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Lowe v. Maxwell & Morgan PC

United States District Court, D. Arizona

September 19, 2017

Michael Lowe, Plaintiff,
v.
Maxwell & Morgan PC, Defendant.

          ORDER

          Douglas L. Rayes United States District Judge.

         Plaintiff Michael Lowe alleges that Defendant Maxwell & Morgan PC (“M&M”) violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., by attempting to recover post-judgement attorneys' fees and costs not authorized by Arizona law. At issue is Lowe's motion for class certification and M&M's related motion to strike. (Docs. 14, 49.) The motions are fully briefed and the Court heard oral argument on July 14, 2017. For the reasons below, both motions are denied.

         BACKGROUND

         Lowe formerly owned and resided at real property governed by the Village of Copper Basin Community Association (“VCB”), to which he was required to pay periodic assessments. (Doc. 14 ¶¶ 20-28.) In 2012, VCB filed an action against Lowe in Apache Junction Justice Court after he failed to make those payments. (¶ 29.) M&M represented VCB before the Justice Court, and on January 31, 2014, successfully obtained a default judgment against Lowe in the amount of $6, 349.69, plus interest (the “Justice Court Judgment”). (¶¶ 30-31, 34.) This total included $4, 546.65 in unpaid assessments, $1, 267.50 in attorneys' fees, and $535.54 in costs. (¶ 34.) Additionally, the Justice Court Judgment awarded VCB “all costs and attorney fees incurred . . . after submission of this judgment for entry by the Court in collecting the amounts listed in this Judgment.” (¶ 35.)

         M&M later filed the Justice Court Judgment in Maricopa County Superior Court, presumably to domesticate it in Maricopa County for collection purposes (the “Superior Court Action”). (¶ 40.) On July 14, 2015, M&M simultaneously filed in the Superior Court Action an Application for Amount of Attorney Fees Incurred Post-Judgment, Pre-Garnishment (“Post-Judgment Fee Application”) and an Application for Garnishment (“Garnishment Application”). (¶¶ 41, 46.) The Post-Judgment Fee Application requested an award of $1, 175.52, representing $875 in post-judgment attorneys' fees and $300.52 in post-judgment costs. (¶ 46.) Although those amounts had not yet been approved by the Superior Court, the Garnishment Application incorporated them, stating:

On the date of this Application, Judgment Debtors owe $7, 910.75 outstanding balance on the judgment, including Judgment principal and interest of $6, 735.23 and $1, 175.52 in post-judgment, pre-garnishment attorney fees and costs, subject to Court approval, plus accruing amounts pursuant to the Judgment.

         (¶ 41.) Consequently, the Superior Court issued a Writ of Garnishment and Summons (“Writ”) stating that VCB had a $7, 910.75 claim against Lowe, even though the full amount had not been approved by a court at the time the Writ issued. (¶¶ 42-43.) The Writ then was served on Lowe's employer. (¶ 52.)

         On August 14, 2015, Lowe tendered $6, 760 to M&M, representing the sum certain awarded by the Justice Court Judgment. (¶ 56.) M&M refused to accept the payment, however, because it did not also cover the post-judgment attorneys' fees and costs that M&M had requested and included in the Writ, but which had yet been approved by the Superior Court. (¶ 57.) The Superior Court later approved M&M's post-judgment attorneys' fees and costs on September 9, 2015. (Doc. 42 at 3.)

         Lowe asserts that post-judgment attorneys' fees and costs incurred in collecting the underlying judgment are not authorized under Arizona law, and that M&M's method of garnishing those fees and costs in his case is part of a larger debt collection pattern. (Doc. 14 ¶¶ 33, 36, 38, 63.) He alleges that M&M utilizes a form template for all default and uncontested judgements it prepares and obtains against those similarly situated to him, and that this template routinely includes boilerplate language regarding otherwise impermissible post-judgment costs and fees. (¶¶ 33, 36, 63.) Lowe further claims that M&M regularly includes post-judgment fees and costs in its garnishment applications before those amounts have been approved by a court of competent jurisdiction. Consequently, the garnishment writs that M&M obtains are for amounts greater than the sums certain awarded in the underlying judgments. (¶¶ 38-39, 61-62.)

         On December 7, 2015, Lowe initiated this action alleging that M&M's post-judgment litigation strategy violates the FDCPA. Lowe claims that he is but one among many who have been subject to M&M's post-judgment fee collection efforts, and therefore seeks to certify the following two classes:

1. All natural persons to whom, in the one year prior to December 7, 2015 through the date of class certification, Defendant garnished or attempted to garnish post-judgment fees and/or costs incurred in the collection of an underlying judgment.
2. All natural persons against whom, in the one year prior to December 7, 2015 through the date of class certification, Defendant requested or caused writs of garnishment to issue that included attorneys' fees and/or costs before those fees and/or costs were awarded by a court of competent jurisdiction.

         (Doc. 42 at 1; Doc. 53 at 1.) M&M opposes class certification.

         MOTION TO STRIKE

         Preliminarily, M&M moves to strike what it argues are new proposed class definitions introduced in Lowe's reply memorandum. (Doc. 49.) Motions to strike are generally disfavored and rarely granted. XY Skin Care & Cosmetics, LLC v. Hugo Boss USA, Inc., No. CV-08-1467-PHX-ROS, 2009 WL 2382998, at *1 (D. Ariz. Aug. 4, 2009); Ordahl v. U.S., 646 F.Supp. 4, 6 (D. Mont. 1985). Under Local Rule 7.2(m):

a motion to strike may be filed only if it is authorized by statute or rule, such as Federal Rule of Civil Procedure 12(f), 26(g)(2), or 37(b)(2)(A)(iii), or if it seeks to strike any part of a filing or submission on the ground that it is prohibited (or not authorized) by a statute, rule, or court order.

         In his motion for class certification, Lowe identifies the two putative classes as follows:

1. All natural persons to whom, in the one year prior to December 7, 2015, Defendant garnished or attempted to garnish post-judgment fees and/or costs incurred in the collection of an underlying judgment.
2. All natural persons against whom, in the one year prior to December 7, 2015, Defendant requested or caused writs of garnishment to issue that included attorneys' fees and/or costs before those fees and/or costs were awarded by a court of competent jurisdiction.

(Doc. 42 at 1.) M&M interpreted Lowe's class definitions as encompassing only those against whom garnishment writs issued between December 7, 2014 and December 6, 2015. (Doc. 45 at 7.) Lowe clarified in his reply, however, that his proposed class definitions cover those against whom garnishment writs issued between December 7, 2014 and the date of class certification. (Doc. 47 at 7-8.) In ...


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