Court Opinion

ID: 4672478
Source: CourtListenerOpinion
Date Created: 2021-03-29 20:00:30.413657+00
Date Added: 2024-06-11T08:03:07.565166
License: Public Domain

NOT FOR PUBLICATION                           FILED
                                                                            MAR 29 2021
                      UNITED STATES COURT OF APPEALS
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
                             FOR THE NINTH CIRCUIT

KARLA GONZALEZ; JAMIE RETIGUIN                    Nos. 19-16813
BARBA, Sr.,                                            20-15002

               Plaintiffs-Appellees,              D.C. No.
                                                  2:16-cv-02909-MMD-VCF
    v.

ALLIED COLLECTION SERVICES,                       MEMORANDUM*
INC.,

               Defendant-Appellant.

                     Appeal from the United States District Court
                              for the District of Nevada
                    Miranda M. Du, Chief District Judge, Presiding

                        Argued and Submitted March 12, 2021
                                 Las Vegas, Nevada

Before: CLIFTON, NGUYEN, and BENNETT, Circuit Judges.

         In this Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et

seq., action, Allied Collection Services, Inc. (“Allied”) appeals the district court’s

grant of summary judgment to Karla Gonzalez, the denial of its motions for

*
      This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
attorneys’ fees, sanctions, and costs, and the grant of attorneys’ fees and costs to

Gonzalez. The district court had subject matter jurisdiction over Gonzalez’s

claims.1 See 28 U.S.C. § 1331; 15 U.S.C. § 1692k(d). We have jurisdiction under

28 U.S.C. § 1291. We affirm in part and vacate and remand in part.

      Reviewing de novo, Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1030

(9th Cir. 2010), we conclude that the district court properly granted summary

judgment to Gonzalez. The service of a writ of execution or writ of garnishment

that seeks to collect an inaccurate debt amount can constitute a violation or

violations of 15 U.S.C. §§ 1692e or 1692f. Allied conceded at oral argument that

the amount of debt owed as specified in the second writ when it was served on

Gonzalez’s employer was “erroneous.” Allied violated § 1692f(1) because it

attempted to collect a debt amount that was not “expressly authorized by the

agreement creating the debt.” The same facts support the conclusion that Allied

1
  Allied’s lack of standing argument, raised in a cursory manner for the first time at
oral argument, is unpersuasive. See Tourgeman v. Collins Fin. Servs., Inc., 755
F.3d 1109, 1117 (9th Cir. 2014) (outlining when a FDCPA plaintiff has statutory
standing to bring a cause of action). Donohue v. Quick Collect, Inc. is inapposite
because it did not discuss standing and indeed addressed the merits of the
plaintiff’s claim. See 592 F.3d 1027, 1033–34 (9th Cir. 2010). Further, Allied’s
violation was material. See Afewerki v. Anaya Law Grp., 868 F.3d 771, 773 (9th
Cir. 2017) (Material false representations are representations that “could ‘cause the
least sophisticated debtor to suffer a disadvantage in charting a course of action in
response to the collection effort.’”) (quoting Tourgeman, 755 F.3d at 1121).
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violated 15 U.S.C. §§ 1692e(5) and 1692e(10). Allied’s arguments to the contrary

are unavailing because its intentional decision to not credit the California

Ironworkers Field Welfare Plan’s payment to Dr. Mendoza does not negate the fact

that it violated the statute by trying to collect an amount of debt that was already

partially paid, even if that partial payment was subsequently rescinded by the

recipient. See Donohue, 592 F.3d at 1030 (“The FDCPA is a strict liability statute

that ‘makes debt collectors liable for violations that are not knowing or

intentional.’”) (quoting Reichert v. Nat’l Credit Sys., Inc., 531 F.3d 1002, 1005

(9th Cir. 2008)).

      The district court did not abuse its discretion, see Barber v. Miller, 146 F.3d

707, 709 (9th Cir. 1998), in denying Allied’s pre-trial motion to impose sanctions

under 28 U.S.C. § 1927. Allied’s arguments do not support a finding that Jamie

Barba’s counsel acted vexatiously in pursuing Barba’s claims. See In re Girardi,

611 F.3d 1027, 1061 (9th Cir. 2010) (explaining that, although “carelessly,

negligently, or unreasonably multiplying the proceedings is not” vexatious,

“recklessly or intentionally misl[eading] the court” is vexatious, as is “recklessly

rais[ing] a frivolous argument”).

      The district court did not clearly err, see Guerrero v. RJM Acquisitions LLC,

499 F.3d 926, 933 (9th Cir. 2007) (per curiam), in concluding that there was no

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bad faith or harassment in denying Allied’s pre-trial and post-trial motions for

attorneys’ fees and costs under 15 U.S.C. § 1692k(a)(3), see United States v.

Spangle, 626 F.3d 488, 497 (9th Cir. 2010) (requiring district court’s conclusions

to be “illogical, implausible, or without support in the record” in order to hold that

it clearly erred).

         The district court did not abuse its discretion, see Snake River Valley Elec.

Ass’n v. PacifiCorp, 357 F.3d 1042, 1054 n.12 (9th Cir. 2004), in denying Allied’s

post-trial motion for attorneys’ fees under the district court’s inherent powers.

Although fees may be awarded when a party acts in bad faith, see Marx v. Gen.

Revenue Corp., 568 U.S. 371, 382 (2013), Allied’s arguments do not support the

conclusion that Gonzalez’s pursuit of damages for emotional distress was in bad

faith.

         The district court did not clearly err, see Citizens For Better Forestry v. U.S.

Dep’t of Agr., 567 F.3d 1128, 1131 (9th Cir. 2009), in denying Allied’s post-trial

motion for costs under Federal Rule of Civil Procedure 54. Although there can be

multiple prevailing parties under Rule 54 when there are verdicts involving

different claims, and thus mixed judgments where it is within the discretion of a

district court to require each party to bear its own costs, see Amarel v. Connell, 102

F.3d 1494, 1523–24 (9th Cir. 1996), there are not multiple prevailing parties when

                                             4
there are different outcomes as to the types of relief, cf. Matter of Sparkman, 703

F.2d 1097, 1100 (9th Cir. 1983) (“[U]nder California law . . . the party who obtains

a favorable judgment is deemed to be the prevailing party even though he did not

successfully obtain all the relief which he sought in the action.”). The district court

properly determined that Gonzalez was the sole prevailing party as to her claims.

See Farrar v. Hobby, 506 U.S. 103, 115 (1992) (“A plaintiff who seeks

compensatory damages but receives no more than nominal damages is often such a

prevailing party.”).

      The district court abused its discretion, see Morales v. City of San Rafael, 96

F.3d 359, 362 (9th Cir. 1996), in not adequately accounting for the degree of

success that Gonzalez’s attorneys achieved, see Farrar, 506 U.S. at 114 (“‘[T]he

most critical factor’ in determining the reasonableness of a fee award ‘is the degree

of success obtained.’”) (quoting Hensley v. Eckerhart, 461 U.S. 424, 436 (1983)).

Proportionality of an award is different than awarding fees for hours spent

pursuing an unsuccessful result. Cf. In re Bluetooth Headset Prods. Liab. Litig.,

654 F.3d 935, 942 (9th Cir. 2011) (“[W]here the plaintiff has achieved ‘only

limited success,’ counting all hours expended on the litigation . . . may produce an

‘excessive amount,’ and the Supreme Court has instructed district courts to instead

                                          5
‘award only that amount of fees that is reasonable in relation to the results

obtained.’”) (quoting Hensley, 461 U.S. at 436, 440).

      The district court concluded that “time involved and results

obtained[] . . . favors the award for Gonzalez’s counsel.” Although she succeeded

in part at summary judgment, Gonzalez was unsuccessful at trial. She sought

damages for emotional distress, but the jury did not award those. The jury

“advised” the district court that Gonzalez be awarded $1,000 in statutory damages,

but it did not have the power to award those damages. See 15 U.S.C.

§§ 1692k(a)(2)(A), 1692k(b). The award of fees for hours spent pursuing an

unsuccessful result cannot be sustained. We vacate the judgment awarding

attorneys’ fees and costs to Gonzalez and remand for the district court to determine

an appropriate amount of fees, including consideration of the results obtained.

      Each party to bear its own costs on appeal.

      AFFIRMED IN PART, VACATED AND REMANDED IN PART.

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