Fabish v. Harnak

[Cite as Fabish v. Harnak, 2015-Ohio-4777.]
COURT OF APPEALS
DELAWARE COUNTY, OHIO
FIFTH APPELLATE DISTRICT
JUDGES:
TODD J. FABISH : Hon. W. Scott Gwin, P.J.
: Hon. Patricia A. Delaney, J.
Plaintiff-Appellee : Hon. Craig R. Baldwin, J.
:
-vs- :
: Case No. 15 CAG 04 0036
BRIAN K. HARNAK, ET AL :
:
Defendants-Appellants : OPINION
CHARACTER OF PROCEEDING: Civil appeal from the Delaware Municipal
Court, Case No. 08-CVF-01197
JUDGMENT: Affirmed
DATE OF JUDGMENT ENTRY: November 19, 2015
APPEARANCES:
For Plaintiff-Appellee For Defendants-Appellants
RICHARD DONOVAN CHRISTOPHER ESKER
571 High Street, Ste. 22 BRANDON PAULEY
Worthington, OH 43085 50 S. Main Street. 10th Floor
Akron, OH 44308
Delaware County, Case No. 15 CAG 04 0036 2
Gwin, P.J.
{¶1} Appellants appeal the March 24, 2015 judgment entry of the Delaware
Municipal Court overruling their motion and objection to the December 8, 2014
magistrate's decision.
Facts & Procedural History
{¶2} On May 16, 2008, appellee Todd Fabish filed a complaint against
appellants Brian Harnak and Roderick Linton LLP for violations of the Fair Debt
Collection Practices Act ("FDCPA") and Consumer Sales Practices Act ("CSPA"). The
complaint alleged that appellants, as debt collectors, sued appellee and his parents, as
co-signers, on behalf of Wells Fargo to collect on a student loan. Further, that
appellants filed the suit in Delaware County, Ohio, where appellee did not live and
where the contract was not made. Appellee averred that he lived in Chicago when
appellants filed the lawsuit in Delaware County. Appellee argued that bringing suit in
Delaware County violated the FDCPA.
{¶3} Both parties filed motions for summary judgment in 2009, which the
magistrate denied. Appellee filed objections to the magistrate's decision. On June 10,
2009, the trial court partially reversed the magistrate's decision and found that appellee
was entitled to partial summary judgment that: (1) appellee is a consumer obligated to
pay money arising out of a transaction for personal, family, or household purposes as
contemplated by the FDCPA and (2) the litigation filed against him to collect a debt was
in a judicial district in which he did not sign the contract or reside.
{¶4} The magistrate conducted a trial on April 16, 2010. Frank Fabish,
appellee's father, testified at the trial. On June 4, 2010, the magistrate filed a judgment
Delaware County, Case No. 15 CAG 04 0036 3
entry with findings of fact and conclusions of law. The magistrate found that appellee
showed actual harm, but offered no evidence of out-of-pocket or emotional damages.
Thus, the magistrate awarded appellee the nominal sum $100 in actual damages. The
magistrate further found that the FDCPA allows statutory damages of up to $1,000 even
in the absence of proof of actual damages. The magistrate awarded appellee $500 in
statutory damages and stated that while there was no evidence appellants' non-
compliance was intentional, appellants chose a forum they knew might not satisfy the
express requirements of the FDCPA. The magistrate dismissed and denied appellee's
claim under the CSPA. Additionally, the magistrate found that Roderick Linton LLP
could not be held directly liable or responsible for appellee's claims under the FDCPA.
Appellants filed objections to the magistrate's decision and award of $600 in damages
on June 23, 2010.
{¶5} On June 16, 2010, appellee filed a motion for costs and attorney fees
totaling $25,081. Attached to the motion were invoices detailing the date, hours, rate,
and description of each action billed for. Also attached to the motion was the affidavit of
appellee's counsel. On July 19, 2010, appellants filed a response to the motion for
attorney fees. Appellants filed a supplemental response on August 25, 2010.
{¶6} On August 11, 2010, the trial court overruled appellants' objections to the
June 4, 2010 magistrate's decision, finding that the objections were untimely filed.
Appellants filed a motion with the trial court to reconsider its August 11, 2010 judgment
entry. The trial court denied appellants' motion on September 9, 2010, again finding
that appellants' objections were not timely filed and finding that excusable neglect had
not been shown.
Delaware County, Case No. 15 CAG 04 0036 4
{¶7} Appellee filed a motion for status conference in 2012. The trial court set
the matter for hearing on November 16, 2012. On November 14, 2012, appellee filed a
supplemental affidavit requesting attorney fees of $6,992.50 that accrued following the
decision of the court in June 2010. Appellants filed supplemental memoranda on
November 16, 2012 and on December 11, 2012. On December 21, 2012, appellee filed
a reply to appellants' December 11 memorandum and included copies of multiple legal
publications relating to law office economics and attorney fees. On December 26, 2012,
appellants filed a motion to strike appellee's reply. On April 17, 2014, the trial court
scheduled the matter for hearing on May 14, 2014 due to the confusion regarding the
hearing on November 16, 2012. Appellee presented no further evidence than that
previously submitted. Appellants elected to present no evidence and also relied on
legal memoranda previously submitted.
{¶8} On December 8, 2014, the magistrate issued a judgment entry and
decision. The magistrate cited the Bittner v. Tri- County Toyota, Inc., case for the
proposition that a court should determine the hours reasonably expended by counsel
and counsel's reasonable hourly fee, but could adjust the resulting figure based upon
several factors. 58 Ohio St. 3d 142, 569 N.E.2d 464 (1991). The magistrate found that
appellee submitted affidavits incorporating counsel's itemized statements for fees, along
with timely publications regarding law office economics (including surveys conducted by
the Ohio State Bar Association and the National Consumer Law Center) and containing
prevailing rates for attorney fees that showed that appellee's counsel's hourly rate fell
within the prevailing rates in the area. Further, that the affidavits detailed the nature of
the services and time required. The magistrate stated that appellants did not challenge
Delaware County, Case No. 15 CAG 04 0036 5
or question appellee's counsel's rate nor the time required. The magistrate found that
appellee's counsel manifested the skill and experience commensurate with his hourly
rates.
{¶9} The magistrate determined that the evidentiary material submitted by
appellee demonstrated that some of the litigation involved was not directly related to the
enforcement of the FDCPA. The magistrate could not tell what fees were tied to the
FDCPA from October 2008 to June 2010; thus, appellee was precluded from receiving
attorney fees during this period. The magistrate found that appellee submitted
supplemental evidentiary material that established he accrued additional legal fees after
the judgment of $6,993. Further, that the material submitted by appellee established
that the hours billed were consistent with the research and writing required by appellee
to respond to appellants' objections to the judgment and application to recover attorney
fees. The magistrate found that appellee was entitled to an award of attorney fees
totaling $11,375.
{¶10} On December 18, 2014, appellants filed a motion to set aside the
magistrate's decision. On December 22, 2014, appellants filed objections to the
magistrate's decision. On March 25, 2015, the trial court issued a judgment entry
denying appellants' motions and objections. The trial court found that the magistrate
properly calculated the attorney fees utilizing the lodestar method and that counsel for
appellee submitted documents demonstrating his rate was reasonable and the hours he
reasonably expended. Further, that the parties agreed to submit the issue of attorney
fees upon affidavits and memoranda of law. The trial court stated that appellants
submitted nothing contradicting the reasonableness of the hours expended or the
Delaware County, Case No. 15 CAG 04 0036 6
reasonableness of the hourly rate. Additionally, that the magistrate awarded
substantially less than the $25,081 sought by appellee for attorney fees.
{¶11} Appellants appeal the judgment entries of the Delaware Municipal Court
and assign the following as error:
{¶12} "I. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT AWARDED ATTORNEY'S FEES IN THE AMOUNT OF $11,375 TO PLAINTIFF AS
THE EVIDENCE SUBMITTED IN SUPPORT OF SAID FEES WAS INSUFFICIENT TO
SUPPORT SUCH FINDING AS ORDERED DECEMBER 8, 2014 AS UPHELD MARCH
24, 2015.
{¶13} "II. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT RULED IN FAVOR OF PLAINTIFF AND GRANTED $100 IN ACTUAL DAMAGES
AND $500 STATUTORY DAMAGES ON FDCPA CLAIMS AS ORDERED JUNE 4,
2010.
{¶14} "III. THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN
IT ADOPTED THE MAGISTRATE'S DECISIONS OF JUNE 4, 2010 AND DECEMBER
8, 2014."
I.
{¶15} Appellants first argue that the trial court abused its discretion by granting
appellee attorney fees as appellee failed to meet his evidentiary burden to prove
entitlement to any fees. Further, that the fees awarded were linked to the pursuit of the
CSPA claims rather than the FDCPA claims.
Delaware County, Case No. 15 CAG 04 0036 7
{¶16} A decision to modify, affirm, or reverse a magistrate’s decision lies within
the sound discretion of the trial court and should not be reversed on appeal absent an
abuse of discretion. Booth v. Booth, 44 Ohio St. 3d 142, 541 N.E.2d 1028 (1989).
{¶17} An award of attorney fees is within the sound discretion of the trial court.
Rand v. Rand, 18 Ohio St. 3d 356, 481 N.E.2d 609 (1985). In order to find an abuse of
discretion, we must determine the trial court's decision was unreasonable, arbitrary, or
unconscionable and not merely an error of law or judgment. Blakemore v. Blakemore, 5
Ohio St. 3d 217, 450 N.E.2d 1140 (1983).
{¶18} 15 U.S.C.A. 1692k(a)(3) provides that, " a debtor collector who fails to
comply with any provision of this subdivision * * * is liable to such person in an amount
equal to the sum of -- * * * in the case of any successful action to enforce the foregoing
liability, the costs of the action, together with a reasonable attorney's fee as determined
by the court." FDCPA attorney fee provisions serve as a deterrent to prevent the
prohibited conduct and, thus, it is not unusual in a FDCPA case for the amount of
attorney fees to be higher than the damages awarded in the case. Sanders v. Jackson,
209 F.3d 998 (7th Cir. 2000).
{¶19} The Ohio Supreme Court has held that rather than forcing a direct
relationship between the attorney fees and the amount the consumer recovers, the
starting point for the determination of a reasonable amount of fees is the number of
hours spent by the attorney multiplied by a reasonable hourly rate, also termed the
“lodestar figure.” Bittner v. Tri-County Toyota, 58 Ohio St. 3d 142, 569 N.E.2d 464
(1991). “This calculation provides an objective basis on which to make an initial
estimate of the value of the lawyer’s services.” Hensley v. Eckerhart, 461 U.S. 424, 103
Delaware County, Case No. 15 CAG 04 0036 8
S. Ct. 1933, 76 L. Ed. 2d 40 (1983). Once a trial court calculates the “lodestar figure,” it
can modify the calculation by applying the factors listed in Rule 1.5 of the Ohio Rules of
Professional Conduct. Landmark Disposal Ltd. v. Byler Flea Market, 5th Dist. Stark No.
2005CA00294, 2006-Ohio-3935. The trial court has the discretion to determine which
factors to apply, if any, and what manner the application will affect the initial calculation.
Id.
{¶20} The fee applicant bears the burden of establishing entitlement to an award
and documenting the appropriate hours expended and hourly rates. Canton v. Irwin,
5th Dist. Stark No. 2011 CA 0029, 2012-Ohio-344. To establish the number of hours
reasonably expended, the party requesting the fees should submit evidence to support
the hours worked. Hensley, 461 U.S. at 433. The number of hours should be reduced
to exclude “hours that are excessive, redundant, or otherwise unnecessary” in order to
reflect the number of hours that would properly be billed to the client.” Id. A reasonable
hourly rate is the “prevailing market rate in the community.” Blum v. Stenson, 465 U.S.
886, 104 S. Ct. 1541, 79 L. Ed. 2d 891 (1984). The party requesting the attorney fees
bears that burden “to produce satisfactory evidence – in addition to the attorney’s own
affidavit – that the requested rate [is] in line with those prevailing in the community for
similar services by lawyers of reasonably comparable skill, experience, and reputation.”
Id. at 895.
{¶21} Appellants argue that the trial court erred in finding appellee submitted
sufficient evidence to establish a reasonable hourly rate and the amount of reasonable
hours expended. We disagree. Both the magistrate and trial court cite the Bittner v. Tri-
County Toyota case and the lodestar standard. The magistrate specifically determined
Delaware County, Case No. 15 CAG 04 0036 9
the lodestar figure. With regards to a reasonable hourly rate, appellee submitted
recently published surveys from the Ohio State Bar Association and the National
Consumer Law Center to establish professional prevailing rates under the Act. The
magistrate determined that the publications established that the hourly rate of appellee’s
counsel was consistent with the prevailing rates. Further, appellee’s counsel presented
evidence in his affidavit regarding his skill and experience and ability, and specifically
details his experience with the type of litigation that is the subject of this case. The
magistrate found that appellee’s counsel manifested the skill and experience
commensurate with his hourly rate. Appellants did not furnish the trial court with any
evidence to contradict the evidence presented by appellee that his counsel’s rate was in
line with those prevailing in the community for similar services by lawyers of reasonably
comparable skill, experience, and reputation.
{¶22} With regards to a reasonable amount of hours worked, appellee presented
his itemized bill for legal fees including the work performed by date, nature, amount of
time, and hourly rate so that the magistrate and trial court could determine the
reasonableness of these fees. See Tipton v. Directory Concepts, Inc., 5th Dist.
Richland No. 13CA61, 2014-Ohio-1215; Van Horn v. Nationwide Property and Cas. Ins.
Co., 436 Fed. Appx. 496 (6th Cir. August 26, 2011). The magistrate found the
reasonable number of hours worked by appellee’s counsel did not include all of the
hours included in the itemized billing and awarded appellee only a portion, $11,375, of
the $25,081 total requested by appellee. Appellants did not provide the trial court with
any evidence to contradict the evidence presented by appellee regarding the number of
hours worked.
Delaware County, Case No. 15 CAG 04 0036 10
{¶23} Upon review of the record and evidence submitted, we find the trial court
did not abuse its discretion in determining that appellee submitted sufficient evidence to
award attorneys’ fees.
{¶24} Appellants argue in their brief that the trial court improperly reopened the
case so that appellee could submit further evidentiary information on attorneys’ fees.
However, it is apparent that the above-captioned case was not “closed” for purposes of
the trial court’s decision on attorneys’ fees until the trial court issued its judgment entry
of final, appealable order on March 24, 2015.
{¶25} Appellants finally contend that the trial court abused its discretion in
awarding appellee attorney fees because the fees awarded were linked to the pursuit of
the CPSA claims in addition to the FDCPA claims. We disagree. The magistrate
reviewed the itemized billing statements of appellee’s counsel and excluded from the
attorney fee award fees contained in appellee’s counsel’s billing statements from
October 2008 to June of 2010 because appellee failed to show the work was required
for the enforcement of the FDCPA. However, the magistrate determined that appellee
met its burden in demonstrating the remainder of the fees were required for the
enforcement of the FDCPA. Upon review of the evidence submitted by appellee, we
find the magistrate and trial court did not abuse its discretion in this determination.
{¶26} Appellants’ first assignment of error is overruled.
II.
{¶27} Appellants next argue the trial court abused its discretion when it ruled in
favor of appellee and granted $100 in actual damages and $500 in statutory damages
Delaware County, Case No. 15 CAG 04 0036 11
on FDCPA claims as ordered on June 4, 2010. Appellants specifically contend that the
magistrate erred in considering hearsay testimony during the April 16, 2010 bench trial.
{¶28} In 2009, the trial court granted appellee's partial motion for summary
judgment, finding that appellee is a consumer obligated to pay money arising out of a
transaction for personal, family, or household purposes as contemplated by the FDCPA
and that the litigation filed against him to collect a debt was in a judicial district in which
he did not sign the contract or reside. The bench trial in April of 2010 conducted by the
magistrate with regards to the FDCPA dealt only with damages.
{¶29} We must first address appellants' failure to timely file objections to the
June 4, 2010 magistrate's decision. On August 11, 2010, the trial court overruled
appellants' objections to the magistrate's decision, finding that appellants' objections
were untimely. Appellants filed a motion to reconsider the trial court's finding that the
objections were untimely, which the trial court denied on September 9, 2010. The trial
court again found the objections to be untimely and found that excusable neglect had
not been shown. Appellant has not assigned as error the finding of the trial court that
their objections were untimely.
{¶30} When a party fails to timely file objections to a magistrate's decision, Civil
Rule 53(D)(3)(b)(iv) provides that "a party shall not assign as error on appeal the court's
adoption of any factual finding or legal conclusion * * * unless the party has objected to
that finding or conclusion as required by Civil Rule 53(D)(3)(b)." Tipton v. Directory
Concepts, Inc., 5th Dist. Richland No. 13CA61, 2014-Ohio-1215.
{¶31} We note, however, that authority exists in Ohio law for the proposition that
appellants' failure to object to the magistrate's decision does not bar appellate review for
Delaware County, Case No. 15 CAG 04 0036 12
"plain error." Id. However, in appeals of civil cases, the plain error doctrine is not
favored and may be applied only in the extremely rare case involving exceptional
circumstances where error seriously affects the basic fairness, integrity, or public
reputation of the judicial process, thereby challenging the legitimacy of the underlying
judicial process itself. Kell v. Russo, 5th Dist. Stark No. 2011 CA 00082, 2012-Ohio-
1286, citing Goldfuss v. Davidson, 79 Ohio St. 3d 116, 679 N.E.2d 1099 (1997); Pratt v.
Easton Technical Products, Inc., 5th Dist. Stark No. 2014CA00144, 2015-Ohio-3180. In
Goldfuss, the Court explained that the doctrine should only be applied in extremely
unusual circumstances where the error complained of, if left uncorrected, would have a
material adverse effect on the character of and public confidence in the judicial
proceeding. 79 Ohio St. 3d 116, 679 N.E.2d 1099 (1997).
{¶32} Upon review, we find this case does not present exceptional
circumstances that rise to the level of plain error. Appellants' second assignment of
error is overruled.
III.
{¶33} Appellants finally argue that the trial court erred and abused its discretion
when it upheld the magistrate's decisions of June 4, 2010 and December 8, 2014.
Appellants essentially repeat their arguments contained in the first two assignments of
error. Based upon our discussion in Assignments of Error I and II above, we overrule
appellants' third assignment of error.
Delaware County, Case No. 15 CAG 04 0036 13
{¶34} Based on the foregoing, appellants' assignments of error are overruled.
The judgment entries of the Delaware Municipal Court are affirmed.
By Gwin, P.J.,
Delaney, J., and
Baldwin, J., concur