United States District Court, D. New Mexico
JOSHUA CORDOVA, on his own behalf, and on behalf of all others similarly situated, Plaintiff,
JODY JENKINS and JENKINS, WAGNON & YOUNG, P.C., Defendants.
MEMORANDUM OPINION AND ORDER
matter comes before the Court upon Defendants Jody Jenkins
and Jenkins, Wagnon & Young, P.C.'s Motion for
Partial Summary Judgment on Plaintiff's Claims under the
Fair Debt Collection Practices Act (“FDCPA”) and
the New Mexico Unfair Practices Act (“UPA”)
(“Motion”), filed on January 10, 2018. (Doc. 75).
Plaintiff responded on February 14, 2018, and Defendants
filed their Reply on March 15, 2018. (Docs. 83 and 97).
Having considered the Motion, the accompanying briefing, and
the relevant evidence, the Court GRANTS the
Motion with respect to Plaintiff's FDCPA claim. The Court
declines to exercise supplemental jurisdiction over the
remaining state claims, and, therefore, remands this matter
to state court for final resolution.
Facts Viewed in the Light Most Favorable to Plaintiff
16, 2014, attorney Jody Jenkins (“Defendant
Jenkins”) filed suit in Second Judicial District Court
in the County of Bernalillo, New Mexico (“State
District Court”) on behalf of debt buyer Autovest,
L.L.C. (“Autovest”) against Plaintiff Joshua
Cordova and his father (the “Lawsuit”). (Doc.
75-1) at 1-2. The Lawsuit arose from an auto loan that
Plaintiff and his father signed with Wells Fargo in 2006 to
finance the purchase of a motor vehicle. Id. at 3.
Plaintiff's loan agreement stated, “If we hire an
attorney who is not our salaried employee to collect what you
owe, you will pay the attorney's reasonable fee and court
costs the law permits. The maximum attorney's fee you
will pay will be 15% of the amount you owe.”
Id. at 4.
complaint in the Lawsuit alleged that Autovest was the owner
and holder of the auto loan contract, having acquired it from
Wells Fargo. Id. at 1. The complaint further alleged
that Plaintiff defaulted on the auto loan and, as a result,
Plaintiff was indebted to Autovest. Id. According to
Plaintiff, Plaintiff's sister was supposed to pay the
loan because she was the primary driver of the vehicle, but
she failed to do so and the vehicle was repossessed before
Plaintiff knew she had stopped making payments. (Doc. 75-1)
at 8, depo. at 28:8-22. Plaintiff knew Autovest had filed the
Lawsuit against him to recover the debt he owed, but
“just never took any action to clear it up.”
Id. at 9, depo. at 30:1-2.
the Lawsuit, neither Plaintiff nor his father filed
responsive pleadings, the State District Court did not hold
any hearings, and Defendant Jenkins did not make any court
appearances. (Doc. 83-3) at 1. Subsequently, Defendant
Jenkins filed a one-page Motion for Default Judgment on
behalf of Autovest, to which he attached a signed and
notarized “Itemized Affidavit in Support of
Attorney's Fees” (“Fee Affidavit”).
(Doc. 83-1). The Fee Affidavit sought attorney's fees for
the hours Defendants Jenkins and his law firm, Jenkins,
Wagnon, and Young, P.C. (“Defendant JWY”) spent
on the Lawsuit under the lodestar method. Id. In
support of their request for fees, Defendant Jenkins stated,
under oath, that Defendant JWY had spent a total of 4.25
attorney hours, at a reasonable rate of $250 per hour, on the
Lawsuit. Id. at 2. Defendants itemized the time
expended on the Lawsuit as follows: (1) “[r]eceive and
review file and general demand letter - .5;” (2)
“[d]raft Complaint, Summons, Affidavit in Support of
Complaint, and Non-Military affidavit - 1.0;” (3)
“[f]ile Complaint/ Correspond with Process Server -
.5;” (4) “[d]raft letter to clerk to file return
of service with certificate of mailing - .25;” (5)
“[d]raft Motion for Default Judgment and Final Judgment
- 1.0; and” (6) “[m]iscellaneous communications
with client - 1.0.” Id. at 1. Defendants
sought a total of $1, 062.50 in attorney's fees and a
total amount of court costs of $268.70. Id. at 2.
October 30, 2014, the State District Court granted
Autovest's Motion for Default Judgment. (Doc. 83-3). The
Court also awarded Defendants $934.68 in attorney's fees,
with gross receipts tax included, which represented 15% of
the debt as authorized by the loan agreement. Id. at
2. Plaintiff, as of the date of completion of briefing on
this Motion, has not paid any portion of the default
judgment, including the attorney's fees that the State
District Court awarded Defendants. (Doc. 75-1) at 10, depo.
subsequently filed a Class Action Complaint for Damages
(“Complaint”) in State District Court on October
29, 2015. (Doc. 1-1) at 8-15. Defendants were not served with
the Complaint until April 21, 2016, and Defendants removed
the case to federal court on May 20, 2016. (Doc. 1) at 1. In
the Complaint, Plaintiff alleges that Defendant Jenkins and
Defendant JWY submitted fraudulent attorney fee affidavits in
their New Mexico debt collection cases, including in the
Lawsuit, resulting in hundreds of inflated judgments against
Plaintiff and other New Mexico residents. (Doc. 1-1) at 8.
Plaintiff alleged violations of the FDCPA (Count I) and UPA
(Count II), and asserted that Defendants committed malicious
abuse of process (Count III) and unjust enrichment (Count V).
Id. at 13-15.
the Lawsuit, specifically, Plaintiff alleges that Defendant
Jenkins did not perform 4.25 hours of work. In support of
this allegation, Plaintiff attaches to the Complaint several
other nearly identical fee affidavits, which Defendant
Jenkins submitted in other New Mexico debt collection cases
resolved by default judgments around the time the Lawsuit was
resolved. Id. at 10, 16-23; (Doc. 1-2) at 1-11. In
those fee affidavits, like in the Lawsuit, Defendant Jenkins
claims that he performed 4.25 hours of work, with the same
itemization of attorney time as in the Lawsuit. Id.
In addition, Plaintiff attaches to the Complaint a one-page
Motion for Default Judgment filed in the Lawsuit, along with
five other nearly identical motions for default judgment
filed in those similar New Mexico cases. (Doc. 1-2) at 11-16.
Plaintiff alleges that the fee affidavits “do not
reflect actual attorney time expended on each case.”
(Doc. 1-1) at 11. Plaintiff contends that Defendants' fee
affidavits, therefore, contained false statements, which
violated the FDCPA and the UPA, and constituted malicious
abuse of process and unjust enrichment. Id.
respect to the Lawsuit against Plaintiff, Defendant Jenkins
testified at his deposition, “The [Fee Affidavit] says
the fees sought [were] based on the time that would be
charged, and anticipated time in executing. So that language
says had this been an hourly case where there were records
kept, this is what I believe the time entries would have
shown.” (Doc. 75-1) at 17, depo. at 63:3-7.
Defendant Jenkins continued, “The amount of time that I
have given you in these affidavits is based upon what I
believe to be the minimum amount of time I have ever spent on
one of these cases from start to finish.”
Id.at 18, depo. at 92:8-11. Defendant Jenkins
further explained, “I did spend at least this much time
. . . I think what the affidavit says is that it's time
that would be charged in obtaining the judgment. So when it
would be charged in obtaining the judgment, I'm using my
opinion to say this is how much time I think would be
incurred had I kept records of this type of work for this
type of case.” Id. at 17, depo. at 63:16,
Jenkins also testified about the amount of time that he
typically spent reviewing a civil complaint. Defendant
Jenkins testified that usually he reviewed a civil complaint
three or four times, and that he “probably spend[s] a
quarter of an hour each time I'm looking at something.
15, 20 minutes. It could be longer. It could be
shorter.” (Doc. 83-7) at 4, depo. at 78:6-9, 80:23-25,
81:1-2. Referring to the history notes for the Lawsuit,
Defendant Jenkins stated, “[I]n this particular case,
it looks like there were several issues with the formatting
of it based on the number of entries that are related to the
people Tara Bratcher and Karli changing their time in June
for changing the status back and forth meaning that there
were multiple versions of this complaint that were
drafted.” Id. at 6, depo. at 88:10-16.
Defendant Jenkins testified about the letter to the State
District Court clerk regarding filing the return of service,
stating that he did not recall if there was such a letter in
the Lawsuit. (Doc. 83-7) at 6, depo. at 85:16-17. He
testified, “I know there was correspondence with the
clerk about issuing the summons. And that would include a
request that, you know, the clerk look at the file and issue
the certificate of the state of the record.”
Id., depo. at 85:18-21. Defendant Jenkins continued
that the time entry for the letter to the court clerk in the
Fee Affidavit is “an estimation of the time[, ]”
but that “there is time [spent] in sending the summons
to the court and the affidavit of service and the certificate
of mailing if it's substitute service like I believe this
one was.” Id., depo. at 86:2-5. Defendant
Jenkins asserted in his testimony, “I know that at some
point I told my staff to put together a letter to
send that to the clerk. And I would not have necessarily
signed off on that document and they may have just
electronically filed it as opposed to sending with it some
kind of enclosure letter.” Id., depo. at
86:11-16 (emphasis added).
Digiovanni is an employee of Defendant JWY. (Doc. 75-1) at
20, depo. 6:8-12. Ms. Digiovanni testified that she worked on
the Lawsuit, but does not have a specific recollection of
that work. Id. at 21, depo. at 10:13-18. Ms.
Digiovanni knew that she worked on the Lawsuit only because
her initials came up in the history notes that Defendant JWY
maintained for the case. Id., depo. at 10:19-22.
Responding to Plaintiff's counsel's questions about
whether Defendant Jenkins had spent 0.25 hours of attorney
time drafting a letter to the clerk to file the return of
service, whether the letter had ever been drafted for the
case, or whether Defendant Jenkins filed the complaint or
corresponded with the process server, Ms. Digiovanni
repeatedly testified that she did not know whether the work
had been completed. (Doc. 83-6) at 2, depo. at 85:5-14,
86:10-15. Ms. Digiovanni also did not know whether Defendant
Jenkins spent one hour of time communicating with anyone from
Autovest regarding its lawsuit against Plaintiff.
Id. at 1, depo. at 84:18-22.
Digiovanni did testify that depending on the case, Defendant
Jenkins would file the complaint or correspond with the
process server. Id. at 2, depo. at 86:16-22. She
also testified that she was sure that Defendant Jenkins filed
complaints and corresponded with process servers on the vast
majority of his cases, yet she could not remember a specific
time when he actually completed those tasks. Id.,
depo. at 86:23-25, 87:1-5. Ms. Digiovanni could not remember
specific changes that had been made to the fee affidavit form
since she started working at the firm, but she knew the
changes were on a “case-by-case” basis, so the
court costs section would have changed with each case.
Id. at 1, depo. at 84:2-5.
to Ms. Digiovanni, the complaint, the itemized affidavit of
attorney's fees, the motion for default judgment, the
certificate as to the state of the record, and the military
affidavit for any given case are created using templates that
Defendant Jenkins drafted. (Doc. 75-1) at 25, depo. at
78:20-25, 79, 80:1-20. After she creates a document using a
template, Defendant Jenkins reviews the document and fills in
the blanks. Id. at 23, 25, depo. at 45:6-23,
46:11-13, 47:6-25, 48:1-20, 78:20-25, 79, 80:1-20.
how much time Defendant Jenkins typically spent reviewing a
civil complaint, Ms. Digiovanni testified that “it
would take maybe an hour up to several. It just
depends.” Id. at 24, depo. at 62:11-18. Ms.
Digiovanni also testified that it was normal for Defendant
Jenkins to spend an hour or two, or longer, reviewing a
single civil complaint. Id., depo. at 62:21-23. When
Plaintiff's counsel asked Ms. Digiovanni whether it was
her testimony under oath that Defendant Jenkins's usual
practice was to take an hour or two to review a debt
collection civil complaint, Ms. Digiovanni qualified her
answer and said “[i]t was an estimate.”
Id., depo. at 63:2-7.
testified that he did not have any evidence that Defendant
Jenkins did not spend at least 4.25 hours of time on
the Lawsuit. (Doc. 75-1) at 6, depo. at 23:6-8. Plaintiff
admitted that while he did not know whether Defendant Jenkins
spent 4.25 hours on the Lawsuit, he agreed it was possible
that Defendant Jenkins spent 4.25 hours on the Lawsuit.
Id. at 12-13, depo. at 51:14-20, 24-25; 52:1.
Plaintiff conceded that he thought it was unreasonable for
Defendant Jenkins to spend 4.25 hours on an entire lawsuit,
implying that 4.25 hours was very little to spend on an
entire case. Id. at 13, depo. at 52:7-10.
also testified that he did not have any evidence that
Defendant Jenkins did not spend an hour
communicating with his client during the course of the
Lawsuit. Id. at 14, depo. at 53:7-16. Plaintiff
testified that he did not have any evidence for any of the
Complaint's claims other than what his lawyer may or may
not have told him. Id. at 15, depo. at 56:13-20.
Plaintiff testified that in terms of damages, he seeks only
“the 900-and-some dollars that they want to get from me
[in attorney's fees as part of the default
judgment].” Id. at 10, depo. at 31:14-17.
Plaintiff admitted that he had not paid any portion of the
default judgment. Id, depo. at 31:2-12. B. The
Motion for Summary Judgment With respect to
Plaintiff's FDCPA claim, Defendants contend that the Fee
Affidavit is not misleading, even to the least sophisticated
consumer, because “it explicitly states that it
contains an estimate of the attorney hours that would be
spent on resolving the debt collection.” (Doc. 75) at
12. Defendants favorably compare this case to an
out-of-circuit case in which a request for attorney's
fees in a complaint did not violate the FDCPA because it was
merely an estimate of attorney time spent on the matter.
Id. at 11-14 (citing Elyazidi v. Suntrust
Bank, 780 F.3d 227 (4th Cir. 2015)). Defendants assert
that not only does Plaintiff not have any evidence that
Defendant Jenkins did not spend 4.25 hours on the