Shipp v. Messerli and Kramer Professional Association

No. 05-94 (D. Minn. filed March 25, 2005), removed from No. C7-04-12204 (Minn. Dist. Ct. Ramsey County filed December 21, 2004) ; Clearinghouse Number: 55828

Description

Debtors Challenge Law Firm’s Request for Excessive Fee Awards in Default Collection Cases

Abstract

Plaintiff Minnesota residents sued by creditors in state courts challenge defendant law firm’s practice of seeking excessive and unearned attorney fee awards in default judgment cases in which it represented creditors. In each collection case against plaintiffs, plaintiffs defaulted, creditors were awarded default judgments, and defendant obtained judgments against plaintiffs for attorney fees. A state court rule permits counsel for a creditor, once a debtor is in default, to obtain approval of a fee request administratively without a motion hearing if the fee does not exceed 15 percent of the principal balance owing as requested in the party’s pleadings, up to a maximum of $3,000; a defaulting party may request a hearing to challenge the fee request. In a class action complaint, plaintiffs claim that defendant’s cover letter to debtors misleads debtors about who may use the enclosed hearing request form and about the possible consequences of the hearings, thereby discouraging debtors from exercising their right to request a hearing. Plaintiffs challenge defendant’s boilerplate affidavits that base its fee requests on the average time that defendant claims to have expended on other collection cases rather than time actually spent on the case at issue. They also challenge defendant’s regular requests for fee awards based on anticipated future work to be performed. Alleging violations of the federal Fair Debt Collection Practices Act and Minnesota’s Rules of Practice and Uniform Deceptive Trade Practices Act, plaintiffs seek declaratory and injunctive relief, equitable relief or actual damages, and costs and attorney fees.

Additional Information

Attorney Information
Plaintiff represented by Michael Persellin, Galen Robinson, Legal Aid Society of Minneapolis, 2929 Fourth Ave. S, Minneapolis, MN 55408 (telephone number: 612.332.1441); Timothy Thompson, Legal Aid Society of Minneapolis, 430 First Ave. N, Minneapolis, MN 55401-1780 (telephone number: 612.746.3750).
Docket Date
2005-03-25 00:00:00+00:00
Attorney Email
mpersell@midmnlegal.org