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Gwinn v. Safeguard Recovery LLC

United States District Court, D. Arizona

June 15, 2015

Marion Gwinn, Plaintiff,
Safeguard Recovery LLC, Eckity Capital Markets, LLC, Defendants.



This case is a civil action brought under the Fair Debt Collections Practices Act (“FDCPA”). Doc. 1 (citing 15 U.S.C. § 1692 et seq.). Plaintiff filed his complaint on August 29, 2014. The substance of his claim is that Defendants sent him a letter trying to collect a debt that had already been settled. Defendants have not answered or otherwise responded to the complaint. On October 6, 2014, the Clerk entered default. Doc. 10. On March 13, 2015, Plaintiff filed a motion for default judgment against Defendants Safeguard Recovery LLC and Eckity Capital Markets, LLC. Doc. 13. The Court ordered Plaintiff and Plaintiff’s attorney to file affidavits in support of the claimed damages and attorney’s fees. Doc. 14. Having received the affidavits, the Court will grant Plaintiff’s motion.

I. The Motion for Default Judgment.

Once a party’s default has been entered, the district court has discretion to grant default judgment against that party. See Fed. R. Civ. P. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors the court may consider in deciding whether to grant default judgment include (1) the possibility of prejudice to the plaintiff, (2) the merits of the claim, (3) the sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of a dispute concerning material facts, (6) whether default was due to excusable neglect, and (7) the policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In applying the Eitel factors, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977).

A. Possible Prejudice to Plaintiff.

The first Eitel factor weighs in favor of granting Plaintiff’s motion. Plaintiff served process on Defendants on September 3, 2014 and September 8, 2014. Docs. 6, 7. Defendants have not answered the complaint or otherwise appeared in this action. If Plaintiff’s motion for default judgment is not granted, Plaintiff “will likely be without other recourse for recovery.” PepsiCo, Inc. v. Cal. Security Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002).

B. The Merits of Plaintiff’s Claims and the Sufficiency of the Complaint.

The second and third Eitel factors favor a default judgment where the complaint sufficiently states a claim for relief. See PepsiCo, Inc., 238 F.Supp.2d at 1175; Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978). A review of Plaintiff’s complaint shows that Plaintiff has stated valid claims against Defendants. See Doc. 1 at 2-4. Plaintiff alleges that he was indebted to Bank of America and that he and Bank of America settled the debt. After this settlement, Defendant Safeguard Recovery, LLC, on behalf of Defendant Eckity Capital Markets, LLC, sent Plaintiff a letter attempting to collect this same debt. An attempt by Defendants to collect a debt that had already been paid off or settled is a violation of the Fair Debt Collection Practices Act. See 15 U.S.C. § 1692e(2) (a debt collector may not misrepresent “the character, amount, or legal status of any debt”); id. § 1692f(1) (a debt collector may not collect an amount “unless such amount is expressly authorized by the agreement creating the debt or permitted by law”).

C. The Amount of Money at Stake.

Under the fourth Eitel factor, the court considers the amount of money at stake in relation to the seriousness of the defendants’ conduct. See PepsiCo, Inc., 238 F.Supp.2d at 1176. Plaintiff seeks a total of $1, 500 in damages, as well as attorney’s fees and costs in the amount of $2, 110. Doc. 13 at 2. These relatively small amounts – although adjusted somewhat by the Court below – are proportional to the violation alleged and the effort invested by Plaintiffs’ counsel in this case.

D. Possible Dispute Concerning Material Facts.

Given the sufficiency of the complaint and Defendant’s default, “no genuine dispute of material facts would preclude granting [Plaintiff’s] motion.” PepsiCo, Inc., 238 F.Supp.2d at 1177; see Geddes, 559 F.2d at 560.

E. Whether Default Was Due to Excusable Neglect.

Defendants appear to have been properly served with the summons and complaint pursuant to Rule 4 of the Federal Rules of Civil Procedure. Docs. 6, 7. It is therefore “unlikely that [Defendants’] failure to answer and the resulting default was the result of excusable neglect.” Gemmel v. ...

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