by stating that he was authorized to settle for $9,001. The billing records later submitted to the court showed that Sheridan had billed substantially less than those settlement demands at the relevant times.

Ricketson’s Motion for Fees and Costs

The court applied the Fair Debt Collection Practices Act’s fee-shifting provision, which permits a successful plaintiff to recover reasonable attorneys’ fees and costs. The court used the lodestar method, which generally calculates a fee by multiplying reasonable hours by a reasonable hourly rate.

The court found Sheridan’s $300 hourly rate reasonable. It also found reasonable the 7.6 hours he worked through Ricketson’s acceptance of ACP’s offer, totaling $2,220. That work included preparing the complaint, filing and serving documents, reviewing and researching the Rule 68 offer, communicating with the client and opposing counsel, and preparing the written acceptance.

The court rejected the request for $5,640 for 17.9 hours worked after acceptance of the offer. Ricketson had already obtained more than the statutory damages she sought, and the court found that Sheridan’s later conduct was aimed at prolonging the fee dispute and increasing the recovery rather than obtaining relief reasonably available under the statute. The court concluded that those later hours were unreasonable and unrecoverable.

The court awarded the requested $469.50 in costs, consisting of $402 in filing fees and $67.50 in service-of-process fees. Ricketson’s motion was therefore granted in part and denied in part, and she was awarded $2,220 in attorneys’ fees and $469.50 in costs.

ACP’s Motion Under Section 1927

ACP sought fees and costs under 28 U.S.C. § 1927. That statute permits a court to require a lawyer to pay fees and costs caused by unreasonably and vexatiously multiplying court proceedings. The court explained that sanctions require conduct showing intentional or reckless disregard of the lawyer’s duties to the court.

The court found that Sheridan repeatedly refused reasonable requests for billing information, obstructed meaningful negotiations, demanded amounts unsupported by his billing records, and continued conduct that delayed resolution of the case. The court also considered his representations to the magistrate judge and found them, at best, highly misleading.

The court concluded that Sheridan’s conduct unreasonably and vexatiously multiplied the proceedings and that an award would deter similar misconduct. ACP’s motion was granted, but the amount was not set in the order. ACP was directed to file a supplemental motion and supporting materials within 30 days; Ricketson could respond within 21 days, and ACP could reply within 14 days. Judge Wilhelmina M. Wright stated that the court would then decide the amount based on the written submissions.