Mailhot et al v. Direct Recovery Services, LLC

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Kelly Mailhot et al.
v. Case No. 16-cv-43-JL
Direct Recovery Services, LLC
REPORT AND RECOMMENDATION
The plaintiffs, Kelly Mailhot and Dave Mailhot, brought
suit against Direct Recovery Services (“DRS”) alleging claims
arising out of communications that DRS made to the plaintiffs in
an attempt to collect a debt. On February 28, 2017, the Clerk
of Court entered default against DRS for failure to respond to
service. See doc. no. 13. Before the court for Report and
Recommendation is the plaintiffs’ motion for default judgment
(doc. no. 14) pursuant to Federal Rule of Civil Procedure
55(b)(2). For the reasons that follow, the court recommends
that the plaintiffs’ motion be granted in part.
Standard of Review
After default is entered and when the amount at issue is
not a sum certain, “the party must apply to the court for a
default judgment.” Fed. R. Civ. P. 55(b)(2); see also KPS &
Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 19 (1st Cir.
2003). Before entering a default judgment, the court “may
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examine a plaintiff’s complaint, taking all well-pleaded factual
allegations as true, to determine whether it alleges a cause of
action.” Ramos-Falcón v. Autoridad de Energía Electríca, 301
F.3d 1, 2 (1st Cir. 2002) (quoting Quirindongo Pacheco v. Rolon
Morales, 953 F.2d 15, 16 (1st Cir. 1992)). The defaulted party
is “taken to have conceded the truth of the factual allegations
in the complaint . . . .” Ortiz-Gonzalez v. Fonovisa, 277 F.3d
59, 62-63 (1st Cir. 2002) (quoting Franco v. Selective Ins. Co.,
184 F.3d 4, 9 n. 3 (1st Cir. 1999). The defaulted party does
not, however, “admit the legal sufficiency of those claims.” 10
James Wm. Moore, Moore’s Federal Practice § 55.32[1][b] (3d ed.
2013). In other words, before entering default judgment, the
court must determine whether the admitted facts state actionable
claims. See Hop Hing Produces Inc. v. X & L Supermarket, Inc.,
No. CV 2012-1401(ARR)(MDG), 2013 WL 1232919, at *2 (E.D.N.Y.
Mar. 4, 2013); E. Armata, Inc. v. 27 Farmers Market, Inc., No.
08-5212 (KSH), 2009 WL 2386074, at *2 (D.N.J. July 31, 2009).
Background
By virtue of its default, DRS concedes the following facts
alleged in the amended complaint:
Kelly Mailhot resides in Hillsborough County, New
Hampshire. Dave Mailhot, her father, also lives in Hillsborough
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County.1 DRS was attempting to collect an alleged debt from
Kelly. Dave does not live with Kelly, and is not liable for the
alleged debt.
Both Dave and Kelly received communications from DRS
concerning the debt. DRS sent Dave a letter, dated October 28,
2015, regarding an outstanding balance of $780 that DRS had been
authorized to collect. See doc. no. 8-1. DRS also left the
following two messages on Dave’s cell phone between March and
November of 2015:
1) [Computerized voice] This is your final notice. Federal
law designates this matter as a confidential notice for
Kelly Mailhot. If this is not Kelly Mailhot, hang up
now.
[Human voice] Hello this is Sylvia Holt. Unfortunately
we received a notice of escalation concerning your file
this morning. Our client has asked us to cease all
voluntary communication and expedite paperwork
immediately. Please understand that we only have until
the end of the day to reach you. Please contact us or
have your attorney call. Understand that a failure to
communicate will result in your paperwork being expedited
and we will no longer be in a position to help you.
Please call 844-284-5550. Again, I apologize for the
aggravation and the short notice. The number is 844-284-
5550. Thank you.
2) Hi Dave, Sharon Hewes calling here. We spoke a few hours
ago in reference to your daughter Kelly. If you could
give me a call back, I wanted to see if you received the
e-mail. My number here, which is my direct line, is 844-
780-6747. Again, 844-780-6747. If you call and I don’t
answer, just leave a quick voicemail and I’ll definitely
give you a call right back.
1 As both plaintiffs share a last name, the court will refer
to them by their first names in this Report and Recommendation.
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Amend. Compl. ¶¶ 23(a), 24(a) (doc. no. 8) (formatting and
punctuation altered).
Kelly received three messages from DRS. The first, left on
her cell phone at some point between March and November of 2015,
was identical to the first message received by Dave, as detailed
above, except that it included the following additional partial
message: “. . . in our office Wednesday, Thursday, or Friday of
this week. Otherwise please do call right away because there
have been some changes made and we do need to speak with you.
Thank you. The number is 855-269-9628. Again, 855-269-9628.
This is concerning your account here.”2 Id. ¶ 25(a), (b)
(formatting and punctuation altered). Kelly also received the
following messages on October 1, 2015, and October 9, 2015,
respectively: 1) “Give me a call back. It’s very important. I
need to speak with you.”; and 2) “Please give me a call back.
It’s very important. I need to talk to you.” Id. ¶¶ 63, 64.
The amended complaint also references three messages left
by DRS that failed to identify the name of the caller and failed
to disclose the person from whom the debt collector was
attempting to collect the debt. The amended complaint does not
2 The amended complaint indicates that this message
“start[ed] in the middle with Sylvia Holt’s pre-recorded
message.” Amend. Compl. ¶ 25(b). It is unclear to the court
what exactly this means.
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identify who received these messages, when they were received,
or if they correspond with any of the messages quoted in the
amended complaint.
The amended complaint alleges that the plaintiffs did not
give consent to be contacted on their cell phones. The amended
complaint further alleges that the plaintiffs received calls
from various numbers, some of which had New Hampshire area
codes, and one of which was associated with the New Hampshire
court system. The amended complaint alleges that some or all of
these calls appear to have been automated.
Finally, the amended complaint alleges that DRS does not
have a New Hampshire office, and that DRS is not registered with
the New Hampshire Secretary of State.
Discussion
The plaintiffs seek statutory damages under two federal
provisions: (1) the Telephone Consumer Protection Act (“TCPA”),
47 U.S.C. § 227 (Count I) and (2) the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. (Counts II
through VI).3 They seek $2,000 in total statutory damages under
3 In their amended complaint, the plaintiffs also allege
violations of the New Hampshire Unfair, Deceptive, or
Unreasonable Collection Practices Act (“UDUCPA”), N.H. Rev.
Stat. Ann. (“RSA”) ch. 358-C (Count VII) and the New Hampshire
Consumer Protection Act (“CPA”), RSA ch. 358-A (Counts VIII
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the TCPA and $4,000 in total statutory damages under the FDCPA.
They also seek an award of attorney’s fees and costs.
I. TCPA
Under the TCPA, it is unlawful, subject to certain
exceptions not applicable here,
for any person within the United States . . . to make any
call (other than a call made for emergency purposes or made
without prior express consent of the called party) using
any automatic telephone dialing system or an artificial or
prerecorded voice . . . to any telephone number assigned to
a . . . cellular telephone service . . . .
47 U.S.C. § 227(b)(1)(A)(iii) (formatting altered). A person or
entity may bring a private action for a violation of the TCPA
and may recover, in lieu of actual damages, “$500 in damages for
each such violation . . . .” Id. § 227(b)(3)(B). “The TCPA is
essentially a strict liability statute . . . ,” and a party need
not be the “intended recipient” of the call in order to recover
thereunder. Davis v. Diversified Consultants, Inc., 36 F. Supp.
3d 217, 223, 224 (D. Mass. 2014) (internal quotations omitted)
(citation omitted).
In their amended complaint, the plaintiffs allege that they
each received identical messages from DRS that included both a
through X), as well as a state common-law claim for invasion of
privacy (Count XI). The plaintiffs have since affirmatively
waived their claims for damages under these counts. See doc.
no. 14 at ¶ 7; doc. no. 15. The court accordingly will not
address these counts herein, and the district judge should
decline to enter default judgment on these claims.
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“computerized” voice and what can reasonably be construed to be
a prerecorded voice. See Amend. Compl. ¶¶ 23(a), 25(a). The
plaintiffs further allege that they did not give DRS permission
to contact them on their cell phones. Assuming the truth of
these allegations, the court concludes that each of these calls
violated the TCPA.
The amended complaint does not, however, state actionable
claims under the TCPA with respect to any of the remaining
calls. There is nothing in the complaint from which the court
can reasonably infer that any of these calls utilized an
artificial and/or prerecorded voice. Nor, despite the
plaintiffs’ conclusory assertion to the contrary, are there
sufficient allegations in the complaint to support the plausible
conclusion that these calls were made using an automatic
telephone dialing system. The plaintiffs appear to suggest that
the mere fact these calls purportedly came from several
different telephone numbers demonstrates that they were made
using an automatic dialing system. The court cannot find any
support for such a premise, and accordingly declines to find
violations of the TCPA on this basis.
In sum, the amended complaint plausibly alleges two
violations of the TCPA by DRS: one with respect to Kelly and one
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with respect to Dave. The plaintiffs are accordingly entitled
to default judgment on Count I only as to these two calls.
II. FDCPA
Both plaintiffs allege several violations of the FDCPA by
DRS. “In order to prevail on an FDCPA claim, a plaintiff must
prove that: 1) the plaintiff has been the object of collection
arising from consumer debt, 2) the defendant is a debt collector
as defined by the FDCPA, and 3) the defendant has engaged in an
act or omission prohibited by the FDCPA.” Halsey v. Litton Loan
Servicing, No. 12-cv-511-PB, 2013 WL 3754919, at *3 (D.N.H. July
13, 2013) (internal quotation marks and citations omitted). By
virtue of its default, DRS concedes that it is a debt collector
for FDCPA purposes. DRS also concedes, based on the allegations
in the complaint, that Kelly was the object of collection
arising from a consumer debt.
The allegations in the complaint do not, however, support
the conclusion that DRS ever attempted to collect this debt from
Dave. The amended complaint concedes that Dave is not liable
for the debt DRS was seeking to collect. Moreover, there are no
factual allegations in the complaint that support an inference
that DRS ever contacted Dave for the purpose of collecting this
debt from him. For instance, both messages left on Dave’s cell
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phone make explicit reference to Kelly,4 and there is nothing in
either message to suggest that DRS sought payment from Dave
instead. Similarly, though the amended complaint alleges that
DRS sent Dave a letter on October 28, 2015, there are no
allegations that this letter sought to collect the debt from
Dave, and the sole version of the letter in the record is
redacted such that it is impossible to determine from whom
specifically DRS sought to collect the debt. See doc. no. 8-1.
The mere allegation in the amended complaint that DRS “attempted
to collect such alleged debt from the other plaintiffs,” Amend.
Compl. ¶ 16, is insufficient, on its own, to satisfy this first
element. Cf. Forcier v. Creditors Specialty Serv., Inc., No.
13-cv-444-LM, 2014 WL 6473043, at *3 (D.N.H. Nov. 17, 2014)
(citations omitted) (noting that conclusory allegations and
allegations tracking statutory requirements are insufficient to
support an entry of default judgment). Thus, the facts alleged,
when assumed true, fail to plausibly demonstrate that Dave was
ever the object of collection. For this reason, Dave is not
entitled to a default judgment on any of his FDCPA claims
4 The first message states: “Federal law designates this
matter as a confidential notice for Kelly Mailhot. If this is
not Kelly Mailhot hang up now.” Amend. Compl. ¶ 23(a) (emphasis
added). The second message states: “We spoke a few hours ago in
reference to your daughter Kelly.” Id. ¶ 24(a) (emphasis
added).
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against DRS. Cf. Christy v. EOS CCA, 905 F. Supp. 2d 648, 653
(E.D. Pa. 2012) (concluding that a father, who was not liable
for his adult daughter’s debt, was not a “consumer” for FDCPA
purposes).
For her part, Kelly alleges violations of 15 U.S.C. §§
1692e, 1692e(5), 1692e(7), 1692e(10), 1692e(11), 1692f,
1692g(a), and 1692g(b). The court turns first to her claims
under § 1692e, which prohibits a debt collector from using “any
false, deceptive, or misleading representation or means in
connection with the collection of a debt.” This section
contains a non-exhaustive list of proscribed conduct. See id.
§§ 1692e(1)–(16). It also generally prohibits, among other
things, communications that create “a false sense of urgency.”
See Kimbro v. I.C. Sys., Inc., 336 F. Supp. 2d 188, 192 (D.
Conn. 2004).
“[F]or FDCPA purposes, [a communication] is to be viewed
from the perspective of the hypothetical unsophisticated
consumer.” Pollard v. Law Office of Mandy L. Spaulding, 766
F.3d 98, 103 (1st Cir. 2014). This standard is similar to the
“least sophisticated consumer” standard employed by the majority
of circuits. Id. at 103 n.4; see also Waters v. J.C.
Christensen & Assoc., Inc., No. 08-11795-NH, 2011 WL 1344452, at
*8 (D. Mass. Mar 4, 2011) (“[D]ifferentiating between the least
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sophisticated consumer and the unsophisticated consumer
standards would involve the splitting of hairs.” (internal
quotation marks and citations omitted)). “The standard protects
all consumers, including the inexperienced, the untrained, and
the credulous.” Pollard, 766 F.3d at 103.
Here, Kelly has plausibly alleged communications that
create a false sense of urgency. The amended complaint alleges
that Kelly received messages that stated, among other things,
the following:
 “Our client has asked us to cease all voluntary
communication and expedite paperwork immediately.”
Amend. Compl. ¶ 25(a).
 “We only have until the end of the day to reach you.”
Id.
 “Understand that a failure to communicate will result in
your paperwork being expedited and we will no longer be
in a position to help you.” Id.
 “Please call right away because there have been some
changes made and we do need to speak with you.” Id. ¶
25(b).
 “Give me a call back. It’s very important. I do need to
speak with you.” Id. ¶ 63.
 “Please give me a call back. It’s very important. I
need to talk to you.” Id. ¶ 64.
These statements could be interpreted by an unsophisticated
consumer as creating a sense of urgency. The amended complaint
further alleges that these statements were made over an eight-
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month period. When assumed true, this allegation supports the
conclusion that the sense of urgency created by these statements
was false. The amended complaint accordingly states an
actionable claim under § 1692e with respect to Kelly.
Because Kelly is entitled to default judgment based on
DRS’s general violation of § 1692e, the court does not address
her remaining FDCPA claims. Rhodes v. Olson Assocs., P.C., 83
F. Supp. 3d 1096, 1103 (D. Colo. 2015) (“Plaintiff need
demonstrate only one violation of its provisions to be entitled
to a favorable judgment.”).
III. Damages
As noted, the plaintiffs only seek statutory damages.
Under the TCPA, the prevailing party is entitled to statutory
damages of $500 for each violation. 47 U.S.C. § 227(b)(3)(B).
As discussed above, Kelly and Dave are each entitled to judgment
on one violation of the TCPA by DRS. The court accordingly
recommends that the district judge award each plaintiff $500 in
statutory damages under the TCPA.
“[S]tatutory damages under the FDCPA are limited to $1,000
per lawsuit, not $1,000 per violation.” Nelson v. Equifax Info.
Servs., LLC, 522 F. Supp. 2d 1222, 1238 (C.D. Cal. 2007); see
also Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 650-51
(6th Cir. 1994) (en banc); Williams v. Pressler and Pressler,
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LLP, No. 11-7296 (KSH), 2013 WL 5435068, at *10 (D.N.J. Sept.
27, 2013); Stilz v. Global Cash Network, Inc., No. 10 CV 1998,
2010 WL 3975588, at *4 (N.D. Ill. Oct. 7, 2010). “Whether
statutory damages should be granted, and, if so, whether the
full amount of $1,000 should be allowed, is committed to the
discretion of the court. In exercising that discretion, courts
look to the nature of the violation. If the violation is
especially egregious, or if plaintiffs show that it was repeated
and persistent, courts are more likely to award the full
amount.” Manopla v. Bryant, Hodge and Assoc., LLC, No. 13-338
(JAP), 2014 WL 793555, at *6 (D.N.J. Feb. 26, 2014) (internal
citations omitted).
In view of the facts alleged in the amended complaint, the
court considers $1,000 in statutory damages to be an appropriate
award. The amended complaint alleges that DRS created a false
sense of urgency through multiple phone calls, which seemingly
occurred over a period of several months. And though Dave
cannot recover in his own right under the FDCPA, the amended
complaint further alleges that DRS sent Dave multiple
communications, at least one of which an unsophisticated
consumer might reasonably interpret as creating a false sense of
urgency. See Amend. Compl. ¶ 23(a). There are also facts in
the record arguably demonstrating that DRS attempted to thwart
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or evade service of process in this case. See Feb. 27, 2017
Order. Under these circumstances, the court concludes that an
award of statutory damages in the full amount of $1,000 is
justified.
In sum, the court concludes: 1) that Dave and Kelly are
each entitled to an award of $500 in statutory damages under the
TCPA, and 2) Kelly is entitled to an award of $1,000 in
statutory damages under the FDCPA. The court accordingly
recommends that the district judge award Dave $500 in damages
and Kelly $1,500 in damages, for a total damages award of
$2,000.
IV. Attorney’s Fees
Under the FDCPA, a prevailing party is entitled to
“reasonable attorney’s fees as determined by the court.” French
v. Corp. Receivables, Inc., 489 F.3d 402, 403 (1st Cir. 2007)
(internal quotations and ellipsis omitted) (quoting 15 U.S.C. §
1692k(a)(3)). “An award of attorney’s fees to successful
plaintiffs under the FDCPA is obligatory.” Id.
An award of reasonable attorney’s fees is typically
calculated by the lodestar method in which the court multiplies
the hours productively spent by a reasonable hourly rate.
Spooner v. EEN, Inc., 644 F.3d 62, 67-68 (1st Cir. 2011).
“‘Reasonable hourly rates will vary depending on the nature of
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the work, the locality in which it is performed, the
qualifications of the lawyers, and other criteria.’” Hutchison
ex rel. Julien v. Patrick, 636 F.3d 1, 16 (1st Cir. 2011).
(quoting United States v. One Star Class Sloop Sailboat, 546
F.3d 26, 38 (1st Cir. 2008)). The determination of what
constitutes a “reasonable” fee is left to the court’s
discretion. de Jesus v. Banco Popular de P.R., 918 F.2d 232,
233-34 (1st Cir. 1990).
The party seeking a fee award bears the burden of producing
materials to support the request. Hutchison, 636 F.3d at 13.
“Appropriate supporting documentation includes counsel’s
contemporaneous time and billing records and information
establishing the usual and customary rates in the marketplace
for comparably credentialed counsel.” Spooner, 644 F.3d at 68;
see also Bogan v. City of Boston, 489 F.3d 417, 426 (1st Cir.
2007)).
The plaintiffs seek an award of $6,143.33 in attorney’s
fees and $551.83 in costs. Plaintiffs’ counsel submits a sworn
affidavit in support of this request. In this affidavit,
plaintiffs’ counsel states that he and members of his firm have
spent at least twenty-one hours on this matter. Plaintiffs’
counsel states that work on this case has been charged at a rate
of $295 per hour for attorney time and $125 per hour for staff
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time. Plaintiffs’ counsel states that he has previously been
assigned an hourly rate of $325 per hour in other matters, and
correctly points out in the motion for default judgment that
this court has previously approved a rate of $295 per hour in a
similar case that he brought. See doc. no. 14 at 2 n. 1 (citing
Forcier, 2014 WL 6473043, at *14). The court concludes that the
fees requested are reasonable in light of these representations.
The court further concludes that the costs requested are
reasonable in light of the filing fee in this district and the
multiple attempts undertaken by the plaintiffs to serve process
on DRS.
Accordingly, the court recommends that the district judge
award the plaintiffs $6,143.33 in attorney’s fees and $551.83 in
costs.
Conclusion
For the foregoing reasons, the court recommends that the
district judge: 1) grant default judgment to both plaintiffs on
their TCPA claims; 2) grant default judgment to Kelly on her
FDCPA claim under § 1692e; 3) award each plaintiff $500 in
damages for their TCPA claims; 4) award Kelly $1,000 in damages
for her FDCPA claim; and 5) award the plaintiffs $6,143.33 in
attorney’s fees and $561.83 in costs.
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Any objections to this Report and Recommendation must be
filed within fourteen days of receipt of this notice. See Fed.
R. Civ. P. 72(b)(2). The fourteen-day period may be extended
upon motion. Failure to file specific written objections to the
Report and Recommendation within the specified time waives the
right to appeal the district court’s order. See Santos-Santos
v. Torres-Centeno, 842 F.3d 163, 168 (1st Cir. 2016); Fed. R.
Civ. P. 72(b)(2).
__________________________
Andrea K. Johnstone
United States Magistrate Judge
May 10, 2017
cc: John F. Skinner, III, Esq.
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