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Federal Trade Commission v. Life Management Services of Orange County, LLC

United States District Court, M.D. Florida, Orlando Division

July 2, 2019

FEDERAL TRADE COMMISSION and OFFICE OF THE ATTORNEY GENERAL, STATE OF FLORIDA, DEPARTMENT OF LEGAL AFFAIRS, Plaintiffs,
v.
LIFE MANAGEMENT SERVICES OF ORANGE COUNTY, LLC, LOYAL FINANCIAL & CREDIT SERVICES, LLC, IVD RECOVERY, LLC, KWP SERVICES, LLC, KWP SERVICES OF FLORIDA LLC, LPSOFFLA LLC, LPSOFFLORIDA L.L.C., PW&F CONSULTANTS OF FLORIDA LLC, UAD SECURE SERVICES LLC, UAD SECURE SERVICE OF FL LLC, URB MANAGEMENT, LLC, YCC SOLUTIONS LLC, YFP SOLUTIONS LLC, KEVIN W. GUICE, CHASE P. JACKOWSKI, LINDA N. MCNEALY, CLARENCE H. WAHL, KAREN M. WAHL, ROBERT GUICE and TIMOTHY WOODS, Defendants.

          REPORT AND RECOMMENDATION

          THOMAS B. SMITH, UNITED STATES MAGISTRATE JUDGE

         Pending before the Court is the Receiver's Unopposed Verified Fourth Application for Payment for Services Rendered and Reimbursement for Costs Incurred. (Doc 287). After due consideration I respectfully recommend that the motion be granted.

         I. Background

         Plaintiffs the Federal Trade Commission and Office of the Attorney General, State of Florida, Department of Legal Affairs brought this action for a permanent injunction and other equitable relief pursuant to § 13(b) of the Federal Trade Commission Act, 15 U.S.C. § 53(b), the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101-6108, and the Florida Deceptive and Unfair Trade Practices Act, Chapter 501, Part II, Florida Statutes (2015) (Doc. 1). Plaintiffs alleged, in sum, that Defendants had engaged in a telemarketing scheme intended to defraud financially distressed consumers by selling them phony debt relief services (Id. at ¶ 3).

         The significant events in this case include the Court's entry of a temporary restraining order in June of 2016 which, among other things, froze Defendants' assets and appointed the Receiver as temporary receiver for the corporate Defendants, their affiliates, subsidiaries, divisions and operations (Doc. 36 at 10-12, 18-22). In early July 2016, the Court entered a preliminary injunction which continued the asset freeze and converted the Receiver from a temporary to permanent receiver (Doc. 89 at 15-20).

         One year later, the Receiver motioned the Court to establish summary procedures for the parties and Court to follow in connection with a to-be-filed motion to compel Defendant Kevin Guice and his wife, Shannon Guice to disgorge assets, for the imposition of a constructive trust, and for other equitable relief (Doc. 171). The Court granted the motion (Doc. 197), and the Receiver filed his motion for disgorgement and other relief (Doc. 198).

         On December 7, 2018, the Court granted Plaintiffs' motion for summary judgment and entered a permanent injunction against Defendant Kevin Guice (Doc. 225).

         In January 2019, I recommended that the Court grant the Receiver's disgorgement motion in part (Doc. 239). This matter remains pending before the Court.

         In April 2019, the Court entered judgment for Plaintiffs and against Defendants Chase P. Jackowski, Linda N. McNealy, Clarence H. Wahl, Karen M. Wahl, Life Management Services of Orange County, LLC, Loyal Financial & Credit Services, LLC, IVD Recovery, LLC, KWP Services, LLC, KWP Services of Florida LLC, LPSOFFLA LLC, LPSOFFLORIDA L.L.C., PW&F Consultants of Florida LLC, UAD Secure Services LLC, UAD Secure Service of FL LLC, URB Management, LLC, YCC Solutions LLC, YFP Solutions LLC, Robert Guice and Timothy Woods in the amount of $23, 099, 878 jointly and severally (Doc. 274).

         Now before the Court is the Receiver's fourth application for payment in which he seeks $50, 000 in fees and $346.87 to reimburse actual out-of-pocket expenses (Doc. 287 at 2). The application includes a $3, 300 fee reduction made at Plaintiffs' request (Id.). No. party opposes the motion (Id.).

         II. Legal Standard

         “Whether a receiver merits a fee is based on the circumstances surrounding the receivership, and ‘results are always relevant.'” SEC v. Elliot, 953 F.2d 1560, 1577 (11th Cir. 1992) (quoting SEC v. W. L. Moody & Co., Bankers (Unincorporated), 374 F.Supp. 465 (S.D. Tex. 1974), aff'd, 519 F.2d 1087 (5th Cir. 1975)).

         The Court employs the lodestar approach as the first step in calculating a reasonable fee for a lawyer, or in this case, the Receiver's services. SEC v. Aquacell Batteries, Inc., No. 6:07-cv-608-Orl-22DAB, 2008 WL 276026, at *3 (M.D. Fla. Jan. 31, 2008); Hensley v. Eckerhart, 461 U.S. 424 (1983); Norman v. Housing Authority of the City of Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988). “[T]he starting point in any determination for an objective estimate of the value of a lawyer's services is to multiply hours reasonably expended by a reasonable hourly rate.” Norman, 836 F.2d at 1299; Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir. 1994) (per curiam).

         “[T]he lodestar as calculated in Hensley presumptively includes all of the twelve factors derived from the ABA Code of Professional Responsibility DR 2-106 (1980) and adopted in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974), except on rare occasions the factor of results obtained and, perhaps, enhancement for contingency.” Norman, 836 F.2d at 1299. The Johnson factors are: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; ...


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