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Sarah Jean Haywood v. Lra Corporation D/B/A L.R.A. Corporation Debt Collection Services and Larry Raybin

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION


April 5, 2013

SARAH JEAN HAYWOOD, PLAINTIFF,
v.
LRA CORPORATION D/B/A L.R.A. CORPORATION DEBT COLLECTION SERVICES AND LARRY RAYBIN, DEFENDANTS.

The opinion of the court was delivered by: Judge Leinenweber

PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

C ONTENTS

I.INTRODUCTION

II.BRIEF MEMORANDUM OF APPLICABLE LAW

A.Violation of the Fair Debt Collection Practices Act (FDCPA)

B.Damages under the FDCPA

III.PLAINTIFF'S CLAIM FOR DAMAGES

IV.ATTESTATION OF THE FACTS Affidavit of Plaintiff (Exhibit A)

V.ATTORNEYS'FEES &COURT COSTS

A.Plaintiff's Counsel's Hourly Rates

B.Attorney's Rates -- Laffey Matrix (Exhibit C)

C.Attorney's Rates -- Consumer Attorney's Rates Survey (Exhibit D)

D.Hours Billed (Comprehensive listing attached hereto as Exhibit B)

VI.PRAYER FOR RELIEF

I.INTRODUCTION

Plaintiff, SARAH JEAN HAYWOOD, filed the Complaint in this matter alleging, inter alia, that Defendants, LRA CORPORATION d/b/a L.R.A. CORPORATION DEBT COLLECTION SERVICES and LARRY RAYBIN, violated the Fair Debt Collection Practices Act, 15 U.S.C. §1692, et seq. ("FDCPA").

On November 20, 2012, Plaintiff filed a Motion to Default Defendants due to Defendants' failure to answer or otherwise plead. Said Motion was granted and on December 21, 2012, an Entry of Default was entered against Defendants. Plaintiff now moves for the entry of a Default Judgment by the Court.

II.BRIEF MEMORANDUM OF APPLICABLE LAW

A.Violation of the Fair Debt Collection Practices Act (FDCPA)

Plaintiff's Complaint alleges that Defendants violated the FDCPA by the manner with which they attempted to collect an alleged debt from Plaintiff.

Specifically, Plaintiff's Complaint alleges that Defendants violated the FDCPA as follows:

a. Used any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt in violation of 15 U.S.C. §1692b(5);

b. Communicated with the consumer after the debt collector knew the consumer was represented by an attorney with regards to the subject debt and has knowledge of, or can readily ascertain, such attorney's name and address and said attorney did not fail to respond within a reasonable period of time to communications from the debt collector, in violation of 15 U.S.C. §1692b(6);

c. Communicated with the consumer despite knowing that the consumer was represented by an attorney with respect to the debt allegedly owed by Plaintiff and said attorney had not consented for Defendant to have direct communication with Plaintiff in violation of 15 U.S.C. §1692c(a)(2);

d. Used false, deceptive, misleading and unfair or unconscionable means to collect or attempt to collect an alleged debt in violation of 15 U.S.C. §1692e;

e. Falsely represented the character, amount, or legal status of any debt in violation of 15 U.S.C. §1692e(2)(A);

f. Threatened to take action that cannot legally or is not intended to be taken in violation of 15 U.S.C. §1692e(5);

g. Used any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning the consumer in violation of 15 U.S.C. §1692e(10);

h. Used unfair and/or unconscionable means to collect or attempt to collect a debt in violation of 15 U.S.C. §1692f;

i. Failed to comply with the provisions of 15 U.S.C. §1692g(a);

j. Contradicted, overshadowed and obscured the required validation/verification language required by §1692g(a) of the FDCPA by extraneous language contained in the aforementioned Letter; and,

k. Was otherwise deceptive and failed to comply with the provisions of the FDCPA.

B. Damages under the FDCPA

The Fair Debt Collection Practices Act provides for the payment of any actual damages and statutory damages of up to $1,000.00. 15 U.S.C. §1692k.

The aforesaid section of the FDCPA states: "Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person in an amount equal to the sum of:

(1) any actual damage sustained by such person as a result of such failure;

(2)(A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000;

As noted by myriad courts ruling on FDCPA claims, emotional distress damages are actual damages deserving of compensation. A plethora of cases, similar in nature to that of the Plaintiff in the present case, have resulted in the finding of actual damages in favor of the Plaintiffs. See Anderson v. Conwood Co., 34 F. Supp. 2d 650 (W.D. Tenn. 1999) ($50,000 in actual damages awarded in absence of testimony other than worry, stress and anxiety); Stevenson v. TRW, 987 F.2d 288 (5th Cir. 1993) ($30,000 in mental anguish and embarrassment damages, plus $20,700 in attorney's fees); Thompson v. San Antonio Retail Merchants Ass'n, 682 F.2d 509 (5th Cir. 1982) ($10,000 actual damages for humiliation and mental distress even when no out-of-pocket expenses); Morris v. Credit Bureau, 563 F. Supp. 962 (S.D. Ohio. 1983) ($10,000 for stress, anxiety, humiliation, injury to his reputation , his work, his family, his sense of well-being); Collins v. Retail Credit Co., 410 F. Supp. 924 (E.D. Mich. 1976) ($21,750 for loss of reputation, embarrassment, in recognition of the "many subtle and indirect adverse effects upon a personal, social and economic life", ($50,000 in punitive damages and $21,000 in attorney's fees); Jones v. Credit Bureau of Huntington, Inc., 399 S.E.2d 694 (W. Va. 1990): Jury award of $4,000 compensatory $42,500 punitive, upheld; Bryant v. TRW Inc., 689 F.2d 72 (6th Cir. 1982) ($8,000 for embarrassment and humiliation, attorney's fees $13,705); Belile v Allied Medical Accounts Control Associated Bureaus, Inc., 209 B.R. 658 (E.D. Pa. 1997) (Consumer is entitled to actual damages under the FDCPA.for emotional distress arising from unlawful debt collection practices arising from letter violation); Crossley v Lieberman, 90 B.R. 682 (E.D. Pa 1988), aff'd, 868 F.2d 566 (3d. Cir 1989) (actual damages in the form of emotional stress assessed at $1,000 for debt collector's violation of the FDCPA); In re Littles, 75 B.R. 241 (E.D. Pa. 1987), aff'd, 90 B.R. 700 (E.D. Pa. 1988); Southern Siding Company, Inc, v. Raymond, 703 So.2d 44 (La. App., 1st Cir. 1997) (Actual damages of $5000 and $2000 and $2000 in statutory damages were awarded to husband and wife under the FDCPA for mental and emotional distress in the form of undue stress, anxiety and sleeplessness and physical injury in the form of depression as result of threatening letter); Venes v. Professional service Bureau, 353 N.W. 2d 671 (Minn. Ct. App. 1984) ($6000 awarded for undue stress as a result of debt collection violations involving harassing telephone calls); Smith v. Law Offices of Mitchell N. Kay, 124 B.R. 182 (D. Del. 1991)($3000 for actual damages in the form of emotional distress as a result of FDCPA violation).

Moreover, such damages as outlined above, including personal humiliation, embarrassment, sleeplessness, depression and mental anguish or emotional stress need not be proved by expert testimony and can be sustained by the consumer himself. See Belile, Crossley, Littles, Raymond.

III.PLAINTIFF'S CLAIM FOR DAMAGES

Plaintiff seeks to recover $1,000.00 in statutory damages and $1,500.00 for actual damages, as detailed in Plaintiff's affidavit. Additionally, Plaintiff seeks recovery of her attorneys' fees and costs as delineated below.

IV.ATTESTATION OF THE FACTS

Please see affidavit of Plaintiff attached hereto as Exhibit A.

V.ATTORNEYS'FEES &COURT COSTS

A.Plaintiff's Counsel's Hourly Rates

Ashley Decker has been licensed since 2009 and her hourly rate is $225 per hour. David Marco has been licensed since 2000 and his hourly rate is $340 per hour. Larry Smith has been licensed since 1993 and his hourly rate is $395 per hour. Paralegals at SMITHMARCO, P.C., have an hourly rate of $115 per hour.

B.The Rates Sought by Plaintiff's Counsel are Reasonable as Evidenced by the United States Attorneys' Office and the "Laffey Matrix"

The hourly rates requested by Plaintiff as detailed in Plaintiff's Statement of Services are commensurate with the prevailing rates for attorneys that practice federal law. As the case at bar was filed pursuant to a federal remedial statute, the FDCPA, rates charged by other attorneys practicing federal law may be compared to determine an appropriate rate. See Laffey v. Northwest Airlines, Inc., 572 F. Supp. 354, 371 (D.D.C. 1983).

In Laffey, the court compared rates of attorneys practicing federal claims with fee-shifting provisions to reach a hybrid rate. Id. The court's analysis in Laffey was taken one step further by the Civil Division for the United States Attorney's Office to reflect how rates have changed over the years due to inflation. In doing so, the United States Attorney's office created the "Laffey Matrix."

The Laffey Matrix is an official statement of market-supported reasonable attorney fee rates that was adopted, and is periodically updated, by the United States Court of Appeals for the District of Columbia. Adcock-Ladd v. Secretary of Treasury, 227 F.3d 343, 347 (6th Cir. 2000), citing Laffey v. Northwest Airlines, Inc., 746 F.2d 4 (D.C. Cir. 1984).

As demonstrated by the "Laffey Matrix" the rates sought by Plaintiff's attorneys herein are commensurate with recognized rates for attorneys' with similar experience. (See Laffey Matrix, attached hereto as Exhibit C).

C.The Rates Sought by Plaintiff's Counsel are Reasonable as Evidenced by the Consumer Law Attorney Fee Survey Report

A recent survey was conducted of law firms across the country to determine the rates charged by attorneys practicing in the area of consumer law in various geographic regions. (See United States Consumer Law Attorney Fee Survey Report for 2010-2011 attached hereto as Exhibit D). The survey provides information regarding billable rates for attorneys who practice in the "Midwest Region."*fn1 (Exhibit Dat 11).

The survey states that the average hourly rate for attorneys in the Midwest who have been practicing for one (1) to three (3) years is $287. (Exhibit Dat 20), for attorneys who have been practicing for six (6) to ten (10) years is $318. Id. The median rate for all consumer attorneys in the Midwest is $375. Id. at 47. The median billable hourly rate for paralegals in the Midwest is $112 per hour. Id.

D.Hours Billed

Please see summary below. For a comprehensive list of Plaintiff's attorneys' fees, please see document attached hereto as Exhibit B.

ATTORNEY HOURS RATE TOTAL Larry P. Smith 3.9 $395.00 $1,540.50 David M. Marco 3.3 $340.00 $1,122.00 Ashley S. Decker 15.2 $225.00 $3,420.00 Paralegal 5.5 $115.00 $632.50 ATTORNEYS'FEES $6,715.00 COST FOR FILING COMPLAINT $350.00 COST OF SERVICE OF SUMMONS $195.00 TOTAL ATTORNEYS' FEES AND COSTS $7,260.00

VI.PRAYER FOR RELIEF

WHEREFORE, Plaintiff, SARAH JEAN HAYWOOD, by and through her attorneys, SMITHMARCO, P.C., respectfully requests that this Honorable Court enter judgment in her favor and against Defendants, LRA CORPORATION d/b/a L.R.A. CORPORATION DEBT COLLECTION SERVICES and LARRY RAYBIN, as follows:

1. Actual Damages: $1,500.00 2. Statutory Damages: $1,000.00 3. Attorneys' Fees & Costs: $7,260.00 TOTAL: $9,760.00

Respectfully submitted, SARAH JEAN HAYWOOD By: s/ David M. Marco Attorney for Plaintiff Dated: April 5, 2013 David M. Marco (Atty. No.: 6273315) SMITHMARCO, P.C. 205 North Michigan Avenue, Suite 2940 Chicago, IL 60601 Telephone:(312) 546-6539 Facsimile: (888) 418-1277 E-Mail:dmarco@smithmarco.com

<--text--> EXHIBIT A

AFFIDAVIT OF PLAINTIFF

Plaintiff, SARAH JEAN HAYWOOD, deposes and states as follows:

1. I am over the age of eighteen (18) and I am competent to testify at a hearing should I be so required.

2. I have personal knowledge of the facts contained within this affidavit.

3. If requested to do so, I would testify in accordance with the facts contained within this affidavit.

4. On or about March 8, 2012, LRA Corporation d/b/a L.RA. Corporation Debt Collection Services ("LRA) sent me a letter in an attempt to collect a debt I supposedly owed to ETI Financial Corporation ("ETI"). (See Exhibit A to First Amended Complaint).

5. LRA sent the letter addressed to me via regular mail and this was LRA‟s initial communication to me.

6. When LRA sent the letter to me, LRA enclosed the letter in an envelope, the return address of which identified LRA as "L.R.A. CORPORATION DEBT COLLECTION SERVICES." (See Exhibit B to First Amended Complaint).

7. When LRA sent the letter to me, immediately following my name, LRA listed my account number relative to the debt on which it was attempting to collect as "ACC #7953953." (See Exhibit A to First Amended Complaint). My account number was visible upon viewing the envelope in which LRA enclosed the letter. (See Exhibit B to First Amended Complaint).

8. LRA reasonably should have known that people other than me would see LRA‟s name listed on the return address of the envelope and my account number listed on the envelope immediately after Plaintiff‟s name. I thought this letter and envelope violated my privacy as anyone could see who they were and my personal account number. This was also embarrassing as my husband‟s high school friend was a mail carrier and sometimes was on our route. I did not want anyone to know that I had debt collectors sending me letters. This could make me and my husband subject to gossip among our friends.

9. In its letter dated March 8, 2012, LRA stated that I owed a balance of $32.36 and LRA stated "if we DO NOT RECEIVE PAYMENT WITHIN 30 DAYS we will report this as a BAD DEBT to the THREE CREDIT BUREAUS, EQUIFAX, EXPERIAN, AND TRANSUNION." (See Exhibit A to First Amended Complaint). This statement made me think that if I did not pay LRA within thirty days then the debt would be reported to the credit bureaus. This was very stressful as I was trying to repair my credit, and was very worried that this debt being reporting would ruin all the work I had been doing and this was for a debt I did not think I owed the money on. I felt threatened by their actions and I did not know what action to take and how I could do it quickly but I wanted to do research.

10. In the letter LRA also stated "you have thirty days after receipt of the notice, to dispute the validity of the debt or any portion thereof, or this debt collector will assume the debt valid." (See Exhibit A to First Amended Complaint). This statement by LRA in the same letter confused me, as I did not understand if I had thirty days to dispute the debt, how did I also, only have thirty days to pay the debt. I felt this was very contradictory and confusing as to what I could do. If I disputed the debt would LRA then report it to the credit bureaus because as I would be waiting for validation I would not pay the debt within the thirty days. If I paid the debt to avoid being reported then I would not have the opportunity to dispute this debt and I wanted to because I did not think I owed it.

11. In its letter to me LRA further stated "a bad debt recorded on your credit can cause your credit score to plummet; this will quickly end your ability to acquire any sort of credit. Companies will not lend you money; give you open account (credit) for services, especially in today‟s economy." (See Exhibit A to First Amended Complaint). This statement by LRA was very upsetting as I was extremely concerned that I would not be able to obtain credit down the line should I need or want to due to this debt.

12. In the letter to me, LRA further stated "the "Cost of Bad Credit‟, will affect interest rates for a loan, if you qualify for one, will cause credit card interest rates to go up." (See Exhibit A to First Amended Complaint). I was getting very frustrated that LRA reporting this debt could then make all other accounts I had have the interest rates go up if they reported the debt to the credit bureaus. I felt like all the work I had been doing to repair my credit may be undone and my credit could be worse.

13. LRA‟s representations to me that if a bad debt was reported on my credit report that interest rates for any loan or credit card I had would increase were statements made by LRA to me in an attempt to coerce me into making a payment to LRA.

14. LRA has not provided to me within five (5) days of its initial communication to collect the alleged debt, with a written statement that if I sent a written request to LRA within thirty (30) days after receipt of LRA‟s letter, that LRA would provide me with the name and address of the original creditor, if different from the current creditor.

15. On or about March 22, 2012, my attorney sent a letter to LRA notifying LRA that I was represented with respect to the debt on which it was attempting to collect. Contact information for my attorney was provided. (See Exhibit C to First Amended Complaint).

16. On or about March 26, 2012, LRA sent a letter to my attorney. LRA acknowledged receipt of the March 22, 2012 letter and requested the account number of the debt on which LRA was attempting to collect from me. (See Exhibit D to First Amended Complaint).

17. On or about March 27, 2012, my attorney sent a letter to LRA which stated the account number relative to the debt on which LRA was attempting to collect from me. (See Exhibit E to First Amended Complaint).

18. After LRA received the letter from my attorney, on or about March 27, 2013 LRA sent another letter to my attorney. (See Exhibit F to first Amended Complaint).

19. In the letter LRA sent to my attorney, dated March 27, 2012, LRA, again, acknowledged having received the March 27, 2012 letter.

20. Despite LRA‟s awareness that I was represented by an attorney, on or about April 19, 2012, LRA continued to attempt to collect the debt I allegedly owed to ETI and called my husband in a further attempt to collect the debt I allegedly owed to ETI.

21. On or about April 19, 2012, my husband spoke with LRA and it stated I owed a balance relative to the debt I owed to ETI.

22. At no time has my attorney failed to respond to a communication from LRA.

23. My attorney did not consent to LRA having direct communication with me or my husband nor did I consent to LRA having direct communication with me or my husband.


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