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Beverly Brown v. Patelco Credit Union

December 28, 2010

BEVERLY BROWN, PLAINTIFF,
v.
PATELCO CREDIT UNION, ET AL., DEFENDANT.



The opinion of the court was delivered by: Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Before the Court are (1) Plaintiff's motion [52] asking the Court to vacate its June 24, 2010 order and (2) Plaintiff's motion [49] requesting that the Court approve attorneys' fees and issue an order identifying the share of fees due to Plaintiff's attorney from Defendants Defendant Continental Recovery and Towing ("Continental"), Patelco Credit Union ("Patelco"), and Ron Wainscott ("Wainscott"). For the reasons set forth below, Plaintiff's motion to vacate [52] is denied as moot, and Plaintiff's motion for attorneys' fees [49] is taken under advisement pending Defendants' filing of objections, if any, according to the briefing schedule set forth below.

As explained below, the Court's June 24, 2010 order [45] did not meet the requirements of Rule 54(b), and therefore was not (and is not) a final order as to any claims against any party. Nor, according to the docket sheet, has the Clerk entered judgment following the acceptance by Plaintiff of Rule 68 offers of judgment from all Defendants. Accordingly, because all claims against all parties have been resolved, the Court will now enter a final judgment in a separate document pursuant to Federal Rules of Civil Procedure 58 and 68. Neither the June 24 Order nor today's judgment order affect the Court's continuing jurisdiction over the collateral matters raised in Plaintiff's motion for attorneys' fees [49].

I. Background

Plaintiff initiated this action by filing a complaint against Defendants Continental, Patelco, and Wainscott alleging violations of the Fair Debt Collections Practices Act and state statutes (as to Continental) as well as defamation (as to Continental, Patelco, and Wainscott) and negligence (as to Patelco). On April 21, 2010, Continental made an offer of judgment for Plaintiff in the amount of $4,505 "plus reasonable attorneys' fees and costs accrued to date in an amount to be determined by the Court." [See 55-1, at 1.] Plaintiff accepted the offer on April 29, 2010. [See 40.] Continental then filed a motion [41] requesting entry of judgment nunc pro tunc to April 29, 2010, under Federal Rule of Civil Procedure 54(b). With its motion, Continental submitted a proposed order stating that: "(1) Judgment is entered in favor of Plaintiff and against Defendant Continental Recovery & Towing, Inc. in the amount of $4,505.00, nunc pro tunc to 4/29/2010. (2) Defendant Continental Recovery & Towing, Inc. having obtained the release and having satisfied the judgment is hereby dismissed from this action with prejudice." [See 41-2.] On June 24, 2010, after confirming with the parties that the motion was unopposed, the Court signed the proposed order. [See 43, 44, 45.]

About a month later, on July 22, 2010, Plaintiff accepted an offer of judgment in the amount of $2,500, including costs, from the remaining Defendants, Patelco and Wainscott. [46.] The Court has not entered any judgment against Patelco or Wainscott to date.

In the months following the Court's entry of judgment against Continental and Plaintiff's acceptance of the offer of judgment from the remaining Defendants, the parties failed to reach an agreement regarding the amount of the attorneys' fees referenced in Continental's offer of judgment. On August 31, Plaintiff's counsel mailed to all Defendants an itemized list of attorneys' fees and costs. On September 2, Continental responded to Plaintiff with a letter stating that it had been dismissed from the case and that Plaintiff's request for fees was untimely. Twelve days later, Plaintiff filed the instant fee motion against all Defendants [49] and a motion to vacate the Court's June 24, 2010 order [52].

II. Analysis

Plaintiff's motion to vacate [52] asserts that the Court's June 24 order dismissing the claims against Continental with prejudice was improper under Rule 54(b) and therefore was not final. Plaintiff specifically contends that the Court did not determine that there was no just reason for delay, as required by Rule 54(b). As such, Plaintiff contends that the judgment was not final and remains subject to revision by the Court until the time that it adjudicates all pending claims against all Defendants and enters a proper final judgment. Plaintiff submits that vacating the previous order will not prejudice any of the Defendants as it will not affect their rights or liabilities. Plaintiff's other motion [49] requests that the Court approve attorneys' fees and issue an order identifying the share of fees due to Plaintiff's attorney from each Defendant.

In its response [55], Continental argues that Plaintiff's motion to vacate must be denied for several reasons. First, Continental argues that because the June 24 order dismissed the action as to Continental with prejudice, the Court no longer retains subject matter jurisdiction over any matters concerning Continental. Second, Continental argues that Plaintiff's motion is procedurally improper because it was styled as a Rule 54(b) motion rather than as a motion to alter or amend the judgment under Rule 59(e) or to vacate the judgment under Rule 60(b). Third, Continental argues that Plaintiff waived any issue concerning payment of attorneys' fees and costs when Plaintiff failed to object to the entry of the June 24 order or address any issue concerning payment of attorneys' fees in her response to Continental's motion to dismiss. Finally, Continental argues that should the Court determine that it has jurisdiction, the Court should grant Continental leave to enforce the lien provision of the release that Plaintiff signed on May 13, 2010. [See 55, at 6.]

With respect to Plaintiff's fee motion [49], Continental likewise asserts that the Court lacks jurisdiction because the Court dismissed the claims against Continental with prejudice. In addition, Continental posits that Plaintiff's motion is untimely, as Rule 54(d)(2) provides that a fee motion must be filed no later than 14 days after the entry of judgment. Fed. R. Civ. P. 54(d)(2).

As explained below, there are two fatal flaws in Continental's argument. First, although a dismissal with prejudice may be a final and appealable judgment that divests the district court of jurisdiction over the merits of a dispute, it is well settled that "jurisdiction may continue as to certain collateral matters such as attorney's fees." Krull v. Celotex Corp., 827 F.2d 80, 82 (7th Cir. 1987). Second, the order purporting to dismiss the claims against Continental with prejudice was neither a proper Rule 54(b) judgment nor a Rule 68 judgment, and thus was not a final and appealable judgment in any event. The Court will provide a more extended discussion of both of these points, in reverse order, below.

A.Motion to Vacate

In general, when a defendant makes an offer of judgment and a plaintiff accepts, such that all claims relating to all parties are resolved, the Court must enter judgment according to the accepted offer pursuant to Rule 68(a). See Fed. R. Civ. P. 68(a); Webb v. James, 147 F.3d 617, 621 (7th Cir. 1998). "Because of this mandatory directive, the district court has no discretion to alter or modify the parties' agreement. 'Entry of a Rule 68 judgment is ministerial rather than discretionary.'" Webb, 147 F.3d at 621 (quoting Mallory v. Eyrich, 922 F.2d 1273, 1277 (6th Cir. 1991)). Rule 68 thus functions to provide an incentive to settlement, discourage protracted litigation, and ensure finality of an accepted judgment. Id. at 620. The expediency of a Rule 68(a) offer of judgment is complicated, however, where, as here, there are multiple defendants, only one of whom (at least initially) makes an offer of judgment. Although the Court was unable to locate any authority directly on point, the most analogous case provides that a court may "enter a ...


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