Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_06-cv-00447/USCOURTS-azd-4_06-cv-00447-3/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Martin W. Winn, on behalf of himself and

others similarly situated, 

Plaintiff, 

vs.

Unifund CCR Partners, an Ohio

partnership; the Hameroff Law Firm, P.C.,

an Arizona professional corporation;

David E. Hameroff, an individual; the

marital community of David E. Hameroff

and Jane Doe Hameroff; David W.

Lippman, an individual; the marital

community of David W. Lippman and

Jane Doe Lippman, 

Defendants. 

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No. CIV 06-447 TUC FRZ (GEE)

REPORT AND RECOMMENDATION

Pending before the court is a motion for attorney’s fees filed on April 13, 2007, by the

defendants, Hameroff Law Firm, P.C. and David Hameroff (collectively, Hameroff). [doc.

#42] The plaintiff filed a response, and Hameroff filed a reply.

The plaintiff in the instant action, Martin W. Winn, was named as a defendant in a

collection action filed in Maricopa County Superior Court. He brought an action in this court

against the state court plaintiff and his attorney, Hameroff, claiming the state court complaint

violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq. The

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action in this court was dismissed pursuant to FED.R.CIV.P. 12(c). In the instant motion,

Hameroff argues he is entitled to attorney’s fees and costs pursuant to statute. 

The instant motion was referred to Magistrate Judge Edmonds for a Report and

Recommendation pursuant to Local Civil Rule 72.2. Rules of Practice of the U.S. District

Court for the District of Arizona. 

Neither party requested a hearing, and the court finds the motion suitable for decision

without oral argument. The motion should be denied. The underlying action was not filed

in bad faith and for the purpose of harrassment..

Factual and Procedural Background

On or about May 16, 2006, Hameroff filed a civil complaint in Maricopa County

Superior Court claiming Martin W. Winn owed a credit card debt to his client, Unifund CCR

Partners. In the body of the complaint, Hameroff explicitly alleges what Winn owes his

creditor: principal in the amount of $11,301.91; interest in the amount of $1,432.27; and

interest on the principal at the rate of 10.000% from 03/01/2006. (Complaint, Exhibit A.)

The complaint further asserts the creditor is entitled to “recover court costs and reasonable

attorney’s fees.” Id. No specific amount is quoted in this section. 

In the following prayer for damages, the complaint states as follows:

WHEREFORE, Plaintiff prays and demands judgment against the

Defendant(s), and each of them as follows:

A. For judgment in the principal amount of $ 11,301.91:

B. For judgment for accrued interest in the amount of $1,432.27

C. For accruing interest on the following sum(s) until paid in full

Principal Sum of: At the rate of: From:

$11,301.91 10.000% 03/01/2006

D. For reasonable attorney’s fees in the amount of not less than $ 2,486.42.

E. For Plaintiff’s court costs incurred herein;

F. For interest at the legal rate on attorney fees and costs known the date

hereof; and 

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G. For such other and further relief as the court deems just and proper in the

premises.

(Complaint, Exhibit A.) 

The original debt was incurred through the use of a credit card issued by Chase

Manhattan Bank/ First USA Bank. (Complaint, p. 6.) The credit card agreement states the

agreement between the parties will be governed by the laws of the State of Delaware. Id.

The agreement further provides that “reasonable” attorney’s fees may be awarded if the

debtor’s breach results in litigation. Id.

On August 24, 2006, Winn filed the instant action in U.S. District Court. Winn

claimed the prayer for attorney’s fees in the state court complaint violated the FDCPA

because it was “false, deceptive, or misleading in violation of 15 U.S.C. § 1692e” and “[an]

unfair collection communication in an attempt to collect a debt in violation of 15 U.S.C. §

1692f.” Id., p. 9. 

Hameroff filed a motion for judgment on the pleadings. The Magistrate Judge issued

a Report and Recommendation advising the District Court to grant the motion because the

complaint failed to state a claim upon which relief could be granted.

 On March 30, 2007, the District Court granted Hameroff’s motion for judgment on

the pleadings. 

On April 13, 2007, Hameroff filed the instant motion for attorney’s fees and costs.

pursuant to 15 U.S.C. § 1692k(a)(3). Winn filed a response and Hameroff filed a reply.

Discussion

The Fair Debt Collection Practices Act (FDCPA) was designed “to eliminate abusive

debt collection practices by debt collectors, to insure that those debt collectors who refrain

from using abusive debt collection practices are not competitively disadvantaged, and to

promote consistent State action to protect consumers against debt collection abuses.” 15

U.S.C. § 1692. The FDCPA, inter alia, “broadly prohibits a debt collector from using any

false, deceptive, or misleading representation or means in connection with the collection of

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any debt.” Dunlap v. Credit Protection Ass’ n, 419 F.3d 1011, 1012 (9th Cir. 2005) (citing

15 U.S.C. § 1692e) (internal punctuation removed). 

If a plaintiff brings an FDCPA action and loses, subsection 1692k(a)(3) permits the

court to award attorney’s fees and costs to the defendant if the action “was brought in bad

faith and for the purpose of harassment.” For an award to be made, “there must be evidence

that the plaintiff knew that his claim was meritless and that plaintiff pursued his claims with

the purpose of harassing the defendant.” Gorman v. Wolpoff & Abramson, LLP, 435

F.Supp.2d 1004, 1013 (N.D.Cal. 2006).

In the instant motion, Hameroff argues an award of costs and attorney’s fees is

appropriate because (1) the plaintiff’s claim is not supported by any legal authority, (2) the

plaintiff’s attorney has filed numerous actions against him, and (3) the plaintiff’s attorney has

prolonged the litigation. The court does not agree.

Hameroff first argues bad faith may be inferred because there is no legal authority for

the plaintiff’s theory of liability. Hameroff correctly observes there is no case law directly

supporting the plaintiff’s claim for relief. In fact, one court issued an opinion in direct

contradiction, Argentieri v. Fisher Landscapes, Inc., 15 F.Supp.2d 55, 61 (D.Mass.,1998).

On the other hand, it also must be noted there is no binding authority foreclosing the

plaintiff’s position. The issue has not yet been addressed by either the Ninth Circuit or the

Supreme Court. Accordingly, it cannot be said the plaintiff knew his claim was meritless.

Where an issue has not been addressed by a controlling jurisdiction, the court should not

infer bad faith simply from the dismissal of a novel claim. See, e.g., Friedman v. HHL Fin.

Servs., Inc., 1994 WL 22969, at *3 (N.D.Ill., 1994) (“[The plaintiffs] do not risk sanctions

merely by making losing arguments concerning statutory language that is not clearly

defined.”); Riebe v. Juergensmeyer and Associates, 979 F.Supp. 1218, 1222 (N.D.Ill., 1997)

(“[D]espite Defendants’ characterization of the lawsuit as absurd, the facts of this case are

sufficiently unique to bring an action (albeit unsuccessful) under the statute . . . .”).

Hameroff further argues the plaintiff’s attorney has targeted him and points to five

actions which the plaintiff’s attorney filed against him in this court. While five actions is by

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no means an insignificant number, without more the court cannot conclude the plaintiff’s

attorney is filing actions in bad faith simply for the purpose of harassment. The plaintiff’s

attorney apparently specializes in FDCPA actions, while the defendant apparently specializes

in representing creditors. Accordingly, it is not entirely unexpected that these two attorneys

would find themselves opposing each other in multiple lawsuits. 

Finally, Hameroff argues the plaintiff’s attorney has been prolonging the litigation by

making questionable legal arguments. For example, the plaintiff’s attorney argued the

Magistrate Judge in her Report and Recommendation improperly converted the motion for

judgment on the pleadings into a motion for summary judgment by considering case law the

plaintiff did not cite in his briefs. This argument is based on an incorrect reading of the law

and was rejected by the District Court. It is, however, only a small part of the plaintiff’s

objection to the Report and Recommendation and could not have significantly prolonged the

litigation. Accordingly, it is unlikely to be part of a larger campaign of harassment against

the defendant. But see, Black v. Equinox Financial Management Solutions, Inc., 444

F.Supp.2d. 1271, 1275-76 (N.D.Ga., 2006) (Where the plaintiff should have found his action

was meritless by the end of discovery, pressing his claim through the summary judgment

stage was evidence of bad faith.).

Recommendation

 The Magistrate Judge recommends the District Court, after its independent review of

the record, enter an order 

DENYING the motion for attorney’s fees and costs filed on April 13, 2007, by the

defendants, Hameroff Law Firm, P.C. and David Hameroff. [doc. #42] 

Pursuant to 28 U.S.C. §636 (b), any party may serve and file written objections within

10 days of being served with a copy of this Report and Recommendation. If objections are

not timely filed, the party’s right to de novo review may be waived. See United States v.

Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc), cert. denied, 540 U.S. 900

(2003). 

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The Clerk is directed to send a copy of this Report and Recommendation to all parties.

DATED this 7th day of August, 2007.

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