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Felton v. Convergent Outsourcing, Inc.

United States District Court, D. Colorado

April 11, 2014

JACQUELINE FELTON, Plaintiff,
v.
CONVERGENT OUTSOURCING, INC., a Washington corporation, Defendant.

ORDER DENYING DEFENDANT CONVERGENT OUTSOURCING, INC.'S MOTION FOR ATTORNEY'S FEES AND COSTS

ROBERT E. BLACKBURN, District Judge.

The matter before me is Defendant Convergent Outsourcing, Inc.'s Motion for Attorney's Fees and Costs [#32], [1] filed October 18, 2013. I deny the motion.

Defendant seeks its attorney fees and costs pursuant to 15 U.S.C. § 1692k(a)(3) as a sanction for plaintiff's alleged bad faith in bringing this lawsuit. Alternatively, it claims plaintiff's counsel should be liable to reimburse it for these cost items for having vexatiously multiplied the proceedings. I am unpersuaded by either argument.

This case was brought under the Federal Debt Collection Practices Act ("FDCPA" or "the Act"), 15 U.S.C 1692 et seq. Section 1692k of the Act provides that

On 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.

15 U.S.C. § 1692k(a)(3). Thus, "[w]hen a defendant prevails and the court finds that the suit was brought in bad faith and for the purpose of harassment, then (in the court's discretion) that defendant may also recover attorney's fees." Marx v. General Revenue Corp., 668 F.3d 1174, 1178 (10th Cir. 2011), aff'd, 133 S.Ct. 1166 (2013) (emphases in original). Putting aside the not-all-together clear issue whether a defendant may be considered to have "prevailed" when a plaintiff voluntarily dismisses her claims, see University of Kansas v. Sinks, 2008 WL 750350 at *2-3 (D. Kan. Mar. 19, 2008), I find nothing in the record before me to demonstrate that plaintiff's claim was brought in bad faith or merely for the purpose of harassment. Contrary to defendant's selective citation of the evidence, the transcript of the phone call on which plaintiff's claim was premised does not clearly demonstrate that plaintiff had no basis for pursuing an FDCPA claim.[2]

As for defendant's invocation of section 1927, that provision applies when a party's attorney has "unreasonably and vexatiously" multiplied the proceedings. "The power to assess costs against an attorney under § 1927, however, is a power that must be strictly construed and utilized only in instances evidencing a serious and standard disregard for the orderly process of justice." Dreiling v. Peugeot Motors of America, Inc., 768 F.2d 1159, 1165 (10th Cir. 1985) (citation and internal quotation marks omitted). That standard plainly is not met on the record before me. By its own terms, the statute does not apply to the initiation of proceedings, Steinert v. Winn Group, Inc., 440 F.3d 1214, 1225 (10th Cir. 2006), so counsel's alleged failure to accept defendant's assessment of the merits of his claim prior to the filing of suit provide no basis for sanctions thereunder. Moreover, an attorney who acquiesces to the first attempt to dismiss his client's claims cannot be held liable for violation of section 1927. See id. Such is the case here. Although plaintiff's attorney may have engaged in some hard-ball tactics, his actions do not plainly exceed the bounds of zealous advocacy. See Ford Audio Video Systems, Inc. v. AMX Corp., Inc., 1998 WL 658386 at *3 (10th Cir. Sept. 15, 1998); Righthaven LLC v. Hill, 2011 WL 4018105 at *3 (D. Colo. Setp. 9, 2011).

THEREFORE, IT IS ORDERED that Defendant Convergent Outsourcing, Inc.'s Motion for Attorney's Fees and Costs [#32], filed October 18, 2013, is DENIED.


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