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SHULA v. LAWENT

June 4, 2004.

JAMES A. SHULA, Plaintiff, V. PAUL D. LAWENT, and J.V.D.B. & ASSOCIATES, INC., Defendants


The opinion of the court was delivered by: ARLANDER KEYS, Magistrate Judge

MEMORANDUM OPINION AND ORDER

James Shula sued Paul Lawent, J.V.D.B. & Associates, Inc., and Denise Bugno, for violations of the Fair Debt Collection Practices Act ("FDCPA"), and won. The Court entered summary judgment in Mr. Shula's favor on December 20, 2002, awarding him statutory damages under the FDCPA of $1,000, plus attorney's fees and costs. The case is now before the Court on Mr. Shula's petition for an award of attorney's fees and costs. For the reasons explained below, the petition is granted, as modified in this opinion.

BACKGROUND

  In this case, the parties have litigated for almost three years over claims worth just over $1,000. The Court's previous opinion explains the factual background of this case in detail, see Shula v. Lawent, No. 01 C 4883, 2002 WL 31870157 at *1-3 (N.D. Ill. Dec. 23, 2002). But to summarize briefly, defendant J.V.D.B. & Associates, Inc., a collection agency, called James Shula twice about a bill Mr. Shula allegedly owed to Dr. Harry Goldin, who had previously treated him. Mr. Shula disputed the debt. Nevertheless, a couple of months later, J.V.D.B. sued Mr. Shula, on behalf of Dr. Goldin, in state court. Mr. Shula, not wanting to hassle with the lawsuit, paid the bill to Dr. Goldin (most of which the doctor later returned, suggesting that Mr. Shula was actually right to dispute the debt in the first instance). About a month later, J.V.D.B. wrote to Mr. Shula, demanding that he pay $52.73 in court costs. Mr. Shula didn't pay; instead, he retained the law firm of Beeler, Schad & Diamond, P.C., and he sued J.V.D.B., as well as Paul Lawent (J.V.D.B.'s attorney) and Denise Bugno (a principal in the company and the person who managed its legal department). Mr. Shula alleged that J.V.D.B. and Lawent violated various sections of the Fair Debt Collection Practices Act (Counts 1, 2, 3, 4, 5, and 7), and that J.V.D.B. and Ms. Bugno violated the Illinois Consumer Fraud Act (Count 6).

  The defendants moved for summary judgment on all of Mr. Shula's claims, arguing that Counts 1, 2, 4, 5, 6, and 7 were barred by the applicable statutes of limitation, and that the facts alleged in Counts 1, 2, 3, 5, 6, and 7 did not amount to violations of the FDCPA. Mr. Shula filed a cross-motion for summary judgment on Counts 1, 2, 3, and 5. In a memorandum opinion and order issued December 23, 2002, the Court granted summary judgment in favor of Mr. Shula on Counts 1 and 2, which alleged, respectively, that J.V.D.B. and Mr. Lawent violated the FDCPA when they sent the court costs letter demanding a payment not expressly authorized by agreement or law, and that Mr. Lawent violated the FDCPA when he failed to include a validation notice in the letter. Shula, 2002 WL 31870157, at *8-11. The Court otherwise denied the motions. Id. at *4-8, *11-13. Shortly thereafter, the parties reached an agreement with respect to the remaining counts, and the Court dismissed them with prejudice. The defendants then appealed the Court's summary judgment ruling, and the Seventh Circuit affirmed. See Shula v. Lawent, 359 F.3d 489 (7th Cir. 2004). In doing so, the Court noted that the FDCPA violations disclosed in the record were "blatant, and reflect very poorly upon attorney Lawent's professionalism." Id. at 491.

  While the appeal was pending, Mr. Shula filed a petition for attorney's fees and expenses under Local Rule 54.3, and the defendants responded. Consistent with an agreement reached by the parties, the petition is now ripe for consideration.

  DISCUSSION

  A successful FDCPA plaintiff is entitled to recover "the costs of the action, together with a reasonable attorney's fee as determined by the court." 15 U.S.C. § 1692k(a)(3); Zagorski v. Midwest Billing Services, Inc., 128 F.3d 1164, 1166 (7th Cir. 1997). A reasonable attorney's fee is "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). This calculation, known as the "lodestar," may then be adjusted upward or downward, depending on a variety of factors. Altergott v. Modern Collection Techniques, Inc., 864 F. Supp. 778, 780 (N.D. Ill. 1994). The plaintiff bears the burden of proving both that the hourly rates requested are reasonable and that the hours claimed to have been worked were reasonably expended on the litigation. Hensley, 461 U.S. at 433. And, although Courts have broad discretion in fixing the amount of the award, to the extent they deviate from the petitioner's claimed rates and hours, they must explain those deviations. McNabola v. Chicago Transit Authority, 10 F.3d 501, 519 (7th Cir. 1993).

  Mr. Shula unquestionably prevailed in this case; indeed, the defendants do not argue otherwise. The parties disagree, however, on how much money Mr. Shula should be entitled to recover, given his status as a prevailing party. Mr. Shula seeks an award of attorney's fees in the amount of $57,790.00; he seeks to recover 15.3 hours for attorney James Shedden, billed at the rate of $475/hour, 166.7 hours for attorney Michael Hilicki, billed at the rate of $300/hour, and 4.1 hours for law clerk Valerie Walker, billed at the rate of $125/hour. He also seeks reimbursement from the defendants for expenses totaling $3,358.61. Thus, in total, Mr. Shula seeks an award of fees and costs in the amount of $61,148.61.

  The defendants argue that the hourly rates urged by Mr. Shula are too high. They also argue that the total time submitted by Mr. Shula's counsel is excessive, that many of the hours worked were unnecessary, and that the time totals are not adequately documented. They claim that, at most, Mr. Shula is entitled to an award of $15,423.75, though they do not explain how they arrived at this number.

  The Court first considers the reasonable hourly rates for the attorneys and the law clerk who worked on Mr. Shula's case. In determining the reasonable hourly rate to be used in calculating the lodestar, the Court looks to the market rate, the "rate that lawyers of similar ability and experience in the community normally charge their paying clients for the type of work in question." McNabola, 10 F.3d at 519 (citations and quotations omitted). Awarding fees at the market rate helps to ensure that attorneys will take on fee-shifting cases, rather than selling their time to someone else at a higher rate. Tolentino v. Friedman, 46 F.3d 645, 652 (7th Cir. 1995). The burden of establishing the market rate is on the fee applicant; once he meets this burden, the opposing party then has the burden of demonstrating why a lower rate should be awarded. Spegon v. Catholic Bishop of Chicago, 175 F.3d 544, 554-55 (7th Cir. 1999). If the fee applicant fails to establish the market rate, and if the Court is unable to determine the actual billing rates of the attorneys involved in the case, the Court should look to the next best evidence — affidavits from similarly experienced attorneys attesting to the rates they charge paying clients for similar work, or evidence of fee awards the attorney has received in similar cases. See People Who Care v. Rockford Board of Education, School District No. 205, 90 F.3d 1307, 1310 (7th Cir. 1996); Spegon, 175 F.3d at 556. An attorney's self-serving affidavit cannot, by itself, establish the market rate for that attorney's services. Spegon, 175 F.3d at 556.

  Here, Mr. Shula seeks reimbursement for fees at the rates of $475 for attorney Shedden, $300 for attorney Hilicki, and $125 for law clerk Walker. To support his proposed award, Mr. Shula submitted a declaration from Mr. Shedden stating: (1) that he has been an attorney since 1982 and a shareholder at Heeler, Schad & Diamond, his current firm, since 1991; (2) that he has litigated well over a hundred cases under the FDCPA; (3) that his hourly rate was, until June of 2003, $475 for both contingent fee and non-contingent fee work; (4) that in June of 2003, his hourly rate increased to $525, a rate he has been paid in at least one other case in this district, Sharif v. International Development Group Co., No. 02 C 5430. See Declaration of James Shedden, ¶¶ 3, 7-8 (attached to Plaintiff's Petition as Exhibit D). With respect to attorney Hilicki, who also worked on Mr. Shula's case. Mr. Shedden states: (1) that Mr. Hilicki, who became a lawyer in 1994, is a senior associate at Beeler, Schad & Diamond; (2) that he has worked on over one hundred FDCPA cases; (3) that his hourly rate was, until June of 2003, $300; and (4) that, in June of 2003, his hourly rate went up to $350. See id., ¶¶ 5, 7-8.

  In addition to Mr. Shedden's declaration, Mr. Shula submitted affidavits from two attorneys who were not involved in this case, but who handle FDCPA cases in the Chicago area. The first, David Philipps, states that he has been a lawyer since 1987, that he has been practicing law in the Chicago area for fifteen years, and that he specializes in consumer protection and fair debt collection practices cases; he states that his hourly rate for such cases is $300, and that he typically charges clients $250 per hour for work done by his associate. See Affidavit of David J. Philipps, ¶¶ 2, 4-6 (attached to Plaintiff's Petition as Exhibit H). Mr. Philipps also states that, in his view, and given his experience litigating FDCPA cases — and especially FDCPA cases against J.V.D.B. — the rates Mr. Shula requests are imminently reasonable. See id. ¶¶ 7-9. The second attorney, Christopher Langone, who, like Mr. Philipps, practices in the areas of consumer protection and fair debt collection practices, similarly stated in his affidavit that the rates Mr. Shula requests are reasonable. See Affidavit of Christopher V. Langone, ¶¶ 6-7 (attached to Plaintiff's Petition as Exhibit I). Mr. Langone further states in his affidavit that he has been a lawyer since 1992, that he concentrates his practice in the areas of consumer rights and unfair business practices, and that he typically charges clients $320 per hour for his work in these types of cases. Id., ¶¶ 1-3, 5.

  For their part, the defendants cite Mitchell v. Allied Interstate, Inc., No. 97 C 7177, 1999 WL 1100961 (N.D. Ill. Dec. 2, 1999), a class action FDCPA case in which Beeler, Schad & Diamond claimed hourly rates of just $240 for a shareholder and just $160 for a raid-level associate — roughly half the rates being sought in this case. According to the defendants, the fact that the firm's rates have almost doubled in a period of less than five years suggests that the rates sought here ...


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