Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03144/USCOURTS-cand-3_05-cv-03144-3/pdf.json

Parties Involved:
Eskanos & Adler
Defendant
Cynthia Tilton
Plaintiff

Document Text:

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CYNTHIA TILTON, 

Plaintiff,

 v.

ESKANOS & ADLER, a professional

corporation,

Defendant. 

)

)

)

)

)

)

)

)

)

)

)

)

No. C-05-3144-SC

ORDER DENYING MOTION

FOR ATTORNEY'S FEES

I. INTRODUCTION

Plaintiff Cynthia Tilton ("Plaintiff" or "Tilton") filed this

action against Defendant Eskanos & Adler ("Defendant" or "E&A"), a

consumer collection law firm, alleging causes of action under the

Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.

After reaching a monetary settlement with Defendant,

Plaintiff filed, and the Court approved, a voluntary dismissal of

the case with prejudice on June 9, 2006. 

Presently before the Court is Defendant's motion for attorney

fees, alleging that Plaintiff brought her action in bad faith.

For the reasons contained herein, the Court DENIES

Defendant's motion. 

//

// 

Case 3:05-cv-03144-SC Document 47 Filed 08/14/06 Page 1 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 This prior action was filed in the Superior Court for the

County of Contra Costa and was assigned WS04-2609 as its case

number. See Complaint ¶ 12. 

2

 E&A calls it an "inadvertent, clerical mistake." Def's.

Mem. at 9. 

2

II. BACKGROUND

The instant action arose from a prior case in which E&A sued

Tilton.1 This prior action started when E&A was hired to

"prosecute litigation against Ms. Tilton if she did not resolve

her debt owed to" Defendant's client. Defendant's Memorandum in

Support of Motion for Attorney Fees ("Def's. Mem.") at 3. Default

was entered after Tilton failed to respond, E&A ordered an

abstract of judgment on April 15, 2005, and E&A "began the process

of levying Ms. Tilton's bank account." Id.

After April 2005, "it became apparent with the involvement of

[Tilton's counsel] in the instant action, that Ms. Tilton's debt

was potentially time barred." Id. The judgment was vacated after

the parties stipulated to such an action. The parties negotiated

a settlement of "Ms. Tilton's purported claims." Id. at 4. 

However, the matter was not finished. According to E&A, the

state court "erroneously issued an abstract of judgment on June

28, 2005." Id. When E&A received the erroneously issued

abstract, its employee, Monica Otero, committed a blunder by

mailing it to the Contra Costa County Recorder's office. See id.2

The recorder's office subsequently, according to Tilton, sent

Tilton a notice that "E&A had placed a lien" on her property. See

Declaration of Cynthia Tilton in Opposition to Defendant Eskanos &

Adler's Motion for Attorney's Fees ¶¶ 15-16. On August 3, 2005,

Tilton filed the instant action in the U.S. District Court for the

Case 3:05-cv-03144-SC Document 47 Filed 08/14/06 Page 2 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3 E&A also asks for compensation for the "fees incurred to

reply to the opposition to this Motion and attend the hearing on

this motion." 

The Court points out that it vacated the hearing because it

found under Local Rule 7-1(b) that this motion could be determined

without oral argument. There was, then, no hearing for E&A to

attend. 

3

Northern District. See Declaration of June D. Koper in Support of

E&A's Motion for Attorney's Fees ("Koper Decl."), Ex. K at 2. E&A

requested a release of the lien on August 10, 2005, after having

discovered its error. See id. at 2-3. 

After Tilton accepted E&A's offer of a monetary settlement,

she filed, and the Court approved, a voluntary dismissal of the

instant case with prejudice. 

Defendants now move for $19,525.00 in attorney fees under

Federal Rule of Civil Procedure 11 ("Rule 11") and under 15 U.S.C.

§ 1692k(a)(3).3

III. DISCUSSION

A. The Court Will Not Award Sanctions Under Rule 11

E&A alleges that Tilton and her counsel filed the present

action in "bad faith" and without conducting the "due diligence"

requirements" mandated by Rule 11. Def's. Mem. at 1, 12. 

Under Rule 11, a court can impose sanctions on parties, law

firms or attorneys for presenting papers to the court for an

improper purpose, such as harassment, causing unnecessary delay,

or needless increase in the cost of litigation. The court can

also impose sanctions for filing allegations whose factual

contentions lack an evidentiary basis. Id. 

Sanctions under Rule 11 are discretionary - even if a party

has clearly violated Rule 11, the court is not required to impose

Case 3:05-cv-03144-SC Document 47 Filed 08/14/06 Page 3 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

 E&A asserts that Tilton does not properly allege that it

violated the Fair Debt Collection Practices Act. See E&A's Motion

for Attorneys' Fees at 6-8. 

The Court finds this assertion surprising, especially when

even a cursory look at the Complaint indicates that Tilton alleges

facts sufficient to state a claim under various provisions of the

Act. One example will suffice. Tilton alleged in her Complaint

that E&A violated 15 U.S.C. § 1692f(1), which forbids a debt

collector from attempting to collect a debt that was not expressly

authorized by an agreement or permitted by law. From Tilton's

look-out, Defendant appeared to have done exactly that when she

heard that E&A had placed a lien on her house. 

4

any sanction, monetary or otherwise. See Committee Notes on

Amendments to Federal Rules of Civil Procedure (1993) 146 FRD 401,

587. 

The Court will not award attorney's fees to Defendant. The 

Court finds that Plaintiff did not present papers to the Court for

an improper purpose or containing allegations that lacked a

factual basis.4 The Court finds that Tilton was understandably

concerned about her legal rights and her finances when E&A,

however mistakenly, placed a lien on her house, especially

considering that she thought that E&A's suit had settled. 

Although E&A states that it informed Tilton that it sent the

abstract of judgment in error, it would have been reasonable for

Tilton to have little trust in the assertions of her former

litigation adversary. 

Perhaps Tilton and her attorney should have made more probing

inquiries about E&A's actions. (Also, perhaps, E&A should have

carefully researched the statutes limiting its right to file its

state action against Tilton.) Whatever the alleged failures and

possible blunders, the Court will not apply the heavy punishment

of sanctions against Tilton. 

The motion for attorney's fees under Rule 11 is DENIED.

Case 3:05-cv-03144-SC Document 47 Filed 08/14/06 Page 4 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

B. The Court Will Not Award Sanctions Under 15 U.S.C. § 1692k(a)(3)

The Court will not award sanctions under 15 U.S.C. § 1692k

(a)(3), which reads, in relevant part, "[o]n a finding by the

court that an action under this section was brought in bad faith

and for the purpose of harassment, the court may award to the

defendant attorney's fees reasonable in relation to the work

expended and costs."

Under the facts stated above, the Court does not find that

this action was brought in bad faith or for purposes of

harassment.

The motion for attorney's fees under 15 U.S.C. § 1692k(a)(3)

is DENIED. 

On a final note, the Court is displeased that Defendant filed

this motion. Though perhaps not an instance of bad faith, the

Court finds it inappropriate for the Defendant to bring this

motion after the parties had agreed to a settlement and a

dismissal. Settlements serve an important function in our legal

system. Through them, adversaries not only agree to end court 

proceedings, but also agree to terminate their disputes

altogether, in order to save the court and the litigants from

wasting further time and resources. Bringing this sort of motion

after such an arrangement undercuts the very policy underlying the

settlement process.

//

//

//

//

Case 3:05-cv-03144-SC Document 47 Filed 08/14/06 Page 5 of 6
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

IV. CONCLUSION

 The Court finds that the action was not filed in bad faith or

for purposes of harassment, nor did its filing in any way violate

Rule 11, nor is there any reason to justify an award of attorney's

fees under 15 U.S.C. § 1692k(a)(3). Accordingly, Defendant E&A's

motion is DENIED. 

IT IS SO ORDERED.

Dated: August 14, 2006

 

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-03144-SC Document 47 Filed 08/14/06 Page 6 of 6