Koch v. The Law Firm of Derek Williams, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
WACO DIVISION
ANDREW P. KOCH,
Plaintiff,
v.
THE LAW FIRM OF DEREK
WILLIAMS, LLC,
Defendant,
§
§
§
§
§
§
§
§
§
CASE NO. 6:24-CV-00505-ADA-DTG
REPORT AND RECOMMENDATION TO GRANT
PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT (DKT. NO. 17)
TO: THE HONORABLE ALAN D ALBRIGHT
UNITED STATES DISTRICT JUDGE
This Report and Recommendation is submitted to the Court pursuant to 28 U.S.C. §
636(b)(1)(C), Fed. R. Civ. P. 72(b), and Rules 1(d) and 4(b) of Appendix C of the Local Rules of
the United States District Court for the Western District of Texas, Local Rules for the
Assignment of Duties to United States Magistrate Judges. Before the Court is plaintiff, Andrew
P. Koch’s motion for default judgment against the defendant, The Law Firm of Derek Williams,
LLC (Dkt. No. 17). After reviewing the pleadings, the relevant case law, as well as the entire
case file, the Court RECOMMENDS that the plaintiff’s motion for default judgment be
GRANTED.
I. BACKGROUND
The plaintiff filed his complaint for relief against the defendant pursuant to the Credit
Repair Organizations Act, the Texas Credit Services Organizations Act, and the Texas Consumer
Debt Management Services Act. Dkt. No. 1 ¶ 1. The plaintiff alleges that the defendant failed to
perform various debt relief and credit repair services he contracted to perform on behalf of the
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 1 of 8

Page 2 of 8
plaintiff. Dkt. No. 1 ¶¶ 7−25. The plaintiff was told to cease paying his creditors and instead
divert those funds to the defendant. Id. at ¶ 36. The plaintiff made monthly payments of $299 to
be applied towards his debt relief, but the funds were instead paid towards a variety of fees not
previously disclosed. Id. The plaintiff further alleges that the defendant improperly charged the
plaintiff for services before such services were fully performed. Those charges diverted funds
that should have gone towards the plaintiff’s debt obligation. That diversion allowed the
defendant to continue charging unlawful and inappropriate fees for longer than reasonably
necessary. Id. The plaintiff further alleges that despite the plaintiff’s payments over several years,
the defendant only managed to fully pay off a single obligation, leaving the plaintiff in a
significantly worse financial position. Id.
On October 17, 2024, a process server served Defendant’s Registered Agent, Derek
Williams, with a copy of summons and complaint. Dkt. No. 5. To date, the defendant has not
answered or filed an appearance in this case. On August 14, 2025, the plaintiff filed a motion for
entry of default, which was granted. Dkt. Nos. 11 & 12. The plaintiff then filed his motion for
default judgment. Dkt. No. 17. His motion includes an affidavit affirming that the defendant is
not an infant, in the military, or an incompetent person. Dkt. No. 17-2 ¶ 6. The plaintiff seeks a
total of $19,015.00—comprised of actual damages of $5,000.00, punitive damages of
$10,000.00, and $4,015.00 in reasonable attorney fees and costs. Dkt. No. 17 ¶¶ 12−15.
The Court held a hearing on the matter on November 10, 2025. Dkt. No. 21. The
defendant did not appear, but statements and arguments of the plaintiff’s counsel were heard. Id.
At the conclusion of the evidence, the recommendation was made that the motion for default
judgment should be granted. Id.
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 2 of 8

Page 3 of 8
II. ANALYSIS
Rule 55 of the Federal Rules of Civil Procedure governs the plaintiffs’ motion for default
judgment. Rule 55 sets out a three-step process for obtaining default judgment: (1) the
defendants’ default, (2) the entry of default, and (3) the entry of default judgment. New York Life
Ins. Co. v. Brown, 84 F.3d 137, 141 (5th Cir. 1996). After a defendant defaults, the plaintiff must
file a motion for entry of default and the clerk enters default. Fed. R. Civ. P. 55(a). Finally, after
reviewing the plaintiff’s motion for default judgment, the Court may enter a default judgment
against the defendant. Fed. R. Civ. P. 55(b). Additionally, to obtain a default judgment, the
movant must establish that the defendant is neither a minor nor an incompetent person, and that
the defendant is not in military service. 50 U.S.C. § 3931. As outlined above, the defendant has
defaulted, the plaintiff has obtained an entry of default and established that the defendant is
neither a minor nor an incompetent person, and that the defendant is not in military service. The
Court therefore will consider whether a default judgment against the defendants is warranted.
Entry of default judgment is within the Court’s discretion. Lindsey v. Prive Corp., 161
F.3d 886, 893 (5th Cir. 1998). The Court will not grant default judgment automatically—the
Court must instead analyze whether the plaintiffs’ claims are well-pled and substantively
meritorious, whether default judgment appears appropriate, and whether the plaintiffs’ request
relief is proper. See Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 500 (5th Cir. 2015)
(holding that the plaintiff’s complaint was well-pled and substantively meritorious, as required
for the district court to enter default judgment against the defendant).
A. The plaintiff’s claims are well-pled and substantively meritorious.
The plaintiffs’ claims are well-pled for default judgment purposes. The Court may
assume the truth of all well-pled allegations in the plaintiffs’ complaint because the defaulting
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 3 of 8

Page 4 of 8
defendants have functionally admitted well-pled allegations of fact. Nishimatsu Contr. Co. v.
Hous. Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (noting that a defaulting defendant cannot
contest on appeal the plaintiff’s well-pleaded allegations of fact because the defendant admitted
those facts by defaulting). The plaintiff began making monthly payments to the defendant after
the defendant represented to the plaintiff that his payments would be placed in a dedicated
account that would be used to resolve the plaintiff’s enrolled obligations and improve his credit
score and history. Dkt. No. 1 ¶¶ 10−15. After several years of payments to the defendant, only
one obligation was paid off on the plaintiff’s behalf and there was a significant negative impact
on the plaintiff’s credit and finances. Dkt. No. ¶¶ 24−26.
The plaintiff brings claims under multiple sections of the Credit Repair Organizations
Act, the Texas Credit Services Organizations Act, and the Texas Consumer Debt Management
Services Act. See generally Dkt. No. 1. Specifically, Plaintiff alleges that Defendant failed to
perform various debt relief and credit repair services pursuant to an agreement with Plaintiff.
The Credit Repair Organizations Act prohibits any person from making or using any
untrue or misleading representation of the services of the credit repair organization. 15 U.S.C. §
1679b(a)(3). Additionally, the Credit Repair Organizations Act prohibits someone from
engaging, directly or indirectly, in any act, practice or course of business that constitutes the
commission of or an attempt to commit a fraud or deception on any person in connection with
the offer or sale of the services of the credit repair organization. 15 U.S.C. § 1679b(a)(4). Taking
the plaintiff’s factual allegations as true, the Court finds that the claims under the Credit Repair
Organizations Act are well-pled and substantively meritorious.1
1 Damages can be awarded under 15 U.S.C. § 1679 for violating any provision of the
subchapter. However, the plaintiff also brought claims under 15 U.S.C. §§ 1679b, 1679c, 1679d,
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 4 of 8

Page 5 of 8
The Texas Credit Services Organizations Act, pursuant to Tex. Fin. Code § 393 outlines
certain requirements for contracts between consumers and credit services organizations. The
contract must include the specific fees that will be paid to the credit access business for the
business’s services and information about the right to cancel. Tex. Fin. Code §§ 393.201,
393.202. Additionally, the Act prohibits a credit services organization from making or using a
false or misleading representation in the offer or sale of the services of the organization and
provides that a credit services organization or a representative of the organization may not
directly or indirectly engage in a fraudulent or deceptive act, practice, or course of business
relating to the offer or sale of the services of the organization. Tex. Fin. Code §§ 393.304,
393.305. Taking the plaintiff’s factual allegations as true, the Court finds that the claims under
the Texas Credit Services Organizations Act are well-pled and substantively meritorious.
The Texas Consumer Debt Management Services Act prohibits a provider of debt
management services from engaging in false or deceptive advertising and from imposing fees
and other charges that don’t comply with the statute. Tex. Fin. Code §§ 394.207, 394.210. It also
outlines various requirements for contracts entered into between debt management providers and
consumers and states that a provider may not engage in unfair, deceptive, or unconscionable acts
in connection with a service provided to a consumer and that a provider has a duty to a consumer
who receives debt management services from the provider to ensure that client money held by
the provider is managed properly at all times. Tex. Fin. Code §§ 394.209, 394.212−3. Taking the
plaintiff’s factual allegations as true, the Court finds that the claims under the Texas Consumer
Debt Management Services Act are well-pled and substantively meritorious.
and 1679f. The Court finds all the claims under 15 U.S.C. § 1679 as well-pled and substantively
meritorious.
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 5 of 8

Page 6 of 8
B. Default judgment is appropriate.
Entry of default judgment is appropriate in this case. The record indicates that the
plaintiff successfully perfected service of process on the defendant. Dkt. No. 5. The defendant
has failed to respond to the complaint and to the motion for entry of default, the clerk’s entry of
default, or this motion. Two months have passed since the plaintiff filed this motion for default
judgment. The defendant’s lack of action does not appear to be caused by any good faith mistake
or excusable neglect. When a defendant’s failure to respond is “plainly willful, as reflected by
[the defendant’s] failure to respond either to the summons the complaint, the entry of default, or
the motion for default,” then grounds for default are clearly established. See Graham v. Coconut
LLC, No. 4:16-cv-606, 2017 WL 2600318, at *1 (E.D. Tex. June 15, 2017). The Court therefore
finds that entry of default judgment against the defendant is appropriate.
C. The plaintiff’s requested relief is proper.
The plaintiff’s claims and the amount of damages requested are supported by the record.
The plaintiff seeks a total of $19,015.00—comprised of actual damages of $5,000.00, punitive
damages of $10,000.00, and $4,015.00 in reasonable attorney fees and costs. Dkt. No. 17 at 3. In
support of the plaintiff’s damages, the plaintiff’s counsel swore under oath that the actual
damages amounts were true and accurate.
The Court finds that the plaintiff’s requested relief is proper. Under the Credit Repair
Organizations Act, the Texas Credit Services Organizations Act, and the Texas Consumer Debt
Management Services Act., actual damages, punitive damages, and attorney’s fees are
recoverable.
Additionally, the plaintiff’s requested attorneys’ fees are reasonable. Courts in the Fifth
Circuit calculate the lodestar, which is the product of the number of hours reasonably expended
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 6 of 8

Page 7 of 8
on the litigation, multiplied by a reasonable hourly billing rate. Watkins v. Fordice, 7 F.3d 453,
457 (5th Cir. 1993) (citing Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). Plaintiff provided an
invoice detailing the hours spent on the case. Dkt. No. 17−1. The attorneys’ hourly rates ranged
from $125 to $375 per hour. Id. The Court finds that the requested lodestar amount is reasonable.
III. CONCLUSION
For the above reasons, it is the RECOMMENDATION of the United States Magistrate
Judge to the United States District Judge that the plaintiff’s motion for default judgment (Dkt.
No. 17) is GRANTED and judgment be entered in favor of the plaintiff for $5,000.00 in actual
Damages, $10,000.00 in punitive damages, $3,5000.00 in attorney fees, and $415 in costs of suit.
IV. OBJECTIONS
The parties may wish to file objections to this Report and Recommendation. Parties filing
objections must specifically identify those findings or recommendations to which they object.
The District Court need not consider frivolous, conclusive, or general objections. See Battle v.
U.S. Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987).
A party’s failure to file written objections to the proposed findings and recommendations
contained in this Report within fourteen (14) days after the party is served with a copy of the
Report shall bar that party from de novo review by the District Court of the proposed findings
and recommendations in the Report. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S.
140, 150–53 (1985); Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996) (en
banc). Except upon grounds of plain error, failing to object shall further bar the party from
appellate review of unobjected-to proposed factual findings and legal conclusions accepted by
the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas, 474 U.S. at 150–53; Douglass, 79
F.3d at 1415.
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 7 of 8

Page 8 of 8
SIGNED this 9th day of December, 2025.
DEREK T. GILLILAND
UNITED STATES MAGISTRATE JUDGE
Case 6:24-cv-00505-ADA-DTG Document 23 Filed 12/09/25 Page 8 of 8