Notable Cases

Jason Shear makes pro-consumer law in Buffalo City Court.  The Court in  Greenwood Trust Company, Issuer of The Discover Card, By Its Servicing Agent, Discover Financial Services, Inc. vs. Barbara Beres  rules the Court did not have jurisdiction over our client.

Background

Our client found out that she had a default judgment against her after a debt collection law firm froze her bank account. We argued that the judgment should be vacated because our client was not properly served. We also argued that, based under Section 213 of the Uniform City Court Act, the Buffalo City Court did not have jurisdiction over our client who was a resident of the Village of Springville. Section 213 of the Uniform City Court Act sets forth the jurisdictional requirements for actions in Buffalo City Court. These requirements include either residence of plaintiff or defendant within the city or contiguous town, or regular employment or place for the regular transaction of business within the city. The Village of Springville is not contiguous to the City of Buffalo. Furthermore, neither the plaintiff nor my client had a residence or office for the transaction of business in the City of Buffalo .

Result

The Judge ruled that the Court was without authority to enter the judgment, making it null and void. Click here for a link to the Court’s decision.

Jason A. Shear makes pro-consumer law in the Fourth Department, which is New York State’s 2nd highest court. In  Unifund v. Youngman, the Fourth Department’s Significant Decision Will Stand in Debt Buyer Cases.

Background

In 2009, our client who was sued by a debt buyer called Unifund CCR Partners. Unifund moved for Summary Judgment.  Annexed to Unifund’s papers were statements from the original creditor, Chase Bank. However, Unifund used a Unifund employee – not a Chase employee – to certify the records into evidence.  We cross-moved for summary judgment (SJ) based on Unifund lacking standing. The Supreme Court granted Unifund’s motion for SJ and denied our cross-motion for SJ.  The Fourth Department overruled the trial court’s ruling in a unanimous decision.  Unifund’s attorney made a motion to Fourth Department for leave to appeal which was denied.  Recently, The Court of Appeals denied leave to review the Fourth Department’s decision in [ Unifund CCR Partners  v.  Youngman, 89 A.D.3d 1377, 932 N.Y.S.2d 609 (4th Dep’t Nov. 10. 2011), lv. denied, 2012 N.Y. Slip Op. 72420.

In  Unifund, the Fourth Department picked up where it left off in  Palisades Collection, LLC  v.  Kedik, 67 A.D.3d 1329, 1331, 890 N.Y.S.2d 230, 231 (4th Dep’t 2009), holding debt buyers seeking to collect alleged debts strictly to the usual rules of evidence and procedure and rejecting motions for summary judgment that grossly fail to comply with those usual rules.

In  Kedik, the debt buyer actually did a bit better than the above, submitting a spreadsheet purportedly listing the assigned account, but its affiant failed adequately to explain where the spreadsheet came from and so failed to show that the spreadsheet was admissible under the business records exception to the hearsay rule.  Unifund  took the logical step of applying the principles of evidence that  Kedik  applied to proof of assignment to all the putative evidence submitted with such a motion for summary judgment, in particular, account statements. An employee of Unifund does not have personal knowledge of Chase’s records, so cannot authenticate them; only someone from Chase could authenticate them.

Result

Even more significant, the Fourth Department ordered that the Defendant’s cross-motion for summary judgment be granted and the complaint dismissed.  Going forward, a debt buyer, at least in the Fourth Department, will face loss of its case if it makes a motion for summary judgment that inadequately proves standing or inadequately authenticates creditor records. Click here for a link to the Court’s decision.

Jason Shear makes pro-consumer law in Buffalo City Court.  The Court in  Midland Funding LLC v. Wilber  rules an attorney for a debt buyer cannot use a Notice to Admit to prove their case.

Background

We recently had a client who was sued by the debt buyer Midland Funding. Midland Funding was being represented by the law firm of Cohen & Slamowitz. The attorney for Midland Funding sent us a Notice to Admit asking us to admit or deny various issues. I made a motion to the court to strike Midland Funding’s Notice to Admit. Adopting the argument from my Memorandum of Law, the court ruled that the Notice to Admit sent by Cohen & Slamowitz was improper, as it sought to elicit responses that go to the heart of the dispute. Furthermore, the court ruled that the purpose of a Notice to Admit is to eliminate from dispute those matters about which there could be no controversy. It cannot be used to request admission of material issues or ultimate issues or facts.

To explain, in Cohen & Slamowitz’s Notice to Admit, they asked if my client had an account with Target National Bank and if she utilized credit from Target National Bank. Since these are questions that are at the heart of the dispute, we were able to make case law that such a Notice to Admit, as used by many debt collection law firms, is improper.
Many attorneys for debt buyers, including Midland Funding, include these types of inappropriate questions in the Notice to Admit because not only do they have little evidence to establish their case, but they have little interest in obtaining real evidence to prove their case. Instead, they will oftentimes try to win their case by using our client’s own admissions. Furthermore, many debt buyers include these improper questions hoping that the consumer does not respond within the allowable time frame, thereby deeming those questions as an admission that the consumer does owe the alleged debt.

In other words, failure to respond is treated as an admission of all the requested statements.  The debt buyer’s attorney then appends those statements to a summary judgment motion and seeks to prevail in the third party debt collection case even though they presented little or none of their own evidence. By serving a Notice to Admit collectors prey on unrepresented New York consumers’ lack of legal knowledge, attempting to prove their case by “sleight of hand” when they cannot do so by evidence in the NY Courts.

Result

Many Notices to Admit, as sent by numerous debt collection law firms, are improper.  A Notice to Admit in New York is restricted to several narrow limits including those items as to which the party requesting the admission reasonably believes there can be no substantial dispute at trial and which are within the knowledge of such other party or can be ascertained by him or her upon reasonable inquiry.  A Notice to Admit cannot be used as a substitute for existing discovery devices or a subterfuge for obtaining further discovery.  In addition, a Notice to Admit cannot be used to ask questions pertaining to the heart of the dispute.

Clearly, whether or not a consumer owes a debt or applied for credit with the alleged original creditor is at the heart of the dispute. Therefore, a Notice to Admit which contains these types of questions is improper. By establishing that a debt buyer’s attorney cannot use a Notice to Admit to prove their case, not only did we make pro-consumer law, but we also helped thousands of consumers across New York State. Click here for a link to the Court’s decision.

Jason Shear makes pro-consumer law in Federal District Court. Court rules in  Smith vs. RJM Acquisitions, LLC   our client sustained a cause of action under 15 U.S.C. § 1692e(8) by communicating credit information which is known to be false.

Background

RJM Acquisitions, LLC (RJM) sent correspondence dated October 1, 2013 to our client demanding payment and listing the last payment date as November 14, 2006. However, RJM reported the account to the CRAs as being opened in 2009. More importantly, RJM could not claim that the re-aging of the debt was a mistake, as RJM specifically mentioned a last payment date of 2006 in the aforementioned October 1, 2013 letter. Said false credit reporting was an attempt to force our client into paying an account that was past the statute of limitations for lawsuit and credit reporting purposes. Additionally, RJM reported the account to the Credit Reporting Agencies and did not report the debt as being disputed. Specifically, we claimed that the Defendant violated the Fair Debt Collection Practices Act by communicating credit information which is known to be false.

Result

The Court ruled that our client sustained a cause of action under 15 U.S.C. § 1692e(8) by communicating credit information which is known to be false and 15 U.S.C. § 1692e(2)(a) by misrepresenting to credit reporting agencies the legal status of the alleged debt. Click here for a link to the Court’s decision.

Jason Shear makes pro-consumer law in Buffalo City Court. Jason Shear gets debt collection case dismissed for client, finds violations of law by the debt collector’s attorney and gets a settlement where the debt collector pays his client.

Background

We recently had a client that was sued by the large national debt buyer Midland Funding.  Midland Funding is owned by its parent company Midland Credit Management.  After we filed an answer on behalf of our client, Midland Funding’s attorney Cohen & Slamowitz sent us discovery demands.  The problem was that Cohen & Slamowitz also sent discovery demands to our client even though they knew about our representation of our client.  We made a motion to the Court to have those demands stricken. Contacting an individual represented by an attorney is in violation of New York’s code of professional conduct for attorneys.  More importantly, a debt collector contacting a consumer represented by a lawyer is in violation of the Fair Debt Collections Practices Act (FDCPA).  The FDCPA is a federal law that regulates third party debt collectors such as collection agencies, debt buyers and debt collection law firms. To learn more about the FDCPA, click on Creditor Harassment (FDCPA) located in the Practice Areas of our website.

Result

We eventually were able to get Midland’s debt collection case dismissed.  Then, based on Cohen & Slamowitz’s violation of the FDCPA we filed a lawsuit against the Cohen & Slamowitz.  We recovered a settlement for our client.  When it was all said and done, our client did not have to pay the debt and we got a monetary settlement for our client. Jason Shear also made law in Buffalo City Court.  The Court adopted our Memorandum of Law and in a written decision ruled that, pursuant to CPLR 2103(b), interlocutory papers must be served on a party’s attorney.  Click here for a link to the Court’s decision.