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Tejero v. Portfolio Recovery Associates, LLC

United States District Court, W.D. Texas, Austin Division

April 2, 2018

LUIS TEJERO, Plaintiff,
v.
PORTFOLIO RECOVERY ASSOCIATES LLC and WESTERN SURETY COMPANY, Defendants,

          ORDER

          SAM SPARKS SENIOR UNITED STATES DISTRICT JUDGE

         BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendants Portfolio Recovery Associates, LLC (PRA) and Western Surety Company (Western)'s Motion for Sanctions and Attorneys' Fees [#42], Plaintiff Luis Tejero's Response [#45] in opposition, Defendants' Reply [#50] thereto, Plaintiffs Motion for Attorney Fees and Costs [#43], and Defendant's Response [#44] in opposition. Having reviewed the documents, the governing law, the arguments of counsel, and the file as a whole, the Court now enters the following opinion and orders.

         Background

         I. Factual History

         As the Court previously recounted, this lawsuit concerns PRA's efforts to collect Plaintiffs outstanding credit card debt (the Debt) after Plaintiff defaulted. Compl. [#1] ¶¶ 13-22.

         On January 29, 2016, PRA received a faxed letter listing Plaintiff as the sender and stating the following:

I am writing to you regarding the account referenced above. I refuse to pay this debt. My monthly expenses exceed my monthly income; as such there is no reason for you to continue to contacting me, and the amount you are reporting is not accurate either. If my circumstances should change I will be in touch.

Id. [#1-1] Ex. B (Debt Letter). Sometime during March 2016, PRA informed a consumer reporting agency of the Debt. Pl.'s Mot. Summ. J. [#18] at 3. PRA reported a balance of $2, 211.00 and did not indicate the Debt was disputed. Id.

         II. Procedural History

         On June 24, 2016, Plaintiff filed a complaint in this Court alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p, and the Texas Debt Collection Act (TDCA), Texas Finance Code §§ 392.001-392.404, against PRA and Western. Compl. [#1]. Plaintiff claimed PRA violated the FDCPA and TDCA by failing to report the Debt was disputed. Compl. [#1] ¶¶ 12-38.[1]Western is the surety company for the bond PRA has on file with the Texas Secretary of State. Id. ¶ 11.

         Plaintiff filed a motion for summary judgment, which the Court denied as fact issues remained. Order of Apr. 6, 2017 [#27]. Subsequently, Defendants filed a motion for summary judgment, which the Court granted in part and denied in part. Order of July 27, 2017 [#36]. In particular, the Court found Plaintiff had no standing for his TDCA claim because Plaintiff offered no evidence he suffered actual damages, a necessary condition to establish a TDCA claim. Id.at 7-9. On the other hand, the Court denied summary judgment on Plaintiffs FDCA claim because a fact issue existed concerning whether Plaintiff actually disputed the Debt via the Debt Letter. Id. at 10-11. Likewise, the Court denied Plaintiffs motion for reconsideration of his summary judgment motion. Id. at 9-11.

         Trial was set for May 2018, but the parties filed a joint notice of settlement early in February 2018. Settlement Notice [#39]. The Court then ordered both parties to submit motions for attorneys' fees, which are ripe for consideration.

         Analysis

         I. Legal Standards A. Attorneys' Fees Under 28 U.S.C. § 1927

         28 U.S.C. § 1927 provides that "[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." To find a party multiplied proceedings "unreasonably" and "vexatiously, " there must "be evidence of bad faith, improper motive, or reckless disregard of the duty owed to the court." Procter & Gamble Co. v. Amway Corp., 280 F.3d 519, 525 (5th Cir. 2002). Section 1927 authorizes "shifting fees that are associated with the persistent prosecution of a meritless claim." Id. (quotation omitted). "To shift the entire cost of defense, " the party requesting sanctions "must prove, by clear and convincing evidence, that every facet of the litigation was patently meritless .. .and counsel must have lacked a reason ...


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