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Vomberg v. Praxis Financial Solutions, Inc.

United States District Court, E.D. Wisconsin

June 14, 2016

JACQUELINE VOMBERG, Plaintiff,
v.
PRAXIS FINANCIAL SOLUTIONS, INC., Defendant.

          ORDER

          J. P. Stadtmueller U.S. District Judge.

         Plaintiff Jacqueline Vomberg ("Vomberg") filed suit against Praxis Financial Solutions, Inc. ("Praxis") for various violations of the Fair Debt Collection Practices Act ("FDCPA") and the similar Wisconsin Consumer Act - Debt Collection ("WCADC"). (Docket #1 at 3-8). The plaintiff filed a motion for entry of default judgment (Docket #7), which the Clerk of Court granted, together with an accompanying motion for default judgment. (Docket #8). The plaintiff requests the Court to enter default judgment on liability, and award monetary damages. (Docket #8 at 1).

         1. BACKGROUND[1]

         Vomberg alleges that she incurred a payday loan debt that was referred to Praxis for collection. (Docket #8-3). On April 4, 2013, Vomberg filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court, Eastern District of Wisconsin. (Docket #1 ¶ 6). Vomberg alleges that this specific debt was properly scheduled and thus discharged in the final Order of Discharge issued on July 17, 2013 . (Docket #1 ¶ 8).

         Almost two years later, on July 13, 2015, Praxis, acting on behalf of the payday store, called Vomberg in an attempt to collect the debt. (Docket #1 ¶ 9). Vomberg informed the person on the other end, identified as Lisa Clark, that the debt had been discharged in bankruptcy. (Docket #1 ¶ 10; Docket #8-3 8.) Ms. Clark stated that Vomberg "still owed the debt until [Vomberg] confirmed to Praxis that Pay Day Loan store was scheduled in [the] bankruptcy petition." (Docket #8-3 8; see also Docket #1 ¶ 10). A short time later, Vomberg called Praxis and confirmed that the Pay Day Loan store debt was incurred before the bankruptcy petition was filed. (Docket #1 ¶¶ 11, 12).

         As a result of these incidents, Vomberg alleges that she has suffered and continues to suffer stress, aggravation, emotional distress, and mental anguish. (Docket #1 ¶ 13).

         2. LEGAL STANDARD

         Because the Clerk of Court has entered default against the defendant, the Court must accept all well-pleaded facts relating to liability as true. Graham v. Satkoski, 51 F.3d 710, 713 (7th Cir. 1995). "As a general rule, a default judgment establishes, as a matter of law, that defendants are liable to plaintiff as to each cause of action alleged in the complaint." O'Brien v. R.J. O'Brien & Associates, Inc., 998 F.2d 1394, 1404 (7th Cir. 1993) (quoting United States v. DiMucci, 879 F.2d 1488, 1497 (7th Cir. 1989)). However, that does not relieve the plaintiff of the responsibility to prove up its damages under Rule 55(b)(2) of the Federal Rules of Civil Procedure. Indeed, "even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true, " and the Court must conduct an inquiry to ascertain the amount of damages with reasonable certainty. e360 Insight v. The Spamhaus Project, 500 F.3d 594, 602 (7th Cir. 2007) (quoting In re Catt, 368 F.3d 789, 793 (7th Cir. 2004)). Judgment by default may not be entered without a hearing on damages unless "the amount claimed is liquidated or capable of ascertainment from definite figures contained in the documentary evidence or in detailed affidavits." Id. (quoting Dundee Cement Co. v. Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319, 1323 (7th Cir. 1983)).

         The Complaint provides a ceiling for available remedies. Federal Rule of Civil Procedure 54(c) provides that: "A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings. Every other final judgment should grant the relief to which each party is entitled, even if the party has not demanded that relief in its pleadings." Fed.R.Civ.P. 54(c). Rule 54(c) merely formalized this well-settled rule. 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Fed. Prac. & Proc. Civ.3d § 2688 (citing Thomson v. Wooster, 114 U.S. 104, 113-114 (1885)). This rule serves to protect defendants "who choose to default, relying on the damage ceilings contained in plaintiffs' prayers." Appleton Elec. Co. v. Graves Truck Line Inc., 635 F.2d 603, 611 (7th Cir. 1980).

         3. DISCUSSION

         Vomberg's motion for default judgment requests as damages: (1) FDCPA statutory damages in the amount of $1, 000.00; (2) WCADC statutory damages in the amount of $1, 000.00; (3) Attorneys' Fees in the amount of $2, 217.50; and (4) costs in the amount of $455.00. (Docket #8 at 1). The Court will discuss each request in turn.

         3.1 Statutory Damages

         Section 1692k(a) of Title 15 of the United States Code allows for the award of any actual damages; in the case of any action brought by an individual, statutory damages not to exceed $1, 000.00; and the costs of the action, together with a reasonable attorney fee as determined by the court. "The FDCPA does not require proof of actual damages as a precursor to the recovery of statutory damages." Keele v. Wexler, 149 F.3d 589, 593 (7th Cir. 1998). In assessing whether part or all of the $1, 000.00 in statutory damages shall be awarded, the court generally is to consider the frequency and persistence of non-compliance by the debt collector, the nature of such non-compliance, and the extent to which the non-compliance was intentional. 15 U.S.C. § 1692k(b)(1); see also Tolentino v. Friedman, 46 F.3d 645, 651 (7th Cir. 1995).

         Here, Vomberg requests $1, 000.00 in statutory damages, the maximum amount allowed, however, makes no argument as to why that amount is appropriate in this circumstance. The Court declines to award the maximum amount in statutory damages because Praxis's violations were neither frequent nor persistent; indeed, the alleged violations were the result of only one phone call. Additionally, no facts suggest the non-compliance was intentional, and the lack of a follow-up call by Praxis is indicative of an inference that the call was a misunderstanding. As such, the Court finds an appropriate amount of FDCPA statutory damages to be $200.00. See Bartlett v. Heibl,128 F.3d 497, 499 (7th Cir. 1997) ("[I]t is within the district court's discretion to decide whether and if so how much to award, up to the $1, 000 ceiling" of statutory damages); see also Foutz v. Coast to Coast Fin. Solutions, Inc., No. ...


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